SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Check the appropriate box:
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[ ] 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.
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2) Aggregate number of securities to which transaction
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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):
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[ ] Check box if any part of the fee is offset as provided by
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MIDSOUTH BANCORP, INC.
102 Versailles Boulevard
Versailles Centre
Lafayette, Louisiana 70501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Lafayette, Louisiana
April 18, 2003
The annual meeting of shareholders of MidSouth Bancorp, Inc.
("MidSouth") will be held on Tuesday, May 27, 2003, at 4:00 p.m.,
local time, at the Cajundome Convention Center, at 444 Cajun Dome
Blvd., Lafayette, 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, 2003, 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
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 27, 2003, 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 18, 2003.
Only holders of record of MidSouth common stock ("Common
Stock") at the close of business on March 31, 2003, are entitled to
notice of and to vote at the Meeting. On that date, MidSouth had
outstanding 2,901,142 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.
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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.
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 I 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 I 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 8, 2002, 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.
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The following table sets forth certain information as of
March 31, 2003, 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 2006 (Class I Direc-tors)
Year First
Name Age Principal Occupation Became Director
C. R. Cloutier 56 President and C.E.O., 1984
MidSouth and MidSouth Bank
(the "Bank"), MidSouth's
wholly-owned subsidiary
J. B. Hargroder, M.D. 72 Physician, retired 1984
William M. Simmons 69 Private Investments 1984
Directors whose terms expire in 2004 (Class II Directors)
Year First
Name Age Principal Occupation Became Director
Will G. Charbonnet, Sr. 55 Private Investments; Chair- 1984
man of the Board,
MidSouth and the Bank; Until
1999 President-Owner of
Acadiana Fast Foods, Inc.
Clayton Paul Hilliard 77 President, Badger Oil 1985
Corporation
Stephen C. May 54 Majority owner of Atlanta 2000
Publishing, LLC
(2000-Present); Investor and
business consultant (1999-
Present); Former majority
owner, President and
Publisher of The Times
Publishing Group, Inc.
(1980-1999)
Directors whose terms to expire in 2005 (Class III Directors)
Year First
Name Age Principal Occupation Became Director
James R. Davis, Jr. 50 President, Davis/Wade 1991
Financial Services, LLC
Karen L. Hail 49 Chief Financial Officer and 1988
Secretary, MidSouth
Milton B. Kidd,III, O.D. 54 Optometrist, Kidd Vision 1996
Centers
_______________
Mr. May has served on the Board of the Bank since January 2000.
____________
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During 2002, the Board held twelve meetings. Each
incumbent director attended at least 75% of the aggregate
number of meetings held during 2002 of the Board and
committees of which he or she was a member.
The Board has an Audit Committee, an Executive Committee, a
Personnel Committee, and a Corporate Governance and Nominating
Committee.
The members of the Audit Committee are Messrs. Davis,
Charbonnet, Hilliard and Kidd. The Committee, which held four
meetings in 2002, 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 fourteen times in 2002.
The members of the Personnel Committee are Messrs. Charbonnet,
Davis, Hargroder, Hilliard, Kidd, Simmons and May. The Committee,
which met four times in 2002, 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. The Committee considers
nominees who are proposed by shareholders in accordance with the
procedures, described above, in MidSouth's Articles. The Committee
did not meet in 2002.
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 10,968 shares of Common
Stock at $6.67 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 6,500 shares
of Common Stock at $13.00 per share, the fair market value on the
date of grant, exerciseable in annual 20% increments beginning one
year from the date of grant.
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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.
The Board has adopted a Statement of Corporate Governance
Principles, a copy of which is attached as Exhibit A to this proxy
statement.
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
Security Ownership of Management
The following table sets forth certain information as of March
31, 2003, 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.
Amount and Nature
of Beneficial Percent
Name and Address Ownership of Class
Will G. Charbonnet, Sr. 98,813 3.39%
C. R. Cloutier 202,985 6.91%
James R. Davis, Jr. 67,945 2.33%
Karen L. Hail 71,499 2.45%
J. B. Hargroder, M.D. 256,749 8.82%
Clayton Paul Hilliard 121,747 4.18%
Milton B. Kidd, III, O.D. 121,142 4.16%
Stephen C. May 70,000 2.41%
William M. Simmons 105,114 3.61%
Donald R. Landry 53,536 1.83%
All directors and
executive officers as a
group (15 persons) 1,212,332 39.69%
_______________
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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 (164,452 shares or 5.67% as of March 31, 2003).
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, 2003. 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 22,730 shares as to which he shares voting and
investment power, 23,680 shares held for his account in the Trust
and 10,968 shares, which he may acquire within 60 days pursuant
to currently exercisable stock options ("Current Options").
Includes 32,601 shares held by the ESOP for his account,
78,284 shares as to which he shares voting and investment power,
28,831 shares held for his account in the Trust, and 37,500
shares under Current Options. Mr. Cloutier's address is P. O.
Box 3745, Lafayette, Louisiana 70502.
Includes 38,249 shares as to which he shares voting and
investment power, 18,728 shares held for his account in the Trust
and 10,968 shares under Current Options.
Includes 24,038 shares held for her account in the ESOP, 630
shares as to which she shares voting and investment power, 18,494
shares held for her account in the Trust and 22,500 shares under
Current Options.
Includes 220,326 shares as to which he shares voting and
investment power, 25,455 shares held for his account in the
Trust, and 10,968 shares under Current Options. Dr. Hargroder's
address is P. O. Box 1049, Jennings, Louisiana 70546.
Includes 85,419 shares as to which he shares voting and
investment power, 10,776 shares held for his account in the Trust
and 10,968 shares under Current Options.
Includes 8,504 shares held for his account in the Trust and
10,968 shares under Current Options.
Includes 2,998 shares as to which he shares voting and
investment power, 24,408 shares held for his account in
the Trust, and 10,968 shares under Current Options.
Includes 24,703 shares as to which he shares voting and
investment power 10,833 shares held for his account in the
ESOP and 18,000 shares under Current Options.
_______________________
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Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as of March
31, 2003, 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 288.038 9.93 %
Ownership Plan, ESOP Trustees and
ESOP Administrative Committee
P. O. Box 3745, Lafayette, LA 70502
MidSouth Bancorp, Inc., 164,452 5.67 %
Directors Deferred Compensation Plan
& Trust
Executive Committee
P. O. Box 3745, Lafayette, LA 70502
Jeffrey L. Gendell 158,400 5.46 %
Tontine Financial Partners, L.P.
237 Park Avenue, 9th Floor
New York, NY 10017
__________________________
The Administrative Committee directs the Trustees how to
vote the approximately 12,819 unallocated shares of Common Stock
in the ESOP as of March 31, 2003. 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, Earline Vincent, a Bank officer, and Brenda Jordan,
a Bank employee. The Administrative Committee consists of
David L. Majkowski and Teri S. Stelly, executive officers of
MidSouth, and Dailene Melancon, a Bank officer.
_________________________
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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 2002.
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 2002 $204,275 $49,320 0 0 12,500 0 $ 8,678
President & Chief 2001 $198,842 $42,391 0 0 0 0 $ 7,574
Executive Officer 2000 $184,657 $38,539 0 0 0 0 $ 5,929
Karen L. Hail 2002 $139.283 $29,592 0 0 6,000 0 $ 5,619
Senior Exec VP & 2001 $136,092 $25,429 0 0 0 0 $ 5,576
Chief Oper. Off. 2000 $125,765 $23,123 0 0 0 0 $ 4,459
Donald R. Landry 2002 $105,833 $23,427 0 0 5,000 0 $ 5,433
Exec. VP & Chief 2001 $101,708 $20,259 0 0 0 0 $ 5,747
Lending Officer 2000 $ 94,813 $25,184 0 0 0 0 $ 4,838
A. Dwight Utz 2002 $ 92,000 $11,813 0 0 0 0 $ 1,734
Senior VP & 2001 $ 75,250 $ 2,772 0 0 5,000 0 $ 0
Retail Executive 2000 N/A N/A N/A N/A N/A N/A N/a
Manager
_______________
Includes director fees of $25,925 and $24,950 for 2002; $25,300
and $26,425 for 2001; $21,975 and $23,925 for 2000 for Mr.
Cloutier and Ms. Hail, respectively.
Awarded pursuant to the Incentive Compensation Plan of the Bank.
Consists of $6,892, $4,960, $4,661 and $1,734 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 and Mr. Landry concerning unexercised
options held as of December 31, 2002. No options were exercised by
any of the Named Executive Officers in 2002.
OPTION VALUES AS OF DECEMBER 31, 2002
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at At
Name December 31, 2002 December 31, 2002
____ _____________________ ________________________
Exercisable Unexercisable Exercisable Unexercisable
C. R. Cloutier 35,062 14,938 $287,397 $ 58,333
Karen L. Hail 21,375 7,125 $187,842 $ 27,879
Donald Landry 16,931 6,069 $142,570 $ 23,510
A. Dwight Utz 1,000 4,000 $ 6,200 $ 24,800
________________________
Reflects the difference between the closing sale price of a
share of MidSouth Common Stock on December 31, 2002, and the
exercise price of the options.
___________________
Stock Option Grants
The following table sets forth information concerning the
grant of stock options to Mr. Cloutier, Ms. Hail and Mr. Landry
during 2002.
Stock Option Grants
_____________________
% of Total
No. of Shares Options to
Underlying Employees Exercise Experiation
Name Options In 2002 Price Date
____ _______ _______ __________ ___________
C. R. Cloutier 12,500 53.19% $13.00 May 30, 2012
Karen L. Hail 6,000 25.53% $13.00 May 30, 2012
Donald R. Landry 5,000 21.28% $13.00 May 30, 2012
___________________
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.
___________________
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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.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
MidSouth's consolidated financial statements for 2002 were
audited by Deloitte & Touche, LLP, and the Board has appointed it
to audit MidSouth's financial statements for 2003. Representatives
of Deloitte & Touche, LLP are not expected to be present at the
Meeting.
MidSouth billings from Deloitte & Touche, LLP totaled $59,700
for audit of the MidSouth's 2002 annual financial statements and
the review of its financial statements included in MidSouth's 10QSB
filings for 2002. All services rendered to MidSouth by Deloitte &
Touche , LLP in 2002 were audit-related services. No consulting
fees were paid by MidSouth to Deloitte & Touche, LLP in 2002.
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 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. A copy
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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.
SHAREHOLDER PROPOSALS
Eligible shareholders who desire to present a proposal
qualified for inclusion in the proxy materials relating to the 2004
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 9, 2003.
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, 2002, 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
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Secretary
Lafayette, Louisiana
April 18, 2003
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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.
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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
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affected if Director compensation and benefits exceed
customary levels, if the Company makes substantial
charitable contributions to 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.
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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 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
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the year. All standing Committees should meet regularly
during the year and receive reports from Company
personnel on Company 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.
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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.
-19-
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 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 and statement on
Auditing Standard No. 10 relating to the conduct of a review
of interim financial information.
5. Obtain from the independent auditor reports required by
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Section 10A of the Securities Exchange Act of 1934.
6. Approve the fees to be paid to the independent auditor.
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. Approve the engagement of its independent auditor for any
non-audit reviews, including its fees therefore.
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
-21-
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.
-22-
1. Election of Class I Directors
Nominees: C. R. Cloutier
J. B. Hargroder, M.D.
William M. Simmons
___ 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:____________________2003
____________________________
Signature of Shareholder
____________________________
Signature (if jointly owned)
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD TO
THE COMPANY PROMPTLY USING
THE ENCLOSED ENVELOPE.
-23-
PROXY
MIDSOUTH BANCORP, INC.
May 27, 2003
Annual Meeting of Shareholders
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Raymond F. Mikolajczyk 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 27,
2003 and at any and all adjournments thereof.
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