<PAGE> 1
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-10826
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BancorpSouth, Inc.
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(Exact name of registrant as specified in its charter)
Mississippi 64-0659571
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Mississippi Plaza, Tupelo, Mississippi 38801
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(Address of principal executive offices) (Zip Code)
601/680-2000
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(Registrant's telephone number, including area code)
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(Former name, former address, and former fiscal year, if changed since
last year)
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 (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes / X / No / /
On March 31, 1999, the registrant had outstanding 55,958,150 shares of
common stock, par value $2.50 per share.
<PAGE> 2
BANCORPSOUTH, INC.
CONTENTS
PART I. Financial Information Page
ITEM 1 Financial Statements (unaudited)
Consolidated Condensed Balance Sheets
March 31, 1999 and December 31,1998..................... 3
Consolidated Condensed Statements of Income and
Comprehensive (Loss) Income
Three Months Ended March 31, 1999 and 1998.............. 4
Consolidated Condensed Statements of Cash Flows
Three Months Ended March 31, 1999 and 1998.............. 5
Notes to Consolidated Condensed Financial Statements.... 6
ITEM 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations........... 10
ITEM 3 Quantitative and Qualitative Disclosures About
Market Risk............................................. 16
PART II. Other Information
ITEM 6 Exhibits and Reports on Form 8-K........................ 17
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Report may not be based
on historical facts and are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1993, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements may be identified by reference to a future
period(s) or by the use of forward-looking terminology, such as
"anticipate," "believe," "estimate," "expect," "may," "might,"
"will," and "would." These forward-looking statements include,
without limitation, those relating to the Company's future growth,
revenue, profitability, liquidity, lending policy, capital resources and
Year 2000 compliance. Actual results could differ materially from those
indicated in such forward-looking statements due to a variety of
factors. These factors include, but are not limited to, economic
conditions, government fiscal and monetary policies, prevailing interest
rates, effectiveness of the Company's interest rate hedging strategies,
laws and regulations affecting financial institutions (including
regulatory fees and capital requirements), ability of the Company to
effectively service loans, ability of the Company to identify and
integrate acquisitions and investment opportunities, changes in the
Company's operating or expansion strategy, geographic concentrations of
assets, availability of and costs associated with obtaining adequate and
timely sources of liquidity, dependence on existing sources of funding,
changes in consumer preferences, competition from other financial
services companies, Year 2000 compliance, other factors generally
understood to affect the financial results of financial service
companies and other risks detailed from time to time in the Company's
press releases and filings with the Securities and Exchange Commission.
<PAGE> 3
<TABLE>
<CAPTION>
PART I
FINANCIAL INFORMATION
BANCORPSOUTH, INC.
Consolidated Condensed Balance Sheets
(Unaudited)
(In Thousands)
March 31, December 31,
1999 1998
----------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks $142,080 $175,354
Interest bearing deposits with other banks 9,783 6,632
Held-to-maturity securities, at amortized cost 736,408 647,846
Available-for-sale securities, at fair market value 494,523 549,767
Federal funds sold 195,000 115,040
Loans 3,744,557 3,561,406
Less: Unearned discount 86,418 92,705
Allowance for credit losses 52,264 49,618
----------- ------------
Net loans 3,605,875 3,419,083
Mortgages held for sale 50,000 63,354
Premises and equipment, net 127,296 120,446
Other assets 123,604 106,219
----------- ------------
TOTAL ASSETS $5,484,569 $5,203,741
=========== ============
LIABILITIES
Deposits:
Demand: Non-interest bearing $598,518 $614,529
Interest bearing 1,157,809 1,043,780
Savings 808,726 801,357
Time 2,141,765 1,982,257
----------- ------------
Total deposits 4,706,818 4,441,923
Federal funds purchased and securities
sold under repurchase agreements 67,413 64,554
Long-term debt 168,012 178,318
Other liabilities 65,506 62,589
----------- ------------
TOTAL LIABILITIES 5,007,749 4,747,384
----------- ------------
SHAREHOLDERS' EQUITY
Common stock 140,129 134,879
Capital surplus 104,361 104,620
Accumulated other comprehensive income 4,570 8,669
Retained earnings 228,825 209,544
Less cost of shares held in treasury (1,065) (1,355)
----------- ------------
TOTAL SHAREHOLDERS' EQUITY 476,820 456,357
----------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,484,569 $5,203,741
=========== ============
<FN>
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
BANCORPSOUTH, INC.
Consolidated Condensed Statements of Income and Comprehensive (Loss) Income
(Unaudited)
Three months ended
March 31,
----------------------
(In thousands except for per share amounts) 1999 1998
---------- ----------
<S> <C> <C>
INTEREST REVENUE:
Interest & fees on loans $79,316 $72,929
Deposits with other banks 98 99
Interest on federal funds sold 1,720 568
Interest on held-to-maturity securities:
U. S. Treasury 1,601 1,721
U. S. Government agencies & corporations 5,360 6,818
Obligations of states & political subdivisions 2,640 2,277
Interest and dividends on available-for-sale securities 7,683 8,111
Interest on mortgages held for sale 925 666
---------- ----------
Total interest revenue 99,343 93,189
---------- ----------
INTEREST EXPENSE:
Interest on deposits 43,648 42,126
Interest on federal funds purchased & securities
sold under repurchase agreements 613 662
Other interest expense 2,693 2,533
---------- ----------
Total interest expense 46,954 45,321
---------- ----------
Net interest revenue 52,389 47,868
Provision for credit losses 3,063 3,123
---------- ----------
Net interest revenue, after provision for
credit losses 49,326 44,745
---------- ----------
OTHER REVENUE:
Mortgage lending 4,835 2,435
Trust income 881 861
Service charges 5,702 5,691
Security gains (losses), net 4,288 167
Life insurance income 971 818
Other 3,472 3,012
---------- ----------
Total other revenue 20,149 12,984
---------- ----------
OTHER EXPENSE:
Salaries and employee benefits 19,944 17,928
Net occupancy expense 2,803 2,534
Equipment expense 4,154 3,614
Telecommunications 1,345 1,103
Contributions 4,146 -
Other 14,542 10,762
---------- ----------
Total other expense 46,934 35,941
---------- ----------
Income before income taxes 22,541 21,788
Income tax expense 6,231 7,256
---------- ----------
Net income 16,310 14,532
Other comprehensive (loss) income (4,099) 1,433
---------- ----------
Comprehensive income $12,211 $15,965
========== ==========
Earnings per share: Basic $0.29 $0.27
========== ==========
Diluted $0.29 $0.27
========== ==========
Dividends declared per common share $0.12 $0.11
========== ==========
<FN>
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
BANCORPSOUTH, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited)
(In Thousands)
Three Months Ended
March 31,
--------------------------
1999 1998
---------- ----------
<S> <C> <C>
Net cash provided by operating activities $37,589 $7,552
---------- ----------
Investing activities:
Proceeds from calls and maturities of
held-to-maturity securities 50,890 97,845
Proceeds from calls and maturities of
available-for-sale securities 145,116 59,204
Proceeds from sales of
available-for-sale securities 11,205 26,600
Purchases of held-to-maturity securities (139,537) (334,674)
Purchases of available-for-sale securities (103,834) (112,313)
Net (increase) decrease in short-term investments (79,960) (51,096)
Net increase in loans (188,789) (143,007)
Purchases of premises and equipment (4,540) (4,596)
Other (3,986) 12,320
---------- ----------
Net cash used by investing activities (313,435) (449,717)
---------- ----------
Financing activities:
Net increase in deposits 264,895 299,803
Net decrease in short-term
borrowings and other liabilities 742 (140,110)
Increase (decrease) in long-term debt (13,781) 124,194
Payment of cash dividends (6,163) (6,177)
Exercise of stock options 30 5
---------- ----------
Net cash provided by financing activities 245,723 277,715
---------- ----------
Decrease in cash and cash equivalents (30,123) (164,450)
Cash and cash equivalents at beginning of
period 181,986 314,466
---------- ----------
Cash and cash equivalents at end of period $151,863 $150,016
========== ==========
<FN>
See accompanying notes to consolidated condensed financial statements
</TABLE>
<PAGE> 6
BANCORPSOUTH, INC.
Notes to Consolidated Condensed Financial Statements
(Unaudited)
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION AND
PRINCIPALS OF CONSOLIDATION
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with the accounting
policies in effect as of December 31, 1998, as set forth in the
annual consolidated financial statements of BancorpSouth, Inc.
(the "Company"), as of such date. In the opinion of management,
all adjustments necessary for a fair presentation of the
consolidated condensed financial statements have been included and
all such adjustments were of a normal recurring nature. The
results of operations for the three-month period ended March 31,
1999 are not necessarily indicative of the results to be expected
for the full year.
The consolidated condensed financial statements include the
accounts of the Company and its wholly-owned subsidiary,
BancorpSouth Bank (the "Bank"), and the Bank's wholly-owned
subsidiaries, Century Credit Life Insurance Company, Personal
Finance Corporation, BancorpSouth Insurance Services of
Mississippi, Inc., BancorpSouth Insurance Services of Tennessee,
Inc., BancorpSouth Insurance Services of Alabama, Inc. and
BancorpSouth Investment Services, Inc.
NOTE 2 - LOANS
The composition of the loan portfolio by collateral type is
detailed below:
March 31, December 31,
---------------------------- -------------
1999 1998 1998
------------ ------------ -------------
(in thousands)
Commercial and agricultural $403,092 $356,252 $365,716
Consumer and installment 927,870 879,535 905,413
Real estate mortgage:
1-4 Family 926,109 850,093 886,696
Other 1,253,097 1,025,974 1,167,447
Lease financing 210,823 180,644 210,559
Other 23,566 18,510 25,575
---------- ---------- ----------
Total $3,744,557 $3,311,008 $3,561,406
========== ========== ==========
<PAGE> 7
The following table presents information concerning non-
performing loans:
March 31, December 31,
1999 1998
---------- ------------
(In thousands)
Non-accrual loans $8,312 $6,152
Loans 90 days or more past due 8,838 9,654
Restructured loans 119 713
---------- ----------
Total non-performing loans $17,269 $16,519
========== ==========
NOTE 3 - ALLOWANCE FOR CREDIT LOSSES
The following schedule summarizes the changes in the allowance for
credit losses for the periods indicated:
Three Month Periods Year ended
ended March 31, December 31,
------------------------- -------------
1999 1998 1998
--------- --------- ---------
(In thousands)
Balance at beginning of period $49,618 $42,988 $42,988
Provision charged to expense 3,063 3,123 15,014
Recoveries 492 506 2,396
Loans charged off (2,375) (2,621) (11,932)
Acquisitions 1,466 1,152 1,152
--------- --------- ---------
Balance at end of period $52,264 $45,148 $49,618
========= ========= =========
NOTE 4 - PER SHARE DATA
The computation of basic earnings per share is based on the
weighted average number of common shares outstanding. The computation
of diluted earnings per share is based on the weighted average number
of common shares outstanding plus the shares resulting from the assumed
exercise of all outstanding stock options using the treasury stock
method. The following table provides a reconciliation of the
numerators and denominators of the basic and diluted earnings per share
computations for the periods as shown.
<PAGE> 8
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------------------------------------
1999 1998
---------------------------------- ----------------------------------
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- ------ ----------- ------------- ------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Income available to
common shareholders $16,310 55,830 $0.29 $14,532 53,151 $0.27
====== ======
Effect of dilutive stock
options - 441 - 629
---------- ------------- ----------- -------------
Diluted EPS
Income available to
common shareholders
plus assumed exercise $16,310 56,271 $0.29 $14,532 53,780 $0.27
========== ============= ====== =========== ============= ======
</TABLE>
NOTE 5 - COMPREHENSIVE INCOME
The following table presents the components of other
comprehensive income and the related tax effects allocated to each
component for the periods indicated.
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------------------------------------------------
1999 1998
----------------------------------- ---------------------------------
Before Tax Net Before Tax Net
tax (expense) of tax tax (expense) of tax
amount benefit amount amount benefit amount
---------- ----------- -------- ---------- --------- ---------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Unrealized gains on securities:
Unrealized gains (losses) arising
during holding period ($2,311) $860 ($1,451) $2,274 ($738) $1,536
Less: Reclassification adjustment
for gains realized in net income (4,288) 1,640 (2,648) (167) 64 (103)
---------- ----------- --------- ---------- --------- ---------
Other Comprehensive Income ($6,599) $2,500 ($4,099) $2,107 ($674) $1,433
========== =========== ========= ========== ========= =========
</TABLE>
NOTE 6 - BUSINESS COMBINATIONS
On February 26, 1999, the Company completed its merger with The
HomeBanc Corporation. The Company issued approximately 2.1 million
shares of common stock in the merger which was accounted for as a
pooling of interests. As a result of this transaction, the Company
restated its financial statements to include The HomeBanc Corporation
as of January 1, 1999. Financial statements for prior years were not
restated, as the changes would have been immaterial.
NOTE 7 - RECENT PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" established
accounting and reporting standards for derivative instruments and
hedging activities and requires recognition of all derivatives as
<PAGE> 9
either assets or liabilities measured at fair value. This statement
will be adopted for the year 2000 and is not expected to have a
material effect on the Company's financial condition or results of
operations.
NOTE 8 - STOCK SPLIT
A two-for-one stock split effected in the form of a 100% stock
dividend was paid on May 15, 1998. Certain 1998 information relating
to earnings per share, dividends per share and other share data has
been retroactively adjusted to reflect this stock split.
NOTE 9 - SEGMENT REPORTING
The Company's principal activity is community banking which includes
providing a full range of deposit products, commercial loans and consumer loans.
General corporate and other includes leasing, mortgage lending, trust services,
credit card activities, insurance services and other activities not allocated to
community banking.
Results of operations and selected financial information by operating
segment for the quarters ended March 31, 1999 and 1998 are presented below:
<TABLE>
<CAPTION>
General
Community Corporate
(In thousands) Banking and Other Total
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
March 31, 1999
Results of Operations
Net interest revenue $ 38,970 $13,419 $52,389
Provision for credit losses 2,441 622 3,063
- ---------------------------------------------------------------------------------------
Net interest income after provision for 36,529 12,797 49,326
Other revenue 13,041 7,108 20,149
Other expense 38,596 8,338 46,934
- ---------------------------------------------------------------------------------------
Income before income taxes 10,974 11,567 22,541
Income taxes 3,034 3,197 6,231
- ---------------------------------------------------------------------------------------
Net income 7,940 8,370 16,310
Selected Financial Information
Identifiable Assets 4,912,780 571,789 5,484,569
Depreciation & amortization 3,606 337 3,943
=======================================================================================
March 31, 1998
Results of Operations
Net interest revenue $ 35,559 $12,309 $47,868
Provision for credit losses 2,682 441 3,123
- ---------------------------------------------------------------------------------------
Net interest income after provision for 32,877 11,868 44,745
Other revenue 8,499 4,485 12,984
Other expense 29,232 6,709 35,941
- ---------------------------------------------------------------------------------------
Income before income taxes 12,144 9,644 21,788
Income taxes 4,044 3,212 7,256
- ---------------------------------------------------------------------------------------
Net income 8,100 6,432 14,532
Selected Financial Information
Identifiable Assets 4,484,962 524,752 5,009,714
Depreciation & amortization 3,197 281 3,478
</TABLE>
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion provides certain information
concerning the consolidated financial condition and results of
operations of the Company. This discussion should be read in
conjunction with the unaudited consolidated condensed financial
statements for the periods ended March 31, 1999 and 1998, found
elsewhere in this report.
RESULTS OF OPERATIONS
- ---------------------
Net Income
- ----------
The Company's net income for the first quarter of 1999 was
$16.31 million, an increase of 12.2% from $14.53 million in the
first quarter of 1998. Basic and diluted earnings per common
share for the first quarter of 1999 were $0.29, compared to basic
and diluted earnings per common share of $0.27 for the same period
of 1998, an increase of 7.4%. The annualized returns on average
assets for the first quarter of 1999 and 1998 were 1.21% and
1.20%, respectively.
Net Interest Revenue
- --------------------
Net interest revenue, the difference between interest earned
on assets and the cost of interest-bearing liabilities, is the
largest component of the Company's net income. For purposes of
this discussion, all interest revenue has been adjusted to a fully
taxable equivalent basis. The primary items of concern in
managing net interest revenue are the mix and maturity balance
between interest-sensitive assets and liabilities.
Net interest revenue was $53.46 million for the three months
ended March 31, 1999, compared to $48.95 million for the same
period in 1998. Earning assets averaged $5.05 billion in the first
quarter of 1999, compared with $4.56 billion in the first quarter
of 1998. Average interest-bearing liabilities were $4.26 billion
in the first quarter of 1999 compared with $3.88 billion in the
first quarter of 1998.
Net interest revenue, expressed as a percentage of average
earning assets, was 4.29% for the first quarter of 1999 as
compared to 4.35% for the same period of 1998.
Provision for Credit Losses
- ---------------------------
The provision for credit losses is the cost of providing an
allowance or reserve for estimated probable losses on loans. The
amount for each accounting period is dependent upon many factors,
including loan growth, net charge-offs, changes in the composition
of the loan portfolio, delinquencies, management's assessment of
loan portfolio quality, the value of collateral and general
economic factors. The process of determining the adequacy of the
provision requires that management make material estimates and
assumptions that are particularly susceptible to significant
change. Future additions to the allowance may be necessary based
upon changes in economic conditions. In addition, various
regulatory agencies, as an integral part of their examination
process, periodically review the Company's allowance for credit
losses. These agencies may require the Company to recognize
additions to the allowance based on their judgments about
information available to them at the time of their examination.
<PAGE> 11
The provision for credit losses totaled $3.06 million for the
first quarter of 1999 compared to $3.12 million for the same
period of 1998. This small decrease in provision for the first
quarter of 1999 as compared to 1998 reflects the small decrease in
net charge-offs during the first quarter of 1999 as compared to
the same period in 1998.
Other Revenue
- -------------
Other revenue for the quarter ended March 31, 1999, totaled
$20.15 million compared to $12.98 million for the same period of
1998, an increase of 55.2%. The Company established a charitable
foundation in the first quarter of 1999. Appreciated equity
securities were contributed by the Company to initially fund the
foundation. This transaction resulted in one-time securities
gains of approximately $4.14 million. The other significant
change in other revenue was in mortgage lending where revenue of
$4.84 million was recorded during the first quarter of 1999
compared to $2.44 million in the same period of 1998, a 98.7%
increase. Stable and relatively low mortgage rates during 1999
resulted in increased mortgage loan originations. Also, market
conditions during the first quarter of 1999 allowed for the
reversal of previously recorded impairment related to the
Company's mortgage servicing rights.
Other Expense
- -------------
Other expense totaled $46.93 million for the first quarter of
1999, a 30.6% increase from $35.94 million the same period of
1998. A significant component of this increase was the
contribution by the Company of appreciated equity securities with
an aggregate market value of approximately $4.15 million in
connection with the Company's establishment of a charitable
foundation during the first quarter of 1999, as discussed in
"Other Revenue" above.
Another significant change in other expense relates to the
Company's stock option plans, expense for which is reported under
the caption salaries and employee benefits. Certain of the stock
option plans contain a provision for stock appreciation rights
(SARs) which require the recognition of expense for Company stock
price appreciation or a reduction of expense in the event of a
decline in the stock price. At March 31, 1999, the Company's
common stock had declined by approximately 12.9% from year-end
1998. As a result of this decline in value, a reduction in expense
of $1.15 million was recorded in the first quarter of 1999. This
compares to the recognition of $780,000 in expense during the
first quarter of 1998.
The Company also recorded merger related expense of $1.05
million during the first quarter of 1999 related to the merger
with The HomeBanc Corporation. The charge to operating expense
consisted of termination and change of control payments ($0.5
million), professional fees ($0.5 million) and miscellaneous cost
($0.05 million).
The other components of other expense reflect normal
increases and general inflation in the cost of services and
supplies purchased by the Company.
Income Tax
- ----------
Income tax expense was $6.23 million and $7.26 million for
the first quarters of 1999 and 1998, respectively. The decrease
for the first quarter of 1999 was due to the $1.6 million tax
benefit related to the establishment of a charitable foundation
discussed in "Other Revenue" and "Other Expense" above.
<PAGE> 12
FINANCIAL CONDITION
- -------------------
Earning Assets
- --------------
The percentage of earning assets to total assets measures the
effectiveness of management's efforts to invest available funds
into the most efficient and profitable uses. Earning assets at
March 31, 1999 were $5.14 billion, or 93.8% of total assets,
compared with $4.85 billion, or 93.2%, at December 31, 1998.
The securities portfolio is used to make various term invest-
ments, to provide a source of liquidity and to serve as collateral
to secure certain types of deposits. Held-to-maturity securities
at March 31, 1999 were $736.4 million compared with $647.8 million
at the end of 1998, a 13.7% increase. Available-for-sale
securities were $494.5 million at March 31, 1999, compared to
$549.8 million at December 31, 1998.
The loan portfolio of the Company's bank subsidiary makes up
the largest single component of the Company's earning assets. The
Company's lending activities include both commercial and consumer
loans. Loan originations are derived from a number of sources
including direct solicitation by the Company's loan officers, real
estate broker referrals, mortgage loan companies, present savers
and borrowers, builders, attorneys, walk-in customers and, in some
instances, other lenders. The Company has established disciplined
and systematic procedures for approving and monitoring loans that
vary depending on the size and nature of the loan. Loans, net of
unearned discount, totaled $3.66 billion at March 31, 1999, which
represents a 5.5% increase from the December 31, 1998 total of
$3.47 billion.
At March 31, 1999, the Company did not have any
concentrations of loans in excess of 10% of total loans
outstanding. Loan concentrations are considered to exist when
there are amounts loaned to a multiple number of borrowers engaged
in similar activities that would cause them to be similarly
impacted by economic or other conditions. However, the Company
does conduct business in a geographically concentrated area. The
ability of the Company's borrowers to repay loans is to some
extent dependent upon the economic conditions prevailing in its
market area.
In the normal course of business, management becomes aware of
possible credit problems in which borrowers exhibit potential for
the inability to comply with the contractual terms of their loans,
but which do not currently meet the criteria for disclosure as
problem loans because management currently does not have serious
doubt as to the borrowers' ability to comply with the loan terms.
Historically, some of these loans are ultimately restructured or
placed in non-accrual status.
The Company's policy provides that loans, other than
installment loans, are generally placed on non-accrual status if,
in management's opinion, payment in full of principal or interest
is not expected, or when payment of principal or interest is more
than 90 days past due, unless the loan is both well secured and in
the process of collection. Non-performing loans were 0.47% of all
loans outstanding at March 31, 1999 and 0.48% at December 31,
1998.
Allowance for Credit Losses
- ---------------------------
The Company attempts to maintain the allowance for credit
losses at a level which, in the opinion of management, is adequate
to meet the estimated probable losses on its current portfolio of
loans. Management's judgement is based on a variety of factors
that include examining probable losses in specific credits and
considering the general risks associated with lending functions
such as current economic conditions, business trends in the
Company's region and nationally, historical experience as related
to losses, changes in the mix of the loan portfolio and credits
which bear substantial risk of loss but which cannot be readily
quantified. Material estimates that are particularly susceptible
to significant change in the near term are a necessary part of
this process. Future additions to the allowance may be necessary
based on changes in economic conditions. In addition, various
regulatory agencies, as an integral part of their examination
process, periodically review the Company's allowance for credit
losses. These agencies may require the Company to recognize
additions to the allowance based on their judgments about
information available to them at the time of their examination.
Management does not believe the allowance for credit losses
can be fragmented by category of loans with any precision that
would be useful to investors but is doing so in this report only
in an attempt to comply with disclosure requirements of regulatory
agencies. The allocation of allowance by loan category is based
in part on evaluations of specific loans' past history and on
economic conditions within specific industries or geographical
areas. Accordingly, since all of these conditions are subject to
change, the allocation is not necessarily indicative of the
breakdown of any future losses. The following table presents (a)
the allocation of the allowance for credit losses by loan category
and (b) the percentage of each category in the loan portfolio to
total loans for the dates indicated.
<TABLE>
<CAPTION>
March 31, December 31,
--------------------------------------------------------------- ------------------------------
1999 1998 1998
------------------------------- ------------------------------ ------------------------------
ALLOWANCE % OF ALLOWANCE % OF ALLOWANCE % OF
FOR LOANS TO FOR LOANS TO FOR LOANS TO
CREDIT LOSSES TOTAL LOANS CREDIT LOSSES TOTAL LOANS CREDIT LOSSES TOTAL LOANS
-------------- ------------ -------------- ------------ -------------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Commercial and agricultural $4,362 10.76% $4,216 10.76% $3,865 10.27%
Consumer and installment 20,356 24.78% 17,536 26.56% 18,926 25.42%
Real estate mortgage 24,363 58.20% 20,643 56.66% 23,875 57.68%
Lease financing 3,019 5.63% 2,601 5.46% 2,802 5.91%
Other 164 0.63% 152 0.56% 150 0.72%
-------------- ------------ -------------- ------------ -------------- -------------
Total $52,264 100.00% $45,148 100.00% $49,618 100.00%
============== ============ ============== ============ ============== =============
</TABLE>
The following table provides an analysis of the allowance for
credit losses for the periods indicated.
<PAGE> 14
<TABLE>
<CAPTION>
Twelve months ended
Three months ended March 31, December 31,
----------------------------
1999 1998 1998
----------- ----------- -----------
(dollars in thousands)
<S> <C> <C> <C>
Balance, beginning of period $49,618 $42,988 $42,988
Loans charged off:
Commercial and agricultural (19) (342) (1,462)
Consumer & installment (2,171) (1,900) (8,657)
Real estate mortgage (185) (335) (1,738)
Lease financing - (44) (75)
----------- ----------- -----------
Total loans charged off (2,375) (2,621) (11,932)
----------- ----------- -----------
Recoveries:
Commercial and agricultural 53 126 422
Consumer & installment 380 302 1,790
Real estate mortgage 49 60 164
Lease financing 10 18 20
----------- ----------- -----------
Total recoveries 492 506 2,396
----------- ----------- -----------
Net charge-offs (1,883) (2,115) (9,536)
Provision charged to operating expense 3,063 3,123 15,014
Acquisitions 1,466 1,152 1,152
----------- ----------- -----------
Balance, end of period $52,264 $45,148 $49,618
=========== =========== ===========
Average loans for period $3,628,458 $3,188,521 $3,312,635
=========== =========== ===========
RATIOS:
Net charge offs to average loans-annualized 0.21% 0.27% 0.29%
=========== =========== ===========
</TABLE>
Deposits and Other Interest-bearing Liabilities
- -----------------------------------------------
Deposits originating within the communities served by the
Bank continue to be the Company's primary source of funding its
earning assets. Total deposits at the end of the first quarter of
1999 were $4.71 billion as compared to $4.44 billion at December
31, 1998, representing a 6.0% increase. Non-interest bearing
deposits decreased by $16.0 million, or 2.6%, while interest-
bearing deposits grew $280.9 million from December 31, 1998 to
March 31, 1999.
LIQUIDITY
- ---------
Liquidity is the ability of the Company to fund the needs of
its borrowers, depositors and creditors. The Company's
traditional sources of liquidity include maturing loans and
investment securities, purchased federal funds and its base of
core deposits. Management believes these sources are adequate to
meet liquidity needs for normal operations.
The Company continues to pursue a lending policy stressing
adjustable rate loans, in furtherance of its strategy for matching
interest sensitive assets with an increasingly interest sensitive
liability structure.
CAPITAL RESOURCES
- -----------------
The Company is required to comply with the risk-based capital
requirements of the Board of Governors of the Federal Reserve
System. These requirements apply a variety of weighting factors,
which vary according to the level of risk associated with the
particular assets. At March 31, 1999, the Company's Tier 1
capital and total capital, as a percentage of total risk-adjusted
assets, were 11.70% and 12.96%, respectively. Both ratios exceed
the required minimum levels for these ratios of 4.0% and 8.0%,
respectively. In addition, the Company's leverage capital ratio
(Tier 1 capital divided by total assets, less goodwill) was 8.45%
at March 31, 1999, compared to the required minimum leverage
capital ratio of 4%.
The Company's current capital position continues to provide
it with a level of resources available for the acquisition of
depository institutions and businesses closely related to banking
in the event opportunities arise.
YEAR 2000
- ---------
The Company is utilizing both internal and external resources
to identify, correct or reprogram, and test its systems for Year
2000 compliance. We are conducting our efforts in accordance with
Federal Financial Institutions Examination Council (FFIEC)
guidelines and have met their guidelines for completing testing of
our in-house mission critical systems and for testing third party
service bureau systems. We will continue testing throughout 1999.
Management has assessed the Year 2000 compliance expense and
believes that the related potential effect on the Company's
business, financial condition and results of operations will be
immaterial. The Company is expensing all costs associated with
the Year 2000 as the costs are incurred.
The risks associated with the Company's Year 2000 compliance
include those related to critical business partners, such as
customers, vendors, suppliers and utility providers, and their
ability to effectively address their own Year 2000 issues. These
risks include failure of voice and data communication systems,
failure of utility providers such as water, gas and electricity,
excessive cash withdrawals at year-end 1999, out-of-service ATMs,
delayed cash couriers and inaccessibility of external data
sources. Risks associated with the Company's internal operations
include inability to access and process data and information,
failure of time locks and security systems, inability to meet
customers' demands for cash and the inability to process
electronic transactions for the Company and its customers.
The Company continues to refine and test its contingency
plans and evaluate the most reasonably likely worst case scenario,
which would include any failure of third party service providers
to be Year 2000 compliant. Contingency plans will include items
such as having an alternative source of power for our corporate
operations center in the event that commercial power sources
experience outages, providing paper based reports to our network
of branches to allow customer service in the event of telephone or
data line outages, and the use of remote item processing sites in
dispersed geographical areas to allow for continued processing of
customer transactions.
<PAGE> 16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
During the three months ended March 31, 1999, there were no
material changes to the quantitative and qualitative disclosures
about market risks presented in the Company's Annual Report or
Form 10-K for the year ended December 31, 1998.
<PAGE> 17
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) Exhibits
(10.1) Change of Control Agreement for Aubrey Patterson.
(10.2) Change of Control Agreement for Michael Sappington.
(10.3) Change of Control Agreement for Harry Baxter.
(10.4) Change of Control Agreement for Gregg Cowsert.
(27.1) Financial Data Schedule for the period ended March 31, 1999.
(b)(1) A Current Report on Form 8-K was filed by the Company on
January 6, 1999 regarding the merger with HomeBanc Corporation
located in Guntersville, Alabama.
<PAGE> 18
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.
BancorpSouth, Inc.
----------------------------
(Registrant)
DATE: May 14, 1999 /S/ L. Nash Allen, Jr.
----------------------------
L. Nash Allen, Jr.
Treasurer and
Chief Financial Officer
EXHIBIT 10.1
BancorpSouth, Inc.
Change in Control Agreement
This Agreement ("Agreement") is entered into this 1st day of February,
1999, by and between BancorpSouth, Inc. (the "Company") and Aubrey B.
Patterson ("Employee").
W I T N E S S E T H:
Whereas, Employee is employed as the CEO and Chairman of the Board of
the Company; and
Whereas, the Company desires to provide certain severance payments to
Employee in the event that Employee's employment with the Company is
terminated in connection with a change in control of the Company;
Now, Therefore, based upon the premises set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows
ARTICLE I. DEFINITIONS
Terms used in this Agreement that are defined are indicated by initial
capitalization of the term. References to an "Article" or a "Section" mean an
article or a section of this Agreement. In addition to those terms that are
specifically defined herein, the following terms are defined for purposes
hereof:
"Administrator" means a committee consisting of the Company's chief
executive officer, the secretary of the Company, the vice president of human
resources, and any other individuals appointed by the chief executive officer.
The Administrator may delegate any of its duties or authorities to any person
or entity. If a Change in Control occurs, as described in this Agreement, the
Administrator shall be the committee of individuals who were committee members
immediately prior to the Change in Control.
"Benefit" means the benefits described in Article II.
"Change in Control" means a transaction or circumstance in which any of
the following have occurred:
(a) any "person" as such term is used in sections 13(d) and 14(d) of the
Exchange Act, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation
controlling the Company or owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company, becomes the "beneficial owner"
(as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 25% of the total voting
power represented by the Company's then outstanding Voting Securities
(as defined below), or
(b) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority
thereof, or
(c) the shareholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation
which would result in the Voting Securities (i.e., any securities of the
entity which vote generally in the election of its directors) of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) more than 65% of the total voting
power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or
(d) the shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of its assets.
"Code" means the Internal Revenue Code of 1986, as amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
ARTICLE II. CHANGE IN CONTROL TERMINATION PAYMENT
Section 2.1 Benefits on Termination.
(a) Amount. Subject to the conditions, limitations and adjustments
that are provided for herein, the Company will provide Benefits to Employee
the sum of the amounts described below if, within the 24 month period
following a Change in Control, Employee's employment with the Company
terminates pursuant to Section 2.3 of this Agreement:
(1) An amount equal to 300% of the Employee's annual base compensation
determined by reference to his base salary in effect at the time
of Change in Control.
(2) An amount equal to 300% of the highest annual bonus that Employee
would be eligible to receive during the fiscal year ending during
which the Change in Control occurs.
(3) For a period of 36 months, participation in medical, life,
disability and similar benefit plans that are offered to similarly
situated employees of the Company immediately prior to the
applicable Change in Control for the Eligible Employee and his
dependents. Such participation may be pursuant to the continuation
coverage rights of Eligible Employees pursuant to Part 6 of Title
I of ERISA ("COBRA") or the Company may provide such benefits
directly through the purchase of insurance or otherwise.
Notwithstanding the foregoing, the period of participation in a
self-funded medical plan pursuant to this paragraph 3 shall not
exceed the maximum period of continuation coverage provided under
COBRA. If benefits are provided pursuant to COBRA continuation
rights, the Company shall pay a cash amount to the Eligible
Employee at the time of severance that is sufficient to cover all
premiums required for such COBRA coverage under the appropriate
benefit plans.
(4) For a period of 36 months, participation in general and executive
fringe benefits offered to similarly situated executive employees
immediately prior to the applicable Change in Control, including,
but not limited to, auto allowance, financial planning, annual
physical examination, and civic and country club dues.
(b) Adjustments to the Amount of Benefit. Notwithstanding anything
herein to the contrary, the amounts due to Employee under Section 2.1
(a) shall be adjusted in accordance with Section 2.2 if any payment
provided to Employee is determined to be subject to the excise tax
described in section 4999 of the Code.
(c) Time for Payment; Interest. The cash Benefits payable made under
this Section 2.1 shall be paid to Employee in a single lump sum within
ten days following the date of termination. The Company's obligation
to pay to Employee any amounts under this Section 2.1 will bear
interest at the lesser of (i) 10% or (ii) the maximum rate allowed by
law until paid by the Company, and all accrued and unpaid interest
will bear interest at the same rate, all of which interest will be
compounded annually.
(d) Troubled Institution Limitation. All Benefit payments hereunder
are subject to the limitations on golden parachute and
indemnification payments set forth in 12 USC 1823(k), the
regulations promulgated thereunder, and other law that prohibits
payment of any portion of Benefits by the Company to Employee by the
Company. To the extent possible, this limitation shall be applied by
reducing only the portion of Benefits that exceed such legal
limitation.
2.2 Benefit Adjustments.
(a) Gross Up Payment. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by or on behalf of the Company to or for the benefit
of Employee as a result of a "change in control," as defined in
section 280G of the Code, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required
under this Section, (a "Payment") would be subject to the excise tax
imposed by section 4999 of the Code or any interest or penalties are
incurred by Employee 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 Employee shall be
entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by Employee 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 Gross-Up Payment, Employee retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Tax Opinion. Subject to the provisions of Section 2.2(c), all
determinations required to be made under this Section 2.2, including
whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by a nationally recognized
accounting firm or law firm selected by the Company (the "Tax Firm");
provided, however, that the Tax Firm shall not determine that no
Excise Tax is payable by Employee unless it delivers to Employee a
written opinion (the "Tax Opinion") that failure to pay the Excise Tax
and to report the Excise Tax and the payments potentially subject
thereto on or with Employee's applicable federal income tax return
will not result in the imposition of an accuracy-related or other
penalty on Employee. All fees and expenses of the Tax Firm shall be
borne solely by the Company. Within 15 business days of the receipt
of notice from Employee that there has been a Payment, or such earlier
time as is requested by the Company, the Tax Firm shall make all
determinations required under this Section, shall provide to the
Company and Employee a written report setting forth such
determinations, together with detailed supporting calculations, and,
if the Tax Firm determines that no Excise Tax is payable, shall
deliver the Tax Opinion to Employee. Any Gross-Up Payment, as
determined pursuant to this Section, shall be paid by the Company to
Employee within fifteen days of the receipt of the Tax Firm's
determination. Subject to the remainder of this Section 2.2, any
determination by the Tax Firm shall be binding upon the Company and
Employee; provided, however, that Employee shall only be bound to the
extent that the determinations of the Tax Firm hereunder, including
the determinations made in the Tax Opinion, are reasonable and
reasonably supported by applicable law. As a result of the
uncertainty in the application of section 4999 of the Code at the
time of the initial determination by the Tax Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that it is
ultimately determined in accordance with the procedures set forth in
Section 2.2(c) that Employee is required to make a payment of any
Excise Tax, the Tax Firm shall reasonably determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of Employee. In
determining the reasonableness of Tax Firm's determinations
hereunder, and the effect thereof, Employee shall be provided a
reasonable opportunity to review such determinations with Tax Firm
and Employee's tax counsel. Tax Firm's determinations hereunder,
and the Tax Opinion, shall not be deemed reasonable until Employee's
reasonable objections and comments thereto have been satisfactorily
accommodated by Tax Firm.
(c) Notice of IRS Claim. Employee shall notify the Company in writing
of any claims by the Internal Revenue Service that, if successful,
would require the payment of the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later
than 30 calendar days after Employee actually receives notice in
writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid;
provided, however, that the failure of Employee to notify the Company
of such claim (or to provide any required information with respect
thereto) shall not affect any rights granted to Employee under this
Section 2.2 except to the extent that the Company is materially
prejudiced in the defense of such claim as a direct result of such
failure. Employee shall not pay such claim prior to the expiration
of the 30-day period following the date on which he gives such notice
to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company
notifies Employee in writing prior to the expiration of such period
that it desires to contest such claim, Employee shall do all of
the following:
(1) give the Company any information reasonably requested by the
Company relating to such claim;
(2) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company and
reasonably acceptable to Employee;
(3) cooperate with the Company in good faith in order effectively to
contest such claim;
(4) if the Company elects not to assume and control the defense of
such claim, permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Employee harmless, on an after-
tax basis, for any Excise Tax or income tax (including interest and penalties
with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limiting the foregoing provisions of this
Section 2.2, the Company shall have the right, at its sole option, to assume
the defense of and control all proceedings in connection with such contest, in
which case it may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may either direct Employee to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Employee agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine, provided, however, that if the Company directs
Employee to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to Employee, on an interest-free basis and shall
indemnify and hold Employee harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable year of
Employee with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's right to
assume the defense of and control the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and Employee
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
(d) Right to Tax Refund. If, after the receipt by Employee of an
amount advanced by the Company pursuant to Section 2.2 Employee becomes
entitled to receive any refund with respect to such claim, Employee shall
(subject to the Company's complying with the requirements of Section 2.2(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by Employee of an amount advanced by the Company pursuant to
Section 2.2(c), a determination is made that Employee is not entitled to a
refund with respect to such claim and the Company does not notify Employee in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall, to the extent of
such denial, be forgiven and shall not be required to be repaid and the amount
of forgiven advance shall offset, to the extent thereof, the amount of Gross-
Up Payment required to be paid.
2.3 Termination of Employment. Employee shall only be entitled to the
Benefits described in Section 2.1, as adjusted by Section 2.2, if Employee's
termination of employment is on account of termination by Company without
cause or termination by Employee with cause, which are described as follows:
(a) By Company Without Cause. Termination of employment by the
Company without cause shall occur if the Company provides oral or written
notice to Employee of involuntary termination that is not on account of just
cause. For this purpose, termination for "just cause" will only occur upon
written notice to Employee that employment is involuntarily terminated due to
any of the following:
(1) conviction of Employee for a crime involving fraud, dishonesty or
theft, or of any felony which, in the reasonable judgment of the
Board, materially affects Employee's ability to perform his duties
pursuant to this Agreement;
(2) commission by Employee of an act of fraud, embezzlement, or
material dishonesty against the Company or its affiliates; or
(3) intentional neglect of or material inattention to Employee's
duties, which neglect or inattention remains uncorrected for more
than 30 days following written notice from the Board detailing the
Board's concern.
(b) By Employee With Cause. Termination of employment by Employee with
cause shall occur if Employee terminates employment for any of the following
reasons:
(1) A material adverse alteration in Employee's position,
responsibilities or status from that which was in effect
immediately prior to a Change in Control.
(2) A reduction in Employee's compensation as in effect immediately
prior to the Change in Control, or a substantial reduction in the
benefits provided to Employee prior to the Change in Control.
(3) Relocation of Employee by the Company to a location that is more
than 35 miles from the Employee's current workplace.
(4) The material breach of the Company of any portion of its
employment policies and/or any employment agreement with Employee.
Provided, however, that 180 days after Employee begins performing duties
pursuant to a position that was offered by the Company (or its successor)
following a Change in Control and that would have otherwise resulted in the
occurrence of the events described in this Section 2.3(b), the occurrence of
the events described in this Section 2.3(b) shall be determined by reference
to the position as it was accepted by Employee following the Change in
Control.
ARTICLE III. ADMINISTRATION
Section 3.1. The provisions of this Agreement are intended to provide
severance benefits and protection to Employee. The Administrator has absolute
discretion to interpret the terms of this Agreement and to make all
determinations required in the administration hereof, including making
determinations about eligibility for and the amounts of Benefits. All
decisions of the Administrator are final, binding and conclusive on all
parties.
Section 3.2. Benefits can only be denied or forfeited if Employee does
not satisfy the conditions for receiving payment that are described herein or
if the Company validly amends the Agreement as described in Section 4.4.
Section 3.3. If Employee's claim for Benefits is denied, the
Administrator will furnish written notice of denial to Employee within 90 days
of the date the claim is received, unless special circumstances require an
extension of time for processing the claim. This extension will not exceed 90
days, and Employee must receive written notice stating the grounds for the
extension and the length of the extension within the initial 90-day review
period. If the Administrator does not provide written notice, Employee may
deem the claim denied and seek review according to the appeals procedures set
forth below.
(a) Notice of Denial. The notice of denial to the Claimant shall state:
(1) The specific reasons for the denial.
(2) Specific references to pertinent provisions of the Agreement on
which the denial was based.
(3) A description of any additional material or information needed for
Employee to perfect his claim and an explanation of why the
material or information is needed.
(4) A statement that Employee may request a review upon written
application to the Administrator, review pertinent documents, and
submit issues and comments in writing and that any appeal that
Employee wishes to make of the adverse determination must be in
writing to the Administrator within 60 days after Employee
receives notice of denial of benefits.
(5) The name and address of the Administrator to which Employee may
forward an appeal. The notice may state that failure to appeal the
action to the Administrator in writing within the 60-day period
will render the determination final, binding and conclusive.
(b) Appeals Procedure. If Employee appeals to the Administrator,
Employee or his authorized representative may submit in writing whatever
issues and comments he believes to be pertinent. The Administrator shall
reexamine all facts related to the appeal and make a final determination of
whether the denial of benefits is justified under the circumstances. The
Administrator shall advise Employee in writing of:
(1) The Administrator's decision on appeal.
(2) The specific reasons for the decision.
(3) The specific provisions of the Agreement on which the decision is
based.
Notice of the Administrator's decision shall be given within 60 days of the
Claimant's written request for review, unless additional time is required due
to special circumstances. In no event shall the Administrator render a
decision on an appeal later than 120 days after receiving a request for a
review.
ARTICLE IV. GENERAL TERMS
Section 4.1 Notices. All notices and other communications hereunder
will be in writing or by written telecommunication, and will be deemed to have
been duly given if delivered personally or if sent by overnight courier or by
written telecommunication, to the relevant address set forth below, or to such
other address as the recipient of such notice or communication will have
specified to the other party hereto in accordance with this Section:
If to the Company to:
BancorpSouth, Inc.
Personnel Director
P. O. Box 789
Tupelo, MS 38802
If to Employee, to:
Aubrey B. Patterson
BancorpSouth, Inc.
P. O. Box 789
Tupelo, MS 38802
Section 4.2 Withholding; No Offset. All payments required to be made by
the Company under this Agreement to Employee will be subject to the
withholding of such amounts, if any, relating to federal, state and local
taxes as may be required by law. No payment under this Agreement will be
subject to offset or reduction attributable to any amount Employee may owe to
the Company or any other person, except as required by law.
Section 4.3 Entire Agreement; Modification. This Agreement and its
Attachments constitute the complete and entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements
between the parties. The parties have executed this Agreement based upon the
express terms and provisions set forth herein and have not relied on any
communications or representations, oral or written, which are not set forth in
this Agreement.
Section 4.4 Amendment. This Agreement may not be modified by an
subsequent agreement unless the modifying agreement: (i) is in writing; (ii)
contains an express provision referencing this Agreement; (iii) is signed and
executed on behalf of the Company by an officer of the Company other than
Employee; and (iv) is signed by Employee.
Section 4.5 Choice of Law. This Agreement and the performance hereof
will be construed and governed in accordance with the laws of the State of
Mississippi, without regard to its choice of law principles, except to the
extent that federal law controls or preempts state law.
Section 4.6 Successors and Assigns. The obligations, duties and
responsibilities of Employee under this Agreement are personal and shall not
be assignable. In the event of Employee's death or disability, this Agreement
shall be enforceable by Employee's estate, executors or legal representatives.
The obligations, duties and responsibilities of Company hereunder shall be
binding upon any successor of the Company (whether through a transaction
described as a Change in Control or otherwise).
Section 4.7 Waiver of Provisions. Any waiver of any terms and
conditions hereof must be in writing and signed by the parties hereto. The
waiver of any of the terms and conditions of this Agreement shall not be
construed as a waiver of any subsequent breach of the same or any other terms
and conditions hereof.
Section 4.8 Severability. The provisions of this Agreement and the
amount of Benefits payable hereunder shall be deemed severable, and if any
portion shall be held invalid, illegal or enforceable for any reason, the
remainder of this Agreement and/or Benefit payment shall be effective and
binding upon the parties.
Section 4.9 Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of which
together will constitute one and the same instrument.
ARTICLE V. ERISA RIGHTS AND INFORMATION
The parties acknowledge that the following information is provided to Employee
hereunder in connection with Employee's rights as a welfare plan participant
under ERISA. The terms "you" and "yours" refer to Employee.
As a participant in a welfare plan maintained by the Company, you are entitled
to certain rights and protections under ERISA. ERISA provides that all plan
participants shall be entitled to:
Examine, without charge, at the Administrator's office and at other
specified locations, all plan documents, including insurance contracts, and
copies of all documents filed by the plan with the U.S. Department of
Labor, such as detailed annual reports and plan descriptions.
Obtain copies of all plan documents and other plan information upon written
request to the Administrator. The Administrator may make a reasonable
charge for the copies.
Receive a summary of the plan's annual financial report. The Administrator
is required by law to furnish each participant with a copy of this summary
annual report.
In addition to creating rights for plan participants, ERISA imposes duties
upon the people who are responsible for the operation of the employee benefit
plan. The people who operate your plan, called "fiduciaries" of the plan, have
a duty to do so prudently and in the interest of you and other plan
participants and beneficiaries. No one, including the Company or any other
person, may fire you or otherwise discriminate against you in any way to
prevent you from obtaining a benefit under this plan or from exercising your
rights under ERISA.
If a claim for a Benefit is denied in whole or in part, you must receive a
written explanation of the reason for the denial. You have the right to have
the Administrator review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the plan and do not receive them
within 30 days, you may file suit in a federal court. In such a case, the
court may require the Administrator to provide the materials and pay you up to
$100 a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Administrator.
If you have a claim for benefits that is denied or ignored, in whole or in
part, you may file suit in a state or federal court. If it should happen that
plan fiduciaries misuse the plan's money or if you are discriminated against
for asserting your rights, you may seek assistance from the U.S. Department of
Labor or you may file suit in a federal court. The court will decide who
should pay court costs and fees. If you lose, the court may order you to pay
these costs and fees, for example, if it finds your claim is frivolous.
If you have any questions about your plan, you should contact the
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
Summary of ERISA Information
Name of Plan: BancorpSouth, Inc. Change in Control Plan
Name and Address of the Company:
BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, MS 38801
Who Pays for the Plan: The cost of the plan is paid entirely by the Company.
The Company's Employer Identification No.: 64-0659571
Plan Number: 520
Plan Year: January 1 to December 31
Plan Administrator, Name, Address and Telephone No.
Administrator of the BancorpSouth, Inc. Change in Control plan
c/o Cathy Freeman
BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, MS 38801
(601) 680-2084
Agent for Service of Legal Process on the Plan: Chief executive officer or
Administrator.
Benefits are paid out of the general assets of the Company. The Company may,
in its discretion establish a "grantor trust" to fund the payment of Benefits.
Otherwise, this plan does not give you any rights to any particular assets of
the Company. Cash amounts paid under a severance plan are generally considered
taxable income to the recipient.
IN WITNESS WHEREOF, Company and Employee have caused this Agreement to
be executed on the day and year indicated below to be effective on the day and
year first written above.
Employee
- ---------------------------------- ------------------------------------
Aubrey B. Patterson Date
COMPANY:
BancorpSouth, Inc.
By: ------------------------------ ------------------------------------
(Date)
Its: _____________________________
EXHIBIT 10.2
BancorpSouth, Inc.
Change in Control Agreement
This Agreement ("Agreement") is entered into this 1st day of February,
1999, by and between BancorpSouth, Inc. (the "Company") and Michael Sappington
("Employee").
W I T N E S S E T H:
Whereas, Employee is employed as the Vice Chairman of the Company; and
Whereas, the Company desires to provide certain severance payments to
Employee in the event that Employee's employment with the Company is
terminated in connection with a change in control of the Company;
Now, Therefore, based upon the premises set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows
ARTICLE I. DEFINITIONS
Terms used in this Agreement that are defined are indicated by initial
capitalization of the term. References to an "Article" or a "Section" mean an
article or a section of this Agreement. In addition to those terms that are
specifically defined herein, the following terms are defined for purposes
hereof:
"Administrator" means a committee consisting of the Company's chief
executive officer, the secretary of the Company, the vice president of human
resources, and any other individuals appointed by the chief executive officer.
The Administrator may delegate any of its duties or authorities to any person
or entity. If a Change in Control occurs, as described in this Agreement, the
Administrator shall be the committee of individuals who were committee members
immediately prior to the Change in Control.
"Benefit" means the benefits described in Article II.
"Change in Control" means a transaction or circumstance in which any of
the following have occurred:
(a) any "person" as such term is used in sections 13(d) and 14(d) of the
Exchange Act, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation
controlling the Company or owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company, becomes the "beneficial owner"
(as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 25% of the total voting
power represented by the Company's then outstanding Voting Securities
(as defined below), or
(b) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority
thereof, or
(c) the shareholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation
which would result in the Voting Securities (i.e., any securities of the
entity which vote generally in the election of its directors) of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) more than 65% of the total voting
power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or
(d) the shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of its assets.
"Code" means the Internal Revenue Code of 1986, as amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
ARTICLE II. CHANGE IN CONTROL TERMINATION PAYMENT
Section 2.1 Benefits on Termination.
(a) Amount. Subject to the conditions, limitations and adjustments
that are provided for herein, the Company will provide Benefits to Employee
the sum of the amounts described below if, within the 24 month period
following a Change in Control, Employee's employment with the Company
terminates pursuant to Section 2.3 of this Agreement:
(1) An amount equal to 200% of the Employee's annual base compensation
determined by reference to his base salary in effect at the time
of Change in Control.
(2) An amount equal to 200% of the highest annual bonus that Employee
would be eligible to receive during the fiscal year ending during
which the Change in Control occurs.
(3) For a period of 24 months, participation in medical, life,
disability and similar benefit plans that are offered to similarly
situated employees of the Company immediately prior to the
applicable Change in Control for the Eligible Employee and his
dependents. Such participation may be pursuant to the continuation
coverage rights of Eligible Employees pursuant to Part 6 of Title
I of ERISA ("COBRA") or the Company may provide such benefits
directly through the purchase of insurance or otherwise.
Notwithstanding the foregoing, the period of participation in a
self-funded medical plan pursuant to this paragraph 3 shall not
exceed the maximum period of continuation coverage provided under
COBRA. If benefits are provided pursuant to COBRA continuation
rights, the Company shall pay a cash amount to the Eligible
Employee at the time of severance that is sufficient to cover all
premiums required for such COBRA coverage under the appropriate
benefit plans.
(4) For a period of 24 months, participation in general and executive
fringe benefits offered to similarly situated executive employees
immediately prior to the applicable Change in Control, including,
but not limited to, auto allowance, financial planning, annual
physical examination, and civic and country club dues.
(b) Adjustments to the Amount of Benefit. Notwithstanding anything
herein to the contrary, the amounts due to Employee under Section 2.1
(a) shall be adjusted in accordance with Section 2.2 if any payment
provided to Employee is determined to be subject to the excise tax
described in section 4999 of the Code.
(c) Time for Payment; Interest. The cash Benefits payable made under
this Section 2.1 shall be paid to Employee in a single lump sum within
ten days following the date of termination. The Company's obligation
to pay to Employee any amounts under this Section 2.1 will bear
interest at the lesser of (i) 10% or (ii) the maximum rate allowed by
law until paid by the Company, and all accrued and unpaid interest
will bear interest at the same rate, all of which interest will be
compounded annually.
(d) Troubled Institution Limitation. All Benefit payments hereunder
are subject to the limitations on golden parachute and
indemnification payments set forth in 12 USC 1823(k), the
regulations promulgated thereunder, and other law that prohibits
payment of any portion of Benefits by the Company to Employee by the
Company. To the extent possible, this limitation shall be applied by
reducing only the portion of Benefits that exceed such legal
limitation.
2.2 Benefit Adjustments.
(a) Gross Up Payment. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by or on behalf of the Company to or for the benefit
of Employee as a result of a "change in control," as defined in
section 280G of the Code, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required
under this Section, (a "Payment") would be subject to the excise tax
imposed by section 4999 of the Code or any interest or penalties are
incurred by Employee 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 Employee shall be
entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by Employee 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 Gross-Up Payment, Employee retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Tax Opinion. Subject to the provisions of Section 2.2(c), all
determinations required to be made under this Section 2.2, including
whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by a nationally recognized
accounting firm or law firm selected by the Company (the "Tax Firm");
provided, however, that the Tax Firm shall not determine that no
Excise Tax is payable by Employee unless it delivers to Employee a
written opinion (the "Tax Opinion") that failure to pay the Excise Tax
and to report the Excise Tax and the payments potentially subject
thereto on or with Employee's applicable federal income tax return
will not result in the imposition of an accuracy-related or other
penalty on Employee. All fees and expenses of the Tax Firm shall be
borne solely by the Company. Within 15 business days of the receipt
of notice from Employee that there has been a Payment, or such earlier
time as is requested by the Company, the Tax Firm shall make all
determinations required under this Section, shall provide to the
Company and Employee a written report setting forth such
determinations, together with detailed supporting calculations, and,
if the Tax Firm determines that no Excise Tax is payable, shall
deliver the Tax Opinion to Employee. Any Gross-Up Payment, as
determined pursuant to this Section, shall be paid by the Company to
Employee within fifteen days of the receipt of the Tax Firm's
determination. Subject to the remainder of this Section 2.2, any
determination by the Tax Firm shall be binding upon the Company and
Employee; provided, however, that Employee shall only be bound to the
extent that the determinations of the Tax Firm hereunder, including
the determinations made in the Tax Opinion, are reasonable and
reasonably supported by applicable law. As a result of the
uncertainty in the application of section 4999 of the Code at the
time of the initial determination by the Tax Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that it is
ultimately determined in accordance with the procedures set forth in
Section 2.2(c) that Employee is required to make a payment of any
Excise Tax, the Tax Firm shall reasonably determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of Employee. In
determining the reasonableness of Tax Firm's determinations
hereunder, and the effect thereof, Employee shall be provided a
reasonable opportunity to review such determinations with Tax Firm
and Employee's tax counsel. Tax Firm's determinations hereunder,
and the Tax Opinion, shall not be deemed reasonable until Employee's
reasonable objections and comments thereto have been satisfactorily
accommodated by Tax Firm.
(c) Notice of IRS Claim. Employee shall notify the Company in writing
of any claims by the Internal Revenue Service that, if successful,
would require the payment of the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later
than 30 calendar days after Employee actually receives notice in
writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid;
provided, however, that the failure of Employee to notify the Company
of such claim (or to provide any required information with respect
thereto) shall not affect any rights granted to Employee under this
Section 2.2 except to the extent that the Company is materially
prejudiced in the defense of such claim as a direct result of such
failure. Employee shall not pay such claim prior to the expiration
of the 30-day period following the date on which he gives such notice
to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company
notifies Employee in writing prior to the expiration of such period
that it desires to contest such claim, Employee shall do all of
the following:
(1) give the Company any information reasonably requested by the
Company relating to such claim;
(2) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company and
reasonably acceptable to Employee;
(3) cooperate with the Company in good faith in order effectively to
contest such claim;
(4) if the Company elects not to assume and control the defense of
such claim, permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Employee harmless, on an after-
tax basis, for any Excise Tax or income tax (including interest and penalties
with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limiting the foregoing provisions of this
Section 2.2, the Company shall have the right, at its sole option, to assume
the defense of and control all proceedings in connection with such contest, in
which case it may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may either direct Employee to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Employee agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine, provided, however, that if the Company directs
Employee to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to Employee, on an interest-free basis and shall
indemnify and hold Employee harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable year of
Employee with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's right to
assume the defense of and control the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and Employee
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
(d) Right to Tax Refund. If, after the receipt by Employee of an
amount advanced by the Company pursuant to Section 2.2 Employee becomes
entitled to receive any refund with respect to such claim, Employee shall
(subject to the Company's complying with the requirements of Section 2.2(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by Employee of an amount advanced by the Company pursuant to
Section 2.2(c), a determination is made that Employee is not entitled to a
refund with respect to such claim and the Company does not notify Employee in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall, to the extent of
such denial, be forgiven and shall not be required to be repaid and the amount
of forgiven advance shall offset, to the extent thereof, the amount of Gross-
Up Payment required to be paid.
2.3 Termination of Employment. Employee shall only be entitled to the
Benefits described in Section 2.1, as adjusted by Section 2.2, if Employee's
termination of employment is on account of termination by Company without
cause or termination by Employee with cause, which are described as follows:
(a) By Company Without Cause. Termination of employment by the
Company without cause shall occur if the Company provides oral or written
notice to Employee of involuntary termination that is not on account of just
cause. For this purpose, termination for "just cause" will only occur upon
written notice to Employee that employment is involuntarily terminated due to
any of the following:
(1) conviction of Employee for a crime involving fraud, dishonesty or
theft, or of any felony which, in the reasonable judgment of the
Board, materially affects Employee's ability to perform his duties
pursuant to this Agreement;
(2) commission by Employee of an act of fraud, embezzlement, or
material dishonesty against the Company or its affiliates; or
(3) intentional neglect of or material inattention to Employee's
duties, which neglect or inattention remains uncorrected for more
than 30 days following written notice from the Board detailing the
Board's concern.
(b) By Employee With Cause. Termination of employment by Employee with
cause shall occur if Employee terminates employment for any of the following
reasons:
(1) A material adverse alteration in Employee's position,
responsibilities or status from that which was in effect
immediately prior to a Change in Control.
(2) A reduction in Employee's compensation as in effect immediately
prior to the Change in Control, or a substantial reduction in the
benefits provided to Employee prior to the Change in Control.
(3) Relocation of Employee by the Company to a location that is more
than 35 miles from the Employee's current workplace.
(4) The material breach of the Company of any portion of its
employment policies and/or any employment agreement with Employee.
Provided, however, that 180 days after Employee begins performing duties
pursuant to a position that was offered by the Company (or its successor)
following a Change in Control and that would have otherwise resulted in the
occurrence of the events described in this Section 2.3(b), the occurrence of
the events described in this Section 2.3(b) shall be determined by reference
to the position as it was accepted by Employee following the Change in
Control.
ARTICLE III. ADMINISTRATION
Section 3.1. The provisions of this Agreement are intended to provide
severance benefits and protection to Employee. The Administrator has absolute
discretion to interpret the terms of this Agreement and to make all
determinations required in the administration hereof, including making
determinations about eligibility for and the amounts of Benefits. All
decisions of the Administrator are final, binding and conclusive on all
parties.
Section 3.2. Benefits can only be denied or forfeited if Employee does
not satisfy the conditions for receiving payment that are described herein or
if the Company validly amends the Agreement as described in Section 4.4.
Section 3.3. If Employee's claim for Benefits is denied, the
Administrator will furnish written notice of denial to Employee within 90 days
of the date the claim is received, unless special circumstances require an
extension of time for processing the claim. This extension will not exceed 90
days, and Employee must receive written notice stating the grounds for the
extension and the length of the extension within the initial 90-day review
period. If the Administrator does not provide written notice, Employee may
deem the claim denied and seek review according to the appeals procedures set
forth below.
(a) Notice of Denial. The notice of denial to the Claimant shall state:
(1) The specific reasons for the denial.
(2) Specific references to pertinent provisions of the Agreement on
which the denial was based.
(3) A description of any additional material or information needed for
Employee to perfect his claim and an explanation of why the
material or information is needed.
(4) A statement that Employee may request a review upon written
application to the Administrator, review pertinent documents, and
submit issues and comments in writing and that any appeal that
Employee wishes to make of the adverse determination must be in
writing to the Administrator within 60 days after Employee
receives notice of denial of benefits.
(5) The name and address of the Administrator to which Employee may
forward an appeal. The notice may state that failure to appeal the
action to the Administrator in writing within the 60-day period
will render the determination final, binding and conclusive.
(b) Appeals Procedure. If Employee appeals to the Administrator,
Employee or his authorized representative may submit in writing whatever
issues and comments he believes to be pertinent. The Administrator shall
reexamine all facts related to the appeal and make a final determination of
whether the denial of benefits is justified under the circumstances. The
Administrator shall advise Employee in writing of:
(1) The Administrator's decision on appeal.
(2) The specific reasons for the decision.
(3) The specific provisions of the Agreement on which the decision is
based.
Notice of the Administrator's decision shall be given within 60 days of the
Claimant's written request for review, unless additional time is required due
to special circumstances. In no event shall the Administrator render a
decision on an appeal later than 120 days after receiving a request for a
review.
ARTICLE IV. GENERAL TERMS
Section 4.1 Notices. All notices and other communications hereunder
will be in writing or by written telecommunication, and will be deemed to have
been duly given if delivered personally or if sent by overnight courier or by
written telecommunication, to the relevant address set forth below, or to such
other address as the recipient of such notice or communication will have
specified to the other party hereto in accordance with this Section:
If to the Company to:
BancorpSouth, Inc.
Personnel Director
P. O. Box 789
Tupelo, MS 38802
If to Employee, to:
Michael Sappington
BancorpSouth, Inc.
P. O. Box 789
Tupelo, MS 38802
Section 4.2 Withholding; No Offset. All payments required to be made by
the Company under this Agreement to Employee will be subject to the
withholding of such amounts, if any, relating to federal, state and local
taxes as may be required by law. No payment under this Agreement will be
subject to offset or reduction attributable to any amount Employee may owe to
the Company or any other person, except as required by law.
Section 4.3 Entire Agreement; Modification. This Agreement and its
Attachments constitute the complete and entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements
between the parties. The parties have executed this Agreement based upon the
express terms and provisions set forth herein and have not relied on any
communications or representations, oral or written, which are not set forth in
this Agreement.
Section 4.4 Amendment. This Agreement may not be modified by an
subsequent agreement unless the modifying agreement: (i) is in writing; (ii)
contains an express provision referencing this Agreement; (iii) is signed and
executed on behalf of the Company by an officer of the Company other than
Employee; and (iv) is signed by Employee.
Section 4.5 Choice of Law. This Agreement and the performance hereof
will be construed and governed in accordance with the laws of the State of
Mississippi, without regard to its choice of law principles, except to the
extent that federal law controls or preempts state law.
Section 4.6 Successors and Assigns. The obligations, duties and
responsibilities of Employee under this Agreement are personal and shall not
be assignable. In the event of Employee's death or disability, this Agreement
shall be enforceable by Employee's estate, executors or legal representatives.
The obligations, duties and responsibilities of Company hereunder shall be
binding upon any successor of the Company (whether through a transaction
described as a Change in Control or otherwise).
Section 4.7 Waiver of Provisions. Any waiver of any terms and
conditions hereof must be in writing and signed by the parties hereto. The
waiver of any of the terms and conditions of this Agreement shall not be
construed as a waiver of any subsequent breach of the same or any other terms
and conditions hereof.
Section 4.8 Severability. The provisions of this Agreement and the
amount of Benefits payable hereunder shall be deemed severable, and if any
portion shall be held invalid, illegal or enforceable for any reason, the
remainder of this Agreement and/or Benefit payment shall be effective and
binding upon the parties.
Section 4.9 Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of which
together will constitute one and the same instrument.
ARTICLE V. ERISA RIGHTS AND INFORMATION
The parties acknowledge that the following information is provided to Employee
hereunder in connection with Employee's rights as a welfare plan participant
under ERISA. The terms "you" and "yours" refer to Employee.
As a participant in a welfare plan maintained by the Company, you are entitled
to certain rights and protections under ERISA. ERISA provides that all plan
participants shall be entitled to:
Examine, without charge, at the Administrator's office and at other
specified locations, all plan documents, including insurance contracts, and
copies of all documents filed by the plan with the U.S. Department of
Labor, such as detailed annual reports and plan descriptions.
Obtain copies of all plan documents and other plan information upon written
request to the Administrator. The Administrator may make a reasonable
charge for the copies.
Receive a summary of the plan's annual financial report. The Administrator
is required by law to furnish each participant with a copy of this summary
annual report.
In addition to creating rights for plan participants, ERISA imposes duties
upon the people who are responsible for the operation of the employee benefit
plan. The people who operate your plan, called "fiduciaries" of the plan, have
a duty to do so prudently and in the interest of you and other plan
participants and beneficiaries. No one, including the Company or any other
person, may fire you or otherwise discriminate against you in any way to
prevent you from obtaining a benefit under this plan or from exercising your
rights under ERISA.
If a claim for a Benefit is denied in whole or in part, you must receive a
written explanation of the reason for the denial. You have the right to have
the Administrator review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the plan and do not receive them
within 30 days, you may file suit in a federal court. In such a case, the
court may require the Administrator to provide the materials and pay you up to
$100 a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Administrator.
If you have a claim for benefits that is denied or ignored, in whole or in
part, you may file suit in a state or federal court. If it should happen that
plan fiduciaries misuse the plan's money or if you are discriminated against
for asserting your rights, you may seek assistance from the U.S. Department of
Labor or you may file suit in a federal court. The court will decide who
should pay court costs and fees. If you lose, the court may order you to pay
these costs and fees, for example, if it finds your claim is frivolous.
If you have any questions about your plan, you should contact the
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
Summary of ERISA Information
Name of Plan: BancorpSouth, Inc. Change in Control Plan
Name and Address of the Company:
BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, MS 38801
Who Pays for the Plan: The cost of the plan is paid entirely by the Company.
The Company's Employer Identification No.: 64-0659571
Plan Number: 520
Plan Year: January 1 to December 31
Plan Administrator, Name, Address and Telephone No.
Administrator of the BancorpSouth, Inc. Change in Control plan
c/o Cathy Freeman
BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, MS 38801
(601) 680-2084
Agent for Service of Legal Process on the Plan: Chief executive officer or
Administrator.
Benefits are paid out of the general assets of the Company. The Company may,
in its discretion establish a "grantor trust" to fund the payment of Benefits.
Otherwise, this plan does not give you any rights to any particular assets of
the Company. Cash amounts paid under a severance plan are generally considered
taxable income to the recipient.
IN WITNESS WHEREOF, Company and Employee have caused this Agreement to
be executed on the day and year indicated below to be effective on the day and
year first written above.
Employee
- ---------------------------------- ------------------------------------
Michael Sappington Date
COMPANY:
BancorpSouth, Inc.
By: ------------------------------ ------------------------------------
(Date)
Its: _____________________________
EXHIBIT 10.3
BancorpSouth, Inc.
Change in Control Agreement
This Agreement ("Agreement") is entered into this 1st day of February,
1999, by and between BancorpSouth, Inc. (the "Company") and Harry Baxter
("Employee").
W I T N E S S E T H:
Whereas, Employee is employed as the Vice Chairman of the Company; and
Whereas, the Company desires to provide certain severance payments to
Employee in the event that Employee's employment with the Company is
terminated in connection with a change in control of the Company;
Now, Therefore, based upon the premises set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows
ARTICLE I. DEFINITIONS
Terms used in this Agreement that are defined are indicated by initial
capitalization of the term. References to an "Article" or a "Section" mean an
article or a section of this Agreement. In addition to those terms that are
specifically defined herein, the following terms are defined for purposes
hereof:
"Administrator" means a committee consisting of the Company's chief
executive officer, the secretary of the Company, the vice president of human
resources, and any other individuals appointed by the chief executive officer.
The Administrator may delegate any of its duties or authorities to any person
or entity. If a Change in Control occurs, as described in this Agreement, the
Administrator shall be the committee of individuals who were committee members
immediately prior to the Change in Control.
"Benefit" means the benefits described in Article II.
"Change in Control" means a transaction or circumstance in which any of
the following have occurred:
(a) any "person" as such term is used in sections 13(d) and 14(d) of the
Exchange Act, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation
controlling the Company or owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company, becomes the "beneficial owner"
(as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 25% of the total voting
power represented by the Company's then outstanding Voting Securities
(as defined below), or
(b) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority
thereof, or
(c) the shareholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation
which would result in the Voting Securities (i.e., any securities of the
entity which vote generally in the election of its directors) of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) more than 65% of the total voting
power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or
(d) the shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of its assets.
"Code" means the Internal Revenue Code of 1986, as amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
ARTICLE II. CHANGE IN CONTROL TERMINATION PAYMENT
Section 2.1 Benefits on Termination.
(a) Amount. Subject to the conditions, limitations and adjustments
that are provided for herein, the Company will provide Benefits to Employee
the sum of the amounts described below if, within the 24 month period
following a Change in Control, Employee's employment with the Company
terminates pursuant to Section 2.3 of this Agreement:
(1) An amount equal to 200% of the Employee's annual base compensation
determined by reference to his base salary in effect at the time
of Change in Control.
(2) An amount equal to 200% of the highest annual bonus that Employee
would be eligible to receive during the fiscal year ending during
which the Change in Control occurs.
(3) For a period of 24 months, participation in medical, life,
disability and similar benefit plans that are offered to similarly
situated employees of the Company immediately prior to the
applicable Change in Control for the Eligible Employee and his
dependents. Such participation may be pursuant to the continuation
coverage rights of Eligible Employees pursuant to Part 6 of Title
I of ERISA ("COBRA") or the Company may provide such benefits
directly through the purchase of insurance or otherwise.
Notwithstanding the foregoing, the period of participation in a
self-funded medical plan pursuant to this paragraph 3 shall not
exceed the maximum period of continuation coverage provided under
COBRA. If benefits are provided pursuant to COBRA continuation
rights, the Company shall pay a cash amount to the Eligible
Employee at the time of severance that is sufficient to cover all
premiums required for such COBRA coverage under the appropriate
benefit plans.
(4) For a period of 24 months, participation in general and executive
fringe benefits offered to similarly situated executive employees
immediately prior to the applicable Change in Control, including,
but not limited to, auto allowance, financial planning, annual
physical examination, and civic and country club dues.
(b) Adjustments to the Amount of Benefit. Notwithstanding anything
herein to the contrary, the amounts due to Employee under Section 2.1
(a) shall be adjusted in accordance with Section 2.2 if any payment
provided to Employee is determined to be subject to the excise tax
described in section 4999 of the Code.
(c) Time for Payment; Interest. The cash Benefits payable made under
this Section 2.1 shall be paid to Employee in a single lump sum within
ten days following the date of termination. The Company's obligation
to pay to Employee any amounts under this Section 2.1 will bear
interest at the lesser of (i) 10% or (ii) the maximum rate allowed by
law until paid by the Company, and all accrued and unpaid interest
will bear interest at the same rate, all of which interest will be
compounded annually.
(d) Troubled Institution Limitation. All Benefit payments hereunder
are subject to the limitations on golden parachute and
indemnification payments set forth in 12 USC 1823(k), the
regulations promulgated thereunder, and other law that prohibits
payment of any portion of Benefits by the Company to Employee by the
Company. To the extent possible, this limitation shall be applied by
reducing only the portion of Benefits that exceed such legal
limitation.
2.2 Benefit Adjustments.
(a) Gross Up Payment. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by or on behalf of the Company to or for the benefit
of Employee as a result of a "change in control," as defined in
section 280G of the Code, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required
under this Section, (a "Payment") would be subject to the excise tax
imposed by section 4999 of the Code or any interest or penalties are
incurred by Employee 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 Employee shall be
entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by Employee 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 Gross-Up Payment, Employee retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Tax Opinion. Subject to the provisions of Section 2.2(c), all
determinations required to be made under this Section 2.2, including
whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by a nationally recognized
accounting firm or law firm selected by the Company (the "Tax Firm");
provided, however, that the Tax Firm shall not determine that no
Excise Tax is payable by Employee unless it delivers to Employee a
written opinion (the "Tax Opinion") that failure to pay the Excise Tax
and to report the Excise Tax and the payments potentially subject
thereto on or with Employee's applicable federal income tax return
will not result in the imposition of an accuracy-related or other
penalty on Employee. All fees and expenses of the Tax Firm shall be
borne solely by the Company. Within 15 business days of the receipt
of notice from Employee that there has been a Payment, or such earlier
time as is requested by the Company, the Tax Firm shall make all
determinations required under this Section, shall provide to the
Company and Employee a written report setting forth such
determinations, together with detailed supporting calculations, and,
if the Tax Firm determines that no Excise Tax is payable, shall
deliver the Tax Opinion to Employee. Any Gross-Up Payment, as
determined pursuant to this Section, shall be paid by the Company to
Employee within fifteen days of the receipt of the Tax Firm's
determination. Subject to the remainder of this Section 2.2, any
determination by the Tax Firm shall be binding upon the Company and
Employee; provided, however, that Employee shall only be bound to the
extent that the determinations of the Tax Firm hereunder, including
the determinations made in the Tax Opinion, are reasonable and
reasonably supported by applicable law. As a result of the
uncertainty in the application of section 4999 of the Code at the
time of the initial determination by the Tax Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that it is
ultimately determined in accordance with the procedures set forth in
Section 2.2(c) that Employee is required to make a payment of any
Excise Tax, the Tax Firm shall reasonably determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of Employee. In
determining the reasonableness of Tax Firm's determinations
hereunder, and the effect thereof, Employee shall be provided a
reasonable opportunity to review such determinations with Tax Firm
and Employee's tax counsel. Tax Firm's determinations hereunder,
and the Tax Opinion, shall not be deemed reasonable until Employee's
reasonable objections and comments thereto have been satisfactorily
accommodated by Tax Firm.
(c) Notice of IRS Claim. Employee shall notify the Company in writing
of any claims by the Internal Revenue Service that, if successful,
would require the payment of the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later
than 30 calendar days after Employee actually receives notice in
writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid;
provided, however, that the failure of Employee to notify the Company
of such claim (or to provide any required information with respect
thereto) shall not affect any rights granted to Employee under this
Section 2.2 except to the extent that the Company is materially
prejudiced in the defense of such claim as a direct result of such
failure. Employee shall not pay such claim prior to the expiration
of the 30-day period following the date on which he gives such notice
to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company
notifies Employee in writing prior to the expiration of such period
that it desires to contest such claim, Employee shall do all of
the following:
(1) give the Company any information reasonably requested by the
Company relating to such claim;
(2) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company and
reasonably acceptable to Employee;
(3) cooperate with the Company in good faith in order effectively to
contest such claim;
(4) if the Company elects not to assume and control the defense of
such claim, permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Employee harmless, on an after-
tax basis, for any Excise Tax or income tax (including interest and penalties
with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limiting the foregoing provisions of this
Section 2.2, the Company shall have the right, at its sole option, to assume
the defense of and control all proceedings in connection with such contest, in
which case it may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may either direct Employee to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Employee agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine, provided, however, that if the Company directs
Employee to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to Employee, on an interest-free basis and shall
indemnify and hold Employee harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable year of
Employee with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's right to
assume the defense of and control the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and Employee
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
(d) Right to Tax Refund. If, after the receipt by Employee of an
amount advanced by the Company pursuant to Section 2.2 Employee becomes
entitled to receive any refund with respect to such claim, Employee shall
(subject to the Company's complying with the requirements of Section 2.2(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by Employee of an amount advanced by the Company pursuant to
Section 2.2(c), a determination is made that Employee is not entitled to a
refund with respect to such claim and the Company does not notify Employee in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall, to the extent of
such denial, be forgiven and shall not be required to be repaid and the amount
of forgiven advance shall offset, to the extent thereof, the amount of Gross-
Up Payment required to be paid.
2.3 Termination of Employment. Employee shall only be entitled to the
Benefits described in Section 2.1, as adjusted by Section 2.2, if Employee's
termination of employment is on account of termination by Company without
cause or termination by Employee with cause, which are described as follows:
(a) By Company Without Cause. Termination of employment by the
Company without cause shall occur if the Company provides oral or written
notice to Employee of involuntary termination that is not on account of just
cause. For this purpose, termination for "just cause" will only occur upon
written notice to Employee that employment is involuntarily terminated due to
any of the following:
(1) conviction of Employee for a crime involving fraud, dishonesty or
theft, or of any felony which, in the reasonable judgment of the
Board, materially affects Employee's ability to perform his duties
pursuant to this Agreement;
(2) commission by Employee of an act of fraud, embezzlement, or
material dishonesty against the Company or its affiliates; or
(3) intentional neglect of or material inattention to Employee's
duties, which neglect or inattention remains uncorrected for more
than 30 days following written notice from the Board detailing the
Board's concern.
(b) By Employee With Cause. Termination of employment by Employee with
cause shall occur if Employee terminates employment for any of the following
reasons:
(1) A material adverse alteration in Employee's position,
responsibilities or status from that which was in effect
immediately prior to a Change in Control.
(2) A reduction in Employee's compensation as in effect immediately
prior to the Change in Control, or a substantial reduction in the
benefits provided to Employee prior to the Change in Control.
(3) Relocation of Employee by the Company to a location that is more
than 35 miles from the Employee's current workplace.
(4) The material breach of the Company of any portion of its
employment policies and/or any employment agreement with Employee.
Provided, however, that 180 days after Employee begins performing duties
pursuant to a position that was offered by the Company (or its successor)
following a Change in Control and that would have otherwise resulted in the
occurrence of the events described in this Section 2.3(b), the occurrence of
the events described in this Section 2.3(b) shall be determined by reference
to the position as it was accepted by Employee following the Change in
Control.
ARTICLE III. ADMINISTRATION
Section 3.1. The provisions of this Agreement are intended to provide
severance benefits and protection to Employee. The Administrator has absolute
discretion to interpret the terms of this Agreement and to make all
determinations required in the administration hereof, including making
determinations about eligibility for and the amounts of Benefits. All
decisions of the Administrator are final, binding and conclusive on all
parties.
Section 3.2. Benefits can only be denied or forfeited if Employee does
not satisfy the conditions for receiving payment that are described herein or
if the Company validly amends the Agreement as described in Section 4.4.
Section 3.3. If Employee's claim for Benefits is denied, the
Administrator will furnish written notice of denial to Employee within 90 days
of the date the claim is received, unless special circumstances require an
extension of time for processing the claim. This extension will not exceed 90
days, and Employee must receive written notice stating the grounds for the
extension and the length of the extension within the initial 90-day review
period. If the Administrator does not provide written notice, Employee may
deem the claim denied and seek review according to the appeals procedures set
forth below.
(a) Notice of Denial. The notice of denial to the Claimant shall state:
(1) The specific reasons for the denial.
(2) Specific references to pertinent provisions of the Agreement on
which the denial was based.
(3) A description of any additional material or information needed for
Employee to perfect his claim and an explanation of why the
material or information is needed.
(4) A statement that Employee may request a review upon written
application to the Administrator, review pertinent documents, and
submit issues and comments in writing and that any appeal that
Employee wishes to make of the adverse determination must be in
writing to the Administrator within 60 days after Employee
receives notice of denial of benefits.
(5) The name and address of the Administrator to which Employee may
forward an appeal. The notice may state that failure to appeal the
action to the Administrator in writing within the 60-day period
will render the determination final, binding and conclusive.
(b) Appeals Procedure. If Employee appeals to the Administrator,
Employee or his authorized representative may submit in writing whatever
issues and comments he believes to be pertinent. The Administrator shall
reexamine all facts related to the appeal and make a final determination of
whether the denial of benefits is justified under the circumstances. The
Administrator shall advise Employee in writing of:
(1) The Administrator's decision on appeal.
(2) The specific reasons for the decision.
(3) The specific provisions of the Agreement on which the decision is
based.
Notice of the Administrator's decision shall be given within 60 days of the
Claimant's written request for review, unless additional time is required due
to special circumstances. In no event shall the Administrator render a
decision on an appeal later than 120 days after receiving a request for a
review.
ARTICLE IV. GENERAL TERMS
Section 4.1 Notices. All notices and other communications hereunder
will be in writing or by written telecommunication, and will be deemed to have
been duly given if delivered personally or if sent by overnight courier or by
written telecommunication, to the relevant address set forth below, or to such
other address as the recipient of such notice or communication will have
specified to the other party hereto in accordance with this Section:
If to the Company to:
BancorpSouth, Inc.
Personnel Director
P. O. Box 789
Tupelo, MS 38802
If to Employee, to:
Harry Baxter
BancorpSouth, Inc.
P. O. Box 789
Tupelo, MS 38802
Section 4.2 Withholding; No Offset. All payments required to be made by
the Company under this Agreement to Employee will be subject to the
withholding of such amounts, if any, relating to federal, state and local
taxes as may be required by law. No payment under this Agreement will be
subject to offset or reduction attributable to any amount Employee may owe to
the Company or any other person, except as required by law.
Section 4.3 Entire Agreement; Modification. This Agreement and its
Attachments constitute the complete and entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements
between the parties. The parties have executed this Agreement based upon the
express terms and provisions set forth herein and have not relied on any
communications or representations, oral or written, which are not set forth in
this Agreement.
Section 4.4 Amendment. This Agreement may not be modified by an
subsequent agreement unless the modifying agreement: (i) is in writing; (ii)
contains an express provision referencing this Agreement; (iii) is signed and
executed on behalf of the Company by an officer of the Company other than
Employee; and (iv) is signed by Employee.
Section 4.5 Choice of Law. This Agreement and the performance hereof
will be construed and governed in accordance with the laws of the State of
Mississippi, without regard to its choice of law principles, except to the
extent that federal law controls or preempts state law.
Section 4.6 Successors and Assigns. The obligations, duties and
responsibilities of Employee under this Agreement are personal and shall not
be assignable. In the event of Employee's death or disability, this Agreement
shall be enforceable by Employee's estate, executors or legal representatives.
The obligations, duties and responsibilities of Company hereunder shall be
binding upon any successor of the Company (whether through a transaction
described as a Change in Control or otherwise).
Section 4.7 Waiver of Provisions. Any waiver of any terms and
conditions hereof must be in writing and signed by the parties hereto. The
waiver of any of the terms and conditions of this Agreement shall not be
construed as a waiver of any subsequent breach of the same or any other terms
and conditions hereof.
Section 4.8 Severability. The provisions of this Agreement and the
amount of Benefits payable hereunder shall be deemed severable, and if any
portion shall be held invalid, illegal or enforceable for any reason, the
remainder of this Agreement and/or Benefit payment shall be effective and
binding upon the parties.
Section 4.9 Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of which
together will constitute one and the same instrument.
ARTICLE V. ERISA RIGHTS AND INFORMATION
The parties acknowledge that the following information is provided to Employee
hereunder in connection with Employee's rights as a welfare plan participant
under ERISA. The terms "you" and "yours" refer to Employee.
As a participant in a welfare plan maintained by the Company, you are entitled
to certain rights and protections under ERISA. ERISA provides that all plan
participants shall be entitled to:
Examine, without charge, at the Administrator's office and at other
specified locations, all plan documents, including insurance contracts, and
copies of all documents filed by the plan with the U.S. Department of
Labor, such as detailed annual reports and plan descriptions.
Obtain copies of all plan documents and other plan information upon written
request to the Administrator. The Administrator may make a reasonable
charge for the copies.
Receive a summary of the plan's annual financial report. The Administrator
is required by law to furnish each participant with a copy of this summary
annual report.
In addition to creating rights for plan participants, ERISA imposes duties
upon the people who are responsible for the operation of the employee benefit
plan. The people who operate your plan, called "fiduciaries" of the plan, have
a duty to do so prudently and in the interest of you and other plan
participants and beneficiaries. No one, including the Company or any other
person, may fire you or otherwise discriminate against you in any way to
prevent you from obtaining a benefit under this plan or from exercising your
rights under ERISA.
If a claim for a Benefit is denied in whole or in part, you must receive a
written explanation of the reason for the denial. You have the right to have
the Administrator review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the plan and do not receive them
within 30 days, you may file suit in a federal court. In such a case, the
court may require the Administrator to provide the materials and pay you up to
$100 a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Administrator.
If you have a claim for benefits that is denied or ignored, in whole or in
part, you may file suit in a state or federal court. If it should happen that
plan fiduciaries misuse the plan's money or if you are discriminated against
for asserting your rights, you may seek assistance from the U.S. Department of
Labor or you may file suit in a federal court. The court will decide who
should pay court costs and fees. If you lose, the court may order you to pay
these costs and fees, for example, if it finds your claim is frivolous.
If you have any questions about your plan, you should contact the
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
Summary of ERISA Information
Name of Plan: BancorpSouth, Inc. Change in Control Plan
Name and Address of the Company:
BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, MS 38801
Who Pays for the Plan: The cost of the plan is paid entirely by the Company.
The Company's Employer Identification No.: 64-0659571
Plan Number: 520
Plan Year: January 1 to December 31
Plan Administrator, Name, Address and Telephone No.
Administrator of the BancorpSouth, Inc. Change in Control plan
c/o Cathy Freeman
BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, MS 38801
(601) 680-2084
Agent for Service of Legal Process on the Plan: Chief executive officer or
Administrator.
Benefits are paid out of the general assets of the Company. The Company may,
in its discretion establish a "grantor trust" to fund the payment of Benefits.
Otherwise, this plan does not give you any rights to any particular assets of
the Company. Cash amounts paid under a severance plan are generally considered
taxable income to the recipient.
IN WITNESS WHEREOF, Company and Employee have caused this Agreement to
be executed on the day and year indicated below to be effective on the day and
year first written above.
Employee
- ---------------------------------- ------------------------------------
Harry Baxter Date
COMPANY:
BancorpSouth, Inc.
By: ------------------------------ ------------------------------------
(Date)
Its: _____________________________
EXHIBIT 10.4
BancorpSouth, Inc.
Change in Control Agreement
This Agreement ("Agreement") is entered into this 1st day of February,
1999, by and between BancorpSouth, Inc. (the "Company") and Gregg Cowsert
("Employee").
W I T N E S S E T H:
Whereas, Employee is employed as the Vice Chairman of the Company; and
Whereas, the Company desires to provide certain severance payments to
Employee in the event that Employee's employment with the Company is
terminated in connection with a change in control of the Company;
Now, Therefore, based upon the premises set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows
ARTICLE I. DEFINITIONS
Terms used in this Agreement that are defined are indicated by initial
capitalization of the term. References to an "Article" or a "Section" mean an
article or a section of this Agreement. In addition to those terms that are
specifically defined herein, the following terms are defined for purposes
hereof:
"Administrator" means a committee consisting of the Company's chief
executive officer, the secretary of the Company, the vice president of human
resources, and any other individuals appointed by the chief executive officer.
The Administrator may delegate any of its duties or authorities to any person
or entity. If a Change in Control occurs, as described in this Agreement, the
Administrator shall be the committee of individuals who were committee members
immediately prior to the Change in Control.
"Benefit" means the benefits described in Article II.
"Change in Control" means a transaction or circumstance in which any of
the following have occurred:
(a) any "person" as such term is used in sections 13(d) and 14(d) of the
Exchange Act, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation
controlling the Company or owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company, becomes the "beneficial owner"
(as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 25% of the total voting
power represented by the Company's then outstanding Voting Securities
(as defined below), or
(b) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority
thereof, or
(c) the shareholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation
which would result in the Voting Securities (i.e., any securities of the
entity which vote generally in the election of its directors) of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) more than 65% of the total voting
power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or
(d) the shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of its assets.
"Code" means the Internal Revenue Code of 1986, as amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
ARTICLE II. CHANGE IN CONTROL TERMINATION PAYMENT
Section 2.1 Benefits on Termination.
(a) Amount. Subject to the conditions, limitations and adjustments
that are provided for herein, the Company will provide Benefits to Employee
the sum of the amounts described below if, within the 24 month period
following a Change in Control, Employee's employment with the Company
terminates pursuant to Section 2.3 of this Agreement:
(1) An amount equal to 200% of the Employee's annual base compensation
determined by reference to his base salary in effect at the time
of Change in Control.
(2) An amount equal to 200% of the highest annual bonus that Employee
would be eligible to receive during the fiscal year ending during
which the Change in Control occurs.
(3) For a period of 24 months, participation in medical, life,
disability and similar benefit plans that are offered to similarly
situated employees of the Company immediately prior to the
applicable Change in Control for the Eligible Employee and his
dependents. Such participation may be pursuant to the continuation
coverage rights of Eligible Employees pursuant to Part 6 of Title
I of ERISA ("COBRA") or the Company may provide such benefits
directly through the purchase of insurance or otherwise.
Notwithstanding the foregoing, the period of participation in a
self-funded medical plan pursuant to this paragraph 3 shall not
exceed the maximum period of continuation coverage provided under
COBRA. If benefits are provided pursuant to COBRA continuation
rights, the Company shall pay a cash amount to the Eligible
Employee at the time of severance that is sufficient to cover all
premiums required for such COBRA coverage under the appropriate
benefit plans.
(4) For a period of 24 months, participation in general and executive
fringe benefits offered to similarly situated executive employees
immediately prior to the applicable Change in Control, including,
but not limited to, auto allowance, financial planning, annual
physical examination, and civic and country club dues.
(b) Adjustments to the Amount of Benefit. Notwithstanding anything
herein to the contrary, the amounts due to Employee under Section 2.1
(a) shall be adjusted in accordance with Section 2.2 if any payment
provided to Employee is determined to be subject to the excise tax
described in section 4999 of the Code.
(c) Time for Payment; Interest. The cash Benefits payable made under
this Section 2.1 shall be paid to Employee in a single lump sum within
ten days following the date of termination. The Company's obligation
to pay to Employee any amounts under this Section 2.1 will bear
interest at the lesser of (i) 10% or (ii) the maximum rate allowed by
law until paid by the Company, and all accrued and unpaid interest
will bear interest at the same rate, all of which interest will be
compounded annually.
(d) Troubled Institution Limitation. All Benefit payments hereunder
are subject to the limitations on golden parachute and
indemnification payments set forth in 12 USC 1823(k), the
regulations promulgated thereunder, and other law that prohibits
payment of any portion of Benefits by the Company to Employee by the
Company. To the extent possible, this limitation shall be applied by
reducing only the portion of Benefits that exceed such legal
limitation.
2.2 Benefit Adjustments.
(a) Gross Up Payment. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by or on behalf of the Company to or for the benefit
of Employee as a result of a "change in control," as defined in
section 280G of the Code, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required
under this Section, (a "Payment") would be subject to the excise tax
imposed by section 4999 of the Code or any interest or penalties are
incurred by Employee 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 Employee shall be
entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by Employee 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 Gross-Up Payment, Employee retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Tax Opinion. Subject to the provisions of Section 2.2(c), all
determinations required to be made under this Section 2.2, including
whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by a nationally recognized
accounting firm or law firm selected by the Company (the "Tax Firm");
provided, however, that the Tax Firm shall not determine that no
Excise Tax is payable by Employee unless it delivers to Employee a
written opinion (the "Tax Opinion") that failure to pay the Excise Tax
and to report the Excise Tax and the payments potentially subject
thereto on or with Employee's applicable federal income tax return
will not result in the imposition of an accuracy-related or other
penalty on Employee. All fees and expenses of the Tax Firm shall be
borne solely by the Company. Within 15 business days of the receipt
of notice from Employee that there has been a Payment, or such earlier
time as is requested by the Company, the Tax Firm shall make all
determinations required under this Section, shall provide to the
Company and Employee a written report setting forth such
determinations, together with detailed supporting calculations, and,
if the Tax Firm determines that no Excise Tax is payable, shall
deliver the Tax Opinion to Employee. Any Gross-Up Payment, as
determined pursuant to this Section, shall be paid by the Company to
Employee within fifteen days of the receipt of the Tax Firm's
determination. Subject to the remainder of this Section 2.2, any
determination by the Tax Firm shall be binding upon the Company and
Employee; provided, however, that Employee shall only be bound to the
extent that the determinations of the Tax Firm hereunder, including
the determinations made in the Tax Opinion, are reasonable and
reasonably supported by applicable law. As a result of the
uncertainty in the application of section 4999 of the Code at the
time of the initial determination by the Tax Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that it is
ultimately determined in accordance with the procedures set forth in
Section 2.2(c) that Employee is required to make a payment of any
Excise Tax, the Tax Firm shall reasonably determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of Employee. In
determining the reasonableness of Tax Firm's determinations
hereunder, and the effect thereof, Employee shall be provided a
reasonable opportunity to review such determinations with Tax Firm
and Employee's tax counsel. Tax Firm's determinations hereunder,
and the Tax Opinion, shall not be deemed reasonable until Employee's
reasonable objections and comments thereto have been satisfactorily
accommodated by Tax Firm.
(c) Notice of IRS Claim. Employee shall notify the Company in writing
of any claims by the Internal Revenue Service that, if successful,
would require the payment of the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later
than 30 calendar days after Employee actually receives notice in
writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid;
provided, however, that the failure of Employee to notify the Company
of such claim (or to provide any required information with respect
thereto) shall not affect any rights granted to Employee under this
Section 2.2 except to the extent that the Company is materially
prejudiced in the defense of such claim as a direct result of such
failure. Employee shall not pay such claim prior to the expiration
of the 30-day period following the date on which he gives such notice
to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company
notifies Employee in writing prior to the expiration of such period
that it desires to contest such claim, Employee shall do all of
the following:
(1) give the Company any information reasonably requested by the
Company relating to such claim;
(2) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company and
reasonably acceptable to Employee;
(3) cooperate with the Company in good faith in order effectively to
contest such claim;
(4) if the Company elects not to assume and control the defense of
such claim, permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Employee harmless, on an after-
tax basis, for any Excise Tax or income tax (including interest and penalties
with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limiting the foregoing provisions of this
Section 2.2, the Company shall have the right, at its sole option, to assume
the defense of and control all proceedings in connection with such contest, in
which case it may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may either direct Employee to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Employee agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine, provided, however, that if the Company directs
Employee to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to Employee, on an interest-free basis and shall
indemnify and hold Employee harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable year of
Employee with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's right to
assume the defense of and control the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and Employee
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
(d) Right to Tax Refund. If, after the receipt by Employee of an
amount advanced by the Company pursuant to Section 2.2 Employee becomes
entitled to receive any refund with respect to such claim, Employee shall
(subject to the Company's complying with the requirements of Section 2.2(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by Employee of an amount advanced by the Company pursuant to
Section 2.2(c), a determination is made that Employee is not entitled to a
refund with respect to such claim and the Company does not notify Employee in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall, to the extent of
such denial, be forgiven and shall not be required to be repaid and the amount
of forgiven advance shall offset, to the extent thereof, the amount of Gross-
Up Payment required to be paid.
2.3 Termination of Employment. Employee shall only be entitled to the
Benefits described in Section 2.1, as adjusted by Section 2.2, if Employee's
termination of employment is on account of termination by Company without
cause or termination by Employee with cause, which are described as follows:
(a) By Company Without Cause. Termination of employment by the
Company without cause shall occur if the Company provides oral or written
notice to Employee of involuntary termination that is not on account of just
cause. For this purpose, termination for "just cause" will only occur upon
written notice to Employee that employment is involuntarily terminated due to
any of the following:
(1) conviction of Employee for a crime involving fraud, dishonesty or
theft, or of any felony which, in the reasonable judgment of the
Board, materially affects Employee's ability to perform his duties
pursuant to this Agreement;
(2) commission by Employee of an act of fraud, embezzlement, or
material dishonesty against the Company or its affiliates; or
(3) intentional neglect of or material inattention to Employee's
duties, which neglect or inattention remains uncorrected for more
than 30 days following written notice from the Board detailing the
Board's concern.
(b) By Employee With Cause. Termination of employment by Employee with
cause shall occur if Employee terminates employment for any of the following
reasons:
(1) A material adverse alteration in Employee's position,
responsibilities or status from that which was in effect
immediately prior to a Change in Control.
(2) A reduction in Employee's compensation as in effect immediately
prior to the Change in Control, or a substantial reduction in the
benefits provided to Employee prior to the Change in Control.
(3) Relocation of Employee by the Company to a location that is more
than 35 miles from the Employee's current workplace.
(4) The material breach of the Company of any portion of its
employment policies and/or any employment agreement with Employee.
Provided, however, that 180 days after Employee begins performing duties
pursuant to a position that was offered by the Company (or its successor)
following a Change in Control and that would have otherwise resulted in the
occurrence of the events described in this Section 2.3(b), the occurrence of
the events described in this Section 2.3(b) shall be determined by reference
to the position as it was accepted by Employee following the Change in
Control.
ARTICLE III. ADMINISTRATION
Section 3.1. The provisions of this Agreement are intended to provide
severance benefits and protection to Employee. The Administrator has absolute
discretion to interpret the terms of this Agreement and to make all
determinations required in the administration hereof, including making
determinations about eligibility for and the amounts of Benefits. All
decisions of the Administrator are final, binding and conclusive on all
parties.
Section 3.2. Benefits can only be denied or forfeited if Employee does
not satisfy the conditions for receiving payment that are described herein or
if the Company validly amends the Agreement as described in Section 4.4.
Section 3.3. If Employee's claim for Benefits is denied, the
Administrator will furnish written notice of denial to Employee within 90 days
of the date the claim is received, unless special circumstances require an
extension of time for processing the claim. This extension will not exceed 90
days, and Employee must receive written notice stating the grounds for the
extension and the length of the extension within the initial 90-day review
period. If the Administrator does not provide written notice, Employee may
deem the claim denied and seek review according to the appeals procedures set
forth below.
(a) Notice of Denial. The notice of denial to the Claimant shall state:
(1) The specific reasons for the denial.
(2) Specific references to pertinent provisions of the Agreement on
which the denial was based.
(3) A description of any additional material or information needed for
Employee to perfect his claim and an explanation of why the
material or information is needed.
(4) A statement that Employee may request a review upon written
application to the Administrator, review pertinent documents, and
submit issues and comments in writing and that any appeal that
Employee wishes to make of the adverse determination must be in
writing to the Administrator within 60 days after Employee
receives notice of denial of benefits.
(5) The name and address of the Administrator to which Employee may
forward an appeal. The notice may state that failure to appeal the
action to the Administrator in writing within the 60-day period
will render the determination final, binding and conclusive.
(b) Appeals Procedure. If Employee appeals to the Administrator,
Employee or his authorized representative may submit in writing whatever
issues and comments he believes to be pertinent. The Administrator shall
reexamine all facts related to the appeal and make a final determination of
whether the denial of benefits is justified under the circumstances. The
Administrator shall advise Employee in writing of:
(1) The Administrator's decision on appeal.
(2) The specific reasons for the decision.
(3) The specific provisions of the Agreement on which the decision is
based.
Notice of the Administrator's decision shall be given within 60 days of the
Claimant's written request for review, unless additional time is required due
to special circumstances. In no event shall the Administrator render a
decision on an appeal later than 120 days after receiving a request for a
review.
ARTICLE IV. GENERAL TERMS
Section 4.1 Notices. All notices and other communications hereunder
will be in writing or by written telecommunication, and will be deemed to have
been duly given if delivered personally or if sent by overnight courier or by
written telecommunication, to the relevant address set forth below, or to such
other address as the recipient of such notice or communication will have
specified to the other party hereto in accordance with this Section:
If to the Company to:
BancorpSouth, Inc.
Personnel Director
P. O. Box 789
Tupelo, MS 38802
If to Employee, to:
Gregg Cowsert
BancorpSouth, Inc.
P. O. Box 789
Tupelo, MS 38802
Section 4.2 Withholding; No Offset. All payments required to be made by
the Company under this Agreement to Employee will be subject to the
withholding of such amounts, if any, relating to federal, state and local
taxes as may be required by law. No payment under this Agreement will be
subject to offset or reduction attributable to any amount Employee may owe to
the Company or any other person, except as required by law.
Section 4.3 Entire Agreement; Modification. This Agreement and its
Attachments constitute the complete and entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements
between the parties. The parties have executed this Agreement based upon the
express terms and provisions set forth herein and have not relied on any
communications or representations, oral or written, which are not set forth in
this Agreement.
Section 4.4 Amendment. This Agreement may not be modified by an
subsequent agreement unless the modifying agreement: (i) is in writing; (ii)
contains an express provision referencing this Agreement; (iii) is signed and
executed on behalf of the Company by an officer of the Company other than
Employee; and (iv) is signed by Employee.
Section 4.5 Choice of Law. This Agreement and the performance hereof
will be construed and governed in accordance with the laws of the State of
Mississippi, without regard to its choice of law principles, except to the
extent that federal law controls or preempts state law.
Section 4.6 Successors and Assigns. The obligations, duties and
responsibilities of Employee under this Agreement are personal and shall not
be assignable. In the event of Employee's death or disability, this Agreement
shall be enforceable by Employee's estate, executors or legal representatives.
The obligations, duties and responsibilities of Company hereunder shall be
binding upon any successor of the Company (whether through a transaction
described as a Change in Control or otherwise).
Section 4.7 Waiver of Provisions. Any waiver of any terms and
conditions hereof must be in writing and signed by the parties hereto. The
waiver of any of the terms and conditions of this Agreement shall not be
construed as a waiver of any subsequent breach of the same or any other terms
and conditions hereof.
Section 4.8 Severability. The provisions of this Agreement and the
amount of Benefits payable hereunder shall be deemed severable, and if any
portion shall be held invalid, illegal or enforceable for any reason, the
remainder of this Agreement and/or Benefit payment shall be effective and
binding upon the parties.
Section 4.9 Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of which
together will constitute one and the same instrument.
ARTICLE V. ERISA RIGHTS AND INFORMATION
The parties acknowledge that the following information is provided to Employee
hereunder in connection with Employee's rights as a welfare plan participant
under ERISA. The terms "you" and "yours" refer to Employee.
As a participant in a welfare plan maintained by the Company, you are entitled
to certain rights and protections under ERISA. ERISA provides that all plan
participants shall be entitled to:
Examine, without charge, at the Administrator's office and at other
specified locations, all plan documents, including insurance contracts, and
copies of all documents filed by the plan with the U.S. Department of
Labor, such as detailed annual reports and plan descriptions.
Obtain copies of all plan documents and other plan information upon written
request to the Administrator. The Administrator may make a reasonable
charge for the copies.
Receive a summary of the plan's annual financial report. The Administrator
is required by law to furnish each participant with a copy of this summary
annual report.
In addition to creating rights for plan participants, ERISA imposes duties
upon the people who are responsible for the operation of the employee benefit
plan. The people who operate your plan, called "fiduciaries" of the plan, have
a duty to do so prudently and in the interest of you and other plan
participants and beneficiaries. No one, including the Company or any other
person, may fire you or otherwise discriminate against you in any way to
prevent you from obtaining a benefit under this plan or from exercising your
rights under ERISA.
If a claim for a Benefit is denied in whole or in part, you must receive a
written explanation of the reason for the denial. You have the right to have
the Administrator review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the plan and do not receive them
within 30 days, you may file suit in a federal court. In such a case, the
court may require the Administrator to provide the materials and pay you up to
$100 a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Administrator.
If you have a claim for benefits that is denied or ignored, in whole or in
part, you may file suit in a state or federal court. If it should happen that
plan fiduciaries misuse the plan's money or if you are discriminated against
for asserting your rights, you may seek assistance from the U.S. Department of
Labor or you may file suit in a federal court. The court will decide who
should pay court costs and fees. If you lose, the court may order you to pay
these costs and fees, for example, if it finds your claim is frivolous.
If you have any questions about your plan, you should contact the
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
Summary of ERISA Information
Name of Plan: BancorpSouth, Inc. Change in Control Plan
Name and Address of the Company:
BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, MS 38801
Who Pays for the Plan: The cost of the plan is paid entirely by the Company.
The Company's Employer Identification No.: 64-0659571
Plan Number: 520
Plan Year: January 1 to December 31
Plan Administrator, Name, Address and Telephone No.
Administrator of the BancorpSouth, Inc. Change in Control plan
c/o Cathy Freeman
BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, MS 38801
(601) 680-2084
Agent for Service of Legal Process on the Plan: Chief executive officer or
Administrator.
Benefits are paid out of the general assets of the Company. The Company may,
in its discretion establish a "grantor trust" to fund the payment of Benefits.
Otherwise, this plan does not give you any rights to any particular assets of
the Company. Cash amounts paid under a severance plan are generally considered
taxable income to the recipient.
IN WITNESS WHEREOF, Company and Employee have caused this Agreement to
be executed on the day and year indicated below to be effective on the day and
year first written above.
Employee
- ---------------------------------- ------------------------------------
Gregg Cowsert Date
COMPANY:
BancorpSouth, Inc.
By: ------------------------------ ------------------------------------
(Date)
Its: _____________________________
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