Document:

ex10-3.2.htm

Exhibit 10.3.2

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

This separation agreement and general release (“Agreement”) is entered into by and between Gina Collins (“Employee”) and Build-A-Bear Workshop, Inc. (“Company”).

 

RECITALS

 

A.     Employee’s employment with the Company will cease at the close of business on January 6, 2017 (the “Termination Date”). 

 

B.     Employee and the Company (individually, “Party” and collectively, “Parties”) desire to agree upon provisions for the termination of all duties, responsibilities, and compensation requirements of the Parties.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

 

1.     Termination of Employment Responsibilities. Employee agrees that her employment with the Company will terminate on the “Termination Date”, thereby terminating as of that date all further obligations of the Company to Employee, of whatever kind and nature, including all forms of compensation and benefits that otherwise might have been owed to Employee due to her holding any employment with the Company, except those that are expressly identified in this Agreement. Employee further agrees, as of the Termination Date, to resign from her position as an officer of the Company, and as an officer and a director of any subsidiary or affiliate of the Company, and Employee agrees to complete and submit any documentation necessary to resign such positions. Through the Termination Date, Employee shall perform such duties as shall be assigned to her by the Company, to the best of her abilities.

 

Employee acknowledges that except as provided in Paragraph 2 below and Exhibit 1 hereto, she is not entitled to any payments or benefits under any employee benefit plan, arrangement, policy, agreement or other arrangement of the Company (collectively, “Plans”) following her termination of employment.

 

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2.     Separation Benefits.

 

a.     Separation Pay. Employee shall receive (i) on the regular payroll date immediately following the Termination Date, any unpaid salary which may have been earned by Employee prior to and including the Termination Date in accordance with the Company’s regular payroll practices, (ii) on the regular payroll date immediately following the Termination Date, a lump sum payment in the amount of Forty Thousand Dollars ($40,000), and (iii) the amount of Three Hundred Twenty Four Thousand Five Hundred Dollars ($324,500), payable in equal installments for a period of twelve (12) months (“Payment Period”) on the Company’s regular payroll dates, in accordance with its regular payroll practices, less any applicable withholding, commencing on the date that is thirty (30) days after the Termination Date. Notwithstanding the foregoing or any other provision to the contrary, no payment shall be made or other benefits made available under this Agreement unless Employee (A) does not resign her employment with the Company before the Termination Date, and (B) executes this Agreement, and the release herein becomes effective, and any revocation period has expired by the thirtieth (30th) day after Employee’s Termination Date. 

 

 

 

 

b.     Welfare Payments. The Parties agree that Employee shall not be treated as an employee following the Termination Date under the Welfare Benefit Plans or under any other Plans. The Company shall pay Employee the total amount of Fourteen Thousand Two Hundred Eighty One Dollars and Seventy Four Cents ($14,281.74) (“Welfare Payments”), payable in a single lump sum payment, less any applicable withholding, within thirty (30) days after the Termination Date. The Parties agree that the Welfare Payments are equal to the monthly amount that the Company was paying as the employer contribution toward Employee’s and her dependents’ coverage under the Company’s health, dental and vision plans as of the Termination Date times eighteen (18). For purposes of this Agreement, Welfare Benefit Plans shall mean the medical, dental, vision, long and short term disability and life insurance plans or any other employee welfare benefit plans maintained by the Company in which Employee participates on the Termination Date. 

 

c.     Bonus. Employee shall be eligible to receive a bonus under the 2016 Performance Objectives for Chiefs (“2016 Bonus Plan”), if any, with respect to the 2016 year, in accordance with and at the time and in the manner set forth under the terms of the 2016 Bonus Plan to the extent the performance and other criteria under the 2016 Bonus Plan are achieved. In addition, Employee shall be eligible to receive a bonus under the 2017 Performance Objectives for Chiefs (“2017 Bonus Plan”), if any, with respect to the 2017 year, in accordance with and at the time and in the manner set forth under the terms of the 2017 Bonus Plan to the extent the performance and other criteria under the 2017 Bonus Plan are achieved without regard to whether Employee remains employed with the Company during the applicable fiscal year; however, any such bonus shall be prorated based on the number of full calendar weeks in the applicable fiscal year during which Employee was employed by the Company. Notwithstanding anything herein to the contrary, payment of any such bonus described above under the 2016 Bonus Plan shall be made in calendar year 2017, but no later than April 30, 2017 and payment of any such bonus described above under the 2017 Bonus Plan shall be made in calendar year 2018, but no later than April 30, 2018.

 

d.     Notwithstanding the specific terms of the Build-A-Bear Workshop, Inc. Third Amended and Restated 2004 Stock Incentive Plan (or applicable predecessor or successor plans thereto) (“Incentive Plan”) or the Employee’s applicable award agreements thereunder, with respect to any restricted stock (“Restricted Stock”) and nonqualified stock options (“Options”), the following provisions shall apply:

 

(i)     Vested Options. All Options which have vested on or prior to the Termination Date, but which have not expired, been exercised, or otherwise terminated, shall remain vested and exercisable through the date that is three (3) months after the Termination Date, but in no event after the expiration of their respective terms (as set forth in the applicable option agreements). For the avoidance of doubt, the foregoing shall not apply to any stock option that is intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code, and any such incentive stock option granted to Employee which has vested on or prior to the Termination Date, but which has not expired, been exercised, or otherwise terminated, shall terminate on the date no longer exercisable by its terms.

 

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(ii)     Unvested Options. All Options which have not vested as of the Termination Date, and which have not expired or otherwise terminated, shall terminate on the Termination Date. 

 

(iii)     Restricted Stock. All shares of Restricted Stock which have not vested as of the Termination Date, and which have not expired, terminated, or otherwise been forfeited, shall be forfeited on the Termination Date. 

 

The applicable provisions of this Agreement amend the terms and provisions of the awards granted to Employee under the Incentive Plan to the extent addressed herein.

 

e.     Change in Control. In the event that a Change in Control (as defined in the Amended and Restated Employment, Confidentiality and Noncompete Agreement between the Parties dated March 7, 2016) of the Company occurs within three (3) months following the Termination Date, (i) Employee shall receive on the regular payroll date immediately following the effective date of such Change in Control a lump sum payment in the amount of One Hundred Sixty Two Thousand Two Hundred Fifty Dollars ($162,250), less any applicable withholding and (ii) the monthly amount of the separation payments set forth in Section 2.a. above otherwise payable during the Payment Period shall be payable for a period of eighteen (18) months following the Termination Date, and the Payment Period shall be extended from 12 months to 18 months.

 

f.     No Further Payments; Exhibit 1. By executing this Agreement, Employee acknowledges and agrees that she accepts the amounts described in this Paragraph 2 in full discharge of all obligations of the Company and waives any right or claim she may have to benefits, compensation, or payment from the Company or under any Plans, with the exception of the payments set forth specifically in Exhibit 1. The payments and benefits referred to in this Paragraph 2 relate exclusively to the Employee’s service as an employee and officer of the Company. Employee acknowledges that said payments constitute good and valuable consideration for the various commitments undertaken and releases provided by Employee in this Agreement and the Release.

 

With respect to Plan amounts set forth on Exhibit 1, unless otherwise explicitly stated, such amounts have been determined consistent with the respective Plan provisions and consistent with the Company’s normal practice in determining such benefit amounts. If the Company becomes aware of any discrepancy in any amount set forth in Exhibit 1, it will immediately notify Employee in writing of such discrepancy and make an appropriate adjustment, whether positive or negative, to the respective Plan account balance.

 

g.     Withholding; Plan Compensation. All payments under this Agreement shall be subject to all applicable federal and state tax withholding including FICA, and any other requirements of law. Subject to the provisions of the applicable employee benefit plan, payments made under this Agreement are not considered to be eligible earnings for pension or 401(k) plan purposes.

 

h.     Ancillary Arrangements. The Company shall take such action as may be reasonably necessary to transfer the Company cellular phone number used by Employee to Employee’s personal account in a manner that allows Employee to maintain the existing phone number associated with such cellular phone.

 

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3.     General Release and Agreement Not to Sue. 

 

a.     For and in consideration of the representations, covenants, promises, agreements and acknowledgments contained herein, the sufficiency of which are hereby acknowledged, Employee agrees as follows:

 

	 	
			i.

				
			For purposes of this Agreement, the term “Releasees” means Build-A-Bear Workshop, Inc. and all of its parents, subsidiaries, affiliated entities, predecessors, successors, assigns, directors, officers, administrators, officials, employees, shareholders, transferees, agents, counsel, plans and insurers.

			

 

	 	
			ii.

				
			Employee, on behalf of herself and each of her personal and legal representatives, heirs, devisees, executors, successors and assigns, hereby acknowledges full and complete satisfaction of, and fully and forever waives, releases, acquits, and discharges the Releasees from, any and all claims, causes of action, grievances, demands, rights, liabilities, damages of any kind, obligations, costs, expenses, and debts, of every kind and nature whatsoever, whether based on statute, tort, contract, common law, or other theory of recovery, whether known or unknown, suspected or unsuspected, or fixed or contingent, which Employee holds or at any time previously held against the Releasees, or any of them, with the exception of claims challenging the validity of or alleging breaches of this Agreement, through the effective date of this Agreement (singularly, “Claim” and collectively, “Claims”). This general release specifically includes, but is not limited to, any and all Claims:

			

 

	 	
			1.

				
			Arising under, based upon, or in any way related to Employee’s employment with and/or service as an officer and/or director for any of the Releasees, incidents occurring during Employee’s employment with and/or service as an officer and/or director for any of the Releasees, or the termination of Employee’s employment with and/or service as an officer and/or director for any of the Releasees; and/or

			

 

	 	
			2.

				
			Arising under, based upon, or in any way related to TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, as amended, THE CIVIL RIGHTS ACT OF 1991, 42 U.S.C. §1981, THE AMERICANS WITH DISABILITIES ACT, THE REHABILITATION ACT, THE FAMILY AND MEDICAL LEAVE ACT, THE FAIR LABOR STANDARDS ACT, THE EMPLOYEE RETIREMENT INCOME SECURITY ACT, THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THE OLDER WORKERS BENEFIT PROTECTION ACT, THE EQUAL PAY ACT, THE NATIONAL LABOR RELATIONS ACT, THE WORKER ADJUSTMENT AND RETRAINING NOTIFICATION ACT, STATE WORKERS’ COMPENSATION LAW, THE ELECTRIC SERVICE CUSTOMER CHOICE AND RATE RELIEF LAW OF 1997, and any other federal, state, county, or local common law, statute, rule, ordinance, decision, order, policy, or regulation prohibiting employment discrimination, harassment and/or retaliation, providing for the payment of wages or benefits, or otherwise creating rights or claims for employees, including, but not limited to, any and all claims alleging breach of public policy, the implied obligation of good faith and fair dealing, or any express, implied, oral or written contract, handbook, manual, policy statement or employment practice, or claims alleging misrepresentation, defamation, libel, slander, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, false imprisonment, assault, battery, fraud, negligence, or wrongful discharge; and/or

			

 

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			3.

				
			Any claim arising under the Plans; provided, however, it is understood and agreed by the parties that Employee is not waiving or releasing any claim or rights to the Plan benefits which are described in Exhibit 1 hereto. Employee understands that she is entitled to such benefits in accordance with the specific terms and provisions of the respective Plans.

			

 

Employee hereby agrees not to sue or pursue any claim against Releasees with respect to any Claims released in this Agreement except as specifically stated below. Employee hereby agrees that if any such Claim referenced herein is filed, pursued or otherwise prosecuted, Employee waives her right to relief from such Claim, including the right to damages, attorneys’ fees, costs, and any and all other relief, whether legal or equitable, sought in connection with such Claim. Employee further agrees that if she, or anyone on her behalf, files, pursues or otherwise prosecutes any such Claim, then Employee shall be liable for the payment of all damages and costs, including attorneys’ fees, incurred by the Releasees, or any of them, in connection with such Claim and the Company shall no longer be obligated to make any payment or benefit not already made to Employee, and the Company shall be entitled to recoup the value of all payments and benefits paid hereunder. This agreement not to sue does not prohibit Employee from pursuing a lawsuit or claim to challenge the validity or enforceability of this Agreement under the Age Discrimination in Employment Act or the Older Workers Benefit Protection Act, nor does it render Employee liable for damages or costs, including attorneys’ fees, incurred by Releasees in connection with a lawsuit or claim to challenge the validity or enforceability of this Agreement under the Age Discrimination in Employment Act or the Older Workers Benefit Protection Act. Employee further agrees that if a trier-of-fact finds that Employee has otherwise breached any of the terms of this Agreement, then Employee shall be liable for the payment of all damages, costs and expenses, including attorneys’ fees, incurred by the Releasees, or any of them, in connection with such breach. Employee represents and warrants that as of the date she signs this Agreement, she has not initiated or caused to be initiated against the Company any administrative claim, investigation, proceeding, or suit of any kind. This Agreement shall be a fully binding and complete settlement by Employee, her personal and legal representatives, heirs, devisees, executors, successors, and assigns. The Parties acknowledge that by signing the Agreement, Employee is not waiving any rights which may arise in the future.

 

	 	
			iii.

				
			Notwithstanding the foregoing, nothing in this Agreement shall effect a release of Employee’s right (i) to enforce the terms of this Agreement, and (ii) to indemnity as provided for under the Company’s articles, bylaws, agreements and at common law.

			

 

b.     For and in consideration of the representations, covenants, promises, agreements and acknowledgments contained herein, the sufficiency of which are hereby acknowledged, except as provided below, the Company hereby releases Employee from any and all claims, causes of action, grievances, demands, rights, liabilities, damages of any kind, obligations, costs, expenses, and debts, of every kind and nature whatsoever, in connection with Employee’s employment or termination of employment, whether based on statute, tort, contract, common law, or other theory of recovery, whether known or unknown, suspected or unsuspected, or fixed or contingent, which the Company ever had or may have against Employee through the date of this Agreement.  Notwithstanding the foregoing, the Company’s release provided herein does not waive or release (a) any claims that are not waivable by law, (b) rights or claims that may arise after this Agreement is executed, (c) rights under this Agreement, (d) any criminal, malicious, dishonest or fraudulent acts committed by Employee in violation of any federal or state laws or regulations, (e) any breach of fiduciary duty Employee owed or owes to the Company in her capacity as an officer of the Company or its subsidiaries or affiliates, or (f) any gross negligence or willful misconduct by Employee in the performance of her obligations under this Agreement, her employment agreement, or any other agreement with or policy of the Company or its subsidiaries or affiliates.

 

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4.     General Release. The Parties hereby acknowledge and agree that the release set forth above is a general release of all Claims that Employee holds or previously held against Releasees, or any of them, whether or not they are specifically referred to herein. No reference herein to any specific Claim, statute or obligation is intended to limit the scope of this general release and, notwithstanding any such reference, this Agreement shall be effective as a full and final bar to all Claims that are released in this Agreement.

 

5.     Non-Admission. Employee, the Company, and Releasees understand and agree that this Agreement is intended to finally and fully conclude the employment and officer relationship between Employee, the Company and any of the Releasees and shall not be interpreted as an admission by Employee, the Company or any of the Releasees of any wrongdoing or any violation of federal, state or local law, regulation or ordinance against the other Party. All Parties expressly deny that she/it/they, or their employees, supervisors, representatives, agents, officers, or directors have ever committed any wrongdoing whatsoever. 

 

6.     Taxes. Employee agrees that she is responsible for the payment of all federal, state and local taxes, of any type whatsoever, due and resulting from the payment to her of the above-described consideration.

 

7.     Attorney Review; Time for Execution; Revocation; Acknowledgements and Representations.

 

a.     The Company hereby advises Employee to consult with an attorney prior to executing this Agreement. Each Party shall bear all attorneys’ fees and costs arising from the actions of its own counsel in connection with the review and execution of this Agreement. Employee shall have twenty one (21) days from the date of the presentation of this Agreement to consider whether to sign it. Any changes, regardless of materiality, that are made to this Agreement following its initial presentation to Employee shall not toll or restart Employee’s consideration. Employee may revoke the Agreement, thereby nullifying the Agreement and all of its terms, by notifying the Company by delivering written notice of revocation to Eric Fencl, General Counsel by U.S. Mail at 1954 Innerbelt Business Center Drive, St. Louis, Missouri 63114, at any time within seven (7) days after executing the Agreement. In the event Employee exercises her right to revoke this Agreement, this Agreement will be null and void and the Company shall have no obligation to make the payments or furnish the other consideration recited above, or any other obligation under this Agreement.

 

b.     Employee expressly agrees, acknowledges and understands that: (a) other than what is required by law, the consideration set forth above is consideration that she is not otherwise entitled to and is given in exchange for the release contained above, the Release, and for the other promises contained in this Agreement; (b) she is waiving any and all rights or claims arising under the Age Discrimination in Employment Act; (c) she has been, and is hereby, advised by the Company to consult with an attorney prior to executing this Agreement; (d) she has been given a period of at least twenty one (21) days within which to consider this Agreement; (e) this Agreement does not become effective or enforceable until the seven (7) day revocation period described above has elapsed, with no revocation having occurred, and then the Agreement shall be considered effective retroactive to the date of execution by Employee; (f) she may revoke this Agreement at any time within seven (7) days after execution; (g) she shall not be entitled to any payments or benefits under this Agreement in the event of a revocation; (h) she has had a full opportunity to read and consider this Agreement; and (i) she has knowingly and voluntarily entered into this Agreement, and fully understands and agrees to all of its terms.

 

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8.     Confidentiality. Employee agrees to keep secret and confidential, and not to use or disclose to any third parties, except as directly required for Employee to perform Employee’s employment responsibilities for the Company, any of the Company’s proprietary Confidential Information. Employee acknowledges and confirms that certain data and other information (whether in human or machine readable form) that comes into her possession or knowledge (whether before or after the date of this Agreement) and which was obtained from the Company, or obtained by Employee for or on behalf of the Company (“Confidential Information”) is the secret, confidential property of the Company. This Confidential Information includes, but is not limited to: (a) lists or other identification of customers or prospective customers of the Company; (b) lists or other identification of sources or prospective sources of the Company’s products or components thereof, its landlords and prospective landlords and its current and prospective alliance, marketing and media partners (and key individuals employed or engaged by such parties); (c) all compilations of information, correspondence, designs, drawings, files, formulae, lists, machines, maps, methods, models, studies, surveys, scripts, screenplays, artwork, sketches, notes or other writings, plans, leases, records and reports; (d) financial, sales and marketing data relating to the Company or to the industry or other areas pertaining to the Company’s activities and contemplated activities (including, without limitation, leasing, manufacturing, transportation, distribution and sales costs and non-public pricing information); (e) equipment, materials, designs, procedures, processes, and techniques used in, or related to, the development, manufacture, assembly, fabrication or other production and quality control of the Company’s products, stores and services; (f) the Company’s relations with its past, current and prospective customers, suppliers, landlords, alliance, marketing and media partners and the nature and type of products or services rendered to, received from or developed with such parties or prospective parties; (g) the Company’s relations with its employees (including, without limitation, salaries, job classifications and skill levels); and (h) any other information designated by the Company to be confidential, secret and/or proprietary (including, without limitation, information provided by customers, suppliers and alliance partners of the Company). Further, Employee agrees not to divulge or release this Agreement or its contents, except to her attorneys, financial advisors, or immediate family, provided they agree to keep this Agreement and its contents confidential, or in response to a valid subpoena or court order. Information that is or becomes publicly available through no wrongful act or breach of obligation by Employee shall not be deemed to be Confidential Information. In the event Employee receives a subpoena or court order requiring the release of this Agreement or its contents or any Confidential Information, Employee will notify the Company sufficiently in advance of the date for the disclosure of such information in order to enable the Company to contest the subpoena or court order, and Employee agrees to cooperate with the Company in any related proceeding involving the release of this Agreement or its contents or any Confidential Information. Employee agrees that notwithstanding anything else in this Agreement to the contrary, she has the obligation to maintain strict secrecy regarding trade secrets beyond the expiration of this Agreement.

 

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9.     Restrictions. Employee agrees that through the Termination Date and for the period of time set forth below following the Termination Date, Employee will not, directly or indirectly (whether as owner, partner, consultant, employee or otherwise):

 

a.     For one (1) year, engage in, assist or have an interest in, or enter the employment of or act as an agent, advisor or consultant for, any person or entity which is engaged in, or will be engaged in, the development, manufacture, supplying or sale of a product, process, service or development: (i) which is competitive with a product, process, service or development on which Employee worked; or (ii) with respect to which Employee has or had access to Confidential Information while at the Company (in either case (i) or (ii), a “Restricted Activity”), and which is located within the United States or within any country where the Company has established a retail presence either directly or through a franchise arrangement; or

 

b.     For one (1) year, induce or attempt to induce any employee, consultant, partner or advisor of the Company to accept employment or an affiliation with any other entity.

 

c.     Following termination of Employee’s employment, the restrictions in paragraph 9(a) and 9(b) shall not apply to Employee with respect to an entity that engages in Restricted Activity so long as, for one (1) year following her termination of employment: (i) the sale of stuffed plush toys is not a material business of the entity; (ii) Employee has no direct or personal involvement in the sale of stuffed plush toys; and (iii) neither Employee, her relatives, nor any other entities with which she is affiliated own more than one percent (1%) of the entity. As used in this Paragraph 9, “material business” shall mean that either (A) greater than ten percent (10%) of annual revenues received by such entity were derived from the sale of stuffed plush toys and related products, or (B) the entity otherwise annually derives or is projected to derive annual revenues in excess of five million dollars ($5,000,000) from a retail concept that is similar in any material regard to the Company. 

 

10.     Acknowledgment. Employee recognizes and agrees that the restraints contained in Paragraph 9 (both separately and in total), including the geographic scope thereof in light of the Company’s marketing efforts, are reasonable and enforceable in view of the Company’s legitimate interests in protecting its Confidential Information and customer goodwill and the limited scope of the restrictions in Paragraph 9. 

 

11.     Inventions. Any and all ideas, inventions, discoveries, patents, patent applications, continuation-in-part patent applications, divisional patent applications, technology, copyrights, derivative works, trademarks, service marks, improvements, trade secrets and the like (collectively, “Inventions”), which are or have been developed, conceived, created, discovered, learned, produced and/or otherwise generated by Employee, whether individually or otherwise, during the time that Employee has been employed by the Company, whether or not during working hours, that related to (a) current and anticipated businesses and/or activities of the Company, (b) the current and anticipated research or development of the Company, or (c) any work performed by Employee for the Company, shall be the sole and exclusive property of the Company, and the Company shall own any and all right, title and interest to such Inventions. Employee assigns, and agrees to assign to the Company whenever so requested by the Company, any and all right, title and interest in and to any such Invention, at the Company’s expense, and Employee agrees to execute any and all applications, assignments or other instruments which the Company deems desirable or necessary to protect such interests, at the Company’s expense.

 

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Employee acknowledges that as part of her work for the Company, she has been asked to create, or contribute to the creation of, computer programs, documentation and other copyrightable works. Employee hereby agrees that any and all computer programs, documentation and other copyrightable materials that she has prepared or worked on for the Company shall be treated as and shall be a “work made for hire,” for the exclusive ownership and benefit of the Company according to the copyright laws of the United States, including, but not limited to, Sections 101 and 201 of Title 17 of the U.S. Code (“U.S.C.”) as well as according to similar foreign laws. The Company shall have the exclusive right to register the copyrights in all such works in its name as the owner and author of such works and shall have the exclusive rights conveyed under 17 U.S.C. Sections 106 and 106A including, but not limited to, the right to make all uses of the works in which attribution or integrity rights may be implicated. Without in any way limiting the foregoing, to the extent the works are not treated as works made for hire under any applicable law, Employee hereby irrevocably assigns, transfers, and conveys to the Company and its successors and assigns any and all worldwide right, title, and interest that Employee may now or in the future have in or to the works, including, but not limited to, all ownership, U.S. and foreign copyrights, all treaty, convention, statutory and common law rights under the law of any U.S. or foreign jurisdiction, the right to sue for past, present, and future infringement, and moral, attribution, and integrity rights. Employee hereby expressly and forever irrevocably waives any and all rights that she may have arising under 17 U.S.C. Sections 106A, rights that may arise under any federal, state, or foreign law that conveys rights that are similar in nature to those conveyed under 17 U.S.C. Section 106A, and any other type of moral right or droit moral. 

 

12.     Company Property. Employee acknowledges and represents that any and all equipment and notes, records, sketches, computer diskettes, training materials and other documents relating to the Company obtained by or provided to Employee, or otherwise made, produced or compiled during Employee’s employment with the Company, regardless of the type of medium in which they are preserved, are the sole and exclusive property of the Company and shall be or have been surrendered by Employee to the Company on the Termination Date. 

 

13.     Non-Disparagement. Employee agrees that she will not make any public statement which would materially adversely affect the business of Releasees or any other related entity of the Company, in any manner, at any time, even beyond the date after which Employee will receive no further compensation or benefits of any kind pursuant to the provisions of this Agreement. The Company agrees that its Chief Executive Officer, senior management (i.e., Chiefs) and members of its Board of Directors will not make any public statement which would materially adversely affect the reputation of Employee, in any manner, at any time. Nothing in this Agreement, however, shall be construed to prohibit Employee or the Company from communicating with any government agency in a manner protected by applicable law. Employee agrees that she will not disparage, criticize or speak negatively about Releasees or their decisions or actions, about Releasees’ products, services or operations, about any of Releasees’ past, present or future directors, officers or employees or any of their actions or decisions, or about Releasees’ customers. The Parties agree that Employee shall refer any and all inquiries from prospective employers solely to Darlene Elder, or such person’s successor.

 

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14.     Remedies. The Parties respectively acknowledge that the other Party would be greatly injured by, and have no adequate remedy at law for, breach of obligations contained in Paragraphs 8-13 above. The Parties further recognize the difficulty in ascertaining damages for breach of these provisions. Accordingly, the Parties agree that in the event of a breach or threatened breach of any of Employee’s duties and obligations under the terms and provisions of such Paragraphs hereof, the Company shall be entitled, in addition to any other legal or equitable remedies it may have in connection therewith (including any right to damages that it may suffer), to temporary, preliminary and permanent injunctive relief restraining such breach or threatened breach. Employee hereby expressly acknowledges that the harm which might result to the Company’s business as a result of any noncompliance by Employee with any of the provisions of such Paragraphs would be largely irreparable. Employee specifically agrees that if there is a question as to the enforceability of any such provisions, Employee will not engage in any conduct inconsistent with or contrary to such Paragraphs until after the question has been resolved by a final judgment of a court of competent jurisdiction. 

 

15.     Severability. The provisions of this Agreement are fully severable. Therefore, if any provision of this Agreement is for any reason determined to be invalid or unenforceable under applicable law in any jurisdiction, the remaining provisions hereof shall be unaffected as to such jurisdiction and such adjudication shall not affect the validity or enforceability of such provisions in any other jurisdiction. Furthermore, any invalid or unenforceable provisions shall be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or, if such provision cannot under any circumstances be modified or restricted, it shall be excised from the Agreement without affecting the validity or enforceability of any of the remaining provisions. The Parties expressly acknowledge and agree that this Paragraph is reasonable in view of the Parties’ respective interests.

 

16.     Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matters of this Agreement and supersedes all prior negotiations and agreements, whether written or oral, including, without limitation, the Amended and Restated Employment, Confidentiality and Noncompete Agreement between the Parties dated March 7, 2016. This Agreement may not be altered or amended except by a written document executed by both Parties. Employee represents and acknowledges that in executing this Agreement, she has not relied upon any representation or statement not set forth herein made by the Company or any of the Releasees or by any of the Releasees’ agents, representatives, or attorneys, with regard to the subject matters, basis or effect of this Agreement, the Company, its business or its stock, or any other matter.

 

17.     Arbitration. Any controversy or claim arising out of, or relating to this Agreement, the breach thereof, or Employee’s employment by the Company or termination thereof, shall, at the Company’s sole option, be settled by binding arbitration in the County of St. Louis in accordance with the rules then in force of the American Arbitration Association, and judgment upon the award rendered may be entered and enforced in any court having jurisdiction thereof. In the event Employee commences any action in court which the Company has the right to submit to binding arbitration, the Company shall have sixty (60) days from the date of service of a summons and complaint upon the Company to direct in writing that all or any part of the dispute be arbitrated. Any remedy available in any court action shall also be available in arbitration. 

 

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18.     Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, Employee and her personal and legal representatives, heirs, devisees, executors, successors, and assigns, and the Company and its successors and assigns.

 

19.     Paragraph Headings; Governing Law; Third Party Benefit. Paragraph headings herein are for convenience and reference only and in no way define, limit or enlarge the rights and obligations of the Parties under this Agreement. The provisions of this Agreement are intended to benefit Employee and each of the Releasees and as such may be enforced by each Releasee in such party’s individual right. In light of the Company’s substantial contacts with the State of Missouri, the Parties’ interests in ensuring that disputes regarding the interpretation, validity and enforceability of this Agreement are resolved on a uniform basis, and the Company’s execution of, and the making of, this Agreement in Missouri, the Parties agree that: (a) any litigation involving any noncompliance with or breach of the Agreement, or regarding the interpretation, validity and/or enforceability of the Agreement, shall be filed and conducted in the state or federal courts in St. Louis City or County, Missouri; and (b) the Agreement shall be interpreted in accordance with and governed by the laws of the State of Missouri, without regard for any conflict of law principles.

 

20.     Section 409A. The Agreement is intended to comply with the requirements of Section 409A of the Code or an exemption or exclusion therefrom. In no event may Employee, directly or indirectly, designate the calendar year of any payment to be made under this Agreement. Notwithstanding anything herein to the contrary, in the event that Employee is determined to be a specified employee within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), for purposes of any payment on termination of employment hereunder, payment(s) shall be made or begin, as applicable, on the first payroll date which is more than six months following the date of separation from service, to the extent required to avoid any adverse tax consequences under Section 409A of the Code. Any payments that would have been made during such 6-month period shall be made in a lump sum on the first payroll date which is more than six months following the date Employee separates from service with Company. Each payment under this Agreement shall be treated as a separate payment for purposes of Section 409A of the Code. 

 

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IN WITNESS WHEREOF, the undersigned have executed this Separation Agreement and General Release on the date(s) identified below.

 

PLEASE READ CAREFULLY. THIS SEPARATION AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL CLAIMS. THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE COMPANY. BY SIGNING BELOW, THE PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE CAREFULLY READ AND FULLY UNDERSTAND THIS AGREEMENT AND UNDERSTAND THE RIGHTS THEY ARE WAIVING BY SIGNING THIS AGREEMENT. THE PARTIES ARE ENTERING INTO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY, AND SIGN IT OF THEIR OWN FREE ACT AND DEED.

         

 

	BUILD-A-BEAR WORKSHOP, INC. 	 	EMPLOYEE	 
	 	 	 	 	 
	 	 	 	 
	By:	
			 Sharon John

				
			 

				
			Gina Collins

				
			 

			
	 	
			 President and Chief Executive Officer

				
			 

				
			 

				
			 

			
	 	
			 

				
			 

				
			 

				
			 

			
	Date:	
			 

				
			 

				
			Date: 

				
			 

			

 

                                        

12

 

 

Exhibit 1

 

Benefit Summary - Employee

 

1.     Build-A-Bear Workshop, Inc. Employee Savings Trust (“401(k) Plan”): 

 

Benefits will be distributed in accordance with the terms of the 401(k) Plan.

 

2.     Health and Other Insurance Benefits

 

	 	
			●

				
			Employee may elect COBRA continuation coverage under the Company group health or other insurance benefit plans, to the extent permitted under the applicable plan terms and COBRA. Any conversion or other rights shall be governed by the terms of the applicable plans.

			

 

3.     Build-A-Bear Workshop, Inc. Non-Qualified Deferred Compensation Plan (“Deferred Compensation Plan”)

 

	 	
			●

				
			Benefits will be distributed in accordance with the terms of the Deferred Compensation Plan.

			

 

4.     Stock Options and Restricted Stock Awards 

 

	 	
			●

				
			All unexercised stock options and unvested restricted stock awards that remain outstanding on the Termination Date shall be governed by the terms of the applicable plans and awards, except to the extent specifically amended by the terms of the Separation Agreement and General Release between the parties. 

			

 

	
			5.

				
			Indemnification Agreement dated January 20, 2014 between Build-A-Bear Workshop, Inc. and Employee (“Indemnification Agreement”) 

			

 

	 	
			●

				
			Employee’s rights under the Indemnification Agreement shall continue following the Termination Date to the extent provided therein.

			

 

 

	This exhibit summarizes the benefits Employee could receive at separation. Please note that it only describes the highlights of each plan and estimated amounts. For detailed plan information, refer to the legal plan documents. If there is a discrepancy between the benefit provisions described in this guide and the legal plan documents, the legal plan documents will govern.Exhibit

MIDSOUTH BANCORP, INC.

ANNUAL INCENTIVE COMPENSATION PLAN

2016 PLAN YEAR

STRICTLY CONFIDENTIAL

1

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 2016 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.

		
	5.
	  “Effective Date” means January 1, 2016.

		
	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.

2

		
	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.

		
	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.

3

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.

		
	b.
	Plan Participant Performance – For all Plan Participants, pre-determined Bank, Regional 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.

4

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.

		
	VI.
	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.

		
	VII.
	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. 

		
	VIII.
	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.

5

The Board has the responsibility to administer and interpret the Plan. At 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:
    
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.

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.

		
	IX.
	TERMINATION OF EMPLOYMENT:

6

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.

		
	X.
	AMENDMENTS AND TERMINATION OF PLAN

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

		
	XI.
	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, which 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:

7

		
	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. 

		
	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).

		
	XII.
	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.

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

8

		
	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.

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.

IN WITNESS WHEREOF, The Company has signed this Plan document as of January 30, 2016.

Company:
MIDSOUTH BANCORP, INC.

By:______________________

9

Title:_____________________

10

APPENDIX A

PLAN PARTICIPANT GUIDELINES

MIDSOUTH BANCORP, INC.
2016 ANNUAL INCENTIVE COMPENSATION PLAN

	
							
	Tier*
	Incentive Ranges
	Award Objectives

	Threshold
	Target
	Maximum
	Bank
	Regional
	

Individual

	I
	5.0%
	10%
	Discretionary
	100%
	0%
	

0%

	II
	5.0%
	10%
	Discretionary
	100%
	0%
	0%

	 
	Percent of Salary
	Weighting of Award

*Tier Groups

I    Executive
II    Admin Support

 

11

BENEFICIARY DESIGNATION
MIDSOUTH BANK, N.A.
2016 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: ____________________________

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: _____________

Received by the Plan Administrator this _____ day of __________________, 2016.
By: ________________________________________
Title: _______________________________________

12

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