EXHIBIT 4.2

                           TECHE FEDERAL SAVINGS BANK
                  RESTRICTED STOCK AGREEMENT WITH SCOTT SUTTON


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                           TECHE FEDERAL SAVINGS BANK

                           RESTRICTED STOCK AGREEMENT
                           --------------------------



         This  Agreement  constitutes  the  award of a total of 6,000  shares of
Common  Stock of Teche  Holding  Company  ("Corporation"),  to Scott Sutton (the
"Participant") on such terms and conditions as are set forth hereinafter.

          1.      Definitions.  As used herein, the following definitions  shall
apply.

                  "Award"  means  the  grant by the  Committee  of the  right to
receive Shares as detailed hereinafter.

                  "Bank"  shall  mean  Teche   Federal   Savings  Bank,  or  any
predecessor corporation thereto.

                  "Board"  shall mean the Board of Directors of the Bank, or any
successor corporation thereto.

                  "Change in  Control"  shall  mean:  (i) the sale of all,  or a
material  portion,  of the  assets  of  the  Corporation;  (ii)  the  merger  or
recapitalization of the Corporation whereby the Corporation is not the surviving
entity;  (iii) a change in control of the Corporation,  as otherwise  defined or
determined by the Office of Thrift Supervision or regulations promulgated by it;
or (iv) the  acquisition,  directly or indirectly,  of the beneficial  ownership
(within  the  meaning  of  that  term  as it is used  in  Section  13(d)  of the
Securities  Exchange  Act of 1934  and the  rules  and  regulations  promulgated
thereunder)  of  twenty-five  percent  (25%) or more of the  outstanding  voting
securities  of the  Corporation  by any  person,  trust,  entity or group.  This
limitation  shall  not  apply to the  purchase  of  shares  by  underwriters  in
connection  with a public  offering of  Corporation  stock,  or the  purchase of
shares  of up to  25%  of any  class  of  securities  of  the  Corporation  by a
tax-qualified  employee  stock  benefit  plan which is exempt from the  approval
requirements,  set forth under 12 C.F.R.  ss.574.3(c)(1)(vi) as now in effect or
as may  hereafter be amended.  The term  "person"  refers to an  individual or a
corporation,  partnership,  trust, association,  joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Committee as to whether a Change
in Control has occurred shall be conclusive and binding.

                  "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
amended.

                  "Committee"  shall mean the Board or the Committee  which  may
be appointed by the Board from time to time.

                  "Common Stock" shall mean common stock of the Corporation,  or
any successor or parent corporation thereto.

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                  "Corporation"  shall mean Teche  Holding  Company,  the parent
corporation for the Bank, or any predecessor or Parent thereof.

                  "Date of Grant" shall mean August 23, 1999, or such later date
that shall be the Participant's date of hire with the Bank.

                  "Director"   shall   mean  a  member   of  the  Board  of  the
Corporation, or any successor or parent corporation thereto.

                  "Director  Emeritus" shall mean a person serving as a director
emeritus,  advisory director,  consulting  director or other similar position as
may be appointed by the Board of Directors of the Bank or the  Corporation  from
time to time.

                  "Disability"  means any  physical or mental  impairment  which
renders the Participant  incapable of continuing in the employment or service of
the Bank or the  Parent  in his  then  current  capacity  as  determined  by the
Committee.

                  "Employee"  shall  mean a person  employed  by the Bank or the
Corporation or any present or future Parent or Subsidiary of the Corporation.

                  "Parent"  shall mean any present or future  corporation  which
would be a "parent  corporation" as defined in Subsections 424(e) and (g) of the
Code.

                  "Participant" means Scott Sutton, an Employee of the Bank.

                  "Share" shall mean one share of Common Stock.

                  "Subsidiary"  shall  mean any  present  or future  corporation
which would be a "subsidiary  corporation" as defined in Subsections  424(f) and
(g) of the Code.

         2.       Vesting of Awards.

                  (a)  Schedule  of  Vesting.  The  Awards  shall be earned  and
non-forfeitable  in  accordance  with the terms of the  Agreement,  provided the
holder of such Award is an  Employee of the  Corporation  or the Bank as of such
date, as follows:

                                Date               Percentage of Total Shares
                                ----                    Awarded Which Are
                                                         Non-forfeitable
                                                         ---------------

Upon grant........................................              0%
As of December 1, 1999............................             20%
As of December 1, 2000............................             40%
As of December 1, 2001............................             60%
As of December 1, 2002............................             80%
As of December 1, 2003............................            100%


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         Notwithstanding  any provisions in this Section 2, Awards shall be 100%
earned and non-forfeitable  upon the death or Disability of the Participant,  or
upon a Change in Control.

         3.  Non-transferability of Awards. This Award may not be transferred in
any manner  otherwise than by will or the laws of descent or  distribution.  The
terms of this Award shall be binding upon the executors, administrators,  heirs,
successors and assigns of the Participant.

         4. Six Month Holding Period.  A total of six months must elapse between
the Date of Grant of an Award and the date of the sale of Common Stock  received
thereunder.

         5.  Revocation for Misconduct.  Notwithstanding  anything herein to the
contrary,  the  Board  may,  by  resolution,  immediately  revoke,  rescind  and
terminate any Award, or portion thereof,  previously awarded under this Plan, to
the extent Shares have not been delivered thereunder to the Participant, whether
or not yet earned,  in the case of an Employee who is discharged from the employ
of the Parent, Bank or a Subsidiary for Cause (as hereinafter  defined),  or who
is discovered  after  termination  of employment to have engaged in conduct that
would  have  justified  termination  for cause.  "Cause" is defined as  personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal  profits,   intentional  failure  to  perform  stated  duties,  willful
violation of a material  provision of any law,  rule or  regulation  (other than
traffic  violations  and similar  offense),  or a material  violation of a final
cease-and-desist  order or any  other  action  which  results  in a  substantial
financial  loss to the Parent,  Bank or its  Subsidiaries.  A  determination  of
"Cause" shall be made by the Board within its sole discretion.

         6. Payment of  Dividends.  With  respect to the Awards,  whether or not
non-forfeitable,  the  Participant  shall also be  entitled to receive an amount
equal to any cash  dividends  declared and paid with respect to shares of Common
Stock  represented  by such  Award  between  the date  the  relevant  Award  was
initially  granted to such  Participant and the date the Shares are distributed.
Such dividend  amounts shall be paid to the  Participant  within 30 days of each
respective Dividend Payment Date, subject to applicable tax withholding.


         7.  Tax  Withholding.  The  Bank  may  withhold  from  any  payment  or
distribution  made  under  this  Agreement   sufficient  amounts  to  cover  any
applicable  withholding and employment  taxes, and if the amount of such payment
is not  sufficient,  the  Bank  may  require  the  Participant  to have the Bank
withhold from  delivery a number of Shares  having a fair market  value,  at the
time withheld,  sufficient to satisfy such withholding and employment  taxes, or
to pay to the  Bank  the  amount  required  to be  withheld  as a  condition  of
delivering the Shares.

         8.  Regulatory  Exceptions.  No Shares shall be  distributed  hereunder
unless and until all of the  requirements  of all  applicable law and regulation
shall have been fully  complied  with, as may be required by applicable  law and
regulations as determined by the Board.

                  Shares shall not be issued with  respect to any Award  granted
under the Agreement unless the issuance and delivery of such Shares shall comply
with  all  relevant  provisions  of  law,  including,  without  limitation,  the
Securities  Act of 1933,  as  amended,  the  rules and  regulations  promulgated
thereunder,  any applicable  state  securities law and the  requirements  of any
stock exchange upon which the Shares may then be listed.

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                  The  inability of the  Corporation  or the Bank to obtain from
any  regulatory  body or  authority  deemed by the  Corporation's  counsel to be
necessary to the lawful issuance and sale of any Shares  hereunder shall relieve
the Corporation of any liability in respect of the  non-issuance or sale of such
Shares.

                  As a condition to the exercise of an Award, the Corporation or
the  Bank  may   require   the  person   exercising   the  Award  to  make  such
representations and warranties as may be necessary to assure the availability of
an exemption from the  registration  requirements of federal or state securities
law.

         9. Governing  Law. The Agreement  shall be governed by and construed in
accordance  with the laws of the State of  Louisiana,  except to the extent that
federal law shall be deemed to apply.

         10. Administration.  All decisions,  determinations and interpretations
of the  Agreement  shall  be  made by the  Committee  and  shall  be  final  and
conclusive on all persons affected thereby.

         11.  Successors and Assigns.  This Agreement shall inure to the benefit
of and be binding upon any  corporate  or other  successor of the Bank or Parent
which shall acquire, directly or indirectly, by merger, consolidation,  purchase
or  otherwise,  all or  substantially  all of the assets or stock of the Bank or
Parent.

         12.  Amendments.  No amendments or additions to this Agreement shall be
binding  upon the  parties  hereto  unless  made in  writing  and signed by both
parties, except as herein otherwise specifically provided.

         13.  Severability.  The  provisions of this  Agreement  shall be deemed
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceablitiy of the other provisions hereof.

         14. Entire Agreement. This Agreement together with any understanding or
modifications  thereof as agreed to in writing by the parties,  shall constitute
the entire agreement between the parties hereto.


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                  This  Agreement is hereby  executed  between the parties as of
August 24, 1999.


TECHE HOLDING COMPANY




By: /s/ Patrick O. Little
    ------------------------------------------
         ITS PRESIDENT


Attest:


    /s/ W. Ross Little , Jr.
    ------------------------------------------


[SEAL]






ACCEPTED: /s/ Scott Sutton
          ------------------------------------
            PARTICIPANT