11-K 1 phc11k401plan.txt ANNUAL REPORT FOR 401K - 2001 AND 2000 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. For the transition period from ____________ to ____________. Commission file number: 001-13253 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: THE PEOPLES BANK & TRUST COMPANY 401(K) PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: THE PEOPLES HOLDING COMPANY 209 Troy Street Tupelo, MS 38802 FINANCIAL REPORT THE PEOPLES BANK AND TRUST COMPANY 401(k) PLAN Tupelo, Mississippi December 31, 2001 CONTENTS PAGE INDEPENDENT AUDITORS' REPORT ...................................... 3 FINANCIAL STATEMENTS: STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS ................. 4 STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS ...... 5 NOTES TO FINANCIAL STATEMENTS ................................... 6 SUPPLEMENTAL SCHEDULES: SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR .. 10 SCHEDULE OF REPORTABLE TRANSACTIONS ............................. 11 INDEPENDENT AUDITORS' REPORT To the Administrative Committee The Peoples Bank and Trust Company 401(k) Plan Tupelo, Mississippi We were engaged to audit the financial statements of The Peoples Bank and Trust Company 401(k) Plan as of December 31, 2001 and 2000, and for the years then ended and the supplemental schedules as of and for the year ended December 31, 2001 as listed in the accompanying index. These financial statements and supplemental schedules are the responsibility of the Plan's management. As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, the plan admin-istrator instructed us not to perform, and we did not perform, any auditing procedures with respect to the cash, investments, investment transactions, and related income, which were certified by The Peoples Bank and Trust Company, the trustee of the Plan, except for comparing the information with the related information included in the financial statements. We have been informed by the plan administrator that the trustee holds the Plan's investment assets and executes investment transactions. The plan administr a-tor has obtaine d a certification from the trustee as of and for the years ended December 31, 2001 and 2000, that the information provided to the plan administrator by the trustee is complete and accurate. Because of the significance of the information that we did not audit, we are unable to, and do not, express an opinion on the accompanying financial statements and schedules taken as a whole. The form and content of the information included in the financial statements and schedules, other than that derived from the information certified by the trustee, have been audited by us in accordance with audit-ing standards generally accepted in the United States of America and, in our opinion, are presented in compliance with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. /s/ Nail McKinney Professional Association March 8, 2002 3 STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS THE PEOPLES BANK AND TRUST COMPANY 401(k) PLAN December 31, 2001 and 2000 2001 2000 ASSETS ----------- ----------- INVESTMENTS AT FAIR VALUE (Note 6) Mutual funds ................................ $ 3,851,058 $ 3,046,109 Common stock ................................ 1,566,136 642,600 Trust for U.S. Treasury Obligations ......... 32,423 8,032 ----------- ----------- Total investments .............................. 5,449,617 3,696,741 CASH ........................................... - 4,692 RECEIVABLES Employer contribution ....................... 440,214 450,376 Dividends ................................... 11,247 8,581 ----------- ----------- Total receivables .............................. 451,461 458,957 ----------- ----------- Total assets ................................... 5,901,078 4,160,390 ----------- ----------- LIABILITIES Due to brokers ................................. - 744 Due to participants ............................ 474 474 ----------- ----------- Total liabilities .............................. 474 1,218 ----------- ----------- Net assets available for benefits .............. $ 5,900,604 $ 4,159,172 =========== =========== The notes to financial statements are an integral part of these statements. 4 STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS THE PEOPLES BANK AND TRUST COMPANY 401(k) PLAN Years ended December 31, 2001 and 2000 2001 2000 ----------- ----------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income: Net appreciation (depreciation) in fair value of investments (Note 6) .......... $ 533,399 $ (378,020) Interest ................................. 4,398 4,084 Dividends ................................ 126,531 93,412 ----------- ----------- 664,328 (280,524) Contributions Employer ................................. 440,347 450,376 Participant deferrals .................... 891,413 893,628 ----------- ----------- 1,331,760 1,344,004 ----------- ----------- Total additions ............................. 1,996,088 1,063,480 ----------- ----------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Benefits paid to participants ............ 254,656 78,899 ----------- ----------- Total deductions ............................ 254,656 78,899 ----------- ----------- Net increase ................................ 1,741,432 984,581 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year ........................... 4,159,172 3,174,591 ----------- ----------- End of year ................................. $ 5,900,604 $ 4,159,172 =========== =========== The notes to financial statements are an integral part of these statements. 5 NOTES TO FINANCIAL STATEMENTS THE PEOPLES BANK AND TRUST COMPANY 401(k) PLAN December 31, 2001 NOTE 1. DESCRIPTION OF PLAN The following brief description of The Peoples Bank and Trust Company 401(k) Plan (Plan) is provided for general information purposes only. Participants should refer to the Plan agreement for more complete information. A. General. The Plan is a defined contribution plan covering substantially all employees of The Peoples Bank and Trust Company. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). B. Contributions . Each year, participants may contribute up to 25% of pretax annual com-pensation, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. The employer matches 100% of the employee's salary deferral contribution up to three percent of the employee's compensation. The employer may make a discretionary profit sharing con-tribution. Contributions are subject to certain limitations. C. Participant Accounts. Each participant's account is credited with the participant's con-tribution and allocations of the employer contribution and plan earnings. Each participant's account is also charged with an allocation of administrative expenses, when applicable. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. D. Vesting. Participants are immediately 100% vested in salary deferral contribution and earnings allocated to those accounts. Vesting in matching employer contributions and profit sharing contributions is based on a seven year graduated schedule. Forfeitures of non-vested employer match contributions will reduce employer match contribution or re-duce expenses of the plan. Forfeitures of non-vested employer profit sharing contributions will be allocated to other participants based on compensation. E. Investment Options. Upon enrollment in the Plan, a participant may direct contributions in any of six investment options. - Peoples Holding Company Common Stock - Money Market Obligation Trust - Federated Index Trust - Federated U.S. Government Securities Fund - Vanguard/Wellington Fund, Inc. - Vanguard/Wellesley Income Fund 6 NOTES TO FINANCIAL STATEMENTS - (Continued) NOTE 1. DESCRIPTION OF PLAN - (Continued) F. Payment of Benefits . Upon termination of service with the employer, a participant may elect to receive either a lump-sum amount equal to the value of his or her account or in-stallments over a term certain not to extend beyond the life expectancy of the participant or his or her beneficiary. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Accounting . The financial statements of the Plan are prepared under the accrual method of accounting. B. Valuation of Investments. The Plan's investments are stated at market value. If avail-able, quoted market prices are used to value investments. If quoted market prices are not available, the trustee estimates the fair value of the asset. C. Payment of Benefits. Benefits are recorded when paid. D. Plan Termination. Although it has not expressed any intent to do so, the Employer has the right to terminate the Plan at any time subject to the provisions of ERISA. E. Operating Expenses. The Plan sponsor absorbs substantially all of the administrative ex-penses of the Plan. F. Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may dif-fer from those estimates. NOTE 3. PLAN TERMINATION Although it has not expressed any intent to do so, The Peoples Bank and Trust Company has the right at any time to terminate the Plan. In the event of plan termination, all employees will become 100% vested in their accounts NOTE 4. INCOME TAX STATUS The plan received a favorable determination letter from the Internal Revenue Service dated February 12, 1998. The plan administrator and the plan's tax counsel believe that the plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code. NOTE 5. CERTIFIED INFORMATION Information furnished and certified by The Peoples Bank and Trust Company, the trustee of the Plan, consisted of the following: (1) Summary of assets at December 31, 2001 and 2000 at cost and market value; (2) Statement of transactions for the years ended December 31, 2001 and 2000. 7 NOTES TO FINANCIAL STATEMENTS - (Continued) NOTE 6. INVESTMENTS All of the Plan's investments are held by a bank-administered trust fund. The following table presents the fair value of investments at December 31, 2001 and 2000. Investments that represent 5% or more of the Plan's net assets are separately identified. 2001 2000 ----------- ----------- Investments at fair value as determined by quoted market price Mutual funds: Money Market Obligation Trust ............... $ 151,529 $ 54,067 Federated Index Trust ....................... 1,839,451 1,680,430 Federated U.S. Government Securities Index... 121,809 69,729 Vanguard / Wellington Fund Inc. ............. 1,346,267 994,114 Vanguard / Wellesley Income Fund ............ 392,002 247,769 Common stock: Peoples Holding Company ..................... 1,566,136 642,600 Trust for U.S. Treasury Obligations ............ 32,423 8,032 ----------- ----------- $ 5,449,617 $ 3,696,741 =========== =========== During 2001 and 2000, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value by $ 533,399 and $ (378,020), respectively as follows: 2001 2000 ----------- ----------- Investments at fair value as determined by quoted market price Mutual funds ................................... $ (260,489) $ (76,649) Common stock ................................... 793,888 (301,371) ----------- ----------- $ 533,399 $ (378,020) =========== =========== 8 SUPPLEMENTAL SCHEDULES 9
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR THE PEOPLES BANK AND TRUST COMPANY 401(k) PLAN Year ended December 31, 2001 (c) Description of investment (b) Identity of issue, including maturity date, borrower, lessor, rate of interest, collateral, (e) Current (a) or similar party par, or maturity value (d) Cost Value ---- --------------------- --------------------------------- ------------- ------------- Trust for U.S. Treasury Obligations Mutual Fund $ 32,423 $ 32,423 Money Market Obligations Trust Mutual Fund 151,529 151,529 Federated Index Trust Max-Cap. Inst. Mutual Fund 2,009,124 1,839,451 Federated U.S. Govt. Securities Mutual Fund 119,641 121,809 Vanguard Wellington Fund Mutual Fund 1,410,917 1,346,267 Vanguard Wellesley Fund Mutual Fund 404,613 392,002 Peoples Holding Company Common stock 1,157,349 1,566,136 ------------- ------------- $ 5,285,596 $ 5,449,617 ============= =============
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SCHEDULE OF REPORTABLE TRANSACTIONS THE PEOPLES BANK & TRUST COMPANY 401(k) PLAN Year ended December 31, 2001 (b) Description of (h) Current asset (include value of (a) Identity of interest rate (f) Expense asset on (i) Net of party and maturity in (c) Purchase (d) Selling (e) Lease incurred (g) Cost transaction gain or involved case of a loan) Price Price rental w/transaction of asset date (loss) --------------- ------------------ ------------ ----------- --------- ------------- ------------ ----------- ---------- Trust for U.S. Mutual Fund $ 283,518 $ $ $ $ $ 283,518 $ Treasury Ob- Multiple Purchases ligations Trust for U.S. Mutual Fund 259,127 259,127 259,127 Treasury Ob- Multiple Sales ligations Federated Mutual Fund 716,656 716,656 716,656 Index Trust Multiple Purchases Max-Cap Inst. Federated Mutual Fund 283,621 316,909 283,621 (33,288) Index Trust Multiple Purchases Max-Cap Inst. Vanguard Mutual Fund 507,176 507,176 507,176 Wellington Multiple Purchases Fund
11 EXPLANATORY STATEMENT This initial Form 11-K for The Peoples Bank & Trust Company 401(k) Plan is being filed concurrently with the registration statement on Form S-8 for the plan. It includes the financial statements and supplemental schedule of the plan as of December 31, 2001, and 2000 and for the year ended December 31, 2001. These financial statements were examined by the plan's independent accountant, who issued its report pursuant to the requirements of ERISA, including the limited scope exemption available thereunder. The examination by the independent accountant of the financial statements and supplemental schedule for the plan year ended December 31, 2002 is currently in process. As soon as this examination is completed, the plan will file a Form 11-K for the year ended December 31, 2002, which will include the financial statements and supplemental schedule prepared in accordance with the financial reporting requirements of ERISA, without reliance upon the limited scope exemption. SIGNATURE The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this Annual Report on Form 11-K to be signed on its behalf by the undersigned hereunto duly authorized. THE PEOPLES BANK & TRUST COMPANY 401(K) PLAN Date: April 10, 2003 /s/ Hollis Ray Smith -------------------------- Hollis Ray Smith Senior Vice President Human Resources Department 12