WILSON BANK HOLDING CO
EXECUTIVE SALARY CONTINUATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>3
<FILENAME>g67734ex10-3.txt
<DESCRIPTION>EXECUTIVE SALARY CONTINUATION AGREEMENT
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 10.3

                              WILSON BANK AND TRUST
                     EXECUTIVE SALARY CONTINUATION AGREEMENT

         THE AGREEMENT, made and entered into this 30th day of March, 1995, by
and between Wilson Bank and Trust, a Tennessee commercial bank (hereinafter
called "Bank"), and Elmer Richerson (hereinafter called the "Executive").

                                   WITNESSETH:

         WHEREAS, the Executive has been and continues to be a valued executive
of the Bank, and is now serving the Bank as its Vice President and Senior Loan
Officer; and

         WHEREAS, it is the consensus of the Board of Directors that the
Executive's services to the Bank in the past have been of exceptional merit and
have constituted an invaluable contribution to the general welfare of the Bank
and in bringing it to its present status of operating efficiency, and its
present position in its field of activity; and

         WHEREAS, the experience of the Executive, his knowledge of the affairs
of the Bank, his reputation and contacts in the industry are so valuable that
assurance of his continued services is essential for the future growth and
profits of the Bank and it is in the best interests of the Bank to arrange terms
of continued employment for the Executive so as to reasonably assure his
remaining in the Banks employment during his lifetime or until the age of
retirement; and

         WHEREAS, it is the desire of the Bank that his services be retained as
herein provided; and

         WHEREAS, the Executive is willing to continue in the employ of the Bank
provided the Bank agrees to pay to him or his beneficiaries certain benefits in
accordance with the terms and conditions hereinafter set forth:

         ACCORDINGLY, 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 at retirement or his beneficiary in the event of his premature
death while employed by the Bank; and

         FURTHERMORE, it is the intent of the parties hereto that this agreement
be considered an unfunded arrangement maintained primarily to provide
supplemental benefits for the Executive, as a member of a select group of
management or highly compensated employees of the Bank for purposes of the
Employee Retirement Income Security Act of 1974.

         NOW, THEREFORE, in consideration of services performed in the past and
to be performed in the future as well as of the mutual promises and covenants
herein contained it is agreed as follows:




<PAGE>   2

EMPLOYMENT

         1.    The Executive is an employee at will of the Bank. Except as
               otherwise expressly provided herein, this Agreement does not
               alter or affect the Executive's employment relations with the
               Bank. Nothing contained herein shall be construed as conferring
               upon the Executive the right to be retained as an employee of the
               Bank. The Executive agrees to serve the Bank, under the direction
               of the Board of Directors, faithfully, diligently, competently
               and to the best of his abilities.

FRINGE BENEFITS

         2.    The salary continuation benefits provided by this agreement are
               granted by the Bank as a fringe benefit to the Executive and are
               not part of any salary reduction plan or an arrangement deferring
               a bonus or a salary increase. The Executive has no option to take
               any current payment or bonus in lieu of these salary continuation
               benefits except as set forth hereinafter.

RETIREMENT DATE

         3.    If Executive remains in the continuous employ of the Bank, he
               shall retire from active employment with the Bank as of the
               December 31st nearest his sixty-fifth (65th) birthday, unless by
               action of the Board of Directors his period of active employment
               shall be shortened or extended.

RETIREMENT BENEFIT AND POST-RETIREMENT DEATH BENEFIT

         4.    (a)  Upon retirement the Bank in accordance with Paragraph 3
                    and subject to Paragraphs 4(b) and 8, commencing with the
                    first day of the month following the date of such
                    retirement, shall pay Executive an annual benefit equal to
                    $43,500 in equal monthly installments (of 1/12 of the annual
                    benefit) for a period of one hundred eighty (180) months.

               (b)  The Executive's Retirement Benefit and Post Retirement Death
                    Benefit as provided for in Paragraph 4(a) shall be reduced
                    if the Bank's average return on assets is below one percent
                    (1%) upon Executive's termination of service. Average return
                    on assets shall be calculated from the effective date of
                    this Agreement to the Executive's termination of service.
                    Return on assets for this purpose shall be the return on
                    assets of the Bank as defined and disclosed in the Bank's
                    annual report. If the Bank's average return on assets during
                    the term of this agreement is below one percent (1%) then
                    the benefit due to the Executive under Paragraph 4(a) shall
                    be receive a certain percentage of such benefit in
                    accordance with the following schedule:


                                       2



<PAGE>   3

<TABLE>
<CAPTION>
                                  ----------------------------------------
                                      Average                   Percentage
                                  Return on Assets              Of Benefit
                                  ----------------------------------------
                                  <S>                           <C>
                                   1% or greater                     100%
                                  ----------------------------------------
                                   0.90% - 0.99%                      90%
                                  ----------------------------------------
                                   0.80% - 0.89%                      80%
                                  ----------------------------------------
                                   0.70% - 0.79%                      70%
                                  ----------------------------------------
                                   Below   0.70%                       0%
                                  ----------------------------------------
</TABLE>

               (c)  If the Executive should die subsequent to termination of
                    service but prior to receiving all one hundred eighty (180)
                    monthly payments under this Agreement, then Executive's
                    designated beneficiary shall continue to receive such
                    monthly payments until one hundred eighty (180) payments
                    have been made by the Bank under this Agreement. Such
                    beneficiary designation shall be accomplished on Exhibit 2
                    to this Agreement and filed with the Bank. In the absence of
                    any effective designation of beneficiary, any such amounts
                    becoming due and payable upon the death of the Executive
                    subsequent to termination of service shall be payable to the
                    duly qualified executor or administrator of his estate.

DEATH BENEFIT PRIOR TO RETIREMENT

         5.    In the event the Executive should die while actively employed by
               the Bank at any time after the date of this Agreement but prior
               to his retirement upon attaining the age of sixty-five (65) years
               (or such later date as may be agreed upon), the Bank will pay an
               annual benefit equal to $43,500 in equal monthly installments
               (each equal to 1/12 of the annual benefit) for a period of one
               hundred eighty (180 months to such individual or individuals as
               the Executive may have designated as his beneficiary on Exhibit 2
               and filed with the Bank. The said monthly payments shall begin
               the first day of the third month following the month of the
               decease of the Executive. In the absence of any effective
               designation of beneficiary, any such amount becoming due and
               payable upon the death of the Executive shall be payable to the
               duly qualified executor or administrator of his estate. Provided,
               however, that anything hereinabove to the contrary
               notwithstanding no death benefit shall be payable hereunder if it
               is determined that the Executive's death was caused by suicide.

DISABILITY BENEFIT PRIOR TO RETIREMENT

         6.    In the event the Executive should become disabled while actively
               employed by the Bank at anytime after the effective date of this
               Agreement but prior to his attaining the age of sixty-five (65)
               years (or such later date as may be agreed upon), the Bank will
               pay an annual benefit equal to $43,500 in equal monthly
               installments (of 1/12 of the annual benefit) for a period of one
               hundred eighty (180) months. "Disabled" for purposes of this
               Paragraph 6 shall mean the Executive's medically determined
               physical or mental impairment which qualifies him for disability
               benefits as determined by the Social Security Administration. The
               said monthly payments shall begin the first day of the third
               month following the month that the Executive becomes disabled. If
               the Executive should die prior



                                       3
<PAGE>   4

               to receiving all one hundred eighty (180) monthly payments
               pursuant to this Paragraph 6, then the Executive's designated
               beneficiary, as listed on Exhibit 2 to this Agreement, shall
               continue to receive such monthly payments until one hundred
               eighty (180) payments have been made by the Bank under this
               Agreement. In the absence of any effective designation of
               beneficiary, any such amounts becoming due and payable upon the
               death of the Executive subsequent to becoming disabled shall be
               payable to the duly qualified executor or administrator of his
               estate.

OTHER TERMINATION OF EMPLOYMENT

         7.    (a)  In the event that the Executive's employment shall terminate
                    for any reason other than death, disability (as defined in
                    paragraph 6) or retirement (in accordance with Paragraph 3),
                    by his voluntary action or his discharge by the Bank without
                    cause, the Bank shall pay to the Executive the vested
                    portion of his retirement benefit, as provided for in
                    Paragraphs 4(a) and 8 and subject to any reduction in
                    accordance with Paragraph 4(b), commencing upon the earlier
                    of the Executive's death or by his attaining sixty-five (65)
                    years of age, such payment to be paid in one hundred eighty
                    (180) equal monthly payments. Such payments shall commence
                    on the first day of the month after the Executive attains
                    age sixty-five (65) or if the Executive should die before
                    that time, the first day of the third month following the
                    month of the decease of the Executive. In the event the
                    Executive's death should occur after such severance but
                    prior to the commencement or completion of the monthly
                    payments provided for in this Paragraph 7(a), the remaining
                    installments shall be paid to such individual or individuals
                    as the Executive may have designated in writing, and filed
                    with the Bank. In the absence of any effective designation
                    of beneficiary, any such amounts shall be payable to the
                    duly qualified executor or administrator of his estate.

               (b)  In the event the Executive shall be discharged by the Bank
                    for cause, then all of the Executive's rights under this
                    Agreement shall terminate and he shall forfeit all benefits
                    under this Agreement. For purposes of this Paragraph 7(b),
                    "for cause" shall mean gross negligence or willful
                    misconduct, the commission of a felony or gross-misdemeanor
                    involving moral turpitude, fraud, dishonesty, embezzlement,
                    willful violation of any law or any other behavior or act
                    that results in any adverse effect on the Bank as may be
                    determined by the Bank in its sole discretion.

VESTING

         8.    Except for such benefits provided in Paragraphs 5 and 6, the
               Executive shall vest in the benefits which are the subject of
               this Agreement in accordance with the schedule listed in Exhibit
               1 to this Agreement. The Executive will be credited with a year
               of participation for each anniversary thereafter of the effective
               date of this Agreement for which the Executive remains in the
               employ of the Bank.




                                       4
<PAGE>   5


BENEFIT ACCOUNTING

         9.    The Bank shall account for this benefit using the regulatory
               accounting principles of the Bank's primary federal regulators.
               The Bank shall establish an accrued liability retirement account
               for the Executive into which appropriate reserves shall be
               accrued.

PARTICIPATION IN OTHER PLANS

         10.   The benefits provided hereunder shall be in addition to
               Executive's annual salary as determined by the Board of
               Directors, and shall not affect the right of Executive to
               participate in any current or future Bank Retirement Plan, group
               insurance, bonus, or in any supplemental compensation arrangement
               which constitutes a part of the Bank's regular compensation
               structure.

NON-COMPETE

         11.   The payment of benefits under this Agreement shall be contingent
               upon the Executive's not engaging in any activity that directly
               or indirectly competes with the Bank's interests for a period of
               three (3) years commencing on the date the Executive's employment
               with the Bank is terminated, within Wilson, Davidson, Sumner,
               Trousdale, Smith, DeKalb, Cannon, Rutherford and Williamson
               counties in the State of Tennessee; provided, however, that the
               Bank shall not be entitled to injunctive enforcement of the
               non-compete provisions of this Paragraph 11, its sole remedy for
               a violation by the Executive of the non-compete provisions of
               this Paragraph 11 being the right to cease the payments of
               benefits under this Agreement. In the event there is a change of
               control as defined in Paragraph 12, the provisions of this
               Paragraph 11 shall not apply, and the Executive shall be entitled
               to the payment of benefits as set forth in Paragraph 12.

CHANGE OF CONTROL

         12.   The Bank agrees that if there is a change in control of the
               ownership of the Bank or its parent company, Wilson Bank Holding
               Company, or if the Bank or Wilson Bank Holding Company merges or
               consolidates with any other company or organization, or permits
               its business activities to be taken over by any other
               organization, or ceases its business activities or terminates its
               existence, the Executive will then be considered to be vested in
               one hundred percent (100%) of the retirement benefit to be paid
               to the Executive pursuant to Paragraph 4(a) above and shall not
               be subject to any reduction as provided for in Paragraph 4(b) and
               shall not be subject to the non-compete provisions of Paragraph
               11. For purposes of this Paragraph 12, "change of control" means
               that 50% or more of the outstanding common stock of the Bank or
               Wilson Bank Holding Company shall be held by persons who did not
               hold such stock immediately prior to the transaction or series of
               related transactions in which such stock was acquired by such
               person or persons, unless such shares were acquired in an
               underwritten public offering.


                                       5
<PAGE>   6
ALIENABILITY

         13.   It is agreed that neither Executive nor his/her spouse nor any
               designated beneficiary, shall have any right to commute, sell,
               assign, transfer or otherwise convey the right to receive any
               payments hereunder, which payments and the right thereto are
               expressly declared to be non-assignable and non-transferable;
               and, in the event of any attempted assignment or transfer, the
               Bank shall have no further liability hereunder.

RESTRICTIONS ON FUNDING

         14.   The Bank shall have no obligation to set aside earmark, or
               entrust any fund or money with which to pay its obligations under
               this Agreement. The Bank reserves the absolute right at its sole
               discretion to either fund the obligations undertaken by this
               Agreement or to refrain from funding the same and determine the
               extent, nature, and method of such funding.

GENERAL ASSETS OF THE BANK

         15.   The rights of the Executive under this Agreement and of any
               beneficiary of the Executive shall be solely those of an
               unsecured creditor of the Bank. If the Bank shall acquire an
               insurance policy or any other asset in connection with the
               liabilities assumed by it hereunder, it is expressly understood
               and agreed that neither Executive nor any beneficiary of
               Executive shall have any right with respect to, or claim against,
               such policy or other asset. Such policy or asset shall not be
               deemed to be held under any trust for the benefit of Executive or
               his beneficiaries or to be held in any way as collateral security
               for the fulfilling of the obligations of the Bank under this
               Agreement. It shall be, and remain, a general, unpledged
               unrestricted asset of the Bank and Executive or any of his
               beneficiaries shall not have a greater claim to the insurance
               policy or other assets, or any interest in either of them, than
               any other general creditor of the Bank.

CLAIMS PROCEDURE

         16.   (a)  In the event that benefits under this Agreement are not paid
                    to the Executive (or his beneficiary in the case of the
                    Executive's death), and such person feels entitled to
                    receive them, a claim shall be made in writing to the Board
                    of Directors of the Bank within sixty (60) days from the
                    date payments are not made. Such claim shall be reviewed by
                    the Board of Directors of the Bank and the Bank. If the
                    claim is denied, in full or in part, the Board of Directors
                    of the Bank shall provide a written notice within ninety
                    (90) days setting forth the specific reasons for denial
                    specific reference to the provisions of this Agreement upon
                    which the denial is based, and any additional material or
                    information necessary to perfect the claim, if any. Also,
                    such written notice shall indicate the steps to be taken if
                    a review of the denial is desired.



                                       6
<PAGE>   7

                    If a claim is denied and a review is desired, the Executive
                    (or his beneficiary in the case of the Executive's death),
                    shall notify the Board of Directors of the Bank in writing
                    within sixty (60) days [and a claim shall be deemed denied
                    if the Plan Administrator does not take any action with the
                    aforesaid ninety (90)-day period]. In requesting a review,
                    the Executive or his beneficiary may review this Agreement
                    or any documents relating to it and submit any written issue
                    and comments he or she may feel appropriate. In its sole
                    discretion the Plan Administrator shall then review the
                    claim and provide a written decision within sixty (60) days.
                    This decision likewise shall state the specific provisions
                    of the Agreement on which the decision is based.

               (b)  For purposes of implementing this claims procedure, the
                    Board of Directors of the Bank shall be responsible for the
                    management, control, and administration of the Agreement as
                    established herein. The Bank may delegate to certain aspects
                    of the management a operation responsibilities of the
                    Agreement including the employment of advisors and the
                    delegation of ministerial duties to qualified individuals.

AMENDMENT

         17.   This Agreement may be amended in whole or in part from time to
               time by the Bank. However, any modification to this Agreement
               must be in writing.

INTERPRETATION

         18.   The Bank, acting in good faith, shall have reasonable discretion
               to interpret this Agreement. The Bank's interpretation and
               actions hereunder, if made in the exercise of good faith
               discretion and not in an arbitrary and capricious manner, shall
               be conclusive and binding upon all persons for all purposes.
               Unless the Board of Directors of the Bank determines otherwise
               regarding the interpretation of this Agreement or the review of
               claims pursuant to Paragraph 16, the Chairman of the Board shall
               interpret this agreement and review any claim acting on behalf of
               the Bank. Neither the Bank nor any of its officers, employees or
               members of the Board of Directors (including the Chairman of the
               Board) shall be liable to the Executive or any other person for
               any action taken in connection with the interpretation of the
               Agreement.

HEADINGS

         19.   Headings and subheadings of this Agreement are inserted for
               reference and convenience only and shall not be deemed a part of
               this Agreement.

APPLICABLE LAW

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


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<PAGE>   8

BINDING EFFECT

         21.   Except as herein otherwise expressly stipulated to the contrary,
               this Agreement shall be binding upon and inure to the benefit of
               the Executive and the Bank and their respective successors and
               permitted assigns.

EFFECTIVE DATE

         22.   The effective date of this Agreement shall be March 30, 1995.

         IN WITNESS WHEREOF, Wilson Bank and Trust has caused this Agreement to
be signed in its corporate name by its duly authorized officer, and attested by
its Secretary, and the Executive has hereunto set his hand, all on the day and
year first above written.

                                          WILSON BANK AND TRUST


                                          By:    /s/ Randall Clemons
                                              ----------------------------------
                                          Title:   President
                                                  ------------------------------

ATTEST:

/s/ Becky Taylor
-----------------------------
Secretary

                                          /s/ Elmer Richerson
                                          --------------------------------------
                                          Executive





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<PAGE>   9


                                    EXHIBIT 1

                                VESTING SCHEDULE

<TABLE>
<CAPTION>
              YEAR(S) OF                      AMOUNT OF RETIREMENT BENEFIT
            PARTICIPATION                        IN WHICH VESTING OCCURS
-----------------------------------       ------------------------------------
<S>                                       <C>
                  1                                          6%
                  2                                         12%
                  3                                         18%
                  4                                         24%
                  5                                         30%
                  6                                         36%
                  7                                         42%
                  8                                         48%
                  9                                         54%
                  10                                        60%
                  11                                        66%
                  12                                        72%
                  13                                        78%
                  14                                        84%
                  15                                        90%
                  16                                        96%
          17 and thereafter                                100%
</TABLE>



                                       9

<PAGE>   10


                                    EXHIBIT 2

                           DESIGNATION OF BENEFICIARY

         Pursuant to the terms of the Wilson Bank Holding Company Salary
Continuation Agreement (the "Agreement"), dated ______________, 19__ between
myself and Wilson Bank Holding Company, I hereby designated the following
beneficiary(ies) to receive payments which may be due under such Agreement after
my death:

Primary Beneficiary:

-------------------                 ---------------------     -------------
Name                                Address                   Relationship

Secondary Beneficiary(ies)

-------------------                 ---------------------     -------------
Name                                Address                   Relationship

-------------------                 ---------------------     -------------
Name                                Address                   Relationship

          The Primary Beneficiary named above shall be the designated
beneficiary referred to in Paragraphs 4 and 5 of the Agreement if he or she is
living at the time a death benefit payment thereunder becomes due and payable,
and the Secondary Beneficiary named above shall be the designated beneficiary
referred to in Paragraphs 4 and 5 of the Agreement only if he or she is living
at the time a death benefit payment becomes payable and the Primary Beneficiary
is not then living.

         This designation hereby revokes any prior designation which may have
been in effect.

                                      Date:


------------------------              ---------------------------------
Witness                               Executive

                                      Acknowledged by:



                                      ---------------------------------
                                      (Bank Officer)





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</DOCUMENT>
