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Annual Incentive Compensation Plan (AICP)

Policy Name:                Annual Incentive Compensation Plan

Policy Approval Authority:         MidSouth Bank Board of Directors/Compensation
Committee

Sponsor:                Corporate Efficiency Officer/Human Resources
        
Approval Date:                March 21, 2018

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MIDSOUTH BANCORP, INC.

ANNUAL INCENTIVE COMPENSATION PLAN

2018 PLAN YEAR

STRICTLY CONFIDENTIAL

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ANNUAL INCENTIVE COMPENSATION PLAN

INTRODUCTION

MidSouth Bancorp, Inc. (the “Company”) is a financial holding company founded in
1985 and headquartered in Lafayette, LA. The Company intends to provide annual
incentive award opportunities for employees eligible to participate in the 2018
Annual Incentive Compensation Plan (the “Plan”) to encourage those employees to
achieve targeted business objectives of the Company. These annual incentive
awards will provide a payment based upon attainment of these specified goals and
objectives. The objective is aligning the interests of the Company’s employees
with the interests of the Company and its shareholders in obtaining targeted
financial results.

DEFINITIONS

As referenced within this Plan, the following words and phrases shall have the
following meanings:

1.
“Actual Base Salary” means the annual rate of base salary payable to the Plan
Participant as of the end of the Plan Year to which the annual incentive relates
or, if earlier, at the time of the Plan Participant’s Termination of Employment.

2.
“Board” means the Board of Directors of the Company as constituted from time to
time.

3.
“Code” means the Internal Revenue Code of 1986, as amended.

4.
“Disability” means the employee suffering a sickness, accident, or injury which
has been determined by the carrier of any individual or group disability
insurance policy covering the employee or if no such policy exists then by the
Social Security Administration, to be a disability rendering the employee
totally and permanently disabled. The employee must submit proof to the Plan
Administrator of the carrier’s or Social Security Administration’s determination
upon the request of the Plan Administrator.

5.
“Effective Date” means January 1, 2018.

6.
Plan Administrator” means the plan administrator described in Article VII.

7.
“Plan Participant” means any current employee of the Company that is designated
by the Chief Executive Officer (“CEO”), and approved by the Board, as eligible
to participate in this Plan. Newly-hired or newly-promoted employees must be
designated by the CEO and approved by the Board to participate in the Plan. The
CEO will recommend, and the Board will approve, the level of participation to
which each employee will be eligible.

8.
“Plan Year” means the twelve month period commencing on January 1st and ending
on December 31st of each calendar year. The initial Plan Year shall commence on
the Effective Date.

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9.
“Termination of Employment” means the Plan Participant ceases to be employed by
the Company and its subsidiaries for any reason whatsoever (whether voluntary or
involuntary). The Plan Participant will not be considered to have incurred a
Termination of Employment if the Plan Participant is on an approved leave of
absence with any legal or contractual right to return to employment.

I.
PLAN PURPOSE

The Plan is prospective in design with the utilization of a defined payout
formula that is based upon the achievement of a combination of predetermined
overall Company and other Plan Participant criteria. This Plan is designed to
reward Plan Participants based on the achievement of financial and strategic
goals as set forth annually by the Company. The Plan is further intended to
reward Plan Participants for their performance while prudently managing risks
associated with any activity associated with achievement of specific goals and
objectives. Annual performance is important, but must be combined with long-term
performance standards to ensure necessary safety and soundness for the Company
and its shareholders.

The Plan will commence on the Effective Date.

II.
PARTICIPATION

Eligibility for participation in the Plan shall be limited to those employees
whose responsibilities, in the judgment of the CEO and Board, have a significant
bearing on the success and performance of the Company.

The CEO shall submit to the Board for each Plan Year a list of employees
eligible for participation in the Plan for that Plan Year, the annual incentive
award factors and their weighting, and the incentive ranges and award payouts
allocated to each such Plan Participant. The Board will approve those employees
who will be eligible for participation in the Plan for that Plan Year, the
annual incentive award factors and their weighting, and the incentive ranges and
award payouts allocated to each such Plan Participant. Each Plan Participant
shall be notified of his or her eligibility for participation in the Plan as
soon as administratively practicable after Board approval. Plan Participants may
commence participation any time prior to October 1st of the Plan Year at the
discretion of the CEO with Board approval. The annual incentive award, if any,
payable to any Plan Participant for the Plan Year will be prorated based on the
number of full months of participation in the Plan for the Plan Year with
respect to any Plan Participant who is not employed as of the first day of the
Plan Year. No Plan Participants may be added to the Plan on or after October 1st
of the Plan Year. Eligibility for the Plan will be determined annually for each
Plan Year by the CEO and the Board as described herein.

PLAN YEAR

The period over which performance is measured and the amount of the incentive
award for each Plan Participant will be determined shall be the Plan Year.

III.
GENERAL PLAN DESIGN

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The Company recognizes the need to implement a performance-based incentive
program for executives, key officers, and other employees as designated by the
CEO and approved by the Board. In order to align the Plan with safety and
soundness principles, the Plan design incorporates a tiered approach with annual
incentive awards linked to the achievement of pre-defined performance goals. The
incentive awards utilized in the Plan are designed to provide market competitive
payout percentages for the achievement of the established performance-based
goals. Award levels are pre-established for each Plan Participant and are
designated as a percentage of the Plan Participant’s Actual Base Salary. Levels
of achievement are generally classified as “Threshold” (performance measure
below Target level, but still eligible for incentive award once Threshold is
achieved or exceeded; performance below threshold will result in no payment of
the incentive award), “Target” (performance goal standard, also referred to as
“forecast”), and “Maximum” (performance level above Target whereby award payout
may be either formulaic or discretionary, subject to any established maximum
payout).

IV.
EARNINGS OF ANNUAL INCENTIVE AWARDS

Annual incentive awards are based on achievement of the performance criteria
that has been pre-established and communicated to Plan Participants. As the Plan
develops and priorities change, performance measures, award payout levels and
Company goals may change annually.

The annual incentive awards are to be paid on an annual basis in the form of
supplemental cash compensation (subject to required tax or other withholdings).
Annual cash awards will be paid using the following schedule. Dependent upon the
Company meeting its pre-established performance goals and satisfactory audit
performance, Plan Participants who have achieved their predetermined performance
goals at the threshold, target, or maximum levels, and who have satisfied
qualifying criteria as designated within their Plan Participant worksheet in
order to be eligible to be paid the incentive award, will be paid the amount of
the annual incentive award that corresponds to the Plan Participant’s level of
achievement no later than two and one-half months following the end of the Plan
Year with respect to which the annual incentive award was determined. Payment
within this time period is necessary to avoid classifying incentive awards as
nonqualified deferred compensation under IRC Section §409A.

A.
Annual Incentive Award Levels

Threshold, target, and maximum award levels, expressed as a percent of the Plan
Participant’s Actual Base Salary, will be established for each eligible Plan
Participant.

Percentage payouts will be calculated using either a ratable or fixed percentage
approach whereby award payouts will be calculated at the threshold, target, and
maximum criteria levels as well as at criteria levels between threshold and
target and between target and maximum.

B.
Performance Standards

The Plan will provide annual incentive awards to Plan Participants based on
overall Company and Plan Participant performance as follows:

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1.
Company Performance – The incentive awards for Company performance will be based
on the Company’s overall success as measured by criteria recommended by the CEO
and determined by the Board. Percentage payouts for Company performance will be
allocated based on the achievement of each pre-established Company performance
goal for each Plan Participant in the Plan.

2.
Plan Participant Performance – For all Plan Participants, pre-determined
Company, Bank, Regional and/or Individual Participant performance criteria may
also be used to determine the amount of the Plan Participant’s award payout. A
percentage of each Plan Participant’s annual incentive award will be based on
achievement of Plan Participant criteria, as recommended by the CEO and
determined by the Board (which will be stated in the Plan worksheets). The
specific Plan Participant performance objectives will be established at the same
time as the other performance goals.

For each performance factor (overall Company and Plan Participant), an
appropriate standard of performance is intended to be established with three
essential performance points:

1.
Threshold Performance: Equal to or exceeding threshold is the minimum level of
performance needed to receive an award.

2.
Targeted Performance: The forecasted, or expected, level of performance based
upon both historical data and management’s best judgment of expected performance
during the coming performance period.

3.
Maximum Performance: The level of performance which based upon historical
performance and management’s judgment would be exceptional or beyond the Target
Performance level.

Performance standards are determined by using the Company’s performance history,
safety and soundness principles, peer data and management’s judgment of what
levels can be achieved without taking imprudent and unnecessary risk based on
current market conditions. Once the targeted performance is established, the
Threshold and Maximum payout levels are calculated if applicable. Maximum levels
may be subject to discretionary payouts upon the approval of the CEO and the
Board.

Notwithstanding the foregoing, the Board in its discretion may determine if an
extraordinary occurrence outside of management’s influence, including but not
limited to unanticipated mergers or acquisitions, changes in regulatory, tax or
accounting laws, or other similar items, be it a windfall or a shortfall, has
occurred during the Plan Year, and whether the incentive awards should be
adjusted to neutralize the effects of any such events. Additionally, the Board
in its discretion may determine if an unacceptable performance event has
occurred during the Plan Year or after the end of the Plan year and before award
payout, such as a major management default of primary responsibilities, or a
discovery of fraud, which will result in an adjustment, reduction or elimination
of any award payout for any Plan Participant.

C.
Qualifiers

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As qualifiers to receive awards under this Plan, the Company must meet its
target goal established as the minimum performance achievement which must be met
to pay any incentive awards for the Plan Year and have satisfactory audit
performance, and each Plan Participant must achieve not only satisfactory
performance, but also individual qualitative factors as designated within their
Plan Participant worksheet. The performance rating of each Plan Participant will
be derived from the current performance management system utilized by the
Company. Weighting for each performance criteria (overall Company or Plan
Participant) is allocated based on the Plan Participant’s level of
responsibilities and overall ability to impact results, as recommended by the
CEO and determined by the Board.

D.
Payment of Awards

The procedure for calculating the Plan Participant annual incentive award
entails the following steps:

1.
Except as described below, a Plan participant must be an active employee of the
Company or its subsidiary at the time of the award payout in order to be
eligible to receive the award payout.

2.
Performance levels will be determined relative to specific achievement per Plan
Participant. Each individual award payout is calculated using a percent of the
Plan Participant’s Actual Base Salary for the Plan Year with respect to which
the incentive bonus is to be determined.

3.
For each Plan participant, the incentive award for each factor is multiplied by
the assigned factor weighting.

4.
The incentive award, expressed in dollars, is then computed for each Plan
Participant by calculating the award payout proportion as compared to designated
levels and then adding each factor’s award result.

5.
Incentive awards are paid out to each eligible Plan Participant according to the
established schedule.

6.
Awards will be paid on an annual basis no later than two and one-half months
following the end of the Plan Year with respect to which the incentive bonus is
to be determined.

V.
PROGRAM ADMINISTRATOR

Administration of the Plan is the joint responsibility of the Board, the CEO,
and Human Resources (or others as designated) within the Company.

A.
Responsibilities of the Board of Directors

The Board has the responsibility to approve, amend, or terminate the Plan as the
Board in its discretion shall determine. The actions of the Board shall be final
and binding on all parties.

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The Board has the responsibility to administer and interpret the Plan. Prior to
or as soon as administratively practicable after the beginning of each Plan
Year, the Board shall review and revise, if deemed advisable, the operating
rules of this Plan for the Plan Year to follow. After approval by the Board,
management shall, as soon as practical, inform each of the Plan Participants
under the Plan of their potential award under the operating rules adopted for
the Plan Year to follow.

The Board shall determine and/or approve the final payout of each Plan
Participant’s incentive award in accordance with the terms of the Plan.

B.
Responsibilities of the CEO

The CEO of the Company administers the program directly and provides liaison to
the Board, including the following specific responsibilities:

1.
Recommend Plan Participant Changes Each Plan Year.

a.
This involves determining if additional employees will participate in the Plan
and if any employees are to be removed from participating in the Plan.

2.
Recommendations for Annual Incentive Awards.

a.
The CEO will review the objectives and evaluations, adjust guideline awards for
performance, and recommend final awards to the Board.

b.
Make appropriate adjustments on a discretionary basis for any payout inequities.

3.
Present All Other Appropriate Recommendations to the Board.

a.
Such recommendations may include changes in the Plan provisions which occur
during the life of the Plan.

C.
Responsibilities of Human Resources (or Designee)

Human resources, or designated other, of the Company will act as The Plan
Administrator with regard to responsibilities for reporting the performance
during the course of the Plan Year as determined by the CEO or the Board,
however, additional responsibilities may be assigned to the Plan Administrator
by the Board or the CEO. All necessary reporting to outside auditors for
inclusion in annual reporting will be carried out by the CEO or its designee.
Otherwise, Human Resources, or designed other, will handle all ministerial
duties with respect to the Plan.

VI.
TERMINATION OF EMPLOYMENT

i.
Death of Plan Participant: In the event of the death of a Plan Participant
during the Plan Year or prior to payout of the award, the incentive award
attributable to that Plan Participant will be paid to the Plan Participant’s
designated beneficiary(s) in an amount equal to what the Plan

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Participant would have received had the Plan Participant remained employed with
the Company, at the normal time set forth above. If the Plan Participant dies
during the Plan Year, the Plan Participant will be deemed to have achieved
Target performance with respect to any individual performance goals assigned to
the Plan Participant with respect to that Plan Year.

ii.
Plan Participant Disability: If a Plan Participant incurs a Disability during
the Plan Year or prior to payout of the award, the incentive award attributable
to that Plan Participant will be paid to the Plan Participant in an amount equal
to what the Plan Participant would have received had the Plan Participant
remained employed with the Company, at the normal time set forth above. If the
Plan Participant incurs a Disability during the Plan Year, the Plan Participant
will be deemed to have achieved Target performance with respect to any
individual performance goals assigned to the Plan Participant with respect to
that Plan Year.

iii.
Termination of Employment: If a Plan Participant incurs a Termination of
Employment prior to payout of the award other than as the result of death or
Disability, that Plan Participant will forfeit any unvested, unpaid or accrued
incentive award, whether or not it was earned by such Participant.

iv.
Change in Control: If a Change-in-Control, as defined by U. S. Treasury
guidelines, occurs during any Plan Year, the incentive awards for that Plan Year
will be deemed to have been earned at Target and the Plan Year closed as of the
date of the Change in Control, and the incentive awards for that Plan year shall
be payable to Plan Participants no later than two and one-half months following
the Change in Control otherwise in accordance with the terms of the Plan. If a
Change in Control occurs after the end of the Plan Year, incentive awards for
that Plan Year will be paid in accordance with the terms of the Plan except that
each Plan Participant will be deemed to have achieved no less than Target
performance with respect to any individual performance goals assigned to the
Plan Participant with respect to that Plan Year

VII.
AMENDMENTS AND TERMINATION OF PLAN

The Board may amend or terminate this Plan at any time. Upon termination, no
further incentive awards will be paid for any future Plan Years; but, incentive
awards for the Plan Year in which the termination occurs or any prior Plan Years
will be paid in accordance with the terms of the Plan unless prohibited by
applicable laws.

VIII.
COMMUNICATION OF PLAN TO PLAN PARTICIPANTS

In order for an incentive to produce increases in productivity and results, it
is essential that Plan participants receive vital input required to make daily
management decisions that should positively affect the Company’s growth and
profitability. Thus, it is most useful for senior management to make use of
periodic reviews of the targets set to measure Plan performance. In other words,
the performance targets are intended to become one of the methods by which
senior management directs the day-to-day operating activities of the management
team.

Key communication events are intended to include:

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i.
An initial communication to all Plan Participants of the Plan details, including
the performance targets set for the Plan Year. It is intended that the Company
communicate Plan objectives as soon as administratively practicable after they
are established.

ii.
Communication of new performance targets, Plan procedure changes, etc., as soon
as administratively practicable.

iii.
Periodic (quarterly) reviews throughout the Plan Year as part of general senior
management staff meetings. These reviews are intended to include a review of
performance year-to-date and any changes that assure attainment of the Plan
objectives.

iv.
A Plan year-end review of probable Plan results, including an estimate of the
Company’s performance on each measure/weighted factor.

v.
A discussion of Plan Participant contribution to the overall team results, as
part of the presentation of the annual incentive award.

Finally, it is intended that each Plan Participant be provided sufficient data
throughout the Plan Year, so that each Plan Participant can project probable
earnings from the Plan. It is intended to be re-emphasized to senior management
that specific goals and objectives and the means to accomplishment, as well as
the rewards for successful attainment, be communicated in detail to each Plan
Participant.

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IX.
MISCELLANEOUS

i.
No Guarantee of Employment. This Plan is not an employment policy or contract.
It does not give the Plan Participant the right to remain an employee of the
Company or any subsidiary, nor does it interfere with the Company’s or
subsidiary’s right to discharge the Plan Participant. It also does not require
the Plan Participant to remain an employee nor interfere with the Plan
Participant’s right to terminate employment at any time.

ii.
Non Transferability. Benefits under this Plan cannot be sold, transferred,
assigned, pledged, attached, or encumbered in any manner.

iii.
Reorganization. If the Company shall merge into or consolidate with another
company, or organize, or sell substantially all of its assets to another
company, firm, or person, such succeeding or continuing company, firm or person
shall succeed to, assume and discharge the obligations of the Company under this
Plan.

iv.
Tax Withholding. The Company shall withhold any taxes that are required to be
withheld from the payments made under this Plan.

v.
Applicable Law. The Plan and all rights hereunder shall be governed by the laws
of the State of Louisiana, except to the extent preempted by the laws of the
United States of America.

vi.
Entire Plan. This Plan constitutes the entire Plan between the Company and the
Plan Participant as to the subject matter hereof.

vii.
No Rights. No rights are granted to the Plan Participant by virtue of this Plan
other than those specifically set forth herein.

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IN WITNESS WHEREOF, the Company has signed and adopted this Plan as of March 21,
2018, to be effective as of January 1, 2018.
        

Company:

MIDSOUTH BANCORP, INC.

By: /s/ James R. McLemore
James R. McLemore
President and CEO

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BENEFICIARY DESIGNATION
MIDSOUTH BANK, N.A.
2018 ANNUAL INCENTIVE PLAN

I, ________________________________, designate the following as beneficiary of
benefits under the plan payable following my death:
Primary:
 
 
%
 
 
%
 
 
%

Contingent:
 
 
%
 
 
%
 
 
%
 
 
%

Note:
•
Please PRINT CLEARLY or TYPE the names of the beneficiaries.

•
To name a trust as beneficiary, please provide the name of the trustee(s) and
the exact name and date of the trust agreement.

•
To name your estate as beneficiary, please write “Estate of [your name]”.

•
Be aware that none of the contingent beneficiaries will receive anything unless
ALL of the primary beneficiaries predecease you.

I understand that I many change these beneficiary designations by delivering a
new written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my death. I
further understand that the designation will be automatically revoked if the
beneficiaries predecease me or I have named my spouse as beneficiary and our
marriage is subsequently terminated.
Name: _______________________________________________
Signature: ____________________________________________ Date:
____________________________

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SPOUSAL CONSENT (Required if Spouse not named beneficiary):
I consent to the beneficiary designation above and acknowledge that if I am
named beneficiary and our marriage is subsequently terminated the designation
will be automatically revoked.
Spouse Name: _______________________________ Signature: ________________________
Date: _____

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Received by the Plan Administrator this _____ day of __________________, 2018.
By: ________________________________________
Title: _______________________________________