LOUISIANA BANCORP, INC. AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT 10.2
LOUISIANA
BANCORP, INC.
AMENDED AND
RESTATED EMPLOYMENT
AGREEMENT
This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), is made and
entered into as of the 28th day of October 2008, between Louisiana Bancorp,
Inc., a Louisiana corporation (the “Corporation”), and Xxxx XxXxxxx (the
“Executive”).
WITNESSETH:
WHEREAS,
the Executive is currently employed as Senior Vice President and Chief
Financial Officer of the
Corporation;
WHEREAS,
the Executive is currently employed as Senior Vice President and Chief Financial
Officer of Bank of New Orleans, a federally chartered savings bank (the “Bank”)
(the Corporation and the Bank are referred to together herein as the
“Employers”);
WHEREAS,
the Bank adopted a Plan of Conversion pursuant to which the Bank converted to a
federally chartered stock savings bank and became a wholly owned subsidiary of
the Corporation (the “Conversion”);
WHEREAS,
the Corporation and the Executive have previously entered into an employment
agreement dated July 9, 2007 (the “Prior Agreement”);
WHEREAS,
the Corporation desires to amend and restate the Prior Agreement in order to
make changes to comply with Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), as well as certain other changes;
WHEREAS,
the Corporation desires to assure itself of the continued availability of the
Executive’s services as provided in this Agreement;
WHEREAS, the Executive is
willing to serve the Corporation on
the terms and conditions hereinafter set
forth; and
WHEREAS,
the Executive is concurrently entering into a separate employment agreement with
the Bank;
NOW
THEREFORE, in consideration of the mutual agreements herein contained, and upon
the other terms and conditions hereinafter provided, the Corporation and the
Executive hereby agree as follows:
1. Definitions. The
following words and terms shall have the meanings set forth below for the
purposes of this Agreement:
(a) Annual
Compensation. The Executive's “Annual Compensation” for
purposes of determining severance payable under this Agreement shall be deemed
to mean the sum of (i) the annual rate of Base Salary as of the Date of
Termination, and (ii) the cash bonus, if any, earned by the Executive for the
calendar year immediately preceding the year in which the Date of Termination
occurs.
(b) Base
Salary. “Base Salary” shall have the meaning set forth in
Section 3(a) hereof.
(c) Cause.
Termination of the Executive's employment for “Cause” shall mean termination
because of personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order or material
breach of any provision of this Agreement.
(d) Change in
Control. “Change in Control” shall mean a change in the
ownership of the Corporation or the Bank, a change in the effective control of
the Corporation or the Bank or a change in the ownership of a substantial
portion of the assets of the Corporation or the Bank, in each case as provided
under Section 409A of the Code and the regulations thereunder, provided that the
Conversion shall not be deemed to constitute a Change in Control.
(e) Code. “Code”
shall mean the Internal Revenue Code of 1986, as amended.
(f) Date of
Termination. “Date of Termination” shall mean (i) if the
Executive's employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if the Executive's employment is terminated for
any other reason, the date specified in such Notice of
Termination.
(g) Disability. “Disability”
shall mean the Executive (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Employers.
(h) ERISA. “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
(i) Good
Reason. “Good Reason” means the occurrence of any of the
following conditions:
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(i)
any material breach of this
Agreement by the Corporation, including without limitation any of the
following: (A) a material diminution in the Executive’s base compensation,
(B) a material diminution in the Executive’s authority, duties or
responsibilities, or (C) a material diminution in the authority, duties or
responsibilities of the supervisor to whom the Executive is required to
report, or
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(ii)
any material change in the geographic location at which the
Executive must perform his services under this
Agreement;
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provided,
however, that prior to any termination of employment for Good Reason, the
Executive must first provide written notice to the Corporation within ninety
(90) days of the initial existence of the condition, describing the existence of
such condition, and the Corporation shall thereafter have the right to remedy
the condition within thirty (30) days of the date the Corporation received the
written notice from the Executive. If the Corporation remedies the
condition within such thirty (30) day cure period, then no Good Reason shall be
deemed to exist with respect to such condition. If the Corporation
does not remedy the condition within such thirty (30) day cure period, then the
Executive may deliver a Notice of Termination for Good Reason at any time within
sixty (60) days following the expiration of such cure period.
(j) IRS. IRS
shall mean the Internal Revenue Service.
(k) Notice of
Termination. Any purported termination of the Executive's
employment by the Corporation for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by a written “Notice
of Termination” to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be not less than
thirty (30) nor more than ninety (90) days after such Notice of Termination is
given, except in the case of the Corporation's termination of the Executive's
employment for Cause, which shall be effective immediately, and (iv) is given in
the manner specified in Section 10 hereof.
(l) Retirement. “Retirement”
shall mean a voluntary termination by the Executive which constitutes a
retirement, including early retirement, under the Bank’s 401(k)
plan.
2. Term
of Employment and Duties.
(a) The
Corporation hereby employs the Executive as Senior Vice President and Chief
Financial Officer and the Executive hereby accepts said employment and agrees to
render such services to the Corporation on the terms and conditions set forth in
this Agreement. The terms and conditions of this Agreement shall be
and remain in effect during the period of three years beginning on
the date first written above (the “Effective Date”) and ending on the third
anniversary of the Effective Date, plus such extensions, if any, as are provided
pursuant to Section 2(b) hereof (the "Employment Period").
(b) Except
as provided in Section 2(c), and subject to the requirement below that the Board
of Directors of the Corporation determine at least annually that continued
extensions are appropriate, beginning on the Effective Date, on each day during
the Employment Period, the Employment Period shall automatically be extended for
one additional day, unless either the Corporation, on the one hand, or the
Executive, on the other hand, elects not to extend the Agreement further by
giving written notice thereof to the other party, in which case the Employment
Period shall end on the third anniversary of the date on which such written
notice is given. At least annually, the Board of Directors of the
Corporation shall consider and review (with appropriate corporate documentation
thereof, and taking into account all relevant factors) the Executive's
performance hereunder and whether the Employment Period shall continue to be
extended. If the Board of Directors determines at least annually that
continued extensions of the Employment Period are appropriate, then the
Employment Period shall continue to extend each day as set forth
above. If the Board of Directors determines not to extend the
Employment Period, it shall provide written notice to the Executive as set forth
above. Upon termination of the Executive's employment with the
Corporation for any reason whatsoever, any daily extensions provided pursuant to
this Section 2(b), if not theretofore discontinued, shall automatically
cease.
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(c) Nothing
in this Agreement shall be deemed to prohibit the Corporation at any time from
terminating the Executive's employment during the Employment Period for any
reason, provided that the relative rights and obligations of the Corporation and
the Executive in the event of any such termination shall be determined under
this Agreement.
(d) During
the term of this Agreement, the Executive shall be responsible for the
preparation of the financial statements of the Corporation and the
implementation of all accounting policies of the Corporation. The
Executive shall report directly to the President and Chief Executive Officer of
the Corporation. In addition, the Executive shall perform such
executive services for the Corporation as may be consistent with his titles and
from time to time assigned to him by the Corporation's Board of
Directors.
3. Compensation
and Benefits.
(a) The
Employers shall compensate and pay the Executive for his services during the
term of this Agreement at a minimum base salary of $82,878 per year (“Base
Salary”), which may be increased from time to time in such amounts as may be
mutually determined by the Boards of Directors of the Employers and may not be
decreased without the Executive's express written consent. In
addition to his Base Salary, the Executive shall be entitled to receive during
the term of this Agreement such bonus payments as may be determined by the
Boards of Directors of the Employers.
(b) During
the term of this Agreement, the Executive shall be entitled to participate in
and receive the benefits of any pension or other retirement benefit plan, profit
sharing, stock option, employee stock ownership, or other plans, benefits and
privileges given to employees and executives of the Employers, to the extent
commensurate with his then duties and responsibilities, as fixed by the Boards
of Directors of the Employers, as well as his Supplemental Executive Retirement
Agreement with the Bank dated March 1, 2007, as subsequently amended and
restated. The Corporation shall not make any changes in such plans,
benefits or privileges which would adversely affect the Executive's rights or
benefits thereunder, unless such change occurs pursuant to a program applicable
to all executive officers of the Corporation and does not result in a
proportionately greater adverse change in the rights of or benefits to the
Executive as compared with any other executive officer of the
Corporation. Nothing paid to the Executive under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the salary payable to the Executive pursuant to Section 3(a)
hereof.
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(c) During
the term of this Agreement, the Executive shall be entitled to paid annual
vacation in accordance with the policies as established from time to time by the
Boards of Directors of the Employers. The Executive shall not be
entitled to receive any additional compensation from the Employers for failure
to take a vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized by the
Boards of Directors of the Employers.
(d) During
the term of this Agreement, in keeping with past practices, the Employers shall
continue to pay club dues and assessments for the Bissonet Country Club on
behalf of the Executive so that the Executive may use such club for business
purposes.
(e) The
Executive's compensation, benefits, severance and expenses shall be paid by the
Corporation and the Bank in the same proportion as the time and services
actually expended by the Executive on behalf of each respective
Employer. No provision contained in this Agreement shall require the
Bank to pay any portion of the Executive’s compensation, benefits, severance and
expenses required to be paid by the Corporation pursuant to this Agreement or
the agreement of even date being entered into between the Bank and the
Executive.
4. Expenses. The
Employers shall reimburse the Executive or otherwise provide for or pay for all
reasonable expenses incurred by the Executive in furtherance of or in connection
with the business of the Employers, including, but not by way of limitation,
automobile expenses and traveling expenses, and all reasonable entertainment
expenses (whether incurred at the Executive's residence, while traveling or
otherwise), subject to such reasonable documentation and policies as may be
established by the Boards of Directors of the Employers. If such
expenses are paid in the first instance by the Executive, the Employers shall
reimburse the Executive therefor. Such reimbursement shall be paid
promptly by the Employers and in any event no later than March 15 of the year
immediately following the year in which such expenses were
incurred.
5. Termination.
(a) The
Corporation shall have the right, at any time upon prior Notice of Termination,
to terminate the Executive's employment hereunder for any reason, including
without limitation termination for Cause, Disability or Retirement, and the
Executive shall have the right, upon prior Notice of Termination, to terminate
his employment hereunder for any reason.
(b) In
the event that (i) the Executive's employment is terminated by the Corporation
for Cause or (ii) the Executive terminates his employment hereunder other than
for Disability, Retirement, death or Good Reason, the Executive shall have no
right pursuant to this Agreement to compensation or other benefits for any
period after the applicable Date of Termination.
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(c) In
the event that the Executive's employment is terminated as a result of
Disability, Retirement or the Executive's death during the term of this
Agreement, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination.
(d) In
the event that (i) the Executive's employment is terminated by the Corporation
for other than Cause, Disability, Retirement or the Executive's death or (ii)
such employment is terminated by the Executive for Good Reason, in each case
either before or after a Change in Control, then the Corporation
shall:
(A) pay
to the Executive, in a lump sum as of the Date of Termination, a cash severance
amount equal to three (3) times that portion of the Executive's Annual
Compensation paid by the Corporation,
(B) maintain
and provide for a period ending at the earlier of (i) thirty-six (36) months
after the Date of Termination or (ii) the date of the Executive's full-time
employment by another employer (provided that the Executive is entitled under
the terms of such employment to benefits substantially similar to those
described in this subparagraph (B)), at no cost to the Executive, the
Executive's continued participation in all group insurance, life insurance,
health and accident insurance and disability insurance offered by the
Corporation in which the Executive was entitled to participate immediately prior
to the Date of Termination, subject to subparagraphs (C) and (D)
below,
(C) in
the event that the Executive's participation in any plan, program or arrangement
as provided in subparagraph (B) of this Section 5(d) is barred, or during such
period any such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced, the Corporation shall arrange to provide the
Executive with benefits substantially similar to those which the Executive was
entitled to receive under such plans, programs and arrangements immediately
prior to the Date of Termination, and
(D) any
insurance premiums payable by the Corporation pursuant to Section 5(d)(B) or (C)
shall be payable at such times and in such amounts (except that the Corporation
shall also pay any employee portion of the premiums) as if the Executive was
still an employee of the Corporation, subject to any increases in such amounts
imposed by the insurance company or COBRA, and the amount of insurance premiums
required to be paid by the Corporation in any taxable year shall not affect the
amount of insurance premiums required to be paid by the Corporation in any other
taxable year.
6. Payment
of Additional Benefits under Certain Circumstances.
(a) If
(i) the payments and benefits pursuant to Section 5 hereof, either alone or
together with other payments and benefits which the Executive has the right to
receive from the Employers (including, without limitation, the payments and
benefits which the Executive would have the right to receive from the Bank
pursuant to Section 5 of the Agreement between the Bank and the Executive dated
as of the date hereof (“Bank Agreement”), before giving effect to any reduction
in such amounts pursuant to Section 6 of the Bank Agreement), would constitute a
“parachute payment” as defined in Section 280G(b)(2) of the Code (the “Initial
Parachute Payment”), and (ii) the Initial Parachute Payment either equals three
times the Executive’s Base Amount or exceed three times the Executive’s Base
Amount but by an amount less than 5% of three times the Executive’s Base Amount,
then the Initial Parachute Payment shall be reduced by the least amount
necessary to bring the present value of the payments and benefits below three
times the Executive’s Base Amount, with the cash severance to be reduced
first. As used in this Agreement, “Base Amount” shall have the
meaning set forth in Section 280G(b)(3) of the Code.
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(b)
If the Initial Parachute Payment exceeds 105% of three times the Executive’s
Base Amount, then the Corporation shall pay to the Executive, in a lump sum
within five business days after the Date of Termination, a cash amount equal to
the sum of the following:
(A) the
amount by which the payments and benefits that would have otherwise been paid by
the Bank to the Executive pursuant to Section 5 of the Bank Agreement are
reduced by the provisions of Section 6 of the Bank
Agreement;
(B) twenty
(20) percent (or such other percentage equal to the tax rate imposed by Section
4999 of the Code) of the amount by which the Initial Parachute Payment exceeds
the Executive's “base amount” from the Employers, as defined in Section
280G(b)(3) of the Code, with the difference between the Initial Parachute
Payment and the Executive's base amount being hereinafter referred to as the
“Initial Excess Parachute Payment”; and
(C) such
additional amount (tax allowance) as may be necessary to compensate the
Executive for the payment by the Executive of state and federal income and
excise taxes on the payment provided under clause (B) above and on any payments
under this clause (C). In computing such tax allowance, the payment
to be made under clause (B) above shall be multiplied by the “gross up
percentage” (“GUP”). The GUP shall be determined as
follows:
GUP =
Tax
Rate
1-Tax
Rate
The Tax
Rate for purposes of computing the GUP shall be the highest marginal federal and
state income and employment-related tax rate (including Social Security and
Medicare taxes), including any applicable excise tax rate, applicable to the
Executive in the year in which the payment under clause (B) above is made, and
shall also reflect the phase-out of deductions and the ability to deduct certain
of such taxes.
(c) Notwithstanding
the foregoing, if it shall subsequently be determined in a final judicial
determination or a final administrative settlement to which the Executive is a
party that the actual excess parachute payment as defined in Section 280G(b)(1)
of the Code is different from the Initial Excess Parachute Payment (such
different amount being hereafter referred to as the “Determinative Excess
Parachute Payment”), then the Corporation's independent tax counsel shall
determine the amount (the “Adjustment Amount”) which either the Executive must
pay to the Corporation or the Corporation must pay to the Executive in order to
put the Executive (or the Corporation, as the case may be) in the same position
the Executive (or the Corporation, as the case may be) would have been if the
Initial Excess Parachute Payment had been equal to the Determinative Excess
Parachute Payment. In determining the Adjustment Amount, the
independent tax counsel shall take into account any and all taxes (including any
penalties and interest) paid by or for the Executive or refunded to the
Executive or for the Executive's benefit. As soon as practicable
after the Adjustment Amount has been so determined, and in no event more than
thirty (30) days after the Adjustment Amount has been determined, the
Corporation shall pay the Adjustment Amount to the Executive or the Executive
shall repay the Adjustment Amount to the Corporation, as the case may
be.
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(d) In
each calendar year that the Executive receives payments of benefits that
constitute a parachute amount, the Executive shall report on his state and
federal income tax returns such information as is consistent with the
determination made by the independent tax counsel of the Corporation as
described above. The Corporation shall indemnify and hold the
Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys' fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information, with
such indemnification to be paid by the Corporation to the Executive as soon as
practicable and in any event no later than March 15 of the year immediately
following the year in which the amount subject to indemnification was
determined. The Executive shall promptly notify the Corporation in
writing whenever the Executive receives notice of the institution of a judicial
or administrative proceeding, formal or informal, in which the federal tax
treatment under Section 4999 of the Code of any amount paid or payable under
this Section 6 is being reviewed or is in dispute. The Corporation
shall assume control at its expense over all legal and accounting matters
pertaining to such federal tax treatment (except to the extent necessary or
appropriate for the Executive to resolve any such proceeding with respect to any
matter unrelated to amounts paid or payable pursuant to this Section 6), and the
Executive shall cooperate fully with the Corporation in any such
proceeding. The Executive shall not enter into any compromise or
settlement or otherwise prejudice any rights the Corporation may have in
connection therewith without the prior consent of the
Corporation.
(e) If
the payments and benefits which the Executive would have the right to receive
from the Bank pursuant to Section 5 of the Bank Agreement are reduced pursuant
to Section 6 of the Bank Agreement for reasons unrelated to Section 280G of the
Code, then the Corporation shall pay to the Executive, in a lump sum within five
business days after the Date of Termination, a cash amount equal to the amount
by which the payments and benefits that would have otherwise been paid by the
Bank pursuant to Section 5 of the Bank Agreement are reduced by the provisions
of Section 6 of the Bank Agreement.
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7. Mitigation;
Exclusivity of Benefits.
(a) The
Executive shall not be required to mitigate the amount of any benefits hereunder
by seeking other employment or otherwise, nor shall the amount of any such
benefits be reduced by any compensation earned by the Executive as a result of
employment by another employer after the Date of Termination or otherwise,
except as set forth in Section 5(d)(B) above.
(b) The
specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Executive upon a termination of
employment with the Employers pursuant to employee benefit plans of the
Employers or otherwise.
8. Withholding. All
payments required to be made by the Corporation hereunder to the Executive shall
be subject to the withholding of such amounts, if any, relating to tax and other
payroll deductions as the Corporation shall determine are required to be
withheld pursuant to any applicable law or regulation.
9. Assignability. The
Corporation may assign this Agreement and its rights and obligations hereunder
in whole, but not in part, to any corporation, bank or other entity with or into
which the Corporation may hereafter merge or consolidate or to which the
Corporation may transfer all or substantially all of its assets, if in any such
case said corporation, bank or other entity shall by operation of law or
expressly in writing assume all obligations of the Corporation hereunder as
fully as if it had been originally made a party hereto, but may not otherwise
assign this Agreement or its rights and obligations hereunder. The
Executive may not assign or transfer this Agreement or any rights or obligations
hereunder.
10. Notice. For
the purposes of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
below:
To the
Bank: Secretary
Bank of
New Orleans
0000
Xxxxxxxx Xxxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxxxx 00000
To the
Corporation: Secretary
Louisiana Bancorp, Inc.
0000
Xxxxxxxx Xxxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxxxx 00000
To the
Executive: Xxxx
XxXxxxx
At the
address last appearing on
the
personnel records of the Employers
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11. Amendment;
Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Corporation to sign on
its behalf. No waiver by any party hereto at any time of any breach
by any other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. In addition, notwithstanding anything in this
Agreement to the contrary, the Corporation may amend in good faith any terms of
this Agreement, including retroactively, in order to comply with Section 409A of
the Code.
12. Governing
Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of
Louisiana.
13. Nature of
Obligations. Nothing contained herein shall create or require
the Corporation to create a trust of any kind to fund any benefits which may be
payable hereunder, and to the extent that the Executive acquires a right to
receive benefits from the Corporation hereunder, such right shall be no greater
than the right of any unsecured general creditor of the
Corporation.
14. Headings. The
section headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
15. Validity. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.
16. Changes in Statutes
or Regulations. If any statutory or regulatory provision referenced
herein is subsequently changed or re-numbered, or is replaced by a separate
provision, then the references in this Agreement to such statutory or regulatory
provision shall be deemed to be a reference to such section as amended,
re-numbered or replaced.
17. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.
18. Regulatory
Prohibition. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the FDIA (12 U.S.C. §1828(k)) and 12 C.F.R. Part
359.
19. Entire
Agreement. This Agreement embodies the entire agreement
between the Corporation and the Executive with respect to the matters agreed to
herein. All prior agreements between the Corporation and the
Executive with respect to the matters agreed to herein are hereby superseded and
shall have no force or effect, including the Prior
Agreement. Notwithstanding the foregoing, nothing contained in this
Agreement shall affect the agreement of even date being entered into between the
Bank and the Executive.
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IN
WITNESS WHEREOF, this Agreement has been executed as of the date first written
above.
| Attest: | LOUISIANA BANCORP, INC. | ||
| /s/Xxxx X. Xxxxxxxxxxxx | By: | /s/Xxxxxx X. Xxxxxx | |
| Xxxx X. Xxxxxxxxxxxx | Xxxxxx X. Xxxxxx | ||
| Corporate Secretary | Chairman of the Compensation Committee | ||
| EXECUTIVE | |||
| By: | /s/Xxxx XxXxxxx | ||
| Xxxx XxXxxxx | |||
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