SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for
Use of Commission
[X ] Definitive Proxy Statement Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
par 240.14a-11(c) or par. 240.14a-12
MidSouth Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
Board of Directors of MidSouth Bancorp, Inc.
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies:
2) Aggregate number of securities to which
transaction applies:
3) Per unit price or other underlying value
of transaction computed pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total Fee Paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify
the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
MIDSOUTH BANCORP, INC.
102 Versailles Boulevard
Versailles Centre
Lafayette, Louisiana 70501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Lafayette, Louisiana
April 16, 2004
The annual meeting of shareholders of MidSouth
Bancorp, Inc. ("MidSouth") will be held on Tuesday, May
18, 2004, at 4:00 p.m., local time, at Caf, Des Amis, at 140
East Bridge Street, Breaux Bridge, Louisiana, to elect
directors and to consider such other matters as may properly
come before the meeting or any adjournments thereof.
Only holders of record of MidSouth common stock at the
close of business on March 31, 2004, are entitled to notice of
and to vote at the meeting.
Your vote is important regardless of the number of
shares you own. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
YOUR PROXY MAY BE REVOKED BY APPROPRIATE NOTICE TO MIDSOUTH'S
SECRETARY AT ANY TIME PRIOR TO THE VOTING THEREOF.
BY ORDER OF THE BOARD
OF DIRECTORS
Karen L. Hail
Secretary
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MIDSOUTH BANCORP, INC.
102 Versailles Boulevard
Versailles Centre
Lafayette, Louisiana 70501
PROXY STATEMENT
This Proxy Statement is furnished holders of
common stock of MidSouth Bancorp, Inc. ("MidSouth") in
connection with the solicitation on behalf of its Board of
Directors (the "Board") of proxies for use at MidSouth's
annual shareholders meeting (the "Meeting") to be held on
Tuesday, May 18, 2004, at the time and place shown in the
accompanying notice and at any adjournments thereof. This
Proxy Statement is first being mailed to shareholders about
April 16, 2004.
Only holders of record of MidSouth common stock
("Common Stock") at the close of business on March 31,
2004, are entitled to notice of and to vote at the Meeting. On
that date, MidSouth had outstanding 3,212,801 shares of
Common Stock.
The presence, in person or by proxy, of a majority of
the outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum. If a quorum is present,
directors are elected by plurality vote; with respect to any
other proposal that may properly come before the Meeting, if
the Board has recommended it by the affirmative vote of the
majority of the Continuing Directors, as defined in
MidSouth's Articles of Incorporation ("Articles"), then,
generally, the affirmative vote of a majority of the votes cast
is required to approve it, but if it is not so recommended,
then the affirmative vote of 80% of the Total Voting Power,
as defined in the Articles, is required to approve it.
MidSouth's By-laws provide that the Continuing Directors
will appoint the Judge(s) of Election and that all questions
as to the qualification of voters, validity of proxies and the
acceptance or rejection of votes will be decided by the
Judge(s).
Abstentions or broker non-votes will have no effect
on the election of directors. With respect to any other
proposal, abstentions and broker non-votes will be counted
as votes not cast and will have no effect on any proposal
requiring a majority of votes cast to approve it and will have
the effect of a vote against any proposal requiring an
affirmative vote of a percentage of the Total Voting Power.
All proxies received in the form enclosed will be
voted as specified and, in the absence of instructions to the
contrary, will be voted for the election of the persons named
herein. MidSouth does not know of any matters to be
presented at the Meeting other than those described herein;
however, if any other matters properly come before the
Meeting or any adjournments thereof, it is the intention of
the persons named in the enclosed proxy to vote the shares
represented by them in accordance with their best judgment.
The enclosed proxy may be revoked by the
shareholder at any time prior to its exercise by filing with
MidSouth's Secretary a written revocation or a duly executed
proxy bearing a later date. A shareholder who votes in person
in a manner inconsistent with a proxy previously filed on his
or her behalf will be deemed to have revoked the proxy as to
the matters voted upon in person.
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The cost of soliciting proxies in the enclosed form
will be borne by MidSouth. In addition to the use of the
mails, proxies may be solicited by personal interview,
telephone, telegraph, facsimile and e-mail. Banks, brokerage
houses and other nominees or fiduciaries may be requested
to forward the soliciting material to their principals and to
obtain authorization for the execution of proxies, and
MidSouth will, upon request, reimburse them for their
expenses in so acting.
ELECTION OF DIRECTORS
The Articles provide for three classes of directors,
with one class to be elected at each annual meeting for a
three-year term. At the Meeting, Class II Directors will be
elected to serve until the third succeeding annual meeting
and until their successors have been duly elected and
qualified.
Unless authority is withheld, the persons named in
the enclosed proxy will vote the shares represented by the
proxies received by them for the election of the three Class II
director nominees named below. In the unanticipated event
that one or more nominees cannot be a candidate at the
Meeting, the shares represented will be voted in favor of
such other nominees as may be designated by the Board.
Directors will be elected by plurality vote.
Other than the Board, only shareholders entitled to
vote for the election of directors who have complied with the
procedures of Article IV(H) of MidSouth's Articles may
nominate a person for election. To do so, the shareholder
must have given written notice to MidSouth by December 9,
2003, of the following: (1) as to each person whom he or
she proposes to nominate, (a) his or her name, age, business
address, residential address, principal occupation or
employment, and the class and number of shares of
MidSouth's stock of which he or she is the beneficial owner
and (b) any other information relating to such person that
would be required to be disclosed in solicitations of proxies
for the election of directors by Regulation 14A under the
Securities Exchange Act of 1934; and (2) as to the
shareholder giving the notice, (a) his or her name and
address and the class and number of shares of stock of
MidSouth of which he or she is the beneficial owner and (b)
a description of any agreements, arrangements or
relationships between the shareholder and each person he or
she proposes to nominate. Two inspectors, not affiliated
with MidSouth, appointed by MidSouth's Secretary, will
determine whether the notice provisions were met; if they
determine that the shareholder has not complied with Article
IV(H), the defective nomination will be disregarded.
-3-
The following table sets forth certain information as of
March 31, 2004, with respect to each director nominee and
each director whose term as a director will continue after the
Meeting. Unless otherwise indicated, each person has been
engaged in the principal occupation shown for at least the
past five years. The Board recommends a vote FOR each of
the three nominees named below.
Director Nominees for terms to expire in 2007 (Class II Directors)
Year First
Name Age Principal Occupation Became Director
____ ___ ____________________ _______________
Will G. Charbonnet, Sr. 56 Chairman of the Board, MidSouth and 1984
the Bank; Treasurer/Exec. Officer of
Cross Roads Catholic Book Store;
Computer/Business Consultant;
Treasurer of Philadelphia Fresh
Foods, Inc. (2003-Present)
Clayton Paul Hilliard 78 President/Owner: Badger Oil 1985
Corporation, Badger Oil & Gas
Ltd., Convexx Oil and Gas Inc.,
Warlord Oil Corporation
Stephen C. May 55 Publisher and major shareholder 2000
MayDay Communications-The
Independent; Investor and
business consultant (1999-Present);
Majority owner of Atlanta
Publishing, LLC (2000-2004);
Majority owner, President and
Publisher of The Times Publishing
Group, Inc.(1980-1999)
Directors whose terms expire in 2005 (Class III Directors)
Year First
Name Age Principal Occupation Became Director
____ ___ ____________________ _______________
James R. Davis, Jr. 51 Owner, Davis/Wade Financial 1991
Services, LLC
Karen L. Hail 50 Chief Financial Officer and 1988
Secretary, MidSouth
Milton B. Kidd, III, O.D. 55 Optometrist, Kidd & Assoc., LLC 1996
Directors whose terms expire in 2006 (Class I Directors)
Year First
Name Age Principal Occupation Became Director
____ ___ ____________________ _______________
C. R. Cloutier 57 President and C.E.O., MidSouth 1984
and MidSouth Bank (the "Bank"),
MidSouth's wholly-owned subsidiary
J. B. Hargroder, M.D. 73 Physician, retired; Vice Chairman 1984
MidSouth Board
William M. Simmons 70 Private Investments 1984
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Corporate Governance
Shareholder, Board of Director and Committee
Meetings. During 2003, the Board held thirteen meetings.
Each incumbent director attended at least 75% of the
aggregate number of meetings held during 2003 of the
Board and committees of which he or she was a member.
While the Company encourages all members of the Board
of Directors to attend annual meetings, there is no formal
policy as to their attendance. It is a rare occasion when all
members of the Board are not present for the Shareholder
Meeting. At the Annual Meeting of May 27, 2003, Mr.
May and Mr. Simmons were out of town and unable to
attend.
Board of Director Independence. Each year, the
Corporate Governance and Nominating Committee
reviews the relationships that each director has with the
Company and with other parties. Only those directors who
do not have any relationships that preclude them from
being independent within the meaning of applicable
American Stock Exchange ("AMEX") rules and who the
Corporate Governance and Nominating Committee
affirmatively determines have no relationships that would
interfere with the exercise of independent judgment in
carrying out the responsibilities of a director are
considered to be "independent directors." The Corporate
Governance and Nominating Committee has reviewed a
number of factors to evaluate the independence of each
board member. These factors include its members'
relationships with the Company and its competitors,
suppliers and customers; their relationships with
management and other directors; the relationships their
current and former employers have with the Company; and
the relationships between the Company and other
companies of which the Company's Board members are
directors or executive officers. After evaluating these
factors, the Board of Directors has determined that Messrs.
Charbonnet, Davis, Hargroder, Hilliard, Kidd, May and
Simmons are independent directors of the Company within
the meaning of applicable AMEX rules.
Shareholder Communications. Shareholders may
communicate directly with members of the Board of
Directors or the individual chairman of standing Board of
Directors committees by writing directly to those
individuals at the following address: P. O. Box 3745,
Lafayette, LA 70502. The Company's general policy is to
forward, and not to intentionally screen, any mail received
at the Company's corporate office that is sent directly to an
individual, unless the Company believes the
communication may pose a security risk.
Code of Ethics. The Board has adopted a Code of
Ethics for directors, officers and employees of the
corporation. It is intended to promote honest and ethical
conduct, full and accurate reporting and compliance with
laws as well as other matters. A copy of the Code of
Ethics is posted on the Corporate Relations page of the
Company's website at www.midsouthbank.com.
The Board has an Audit Committee, an Executive
Committee, a Personnel Committee, and a Corporate
Governance and Nominating Committee.
-5-
The members of the Audit Committee are Messrs.
Davis, Charbonnet, Hilliard and Kidd. The Committee,
which held ten meetings in 2003, is responsible for assisting
the Board in monitoring the integrity of MidSouth's financial
statements, compliance with legal and regulatory
requirements and the independence and performance of
MidSouth's internal and external auditors.
The members of the Executive Committee are
Messrs. Charbonnet, Cloutier and Hargroder. The
Committee's duties include shareholder relations, Bank
examination and Securities and Exchange Commission
("SEC") reporting. The Committee met twelve times in
2003.
The members of the Personnel Committee are
Messrs. Charbonnet, Davis, Hargroder, Hilliard, Kidd, May
and Simmons. The Committee, which met four times in
2003, is responsible for evaluating the performance and
setting the compensation of MidSouth's executive officers
and administering MidSouth's Stock Incentive Plan.
The members of the Corporate Governance and
Nominating Committee are Messrs. Charbonnet, Hargroder
and Hilliard. The Committee assists the Board in making
determinations of director independence, assessing overall
and individual Board performance and recommending
director candidates including those recommendations
submitted by shareholders. The Committee met twice in
2003.
Although the Corporate Governance and Nominating
Committee does not have a formal charter it does operate
under Corporate Governance Principles attached to this
proxy statement, and it is the Committee's policy that
candidates for director possess the highest personal and
professional integrity, have demonstrated exceptional ability
and judgment and have skills and expertise appropriate for
the Company and serving the long-term interest of the
Company's shareholders. The Committee's process for
identifying and evaluating nominees is as follows: (1) in the
case of incumbent directors whose terms of office are set to
expire, the Committee reviews such directors' overall service
to the Company during their terms, including the number of
meetings attended, level of participation, quality of
performance, and any related party transactions with the
Company during the applicable time period; and (2) in the
case of new director candidates, the Committee first
conducts any appropriate and necessary inquiries into the
backgrounds and qualifications of possible candidates after
considering the function and needs of the Board of Directors.
The Committee meets to discuss and consider such
candidates' qualification, including whether the nominee is
independent within the meaning of AMEX rules, and then
selects a candidate for recommendation to the Board of
Directors by majority vote. In seeking potential nominees,
the Corporate Governance and Nominating Committee uses
its and management's network of contacts to compile a list
of potential candidates, but may also engage, if it deems
appropriate, a professional search firm. To date, the
Committee has not paid a fee to any third party to assist in
the process of identifying or evaluating director candidates.
The Corporate Governance and Nominating
Committee will consider director candidates recommended
by shareholders provided the shareholders follow the
procedures set forth in Article IV(H) of the Company's
Articles of Incorporation. The committee does not intend to
alter the manner in which it evaluates candidates, including
the criteria set forth above, based on whether the candidate
was recommended by a shareholder or otherwise.
-6-
Eligible shareholders who desire to present a
proposal qualified for inclusion in the proxy materials
relating to the 2005 annual meeting must forward such
proposal to the Secretary of MidSouth at the address listed
on the first page of this Proxy Statement in time to arrive at
MidSouth before December 6, 2004.
The Board has adopted a Statement of Corporate
Governance Principles, a copy of which is attached as
Exhibit A to this proxy statement.
Directors of MidSouth are also directors of the Bank.
Directors are entitled to fees of $100 per month for service
on the MidSouth Board and $200 per month for service on
the Bank Board. The Chairman of the Board receives an
additional $750 per month, the Vice Chairman receives an
additional $350 per month and the Chairman of the Audit
Committee receives an additional $670 per month. Each
director also receives $350 for each regular meeting, and
$125 for each special meeting, of the Board of the Bank and
$150 for the first hour, and $75 per hour for each additional
hour, of each committee meeting. Directors receive meeting
fees only for meetings they attend.
Each of the current directors who are not employees
were granted options in 1997 to purchase up to 12,065 shares
of Common Stock at $6.06 per share, the fair market value
on the date of grant, exercisable in annual 20% increments
beginning one year from the date of grant. Stephen C. May,
a more recent addition to the Board, was granted options in
2002 to purchase up to 7,150 shares of Common Stock at
$11.82 per share, the fair market value on the date of grant,
exerciseable in annual 20% increments beginning one year
from the date of grant.
The Securities and Exchange Act of 1934 and
applicable SEC regulations require MidSouth's directors,
executive officers and ten percent shareholders to file with
the SEC initial reports of ownership and reports of changes
in ownership of equity securities of MidSouth, and to furnish
MidSouth with copies of all the reports they file. To
MidSouth's knowledge, based on a review of reports
furnished to MidSouth, all required reports were filed timely.
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
Security Ownership of Management
The following table sets forth certain information as
of March 31, 2004, concerning the beneficial ownership of
Common Stock by each director and nominee of MidSouth,
by each executive officer named in the Summary of
Executive Compensation Table below, and by all directors
and executive officers as a group. Unless otherwise
indicated, the securities are held with sole voting and
investment power.
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Amount of Nature
of Beneficial Percent
Name and Address Ownership of Class
________________ _____________ ________
Will G. Charbonnet, Sr. 98,905 3.07%
C. R. Cloutier 226,885 6.97%
James R. Davis, Jr. 50,705 1.57%
Karen L. Hail 81,024 2.50%
J. B. Hargroder, M.D. 278,644 8.64%
Clayton Paul Hilliard 133,208 4.13%
Milton B. Kidd, III, O.D. 132,834 4.12%
Stephen C. May 78,930 2.46%
William M. Simmons 116,057 3.60%
Donald R. Landry 60,587 1.88%
A. Dwight Utz 4,758 0.15%
All directors and
executive officers
as a group (17 persons)
1,309,302 42.87%
_______________
Common Stock held by MidSouth's Directors'
Deferred Compensation Trust (the "Trust") is
beneficially owned by its Plan Administrator,
MidSouth's Executive Committee, the members of
which could be deemed to share beneficial
ownership with respect to all Common Stock
held in the Trust (182,308 shares or 5.67% as
of March 31, 2004). For each director, the
table includes the number of shares held for
his or her account only, while the group figure
includes all shares held in the Trust at
March 31, 2004. Common Stock held by MidSouth's
Employee Ownership Plan (the "ESOP") is not
included in the table, except that shares
allocated to an individual's account are
included as beneficially owned by that individual.
Shares which may be acquired by exercise of
currently exercisable options are deemed
outstanding for purposes of computing the
percentage of outstanding Common Stock owned
by persons beneficially owning such shares and
by all directors and executive officers as a
group but are not otherwise deemed to be outstanding.
Includes 25,003 shares as to which he shares
voting and investment power, 26,254 shares held
for his account in the Trust and 12,065 shares,
which he may acquire within 60 days pursuant to
currently exercisable stock options
("Current Options").
Includes 27,896 shares held by the ESOP for his
account, 82,904 shares as to which he shares
voting and investment power, 31,967 shares held
for his account in the Trust, and 41,999 shares
under Current Options. Mr. Cloutier's address
is P. O. Box 3745, Lafayette, Louisiana 70502.
Includes 6,722 shares as to which he shares
voting and investment power, 20,762 shares held
for his account in the Trust and 12,065 shares
under Current Options.
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Includes 27,267 shares held for her account in
the ESOP, 693 shares as to which she shares
voting and investment power, 20,502 shares held
for her account in the Trust and 26,071 shares
under Current Options.
Includes 238,357 shares as to which he shares
voting and investment power, 28,222 shares held
for his account in the Trust, and 12,065 shares
under Current Options. Dr. Hargroder's address
is P. O. Box 1049, Jennings, Louisiana 70546.
Includes 90,000 shares as to which he shares
voting and investment power, 11,943 shares held
for his account in the Trust and 12,065 shares
under Current Options.
Includes 9,422 shares held for his account in
the Trust and 9,065 shares under Current Options.
Includes 1,430 shares under Current Options.
Includes 3,297 shares as to which he shares
voting and investment power, 27,061 shares held
for his account in the Trust, and 9,065 shares
under Current Options.
Includes 27,171 shares as to which he shares
voting and investment power, 12,516 shares held
for his account in the ESOP and 6,978 shares under
Current Options.
Includes 1,804 shares as to which he shares
voting and investment power, 534 shares held for
his account in the ESOP and 2,420 shares under
Current Options.
_______________________
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as
of March 31, 2004, concerning the only persons other than
the persons listed in the table above known to MidSouth to
be the beneficial owner of more than five percent of its
Common Stock.
Name and Address Shares Beneficially Percent
Of Beneficial Owner Owned of Class
___________________ ___________________ ________
MidSouth Bancorp, Inc., Employee Stock 304,725 9.48%
Ownership Plan, ESOP Trustees and
ESOP Administrative Committee
P. O. Box 3745, Lafayette, LA 70502
MidSouth Bancorp, Inc., 182,308 5.67%
Directors Deferred Compensation Plan
Executive Committee
P. O. Box 3745, Lafayette, LA 70502
Jeffrey L. Gendell 174,240 5.42%
Tontine Financial Partners, L.P.
237 Park Avenue, 9th Floor
New York, NY 10017
___________________
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The Administrative Committee directs the Trustees how
to vote the approximately 10,513 unallocated shares of
Common Stock in the ESOP as of March 31, 2004.
Voting rights of the shares allocated to ESOP
participants' accounts are passed through to them. The
Trustees have investment power with respect to the
ESOP's assets, but must exercise it in accordance with an
investment policy established by the Administrative
Committee. The Trustees are Donald R. Landry, an
executive officer of MidSouth, and Katherine Gardner
and Brenda Jordan, two Bank employees. The
Administrative Committee consists of Polly Leonard, an
employee, Teri S. Stelly, an executive officer of
MidSouth, and Dailene Melancon, a Bank officer.
_________________________
EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS
Summary of Executive Compensation
The following table shows all compensation awarded
to, earned by or paid to the Named Executive Officers for all
services rendered by them in all capacities to MidSouth and
its subsidiaries for the past three years. No other executive
officer of MidSouth had total annual salary and bonus
exceeding $100,000 in 2003.
Long-Term Compensation
______________________
Other
Name and Annual Restricted Securities All Other
Principal Compen- Stock Underlying LTIP Compen-
Position Year Salary Bonus sation Award(s) Option(s) Payouts sation
_________ ____ _________ _________ _______ _______ ________ _______ __________
C. R. Cloutier 2003 $212,504 $76,680 0 0 0 0 $8,895
President & Chief 2002 $204,275 $49,320 0 0 12,500 0 $8,678
Executive Officer 2001 $198,842 $42,391 0 0 0 0 $7,574
Karen L. Hail 2003 $145,417 $46,008 0 0 0 0 $6,598
Senior Exec VP & 2002 $139,283 $29,592 0 0 6,000 0 $5,619
Chief Oper. Off. 2001 $136,092 $25,429 0 0 0 0 $5,576
Donald R. Landry 2003 $110,063 $36,423 0 0 0 0 $6,192
Exec. VP & Chief 2002 $105,833 $23,427 0 0 5,000 0 $5,433
Lending Officer 2001 $101,708 $20,259 0 0 0 0 $5,747
A. Dwight Utz 2003 $ 92,000 $22,543 0 0 1,000 0 $4,071
Senior VP & Retail 2002 $ 92,000 $11,813 0 0 0 0 $1,734
Executive Manager 2001 $ 75,250 $ 2,772 0 0 5,000 0 $ 0
___________________
Includes director fees of $24,550 and $24,325
for 2003; $25,925 and $24,950 for 2002;
$25,300 and $26,425 for 2001 for Mr. Cloutier
and Ms. Hail, respectively.
Awarded pursuant to the Incentive Compensation
Plan of the Bank.
Consists of $7,109, $5,939, $5,420 and $4,071
contributed by MidSouth to the ESOP for the
accounts of each of Mr. Cloutier, Ms. Hail,
Mr. Landry and Mr. Utz, respectively; and
$1,786, $659 and $772 paid by MidSouth in
insurance premiums for term life insurance
for the benefit of Mr. Cloutier, Ms. Hail
and Mr. Landry, respectively.
_____________________
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Option Holdings
The following table sets forth information with
respect to Mr. C. R. Cloutier, Ms. Hail, Mr. Landry and Mr.
Utz concerning unexercised options held as of December 31,
2003.
Option Values As of December 31, 2003
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at At
Name December 31, 2003 December 31, 2003
____ _____________________ _______________________
Exercisable Unexercisable Exercisable Unexercisable
C. R. Cloutier 41,999 11,000 $943,803 $215,930
Karen L. Hail 26,071 5,280 $605,083 $103,646
Donald Landry 20,900 4,400 $477,526 $ 86,372
A. Dwight Utz 1,650 4,950 $ 35,244 $105,732
________________________
Reflects the difference between the closing sale price of
a share of MidSouth Common Stock on December 31, 2003,
and the exercise price of the options.
___________________
Option Exercises
The following table contains information with respect
to the Named Executive Officer concerning options
exercised in 2003.
Shares Acquired
Name On Exercise Value Realized
____ ___________ ______________
C. R. Cloutier 2,000 $50,920
________________________
Reflects the difference between the $31.52 closing
price of the Common Stock on December 9, 2003, and the respective
exercise price of the options.
___________________
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Stock Option Grants
The following table sets forth information concerning
the grant of stock options to Mr. Utz during 2003.
Stock Option Grants
___________________
Potential Realization
Value of Assumed
% of Total Annual Rates of Stock
No. of Shares Options to Price Appreciation for
Underlying Employees Exercise Expiration Option Term
Name Options In 2003 Price Date 5% 10%
____ _______ _______ _________ ____ _____________
A. Dwight Utz 1,000 6.91% $17.10 Feb. 9, 2013 $ 18,180 $ 19,860
The exercise price represents the fair market value of
the MidSouth Common Stock on the date of grant. The
options are not exercisable for one year from the date
of grant and become exercisable thereafter in 20%
increments each year, unless exerciseability is
accelerated by the Personnel Committee or upon a
change in control of MidSouth.
___________________
Employment and Severance Contracts with Named Executive Officers
Mr. Cloutier, Ms. Hail and Mr. Landry each have a
written employment agreement with the Bank for a term of
one year, beginning January 1st of each year. The agreements
are automatically extended for one year every year thereafter
beginning on the termination date, unless written notice of
termination is given by any party to the agreement not later
than 60 days before the termination date. Pursuant to the
contract, Mr. Cloutier, Ms. Hail and Mr. Landry receive term
life insurance equal to four times their annual salary payable
to a beneficiary of their choice and disability insurance of not
less than two-thirds of their annual salary. Mr. Cloutier's, Ms.
Hail's and Mr. Landry's contracts have a severance provision
which entitles them to one year's salary if the agreement is
terminated by the Bank, unless they are removed by a
regulatory body.
Certain Transactions
Directors, nominees and executive officers of
MidSouth and their associates have been customers of, and
have borrowed from, the Bank in the ordinary course of
business, and such transactions are expected to continue in the
future. In the opinion of MidSouth's management, such
transactions have been on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time of comparable transactions with other persons and
did not involve more than the normal risk of collectability or
present other unfavorable features.
-12-
Shareholder Return Performance Graph
A following graph, which was prepared by SNL
Securities LC ("SNL"), compares the cumulative total return
on the Common Stock over a measurement period beginning
December 31, 1998 with (i) the cumulative total return on the
stocks included in the Russell 3000 and (ii) the cumulative
total return on the stocks included in the SNL Peer Bank
Index. All of these cumulative returns are computed
assuming the quarterly reinvestment of dividends paid during
the applicable period.
MidSouth Bancorp, Inc.
(GRAPHICAL REPRESENTATION OF DATA TABLE BELOW)
Period Ending
______________________________________________________________
Index 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
______________________________________________________________________________________
MidSouth Bancorp, Inc. 100.00 82.48 80.94 110.92 168.30 341.24
Russell 3000 100.00 120.90 111.88 99.06 77.72 101.86
SNL $250M-$500M Bank Index 100.00 93.03 89.58 127.27 164.11 237.11
The Common Stock of the Company is traded on the American Stock
Exchange under the "MSL" ticker symbol. The stock price
information shown above is not necessarily indicative of future
price performance. Information used was obtained by SNL from
sources believed to be reliable. The Company is not responsible
for any errors or omissions in such information.
-13-
AUDIT COMMITTEE REPORT
The Audit Committee of our Board of Directors is
composed of four non-employee directors. The Board has
made a determination that the members of the Committee
satisfy the requirements of the American Stock Exchange as
to independence, financial literacy and experience. The Board
has also determined that it is not clear whether any members
of the Audit Committee is a "Financial Expert" within the
meaning of SEC Rules, but the Board does not feel a
Financial Expert to be necessary in view of the overall
financial sophistication of Committee members. The
responsibilities of the Committee are set forth in the Charter
of the Audit Committee, which was adopted by the Board of
Directors on May 10, 2000 and revised on March 12, 2003.
The revised Charter was reviewed again and approved
without changes at the March 10, 2004 Audit Meeting. A
copy of the Charter is attached as Exhibit B.
The Committee reviewed and discussed the audited
financial statements with our management including a
discussion of the quality of the accounting principles, the
reasonableness of significant judgements and the clarity of
disclosures in the financial statements. The Committee also
discussed with the independent auditors the matters required
to be discussed by SAS 61 (Codification of Statements on
Auditing Standards, AU Section 380). The Committee also
received the written disclosures and the letter from the
independent auditors required by Independent Standards
Board Standard No. 1 (Independent Standards Board Standard
No. 1, Independence Discussions with Audit Committees),
has discussed with the independent auditors the independent
auditors' independence and has considered the compatibility
of non-audit services with the auditors' independence.
The Committee discussed with the Company's
internal and independent auditors the overall scope and plans
for their respective audits. The Committee met with the
internal and independent auditors, with and without
management present, to discuss the results of their
examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial
reporting.
Based on the reviews and discussions referred to
above, the Committee recommended to the Board that the
audited financial statements be included in our Annual Report
on Form 10-KSB for the last fiscal year for filing with the
SEC.
By the members of the Audit Committee:
James R. Davis
Will G. Charbonnet
C. P. Hilliard
Milton B. Kidd, III, O.D.
-14-
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
General
MidSouth's consolidated financial statements for
2002 and 2003 were audited by the firm of Deloitte &
Touche LLP ("Deloitte"). Deloitte will remain MidSouth's
external auditors until replaced by the Board of Directors
upon the recommendation of the Audit Committee.
Representatives of Deloitte are not expected to be at the
annual shareholders' meeting.
Fees
The following table summarizes the fees billed to
MidSouth for professional services rendered.
Year-ended December 31,
_________________________________________
2003 2002
_________________________________________
Fee Category Amount % Amount %
___________________________ _________________________________________
Audit fees $57,400 90% $54,700 92%
Audit-related fees 6,600 10% 5,000 8%
__________________________________________
Total fees $64,000 100% $59,700 100%
==========================================
Audit fees include fees associated with the required
annual audit and report on Form 10KSB, reviews of
MidSouth's quarterly reports on Form 10QSB and services
that are normally performed by the external independent
auditor in connection with regulatory filings. Audit-related
fees for the two years ended December 31, 2003 include
employee benefit plan audit fees. Audit-related fees may
also include due diligence in connection with acquisitions,
restructuring plans and accounting consultations. Deloitte
does not perform tax services for MidSouth.
Pre-Approval Policy
The Audit Committee's policy is to pre-approve all
audit and permissible non-audit services provided by the
independent auditors. These services may include audit
services, audit-related services, tax services and other
services. Pre-approval is generally provided for up to one
year and any pre-approval is detailed as to the particular
service or category of services and is generally subject to a
specific budget. The independent auditors and management
are required to periodically report to the Audit Committee
regarding the extent of services provided by the
independent auditors in accordance with this pre-approval,
and the fees for services performed to date. The Audit
Committee may also pre-approve particular services on a
case-by-case basis. For 2003, pre-approved non-audit
services included only those services described above for
"Audit Related Fees."
-15-
ANY SHAREHOLDER MAY BY WRITTEN REQUEST OBTAIN WITHOUT
CHARGE A COPY OF MIDSOUTH'S ANNUAL REPORT ON FORM 10-KSB
FOR THE YEAR ENDED DECEMBER 31, 2003, WITHOUT EXHIBITS.
REQUESTS SHOULD BE ADDRESSED TO SALLY D. GARY, INVESTOR
RELATIONS, MIDSOUTH BANCORP, INC., P. O. BOX 3745,
LAFAYETTE, LOUISIANA 70502.
By Order of the Board of Directors
Karen L. Hail
Secretary
Lafayette, Louisiana
April 16, 2004
-16-
EXHIBIT A
MidSouth Bancorp, Inc.
Corporate Governance Principles
I. Board of Directors
A. Membership
1. Size of Board.
The Board's optimum size is
approximately 7-12 members. However, the
Board would be willing to have a greater
number of directors to accommodate the
availability of an outstanding candidate.
Similarly, the Board is willing to reduce
the size of the Board, or maintain a
vacancy, if it cannot identify available
candidates meeting the Board's
qualification standards.
2. Mix of Inside and Outside Directors.
The Board should have a significant
majority of outside directors; the expectation
of the Board is the number of inside directors
should not exceed two.
3. Director Qualifications.
The Board seeks members from
diverse professional backgrounds who
combine a broad spectrum of experience and
expertise with a reputation for integrity.
Directors should have experience in positions
with a high degree of responsibility, be leaders
in the companies or institutions with which
they are affiliated and be selected based upon
contributions they can make to the Board and
management.
4. Definition of "Independent" and
"Outside" Directors.
The Board's policy is that a majority
of the members of the Board meet the criteria
for independent directors in accordance with
the applicable rules of the American Stock
Exchange. The determination that a Director
is independent shall be made by the Board
following a review of all relevant information
and a recommendation by the Corporate
Governance and Nominating Committee. Any
independent director is also considered to be
an Outside Director.
5. Selection of New Directors.
The Corporate Governance and
Nominating Committee has, as one of its
responsibilities, the recommendation of
director candidates to the full Board after
receiving input from all Directors and the
Chief Executive Officer.
6. Other Directorships.
Directors are expected to advise the
Chairman of the Board promptly upon being
offered any other public company
directorship. Unless the Board determines that
the carrying out of a Director's responsibilities
to the Company will not be adversely affected
by the Director's other directorships, Directors
should not serve on any public company
boards other than the Company.
-17-
B. Responsibilities
1. Basic Duties
The basic responsibility of the
Directors is to exercise their business
judgment in good faith to act in what they
believe to be in the best interests of the
Company. Directors are expected to regularly
attend 100% of the Board meetings and at
least 92% of the meetings of committees on
which they serve, and to spend the time
needed and meet as frequently as necessary to
properly discharge their responsibilities. To
prepare for meetings, Directors are expected
to review the materials that are sent to
Directors in advance of those meetings.
2. Conflicts of Interest.
a) Directors are expected to
avoid any action, position or interest
that conflicts with an interest of
the Company, or gives the
appearance of a conflict. The
Company annually solicits
information from Directors in order
to monitor potential conflicts of
interest and Directors are expected to
be mindful of their fiduciary
obligations to the Company. When
faced with a situation involving a
potential conflict of interest,
Directors are encouraged to seek
advice from the Chief Legal Officer.
Directors shall recuse themselves
and not participate in the discussion
and voting on any matter presented at
a Board meeting if they believe that
they have a personal interest or a
conflict of interest. If a significant
conflict of interest with a Director
exists and cannot be resolved, the
Director is expected to tender his or
her resignation to the Chairman.
b) The Company's loan policy
will be less favorable to Directors
than to other customers.
3. Consulting Agreements with Directors.
The Board believes that the Company
should not enter into paid consulting
arrangements with Outside Directors.
4. Share Ownership by Directors.
The Board believes that the number of
shares of the Company's common stock
owned by each Director is a personal decision;
however, each director serving on the date of
the adoption of these Principles is expected to
own a minimum of 25,000 shares of stock at
all times, and new Directors are expected to
own a minimum of 10,000 shares of stock
within a reasonable time after their election or
appointment.
5. Director Compensation.
The Personnel Committee shall
recommend Director compensation and
benefits to the full Board based on comparable
information for companies of similar size and
recommendations from management. The
Committee when making its recommendations
may take into account the appearance that
Directors' independence is adversely affected
if Director compensation and benefits exceed
customary levels, if the Company makes
substantial charitable contributions to
-18-
organizations with which a Director is
affiliated, or if the Company enters into
consulting contracts with, or provides other
indirect forms of compensation, to a Director
or an organization with which the Director is
affiliated.
6. Assessing Board Performance.
The Corporate Governance and
Nominating Committee has the responsibility
to periodically assess overall and individual
Board performance. A self-evaluation shall be
conducted annually to determine whether the
Board and its committees are functioning
effectively. The Board will discuss the results
of the self-evaluations to determine what
actions could improve Board and Committee
performance.
7. Lead Director.
A Lead Director for purposes of
oversight of Audit, Loan Review and
Compliance Departments will be appointed by
the Board and shall be an Outside Director.
8. Executive Sessions of Outside Directors.
Executive Sessions are those sessions
including the Chairman and Outside Directors
and should be called by the Chairman.
Meetings that include only nonemployee
Directors -- called Outside Directors Sessions
-- should occur at least three times a year on
the periodic evaluation of the Chief Executive
Officer, to determine Director independence
and to discuss other matters of importance.
9. Board Access to Management and
Independent Advisors.
Board members have complete and
open access to members of management. The
Chief Executive Officer shall invite key
employees to attend Board and Committee
meetings at which the Chief Executive Officer
believes they can meaningfully contribute to
Board and Committee discussion. The Board
and Board committees may consult with and
retain independent legal, financial and other
advisors as they may deem necessary.
10. Board Interaction with Institutional
Investors, Peers, Customers, etc.
The Board believes that under ordinary
circumstances, management speaks for the
Company and the Chairman speaks for the
Board. Individual Board members may, from
time to time, meet with or communicate with
various constituencies that are involved with
the Company. It is expected that Board
members would do this with the knowledge of
management and, in most instances, at the
request of management.
11. Confidentiality of Information.
In order to facilitate open discussion,
the Board believes maintaining confidentiality
of information and deliberations is an
imperative.
12. Director Orientation and Continuing
Education.
New Board Directors shall participate
in an orientation program to familiarize
themselves with the Company's businesses
and operations, and their responsibilities and
-19-
duties as Directors. Continuing education for
Directors shall be conducted through a
number of methods, including presentations
by the Company's officers concerning the
Company's strategies, initiatives and business
plans; presentations by outside parties
concerning industry issues and general
business and regulatory matters; on-site
meetings with Company personnel at their
business locations; and other appropriate
programs to carry out continuing education.
13. Regulatory Reports.
The Board shall review all reports
from the Office of the Comptroller of the
Currency and the Federal Reserve Board and
consider all recommendations therein.
14. Code of Ethics.
The Board shall adopt a Code of
Ethics for itself, management and employees.
II. Board Committees
1. Committee Structure.
The Board shall at all times maintain
committees with the following
responsibilities: an audit committee, a
compensation committee, and a governance
and nominating committee. All of the
members of these committees shall be
independent directors under the criteria
established by the American Stock Exchange,
and each of these committees shall operate in
accordance with the applicable rules of the
Securities and Exchange Commission and the
American Stock Exchange. The Board has
established the following Committees;
Corporate Governance and Nominating;
Personnel and Executive. The Board shall
establish such additional committees as it
deems appropriate.
2. Committee Charters.
Each Committee shall have its own
charter setting forth the purposes and
responsibilities of the Committee. The
charters shall also provide that each
Committee will annually evaluate its
performance.
3. Frequency and Length of Board
Committee Meetings.
The Chairman should regularly consult
with Committee Chairs to obtain their insights
and to optimize Committee performance. The
Committee Chairs, in consultation with the
Chairman, the Chief Financial Officer and the
Chief Legal Officer, should establish the
frequency and length of Committee meetings.
4. Development of Committee Agenda.
The Committee Chairs, working with
the Chief Executive Officer, should establish
Committee agendas for the year. All standing
Committees should meet regularly during the
year and receive reports from Company
personnel on Company
-20-
developments affecting the Committee's
work. At the beginning of each year, the Audit
Committee should review and approve the
internal audit staff's schedule for the year.
III. Chairman & Chief Executive Officer
1. Separate Positions of Chairman,
President and Chief Executive
Officer.
The positions of Chairman and Chief
Executive Officer may not be the same
person. The Chairman should be an outside
Director.
2. Formal Evaluations of the Chief
Executive Officer.
The Personnel Committee shall
annually conduct the Chief Executive Officer
evaluation in the context of its review of the
Company's performance in meeting its goals
for purposes of awarding compensation. The
Compensation and Organization Committee
Chair shall report to the Board on the
evaluation in a Board meeting attended by
Outside Directors.
3. Succession Planning.
The Chief Executive Officer shall
review succession planning on an annual basis
with the Board, including succession plans for
the Chief Executive Officer.
4. Management Development.
Senior Company executives should
compile and evaluate a succession plan for
their areas of responsibility which should be
reviewed with the Chief Executive Officer and
the Board. The Chief Executive Officer shall
provide input on each succession plan and
discuss the plans with the Board in an
Executive Session.
-21-
EXHIBIT B
MidSouth Bancorp, Inc. Audit Committee Charter
The Board of Directors (Board) of MidSouth Bancorp, Inc.
(MidSouth) has established its audit committee to assist
it in monitoring 1) the integrity of MidSouth's financial
statements, (2) MidSouth's compliance with legal and
regulatory requirements and (3) the independence and
performance of MidSouth's internal and external auditors.
In addition, the Committee is responsible to produce an
annual report of its activities by inclusion in Midsouth's
proxy statement.
By approving this Charter, the Board obligates itself to
provide appropriate funding, as determined by the Audit
Committee, in its capacity as a committee of the Board,
for payment of compensation to any public accounting firm
engaged for the purpose of rendering or issuing an audit
report or related work or performing other audit, review
or attest services for the Bank or other related entities;
and to any advisors employed by the Audit Committee.
The requisite number of members of the Audit Committee
shall be appointed by the Board of Directors. Each member
so appointed must meet the independence and experience
requirements of the American Stock Exchange and of
applicable sections of the Securities and Exchange Act
of 1934. The Chairman shall be designated by the Board.
The Audit Committee shall be directly responsible for the
appointment, compensation, retention and oversight of the
work of the independent auditor. In its capacity, the
Audit Committee shall be responsible for resolving any
disputes between the auditor's work and management. The
Audit Committee has the authority to engage special legal,
accounting or other consultants to advise the Committee.
The Audit Committee may request any officer or employee of
the Company or the Company's outside counsel or independent
auditor to attend a meeting of the Committee or to meet with
any member of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
In its capacity the Audit Committee shall also:
1. Review and reassess the adequacy of this Charter
annually and recommend any proposed changes to the
Board for approval.
2. Review credentials of and recommend to the Board, the
appointment of an independent auditor, which firm is
ultimately accountable to the Audit Committee.
3. Meet with the independent auditor prior to the audit
to review the planning and staffing of the audit.
4. Discuss with the independent auditor the matters
required to be discussed by Statement
on Auditing Standards No. 61 relating to the conduct
of the audit.
5. Obtain from the independent auditor assurance that
Section 10A of the Securities Exchange Act of 1934
has not been implicated.
6. Approve the fees to be paid to the independent auditor.
-22-
7. Receive periodic reports from the independent auditor
regarding the auditor's independence consistent with
Independence Standards Board Standard 1, discuss such
reports with the auditor, and if so determined by the
Audit Committee, take or recommend that the full Board
take appropriate action to oversee the independence of
the auditor.
8. Review the annual audited financial statements with
management, including major issues regarding accounting
and auditing principles and practices as well as the
adequacy of internal controls that could significantly
affect the Company's financial statements.
9. Review any analysis prepared by management and the
independent auditor of significant financial reporting
issues and judgments made in connection with the
preparation of the Company's financial statements.
10. Review with management and the independent auditor
the Company's quarterly financial statements prior to
the filing of its Form10-Q and its annual financial
statements prior to the filing of its Form 10K.
11. Review major changes to the Company's auditing and
accounting principles and practices as suggested by
the independent auditor, internal auditors or management.
12. Meet periodically with management to review the Bank's
exposure to major financial risks and the steps
management has taken to monitor and control such exposures.
13. Approve the appointment and replacement of the senior
internal auditing executive.
14. Review the significant reports to management prepared by
the internal auditing department and management's responses.
15. Resolve any problems or difficulties which may have been
encountered between the internal auditor and management.
Such review should include:
(a) Any difficulties encountered in the course of the
audit work, including any restrictions on the scope
of activities or access to required information.
(b) Any changes required in the planned scope of the
internal audit.
(c) The internal audit department responsibilities,
budget and staffing.
(d) Any difficulties which may have arisen between
internal auditor and management concerning a
response or lack thereof on any management letter.
16. Prepare the report required by the rules of the Securities
and Exchange Commission to be included in the Company's
annual proxy statement.
17. Review with the Company's Counsel legal matters that may
have a material impact on the financial statements, the
Company's compliance policies and material reports or
inquiries received from regulators or governmental agencies.
18. Meet at least annually with the chief financial officer,
the senior internal auditing executive and the independent
auditor in separate executive sessions.
19. Establish procedures which provide for the receipt,
retention and treatment of complaints regarding accounting,
internal accounting controls or auditing matters, including
procedures for the confidential, anonymous submission by
employees of the Bank of concerns regarding questionable
accounting or auditing matters.
While the Audit Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Audit Committee
to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and are in
accordance with generally accepted accounting principles. This
is the responsibility of management and the independent auditor.
-23-
1. Election of Class II Directors
Nominees: Will G. Charbonnet, Sr.
Clayton Paul Hilliard
Stephen C. May
___ FOR all nominees listed except as marked to the
contrary
___ WITHHOLD authority for all nominees
If you wish to withhold authority to vote for
certain of the nominees listed, strike
through the nominee(s) names.
2. In their discretion, to vote upon such other business as
may properly come before the meeting or any adjournment
thereof.
This proxy will be voted as specified.
If no specific directions are given,
this proxy will be voted FOR the
nominees named.
Please sign exactly as name appears on
the certificate or certificates
representing shares to be voted by the
proxy. When signing as executor,
administrator, attorney, trustee or
guardian, please give full title as
such. If a corporation, please sign
in full corporate name by president
or other authorized persons. If a
partnership, please sign in
partnership name by authorized persons.
Dated:______________________2004
________________________________
Signature of Shareholder
_________________________________
Signature (if jointly owned)
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD TO THE COMPANY
PROMPTLY USING THE ENCLOSED ENVELOPE.
-24-
PROXY
MIDSOUTH BANCORP, INC.
May 18, 2004
Annual Meeting of Shareholders
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Raymond F. Mikolajczyk,
Barbara Hightower and Sammy Baudoin, or any of them,
proxies of the undersigned, with full power of substitution,
to represent the undersigned and to vote all of the shares of
Common Stock of MidSouth Bancorp, Inc. (the
"Company") that the undersigned is entitled to vote at the
annual meeting of the shareholders of the Company to be
held on May 18, 2004 and at any and all adjournments
thereof.
-25-