EXHIBIT 10.2(i)
 
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
 
EXECUTIVE AGREEMENT
 
THIS AGREEMENT is made and entered into this 17th day of July, 2001, by and
between The Peoples Bank & Trust Company, a bank organized and existing under
the laws of the State of Alabama (hereinafter referred to as the “Bank”), and
Richard P. Morthland, an Executive of the Bank (hereinafter referred to as the
“Executive”).
 
WHEREAS, the Executive is now in the employ of the Bank and has for many years
faithfully served the Bank. It is the consensus of the Board of Directors
(hereinafter referred to as the “Board”) that the Executive’s services have been
of exceptional merit, in excess of the compensation paid and an invaluable
contribution to the profits and position of the Bank in its field of activity.
The Board further believes that the Executive’s experience, knowledge of
corporate affairs, reputation and industry contacts are of such value, and the
Executive’s continued services so essential to the Bank’s future growth and
profits, that it would suffer severe financial loss ‘should the Executive
terminate their services;
 
ACCORDINGLY, the Board has adopted The Peoples Bank & Trust Company Executive
Supplemental Retirement Plan (hereinafter referred to as the “Executive Plan”)
and it is the desire of the Bank and the Executive to enter into this Agreement
under which the Bank will agree to make certain payments to the Executive upon
the Executive’s retirement or to the Executive’s beneficiary(ies) in the event
of the Executive’s death pursuant to the Executive Plan;
 
FURTHERMORE, it is the intent of the parties hereto that this Executive Plan be
considered an unfunded arrangement maintained primarily to provide supplemental
retirement benefits for the Executive, and be considered a non-qualified benefit
plan for purposes of the Employee Retirement Security Act of 1974, as amended
(“ERISA”). The Executive is fully advised of the Bank’s financial status and has
had substantial input in the design and operation of this benefit plan; and
 
NOW, THEREFORE, in consideration of services the Executive has performed in the
past and those to be performed in the future, and based upon the mutual promises
and covenants herein contained, the Bank and the Executive agree as follows:

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I.
 
DEFINITIONS

 

 
A.
 
Effective Date:

 
The Effective Date of the Executive Plan shall be March 16, 2001.
 

 
B.
 
Plan Year:

 
Any reference to the “Plan Year” shall mean a calendar year from January 1st to
December 31st. In the year of implementation, the term the “Plan Year” shall
mean the period from the Effective Date to December 31st of the year of the
Effective Date.
 

 
C.
 
Retirement Date:

 
Retirement Date shall mean retirement from service with the Bank which becomes
effective on the first day of the calendar month following the month in which
the Executive reaches age sixty-five (65) or such later date as the Executive
may actually retire.
 

 
D.
 
Early Retirement Date:

 
Early Retirement Date shall mean a retirement from service that is effective
prior to the Normal Retirement Age stated herein, provided the Executive has
attained age sixty-two (62).
 

 
E.
 
Termination of Service:

 
Termination of Service shall mean the Executive’s voluntary resignation of
service by the Executive after a Change of Control (Subparagraph I [J]) or the
Bank’s discharge of the Executive without cause, prior to the Normal Retirement
Age (Subparagraph I [K]).
 

 
F.
 
Pre-Retirement Account:

 
A Pre-Retirement Account shall be established as a liability reserve account on
the books of the Bank for the benefit of the Executive. Prior to the Executive’s
Early Retirement Date (Subparagraph I [D]) or Retirement Date (Subparagraph I
[C]), such liability reserve account shall be increased or decreased each Plan
Year, until the aforestated event occurs, by the Index Retirement Benefit
(Subparagraph I [G]).

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G.
 
Index Retirement Benefit:

 
The Index Retirement Benefit for each Executive in the Executive Plan for each
Plan Year shall be equal to the excess (if any) of the Index (Subparagraph I
[H]) for that Plan Year over the Cost of Funds Expense (Subparagraph I [I]) for
that Plan Year.
 

 
H.
 
Index:

 
The Index for any Plan Year shall be the aggregate annual after-tax income from
the life insurance contract(s) described hereinafter as defined by FASB
Technical Bulletin 85-4. This Index shall be applied as if such insurance
contract(s) were purchased on the Effective Date of the Executive Plan.
 
Insurance Company:
 
Southland Life Insurance Company
Policy Form:
 
Flexible Premium Adjustable Life
Policy Name:
 
Max UL
Insured’s Age and Sex:
 
60, Male
Riders:
 
None
Ratings:
 
Table B
Option:
 
Level
Face Amount:
 
$1,171,209
Premiums Paid:
 
$632,500
Number of Premium Payments:
 
Single
Assumed Purchase Date:
 
March 16, 2001
Insurance Company:
 
Union Central Life Insurance Company
Policy Form:
 
Universal Life
Policy Name:
 
COLI UL
Insured’s Age and Sex:
 
60, Male
Riders:
 
None
Ratings:
 
Table C
Option:
 
Level
Face Amount:
 
$823,853
Premiums Paid:
 
$424,000
Number of Premium Payments:
 
Single
Assumed Purchase Date:
 
March 16, 2001

 
If such contracts of life insurance are actually purchased by the Bank, then the
actual policies as of the dates they were actually purchased shall be used in
calculations under this Executive Plan. If such contracts of life insurance are
not purchased or are subsequently surrendered or lapsed, then the Bank shall
receive annual policy illustrations that assume the above-described policies
were purchased or had not subsequently surrendered or lapsed. Said illustrations
shall

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be received from the respective insurance companies and will indicate the
increase in policy values for purposes of calculating the amount of the Index.
 
In either case, references to the life insurance contracts are merely for
purposes of calculating a benefit. The Bank has no obligation to purchase such
life insurance and, if purchased, the Executive and the Executive’s
beneficiary(ies) shall have no ownership interest in such policy and shall
always have no greater interest in the benefits under this Executive Plan than
that of an unsecured creditor of the Bank.
 

 
I.
 
Cost of Funds Expense:

 
The Cost of Funds Expense for any Plan Year shall be calculated by taking the
sum of the amount of premiums for the life insurance policies described in the
definition of “Index” plus the amount of any benefits paid to the Executive
pursuant to the Executive Plan (Paragraph H hereinafter) plus the amount of all
previous years’ after-tax Costs of Funds Expense, and multiplying that sum by
the Average Tax-Adjusted Cost of Funds (Subparagraph I [L]).
 

 
J.
 
Change of Control:

 
Change of Control means the cumulative transfer of more than fifty percent (50%)
of the voting stock of the Bank from the Effective Date of this Executive Plan.
For the purposes of this Executive Plan, transfers on account of deaths or
gifts, transfers between family members or transfers made to a qualified
retirement plan maintained by the Bank shall not be considered in determining
whether there has been a Change of Control.
 

 
K.
 
Normal Retirement Age:

 
Normal Retirement Age shall mean the date on which the Executive attains age
sixty-five (65).
 

 
L.
 
Average Tax-Adjusted Cost of Funds:

 
Average Tax-Adjusted Cost of Funds means, at any particular time, a ratio, tax
adjusted as provided for herein, the numerator of which is the total interest
expense as set forth on Schedule RI-Income Statement of the Bank’s most recently
filed Consolidated Report of Condition and Income (the “Call Report”) and the
denominator of which is an amount equal to: (i) the amount of deposits in
domestic offices (sum of total of columns A and C from Schedule RC-E of the Call
Report), plus (ii) the amount of Federal funds purchased and securities sold
under agreements to repurchase, as set forth on Schedule RC-Balance Sheet of the
Call Report; plus other Borrowed Funds as set forth on the Call Report. The said
ratio shall be adjusted by multiplying the ratio by a percentage equal to 100%
less the federal corporate income tax rate percentage applicable to corporations
similarly situated as the Bank with similar corporate income for the applicable
Plan Year. For example, if in an applicable Plan Year the Average Cost of Funds

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ratio is 4% before tax adjustment, and the federal corporate income tax rate is
34%, the Average Tax-Adjusted Cost of Funds would be 2.64% (100% - 34% = 66% x
4% = 2.64%).
 
II.
 
INDEX BENEFITS

 

 
A.
 
Retirement Benefits:

 
Subject to Subparagraph II (E) hereinafter, an Executive who remains in the
employ of the Bank until the Normal Retirement Age (Subparagraph I [K]) shall be
entitled to receive the balance in the Pre-Retirement Account in two hundred and
forty (240) equal monthly installments commencing thirty (30) days following the
Executive’s retirement. In addition to these payments and commencing in
conjunction therewith, the Index Retirement Benefit (Subparagraph I [G]) for
each Plan Year subsequent to the Executive’s retirement, and including the
remaining portion of the Plan Year following said retirement, shall be paid to
the Executive until the Executive’s death.
 

 
B.
 
Early Retirement:

 
Subject to Subparagraph II (E), should the Executive elect Early Retirement or
be discharged without cause by the Bank subsequent to the Early Retirement Date
(Subparagraph I [D]), the Executive shall be entitled to receive five percent
(5%) times the number of full years of service with the Bank from the date of
first service with the Bank (to a maximum of 100%), times the balance in the
Pre-Retirement Account paid in two hundred and forty (240) equal monthly
installments commencing at the Normal Retirement Age (Subparagraph I [K]). In
addition to these payments and commencing in conjunction therewith, five percent
(5%) times the number of full years of service with the Bank from the date of
first service with the Bank (to a maximum of 100%), times the Index Retirement
Benefit for each Plan Year subsequent to the year in which the Executive attains
Normal Retirement Age, and including the remaining portion of the Plan Year in
which the Executive attains Normal Retirement Age, shall be paid to the
Executive until the Executive’s death.
 

 
C.
 
Termination of Service:

 
Subject to Subparagraph II (E), should an Executive suffer a Termination of
Service the Executive shall be entitled to receive five percent (5%) times the
number of full years of service with the Bank from the date of first service
with the Bank (to a maximum of 100%), times the balance in the Pre-Retirement
Account payable to the Executive in two hundred and forty (240) equal monthly
installments commencing thirty (30) days following the Executive’s Normal
Retirement Age (Subparagraph I [K]). In addition to these payments and
commencing in conjunction therewith, five percent (5%) times the number of full
years of service with the Bank from the date of first service with the Bank (to
a maximum of 100%), times the Index Retirement Benefit for each Plan Year

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subsequent to the year in which the Executive attains Normal Retirement Age, and
including the remaining portion of the Plan Year in which the Executive attains
Normal Retirement Age, shall be paid to the Executive until the Executive’s
death.
 

 
D.
 
Death:

 
Should the Executive die while there is a balance in the Executive’s
Pre-Retirement Account (Subparagraph I [F]), said unpaid balance shall be paid
in a lump sum to the individual or individuals the Executive may have designated
in writing and filed with the Bank. In the absence of any effective beneficiary
designation, the unpaid balance shall be paid as set forth herein to the duly
qualified executor or administrator of the Executive’s estate. Said payment due
hereunder shall be made the first day of the second month following the decease
of the Executive.
 

 
E.
 
Discharge for Cause:

 
Should the Executive be Discharged for Cause at any time, all benefits under
this Executive Plan shall be forfeited. The term “for cause” shall mean any of
the following: (i) gross negligence or gross neglect; (ii) the commission of a
felony or gross misdemeanor involving moral turpitude, fraud, or dishonesty;
(iii) the willful violation of any law, rule, or regulation (other than a
traffic violation or similar offense); (iv) an intentional failure to perform
stated duties; or (v) a breach of fiduciary duty involving personal profit. If a
dispute arises as to discharge “for cause,” such dispute shall be resolved by
arbitration as set forth in this Executive Plan.
 

 
F:
 
Death Benefit:

 
Except as set forth above, there is no death benefit provided under this
Agreement.
 
III.
 
RESTRICTIONS UPON FUNDING

 
The Bank shall have no obligation to set aside, earmark or entrust any fund or
money with which to pay its obligations under this Executive Plan. The
Executive, his/her beneficiary(ies), or any successor in interest shall be and
remain simply a general creditor of the Bank in the same manner as any other
creditor having a general claim for matured and unpaid compensation.
 
The Bank reserves the absolute right, at its sole discretion, to either fund the
obligations undertaken by this Executive Plan or to refrain from funding the
same and to determine the extent, nature and method of such funding. Should the
Bank elect to fund this Executive Plan, in whole or in part, through the
purchase of life insurance, mutual funds, disability policies or annuities, the
Bank reserves the absolute right, in its sole discretion, to terminate such
funding at any time, in whole or in part. At no time shall any Executive

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be deemed to have any lien nor right, title or interest in or to any specific
funding investment or to any assets of the Bank.
 
If the Bank elects to invest in a life insurance, disability or annuity policy
upon the life of the Executive, then the Executive shall assist the Bank by
freely submitting to a physical exam and supplying such additional information
necessary to obtain such insurance or annuities.
 
IV.
 
CHANGE OF CONTROL

 
Upon a Change of Control (Subparagraph I [J]), if the Executive subsequently
suffers a Termination of Service (Subparagraph I [E]), then the Executive shall
receive the benefits promised in this Executive Plan upon attaining Normal
Retirement Age, as if the Executive had been continuously employed by the Bank
until the Executive’s Normal Retirement Age. The Executive will also remain
eligible for all promised death benefits in this Executive Plan. In addition, no
sale, merger, or consolidation of the Bank shall take place unless the new or
surviving entity expressly acknowledges the obligations under this Executive
Plan and agrees to abide by its terms.
 
V.
 
MISCELLANEOUS

 

 
A.
 
Alienability and Assignment Prohibition:

 
Neither the Executive, nor the Executive’s surviving spouse, nor any other
beneficiary(ies) under this Executive Plan shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage, commute, modify or
otherwise encumber in advance any of the benefits payable hereunder nor shall
any of said benefits be subject to seizure for the payment of any debts,
judgments, alimony or separate maintenance owed by the Executive or the
Executive’s beneficiary(ies), nor be transferable by operation of law in the
event of bankruptcy, insolvency or otherwise. In the event the Executive or any
beneficiary attempts assignment, commutation, hypothecation, transfer or
disposal of the benefits hereunder, the Bank’s liabilities shall forthwith cease
and terminate.
 

 
B.
 
Binding Obligation of the Bank and any Successor in Interest:

 
The Bank shall not merge or consolidate into or with another bank or sell
substantially all of its assets to another bank, firm or person until such bank,
firm or person expressly agrees, in writing, to assume and discharge the duties
and obligations of the Bank under this Executive Plan. This Executive Plan shall
be binding upon the parties hereto, their successors, beneficiaries, heirs and
personal representatives.

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C.
 
Amendment or Revocation:

 
It is agreed by and between the parties hereto that, during the lifetime of the
Executive, this Executive Plan may be amended or revoked at any time or times,
in whole or in part, by the mutual written consent of the Executive and the
Bank.
 

 
D.
 
Gender:

 
Whenever in this Executive Plan words are used in the masculine or neuter
gender, they shall be read and construed as in the masculine, feminine or neuter
gender, whenever they should so apply.
 

 
E.
 
Effect on Other Bank Benefit Plans:

 
Nothing contained in this Executive Plan shall affect the right of the Executive
to participate in or be covered by any qualified or non-qualified pension,
profit-sharing, group, bonus or other supplemental compensation or fringe
benefit plan constituting a part of the Bank’s existing or future compensation
structure.
 

 
F.
 
Headings:

 
Headings and subheadings in this Executive Plan are inserted for reference and
convenience only and shall not be deemed a part of this Executive Plan.
 

 
G.
 
Applicable Law:

 
The validity and interpretation of this Agreement shall be governed by the laws
of the State of Alabama.
 

 
H.
 
12 U.S.C. § 1828(k):

 
Any payments made to the Executive pursuant to this Executive Plan, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. §
1828(k) or any regulations promulgated thereunder.
 

 
I.
 
Partial Invalidity:

 
If any term, provision, covenant, or condition of this Executive Plan is
determined by an arbitrator or a court, as the case may be, to be invalid, void,
or unenforceable, such determination shall not render any other term, provision,
covenant, or condition invalid, void, or unenforceable, and the Executive Plan
shall remain in full force and effect notwithstanding such partial invalidity.
 

 
J.
 
Employment:

 
No provision of this Executive Plan shall be deemed to restrict or limit any
existing employment agreement by and between the Bank and the Executive, nor
shall any conditions herein create specific employment rights to the Executive
nor

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limit the right of the Employer to discharge the Executive with or without
cause. In a similar fashion, no provision shall limit the Executive’s rights to
voluntarily sever the Executive’s employment at any time.
 
VI.
 
ERISA PROVISION

 

 
A.
 
Named Fiduciary and Plan Administrator:

 
The “Named Fiduciary and Plan Administrator” of this Executive Plan shall be The
Peoples Bank & Trust Company until its resignation or removal by the Board. As
Named Fiduciary and Plan Administrator, the Bank shall be responsible for the
management, control and administration of the Executive Plan. The Named
Fiduciary may delegate to others certain aspects of the management and operation
responsibilities of the Executive Plan including the employment of advisors and
the delegation of ministerial duties to qualified individuals.
 

 
B.
 
Claims Procedure and Arbitration:

 
In the event a dispute arises over benefits under this Executive Plan and
benefits are not paid to the Executive (or to the Executive’s beneficiary(ies)
in the case of the Executive’s death) and such claimants feel they are entitled
to receive such benefits, then a written claim must be made to the Named
Fiduciary and Plan Administrator named above within sixty (60) days from the
date payments are refused. The Named Fiduciary and Plan Administrator shall
review the written claim and if the claim is denied, in whole or in part, they
shall provide in writing within sixty (60) days of receipt of such claim the
specific reasons for such denial, reference to the provisions of this Executive
Plan upon which the denial is based and any additional material or information
necessary to perfect the claim. Such written notice shall further indicate the
additional steps to be taken.
 
IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read
this Agreement and executed the original thereof on the first day set forth
hereinabove, and that, upon execution, each has received a conforming copy.
 

    
THE PEOPLES BANK & TRUST COMPANY
Selma, Alabama
        ________________________________________________
                                                     Witness
  
By:_____________________________________________
Title
        ________________________________________________
                                                     Witness
  
      _____________________________________________
Richard P. Morthland

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BENEFICIARY DESIGNATION FORM
 
FOR THE EXECUTIVE SUPPLEMENTAL
 
RETIREMENT PLAN AGREEMENT
 
 
PRIMARY DESIGNATION:
 
Name

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Address

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Relationship

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______________________________________________________________________________________________________
 
______________________________________________________________________________________________________
 
______________________________________________________________________________________________________
 
 
SECONDARY (CONTINGENT) DESIGNATION:
 
______________________________________________________________________________________________________
 
______________________________________________________________________________________________________
 
______________________________________________________________________________________________________
 
All sums payable under the Executive Supplemental Retirement Plan Executive
Agreement by reason of my death shall be paid to the Primary Beneficiary, if he
or she survives me, and if no Primary Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.
 
________________________________________________
                                Richard P. Morthland
  
___________________________________________
                                         Date

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