Document:

Exhibit 10.8

 

ANNUAL INCENTIVE COMPENSATION PLAN

2014 PLAN YEAR

STRICTLY CONFIDENTIAL

 

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 is willing to provide annual incentive award opportunities for employees eligible to participate in the 2014 Annual Incentive Compensation Plan (the “Plan”), to encourage 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 total base salary paid to the Plan Participant during the Plan Year.

		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 (a) 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; or (b)   such definition of Disability as defined by the Secretary of the Treasury, in which case such definition shall supersede any other   definition of Disability in this Plan and shall control the terms of this Plan.

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		5.	“Effective Date” means January 1, 2014.

		6.	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

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

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

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

	 	10.	“Termination of Employment” means the Plan Participant ceases to be employed by the Company for any reason whatsoever; voluntary or involuntary, other than by reason of an approved leave of absence.

	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.

 

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	II.	PARTICIPATION

Eligibility for participation in the Plan shall be limited to 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 a list of employees eligible for participation in the Plan for the upcoming Plan Year, the annual incentive award factors and their weighting, and the incentive ranges and award payouts allocated to each Plan Participant. The Plan will commence on the Effective Date. Each Plan Participant shall be notified of eligibility for participation in the Plan. Plan Participants may be added prior to October 1st of the Plan Year at the discretion of the CEO with Board approval. If a Plan Participant is added, the annual incentive award will be prorated based on the number of months of participation in the Plan, except that new Plan Participants may not be added in the last three (3) months of any Plan Year. Future eligibility will be determined annually by the Board and CEO.

	III.	PLAN YEAR

The period over which performance is measured shall be the Plan Year.

	IV.	GENERAL PLAN DESIGN

The Company recognizes the need to implement a performance-based incentive program for executives, key officers, and other employees as designated by the CEO. 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 goals. The payout awards utilized in the Plan are designed to provide market competitive payout percentages for the achievement of performance-based goals. Award levels are pre-established for each Plan Participant and are designated as a percentage of 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 exceeded), “Target” (performance goal standard, also referred to as “forecast”), and “Maximum” (performance level above Target whereby award payout may be either formulaic or discretionary).

	V.	EARNINGS OF ANNUAL INCENTIVE AWARDS

Annual awards are based on performance criteria that have 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.

 

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The annual incentive award is to be in the form of supplemental cash compensation paid on an annual basis. Annual cash awards will be paid using the following schedule. Dependent upon the Company meeting its net target income goal, Plan Participants who have exceeded their predetermined goals at threshold, met their target, or maximum levels will be paid up to one hundred percent (100%) of Annual Incentive Compensation Plan award levels within two and one-half months following the end of the preceding Plan Year. Subsequent payment within this time period is necessary to avoid classifying payments as deferred compensation under IRC Section §409A. In addition to performance achievement, each Plan Participant must have also satisfied qualifying criteria as designated within their Plan Participant worksheet in order to be eligible to receive award payouts.

		A.	ANNUAL INCENTIVE AWARD LEVELS

Threshold, target, and maximum award levels, expressed as a percent of Actual Base Salary, have been set for each eligible position at competitive levels.

Percentage payouts will be calculated using either a ratable or fixed percentage approach whereby award payouts are calculated as a proportion of threshold, target, and maximum criteria levels.

		B.	PERFORMANCE STANDARDS

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

		a.	Company Performance – The overall award for Company performance will be based on the Company’s overall success as measured by criteria determined by the Board and CEO. Percentage payouts for overall Company performance will be allocated based on the achievement of this goal, as located in the Appendix of this Plan, for each Plan Participant in the Plan.

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		b.	Plan Participant Performance – For all Plan Participants, pre-determined Departmental and/or Individual Participant performance criteria will also be used to determine the Plan Participant’s award payout. A percentage of the annual incentive award will be based on achievement of Plan Participant criteria, as indicated in the Plan worksheets. The specific Plan Participant performance objectives will be established at the beginning of the Plan Year.

2.    For each performance factor (overall Company and Plan Participant), an appropriate standard of performance must be established with three essential performance points:

		a.	Threshold Performance: exceeding threshold by at least one is the minimum level of performance needed to receive an award.

		b.	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.

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

Performance standards are determined by using the Company’s performance history, safety and soundness principles, peer data and management’s judgment of what reasonable 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. Maximum levels may be subject to discretionary payouts at the preference of the CEO and Board.

As qualifiers to receive awards under this Plan, the  Company must meet its target net income goal 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 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.

 

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	VI.	PAYMENT OF AWARDS

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

		1.	A Plan participant must be an active employee at the time of the award payout in order to be eligible to receive the award  payout.

		2.	Performance level awards are determined relative to specific achievement per Plan Participant. Each individual award payout is calculated using a percent of total Actual Base Salary for the current Plan Year.

		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 schedule outlined in the Appendix of this Plan Document.

	 	
6.

	
Awards will be paid on an annual basis.

	VII.	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 necessary per its risk management review process. The actions of the Board shall be final and binding on all parties.

The Board has the responsibility to administer and interpret the Plan. Prior to 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. The operating rules shall include the following:

 

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1.

	
Deciding if an extraordinary occurrence totally outside of management’s influence, be it a windfall or a shortfall, has occurred during the current Plan Year, and whether the figures should be adjusted to neutralize the effects of such events.

	 	
2.

	
Deciding if an unacceptable performance event has occurred between the end of the Plan year and award payout, such as a major management default of primary responsibilities, or a discovery of fraud, which would be the basis for potentially restructuring or elimination any award payout.

 

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.

 

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.

 

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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, however additional responsibilities may be assigned to the Plan Administrator by the Board or CEO. This performance data is to be made available    to the Plan Participants within 60 days from data being available and to the extent possible on a quarterly basis. All necessary    reporting to outside auditors for inclusion in annual reporting will be carried out by the CEO or its designee.

	VIII.	TERMINATION OF EMPLOYMENT:

Death of Plan Participant: In the event of death of a Plan Participant during the Plan Year, the incentive award attributable to that individual would be paid to their designated beneficiary(s) in an amount equal to what the Plan Participant would have received at the Target performance level.

Plan Participant Disability: If the Plan Participant becomes disabled during the Plan Year, the accrued amount of incentive award at such time would be payable to Plan Participant.

Termination for Cause or for Good Reason: If any Plan Participant is either terminated for cause or terminates for good reason during the Plan Year, that individual would forfeit any unvested, unpaid or accrued incentive award, whether or not it was earned by such Participant.

Change in Control: If within six months prior to, or within a year after a Change-in-Control, as defined by U. S. Treasury guidelines, the executive is involuntarily terminated or if he terminates employment for good reason, any outstanding awards would vest immediately at the target performance level on a prorated basis.

	IX.	AMENDMENTS AND TERMINATION OF PLAN

The Company may amend or terminate this Plan at any time.

 

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	X.	CLAIMS AND REVIEW PROCEDURES

 

		A.	Claims Procedure. A Plan Participant or beneficiary (“claimant”) who has not received benefits under the Plan that he or she believes should be made shall make a claim for such benefits as follows:

		1.	Initiation – Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for benefits.

		2.	Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within 90 days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

		3.	Notice of Decision. If the Plan Administrator denies part or the entire claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

		a.	The specific reasons for the denial;

	 	
b.

	
A reference to the specific provisions of the Plan on which the denial is based;

	 	
c.

	
A description of any additional information or material    necessary for the claimant to perfect the claim and an   explanation of why it is needed;

	 	
d.

	
An explanation of the Plan’s review procedures and the time limits applicable to such procedures;

	 	
e.

	
A statement of the claimant’s right to bring a civil action under ERISA Section 02(a) following an adverse benefit determination on review.

		B.	Review Procedure.  If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follow:

		1.	Initiation – Written Request. To initiate the review, the claimant, within 60 days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.

 

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		2.	Additional Submissions – Information Access. The claimant shall then have the opportunity to submit written comments, documents, records, and other information relating to the claim. The Plan administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

		3.	Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

		4.	Timing of Plan Administrator Response. The Plan    Administrator shall respond in writing to such claimant within 60 days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

		5.	Notice of Decision. The Plan Administrator shall notify the     claimant in writing of its decision on review. The Plan     Administrator shall write the notification in a manner     calculated to be understood by the claimant. The notification     shall be set forth:

		a.	The specific reasons for the denial;

		b.	A reference to the specific provisions of the Plan on which the denial is based;

		c.	A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant claim for benefits; and

		d.	A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

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	XI.	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 should become the primary method by which senior management directs the day-to-day operating activities of the management team.

Key communication events include:

		i.	An initial communication to all Plan Participants of the Plan details, including the performance targets set for the initial Plan Year. It is recommended that the Company communicate Plan objectives at least 30 days prior to the beginning of the Plan Year.

	 	ii.	Communication of new performance targets, Plan procedure changes, etc., at the beginning of each Plan Year.

		iii.	Periodic (quarterly) reviews throughout the Plan Year as part of general senior management staff meetings. These reviews should include a review of performance plan 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 vital 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 must 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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XII.

	
MISCELLANEOUS

	 	
A.

	
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, nor does it interfere with the Company’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.

	 	
B.

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

	 	
C.

	
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.

	 	
D.

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

	 	
E.

	
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.

	 	
F.

	
Entire Plan. This Plan constitutes the entire Plan between the Company and the Plan Participant as to the subject matter hereof. No rights are granted to the Plan Participant by virtue of this Plan other than those specifically set forth herein.

	 	
G.

	
Designated Fiduciary. The Company shall be the named fiduciary and Plan Administrator under the Plan. The named fiduciary may delegate to others certain aspects of the management and operation responsibilities of the Plan including the employment of advisors and the delegation of ministerial duties to qualified individuals.

 

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IN WITNESS WHEREOF, The Company has signed this Plan document as of January 30, 2014.

 

	 	
Company:

	 	
MIDSOUTH BANCORP, INC.

 

	
 

	
By:

	
 

	

 

	
 

	
Title:

	
 

	

 

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APPENDIX A

PLAN PARTICIPANT GUIDELINES

MIDSOUTH BANCORP, INC.

2014 ANNUAL INCENTIVE COMPENSATION PLAN

	
Tier

	
Incentive Ranges

	
Award Objectives

	
Threshold

	
Target

	
Maximum

	
Bank

	
Regional / Dept.

	
Individual

	
I

	
5.0%

	
10%

	
Discretionary

	
100%

	
0%

	
0%

	
II-A

	
5.0%

	
10%

	
Discretionary

	
50%

	
50%

	
0%

	
II-B

	
5.0%

	
10%

	
Discretionary

	
75%

	
25%

	
0%

	
III-A

	
5.0%

	
10%

	
Discretionary

	
25%

	
75%

	
0%

	
III-B

	
5.0%

	
10%

	
Discretionary

	
25%

	
75%

	
0%

	
III-C

	
5.0%

	
10%

	
Discretionary

	
50%

	
50%

	
0%

	
IV

	
5.0%

	
10%

	
Discretionary

	
10%

	
40%

	
50%

	
V

	
5.0%

	
10%

	
Discretionary

	
25%

	
75%

	
0%

	
VI-A

	
5.0%

	
10%

	
Discretionary

	
10%

	
40%

	
50%

	
VI-B

	
5.0%

	
10%

	
Discretionary

	
25%

	
75%

	
0%

	
VI-C

	
5.0%

	
10%

	
Discretionary

	
10%

	
40%

	
50%

	 	
Percent of Salary

	
Weighting of Award

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BENEFICIARY DESIGNATION

MIDSOUTH BANCORP, INC.

2014 ANNUAL INCENTIVE COMPENSATION PLAN

I, _______________________________, designate the following as beneficiary of benefits under the plan payable following my death:

 

	
Primary:

	
 

	
	 		
	
 

	
 

	
%

	 		
	
   

	
 

	
%

	 		
	
Contingent:

	
 

	
 

	 		
	
 

	
 

	
%

	 		
	
   

	
 

	
%

Notes:

 

		·	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 may 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 designations will be automatically revoked if the beneficiaries predeceases me of I have named my spouse as beneficiary and our marriage is subsequently dissolved.

 

	
Name: 

	
 

	
 

 

	
Signature:

	
 

	
Date:

	
 

	

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 dissolved the designation will be automatically revoked.

 

	
Spouse Name:

	
 

	
Signature:

	
 

	
Date:

	
 

Received by the Plan Administrator this ____day of ___________________, 20___.

	
By:

	
    

	
 

 

	
Title:Exhibit 10.9

 

EXECUTIVE INDEXED SALARY CONTINUATION PLAN

 

AGREEMENT

This Agreement, made and entered into this 15th day of February, 1996, by and between MidSouth National Bank, a Bank organized and existing under the laws of the State of Louisiana, hereinafter referred to as “the Bank”, and C. Russell Cloutier, a Key Employee and the Executive of the Bank, hereinafter referred to as “the Executive”.

 

The Executive has been in the employ of the Bank for several years and has now and for years past faithfully served the Bank. It is the consensus of the Board of Directors of the Bank (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 his continued services are so essential to the Bank’s future growth and profits that it would suffer severe financial loss should the Executive terminate his services.

 

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 upon his retirement and, alternatively, to his beneficiary(ies) in the event of his premature death while employed by the Bank.

 

It is the intent of the parties hereto that this Agreement be considered an arrangement maintained primarily to provide supplemental retirement 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 Security Act of 1974 (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.

 

Therefore, in consideration of the Executive’s services 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:

 

	I.	DEFINITIONS

 

		A.	Effective Date:

 

The Effective Date of this Agreement shall be February 15, 1996.

 

		B.	Plan Year:

 

Any reference to “Plan Year” shall mean a calendar year from January 1 to December 31. In the year of implementation, the term “Plan Year” shall mean the period from the effective date to December 31 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 his sixty-fifth (65th) birthday or such later date as the Executive may actually retire.

 

		D.	Termination of Service:

 

Termination of Service shall mean voluntary resignation of service by the Executive or the Bank’s discharge of the Executive without cause [“cause” defined in subparagraph III (D) hereinafter], prior to the Normal Retirement Age [described in subparagraph I (J) hereinafter].

 

		E.	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 Retirement Date [subparagraph I(C)], such liability reserve account shall be increased or decreased each Plan Year (including the Plan Year in which the Executive ceases to be employed by the Bank) by an amount equal to the annual earnings or loss for that Plan Year determined by the Index [described in subparagraph I (G) hereinafter], less the Cost of Funds Expense for that Plan Year [described in subparagraph I (H) hereinafter].

 

		F.	Index Retirement Benefit:

 

The Index Retirement Benefit for the Executive for any year shall be equal to the excess of the annual earnings (if any) determined by the Index [subparagraph I (G)] for that Plan Year over the Cost of Funds Expense [subparagraph I (H)] for that Plan Year.

 

		G.	Index:

 

The Index for any Plan Year shall be the aggregate annual after-tax income from the life insurance contracts described hereinafter as defined by FASB Technical Bulletin 85-4. This Index shall be applied as if such insurance contracts were purchased on the effective date hereof.

 

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Insurance Company:

	
Massachusetts Mutual Life Insurance Company

		
Policy Form:

	
Whole Life

		
Policy Name:

	
Executive Benefit Life III

		
Insured’s Age and Sex:

	
49, Male

		
Riders:

	
Additional Insurance Coverage

		
Ratings:

	
Table B

		
Face Amount:

	
$1,214,073

		
Premiums Paid:

	
$250,000

		
Number of Premium Payments:

	
One

		
Assumed Purchase Date:

	
February 15, 1996

 

If such contracts of life insurance are actually purchased by the Bank then the actual policies as of the dates they were purchased shall be used in calculations under this Agreement. 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 from the above named insurance company(ies) on the Effective Date from which the increase in policy value will be used to calculate the amount of the Index.

 

In either case, references to the life insurance contract are merely for purposes of calculating a benefit. The Bank has no obligation to purchase such life insurance and, if purchased, the Executive and his beneficiary(ies) shall have no ownership interest in such policy and shall always have no greater interest in the benefits under this Agreement than that of an unsecured general creditor of the Bank.

 

		H.	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 set forth in the Indexed policies described above plus the amount of any after-tax benefits paid to the Executive pursuant to this Agreement (Paragraph III hereinafter) plus the amount of all previous years after-tax Costs of Funds Expense, and multiplying that sum by the average after-tax yield of a one-year Treasury bill for the Plan Year.

 

		I.	Change of Control:

 

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

		J.	Normal Retirement Age:

 

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

 

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	II.	EMPLOYMENT

 

No provision of this Agreement 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 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 his employment at any time.

 

	III.	INDEX BENEFITS

 

The following benefits provided by the Bank to the Executive are in the nature of a fringe benefit and shall in no event be construed to effect nor limit the Executive’s current or prospective salary increases, cash bonuses or profit-sharing distributions or credits.

 

		A.	Retirement Benefits:

 

Should the Executive continue to be employed by the Bank until his “Normal Retirement Age” defined in subparagraph I (J), he shall be entitled to receive the balance in his Pre-Retirement Account [as defined in subparagraph I (E)] in ten (10) equal annual installments commencing thirty (30) days following the Executive’s Normal Retirement Date. In addition to these payments, commencing with the Plan Year in which the Executive attains his Retirement Date, the Index Retirement Benefit [as defined in subparagraph I (F) above] for each year shall be paid to the Executive until his death.

 

		B.	Termination of Service:

 

Subject to subparagraph III (D) hereinafter, should the Executive suffer a termination of service [defined in subparagraph I (D)], he shall be entitled to receive twenty percent (20%), times the number of full years (to a maximum of 100%) the Executive has served from the date of this agreement, times the balance in the Pre-Retirement Account paid over ten (10) years in equal installments commencing at the Retirement Date [subparagraph I (C)]. In addition to these payments, twenty percent (20%) times full years of service with the Bank, times the Index Retirement Benefit for each year shall be paid to the Executive until his death.

 

		C.	Death:

 

Should the Executive die prior to having received the full balance of the Pre-Retirement Account, the unpaid balance of the Pre-Retirement Account shall be paid in a lump sum to the beneficiary selected by the Executive and filed with the Bank. In the absence of or a failure to designate a beneficiary, the unpaid balance shall be paid in a lump sum to the personal representative of the Executive’s estate.

 

4

		D.	Discharge for Cause:

 

Should the Executive be discharged for cause at any time prior to his Retirement Date, all Index Benefits under this Agreement [subparagraphs III (A), (B) or (C)] shall be forfeited. The term “for cause” shall mean gross negligence or gross neglect or the conviction of a felony or gross-misdemeanor involving moral turpitude, fraud, dishonesty or willful violation of any law that results in any adverse effect on the Bank. If a dispute arises as to discharge “for cause”, such dispute shall be resolved by arbitration as set forth in this Agreement.

 

		E.	Death Benefit:

 

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

 

	IV.	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 Agreement. The Executive, his beneficiary(ies) or any successor in interest to him 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 Agreement or to refrain from funding the same and to determine the exact nature and method of such funding. Should the Bank elect to fund this Agreement, 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 the Executive be deemed to have any lien or 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.

 

	V.	CHANGE OF CONTROL

 

Upon a Change of Control [as defined in subparagraph I (I) herein], if the Executive’s employment is subsequently terminated then he shall receive the benefits promised in this Agreement upon attaining Normal Retirement Age, as if he had been continuously employed by the Bank until his Normal Retirement Age. The Executive will also remain eligible for all promised death benefits in this Agreement. 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 Agreement and agrees to abide by its terms.

 

5

	VI.	MISCELLANEOUS

 

		A.	Alienability and Assignment Prohibition:

 

Neither the Executive, his/her surviving spouse nor any other beneficiary under this Agreement 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 his beneficiary, 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 Bank and any Successor in Interest:

 

The Bank expressly agrees that it 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 Agreement. This Agreement shall be binding upon the parties hereto, their successors, beneficiary(ies), heirs and personal representatives.

 

		C.	Revocation:

 

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

 

		D.	Gender:

 

Whenever in this Agreement 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 Agreement 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 Agreement are inserted for reference and convenience only and shall not be deemed a part of this Agreement.

 

6

		G.	Applicable Law:

 

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

 

	VII.	ERISA PROVISION

 

		A.	Named Fiduciary and Plan Administrator:

 

The “Named Fiduciary and Plan Administrator” of this plan shall be MidSouth National Bank until its removal by the Board. As Named Fiduciary and Administrator, the Bank shall be responsible for the management, control and administration of the Salary Continuation Agreement as established herein. The Named Fiduciary may delegate to others certain aspects of the management and operation responsibilities of the 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 Agreement and benefits are not paid to the Executive (or to his beneficiary 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 Plan Administrator named above within ninety (90) days from the date payments are refused. The Plan Administrator shall review the written claim and if the claim is denied, in whole or in part, they shall provide in writing within ninety (90) days of receipt of such claim their specific reasons for such denial, reference to the provisions of this Agreement 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 by claimants if a further review of the claim denial is desired. A claim shall be deemed denied if the Plan Administrator fails to take any action within the aforesaid ninety-day period.

 

If claimants desire a second review they shall notify the Plan Administrator in writing within ninety (90) days of the first claim denial. Claimants may review this Agreement or any documents relating thereto and submit any written issues and comments they may feel appropriate. In its sole discretion, the Plan Administrator shall then review the second claim and provide a written decision within ninety (90) days of receipt of such claim. This decision shall likewise state the specific reasons for the decision and shall include reference to specific provisions of this Agreement upon which the decision is based.

 

If claimants continue to dispute the benefit denial based upon completed performance of this Agreement or the meaning and effect of the terms and conditions thereof, then claimants may submit the dispute to a Board of Arbitration for final arbitration. Said Board shall consist of one member selected by the claimant, one member selected by the Bank, and the third member selected by the first two members. The Board shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such Board with respect to any controversy properly submitted to it for determination.

 

7

Where a dispute arises as to the Bank’s discharge of the Executive “for cause”, such dispute shall likewise be submitted to arbitration as above described and the parties hereto agree to be bound by the decision thereunder.

 

IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the original thereof on the 15th day of February, 1996 and that, upon execution, each has received a conforming copy.

 

	
 

	
 

	
MIDSOUTH NATIONAL BANK

	
 

	
 

	
 

	
	
/s/

	
 

	
By: 

	/s/ Will Charbonnet
	
Witness

	
 

	
 

	Title
	 			
	 			
	
/s/

	
 

	
By:

	/s/ C. Russell Cloutier
	
Witness

	
 

	
 

	
C. Russell Cloutier

 

8

AMENDMENT 

TO THE EXECUTIVE INDEXED SALARY CONTINUATION

PLAN AGREEMENT

DATED FEBRUARY 15, 1996

This Amendment, made and entered into this  1ST day of  JANUARY, 2003, by and between MidSouth National Bank, a Bank organized and existing under the laws of the United States of America, hereinafter referred to as the, “Bank”, and C. Rusty Cloutier, a Key Employee and Executive of the Bank, hereinafter referred to as the, “Executive”, shall effectively amend the Executive Indexed Salary Continuation Plan Agreement dated February 15, 1996. Said Agreement shall be amended as follows:

 

1.                    Subparagraph III (A) titled, “Retirement Benefits”, of the February 15, 1996 Agreement shall be deleted in its entirety and replaced with the following:

 

	A.	Retirement Benefits:

 

Should the Executive continue to be employed by the Bank until his “Normal Retirement Age” defined in Subparagraph I (J), the Executive shall be entitled to receive the balance in the Executive’s Pre-Retirement Account [as defined in Subparagraph I (E)] in ten (10) equal annual installments commencing thirty (30) days following the Executive’s Normal Retirement Date.

 

2.                    Subparagraph III (B) titled, “Termination of Service”, of the February 15, 1996 Agreement shall be deleted in its entirety and replaced with the following:

 

	B.	Termination of Service:

 

Subject to Subparagraph III (D) hereinafter, should the Executive suffer a termination of service [defined in Subparagraph I (D), the Executive shall be entitled to receive twenty percent (20%), times the number of full years (to a maximum of 100%) the Executive has served from the date of this Agreement, times the balance in the Pre-Retirement Account paid over ten (10) years in equal annual installments commencing at the Retirement Date [Subparagraph I (C)].

 

This Amendment shall be effective the 1st day of January, 2003. To the extent that any paragraph, term, or provision of said Agreement is not specifically amended herein, or in any other amendment thereto, said paragraph, term, or provision shall remain in full force and effect as set forth in said February 15, 1996 Agreements.

 

IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Amendment and executed the original thereof on the first day set forth hereinabove, and that, upon execution, each has received a conforming copy.

 

	
 

	
 

	
MIDSOUTH NATIONAL BANK

	
 

	
 

	
Lafayette, LA

	 		
	
/s/

	
 

	
By: 

	/s/ Will Charbonnet, Sr.
	
Witness

	
 

	
 

	CHAIRMAN OF THE BOARD       Title
	 			
	
/s/

	
 

	
By:

	/s/ C. Rusty Cloutier
	
Witness

	
 

	
 

	
C. Rusty Cloutier

 

SECOND AMENDMENT

TO

EXECUTIVE SALARY CONTINUATION PLAN AGREEMENT

 

This amendment (the “Amendment”) to that certain Executive Salary Continuation Plan Agreement (the “Agreement”) originally entered into by and between MidSouth Bank, National Association, a national banking association with its principal office in Lafayette, Louisiana (the “Bank”), and C. Russell Cloutier (the “Executive”) on February 15, 1996, is made effective January 1, 2005.

 

WHEREAS, the Executive is currently employed by the Bank in an executive capacity;

 

WHEREAS, the Executive and the Bank originally entered into the Agreement in order to induce the Executive to remain in the employ of the Bank and to continue to provide valuable services and business counsel to the Bank;

 

WHEREAS, the Agreement provides certain benefits to the Executive in the form of deferred compensation payments which commence upon the Executive’s retirement from the Bank, as provided more specifically in the Agreement;

 

WHEREAS, in late 2004, Congress enacted the American Jobs Creation Act of 2004 (the “Act”), which contained several changes to deferred compensation arrangements similar to the Agreement;

 

WHEREAS, the Bank and the Executive desire to amend the Agreement to bring the Agreement into compliance with the recent guidance and regulations issued by the Internal Revenue Service with respect to the Act; and

 

WHEREAS, pursuant to Section VI(C) of the Agreement, the Bank may amend the Agreement with the consent of the Executive.

 

NOW, THEREFORE, the Bank, with the Executive’s consent, hereby amends the Agreement with this second Amendment, as follows:

 

1.            Section I(D) of the Agreement is amended by deleting existing Section I(D) of the Agreement in its entirety, and substituting the following new Section I(D) of the Agreement in its place:

 

	 	
“D.

	
Termination of Service:

 

		
Termination of Service shall mean that the Executive has incurred a separation of service (within the meaning of Code section 409A and the guidance and regulations issued thereunder) and ceases to be employed by the Bank or Holding Company for any reason.”

 

2.            Section I(I) of the Agreement is amended by deleting existing Section I(I) of the Agreement in its entirety, and substituting the following new Section I(I) of the Agreement in its place:

 

		“I.	Change of Control.

 

Change of Control shall mean the following:

 

		(i)	a change in the ownership of the capital stock of the Bank or of Midsouth Bancorp, Inc. (the “Holding Company”) whereby a person (within the meaning of Internal Revenue Code section 409A and the guidance and regulations issued thereunder) (a “Person”) acquires, directly or indirectly, ownership of a number of shares of capital stock of the Bank or of the Holding Company which, together with capital stock already held by such Person, constitutes fifty percent (50%) or more of the total fair market value or of the combined voting power of the Bank’s or of the Holding Company’s outstanding capital stock then entitled to vote generally in the election of the directors; provided, however, that if a Person already owns fifty percent (50%) or more of the total fair market value or of the combined voting power of the Bank’s or of the Holding Company’s outstanding capital stock then entitled to vote generally in the election of the directors, the acquisition of additional capital stock by such Person is not considered a Change of Control of the Bank or of the Holding Company; or

 

		(ii)	a change in the effective control of the Holding Company whereby a majority of the persons who were members of the Board of Directors of the Holding Company are, within a twelve (12) month period, replaced by individuals whose appointment or election to the Holding Company’s Board of Directors is not endorsed by a majority of the Holding Company’s Board of Directors prior to such appointment or election; or

 

		(iii)	a change in the ownership of the assets of the Bank or of the Holding Company whereby a Person acquires (or has acquired during a twelve (12) month period ending on the date of the most recent acquisition by such Person) assets of the Bank or of the Holding Company that have a total gross fair market value equal to fifty (50%) or more of the total gross fair market value of all of the assets of the Bank or of the Holding Company immediately prior to such acquisition or acquisitions; provided, however, that there is no Change of Control if assets are transferred to an entity that is controlled by the shareholders of the Bank of the Holding Company immediately after the transfer, nor is it a Change of Control if the Bank or Holding Company transfers assets to:

 

		(a)	a shareholder of the Bank or of the Holding Company (immediately before the asset transfer) in exchange for or with respect to the shareholder’s capital stock in the Bank;

 

		(b)	an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Bank or the Holding Company;

 

		(c)	a Person that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding capital stock of the Bank or of the Holding Company; or

 

		(d)	an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in paragraph (iii) of this Section l(l)(iii).”

 

3.            Section I of the Agreement is amended by adding the following new Section I(K) to the Agreement, immediately following existing Section I(J) of the Agreement:

 

		“K.	Specified Employee.

 

		
Specified Employee shall mean a “key employee,” as defined in Code section 409A and the regulations and guidance issued there under.”

 

4.            Section III(A) of the Agreement is amended by adding the following sentence to the end of existing Section III(A) of the Agreement:

 

“Notwithstanding the preceding, if the Executive is a Specified Employee, the benefit under this Section III(A) shall not commence until the first day of the seventh (7th) month following the Executive’s Retirement Date.”

 

5.            Section III(B) of the Agreement is amended by adding the following sentence to the end of existing Section III(B) of the Agreement:

 

“Notwithstanding the preceding, if the Executive is a Specified Employee, the benefit under this Section III(B) shall not commence until the first day of the seventh (7th) month following the Executive’s Termination of Service.”

 

6.            Section VI(C) of the Agreement is amended by deleting existing Section VI(C) of the Agreement in its entirety, and substituting the following new Section VI(C) of the Agreement in its place:

 

		“C.	Revocation and Amendment.

 

		(i)	Agreed Amendments. This Agreement may be amended by written agreement between the Bank and the Executive; provided, however, that no such amendment shall reduce a benefit to which the Executive is entitled, nor shall any amendment delay or accelerate the payment of a benefit provided under this Agreement except in accordance with requirements under Code section 409A and the regulations and guidance issued thereunder.

 

		(ii)	Termination of Agreement. The Bank may terminate this Agreement in its entirety at any time by written notice to the Executive if, and only if, all agreements maintained by the Bank, or an affiliate, that are similar in nature to this Agreement are simultaneously terminated.

 

		(a)	Termination After the Commencement of Benefits. In the event the Bank terminates this Agreement after the Executive or the Executive’s beneficiary has commenced receiving benefits under this Agreement, the Bank shall continue making the next twelve (12) scheduled payments following the date this Agreement is terminated. The Bank shall then pay the Executive or the beneficiary, as applicable, one hundred percent (100%) of the present value of the remaining payments due in a single lump-sum payment on the twelfth (12th) month anniversary of the date this Agreement is terminated, unless the Executive dies, incurs a termination of employment or a Change of Control occurs before such date, in which event the benefit under this Section VI(C)(ii)(a) shall be paid.

 

		(b)	Termination Before the Commencement of Benefits. In the event the Bank terminates this Agreement before payment of benefits have commenced to the Executive or the Executive’s beneficiary under this Agreement, the Executive or the Executive’s beneficiary, as applicable, shall be entitled to receive one hundred percent (100%) of the Pre-Retirement Account, determined as of the date this Agreement is terminated. Payment of the benefit determined under this Section VI(C)(ii)(b) shall be made in a single lump-sum payment on the twelfth (12th) month anniversary of the date the Agreement is terminated under this Section VI(C)(ii)(b), unless the Executive dies, incurs a termination of employment or a Change of Control occurs before such date, in which event the benefit under this Section VI(C)(ii)(b) shall be paid.

 

		(iii)	Termination of Agreement In Connection With a Change of Control. The Bank may terminate this Agreement no earlier than thirty (30) days preceding, or no later than twelve (12) months following, a Change of Control by written notice to the Executive, if, and only if, all agreements maintained by the Bank, or an affiliate, that are similar in nature to this Agreement are simultaneously terminated.

 

		(a)	Termination of Agreement After the Commencement of Benefits. In the event the Bank terminates this Agreement under Section VI(C)(iii) after the Executive or the Executive’s beneficiary has commenced receiving benefits under this Agreement, the Bank shall pay the Executive or the Executive’s beneficiary, as applicable, one hundred percent (100%) of the present value of the remaining payments due in a single lump-sum payment within sixty (60) days following the date the Agreement is terminated,

 

		(b)	Termination of Agreement Before the Commencement of Benefits. In the event the Bank terminates this Agreement under Section VI(C)(iii) before payment of benefits have commenced to the Executive or the Executive’s beneficiary under this Agreement, the Executive or the Executive’s beneficiary, as applicable, shall be entitled to one hundred percent (100%) of the Pre-Retirement Account, determined as of the date this Agreement is terminated. Payment of the benefit determined under this Section VI(C)(iii)(b) shall be made in a single lump-sum payment within sixty (60) days following the date the Agreement is terminated.”

 

********

 

IN WITNESS WHEREOF, the Bank and the Executive both acknowledge that each has carefully read this Amendment and has executed an original hereof on the ___ day of May 2008, to be effective as of January 1, 2005.

 

********

	 	
EXECUTIVE:

	 	 	 
	 	
By: 

	
/s/ C. Russell Cloutier

	 	 	
C. Russell Cloutier

	 	 	 
	 	
BANK:

	 	 	 
	 	
By: 

	
/s/ J. Eustis Corrigan, Jr.

	 	 	 
	 	
Its: 

	
EVP & CFO

 

16

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