8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) December 28, 2012

MidSouth Bancorp, Inc.

(Exact name of registrant as specified in its charter)
Louisiana	1-11826	72-1020809
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
102 Versailles Boulevard, Lafayette, Louisiana		70501
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code    337-237-8343

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01      Completion of Acquisition or Disposition of Assets.

On December 28, 2012, MidSouth Bancorp, Inc. (“MidSouth”) completed its previously announced acquisition (the “Merger”) of PSB Financial Corporation (“PSB”), the holding company of The Peoples State Bank, pursuant to the Agreement and Plan of Merger, dated as of September 26, 2012 (the “Merger Agreement”) by and between MidSouth and PSB. There were 72,045 shares of PSB voting common stock and 1,092 shares of PSB Class B non-voting common stock issued and outstanding immediately prior to the completion of the Merger, that pursuant to the Merger Agreement were each converted into the right to receive (i) $218.77 in cash, (ii) 10.3441 shares of MidSouth common stock, (iii) 1.3673 shares of a newly created class of MidSouth 4.00% noncumulative convertible preferred stock (“Series C Preferred Stock”), and (iv) one contingent value right (“CVR”).  As a result, MidSouth will issue an aggregate of up to 756,536 shares of MidSouth common stock and 100,000 shares of Series C Preferred Stock in connection with the consummation of the Merger.  Each share of MidSouth’s common stock remained outstanding and was unaffected by the Merger.  Additional information regarding the Series C Preferred Stock is provided under Item 5.03

The CVRs were issued pursuant to a Contingent Value Rights Agreement (the “CVR Agreement”) entered into between MidSouth and Computershare Shareowner Services, LLC, who will be serving as the rights agent for CVRs.

The CVRs have a maturity date of the earlier of (i) December 28, 2015 and (ii) the complete payoff of certain assets in The Peoples State Bank legacy loan portfolio (the “Identified Loans”), at which time they may receive a payment of up to $27.35 per CVR, plus interest in the amount of 4.00% per annum accruing from December 28, 2012 until the maturity date, depending on the performance of the Identified Loans between the date of the Merger Agreement and the maturity date of the CVRs. Generally, no payment will be made on the CVRs if the net charge-offs on the Identified Loans for the period between the date of the Merger Agreement and the maturity date of the CVRs exceeds $2,000,000 plus (i) $1,094,000, such amount representing the amount that the PSB Adjusted Capital (calculated pursuant to the Merger Agreement) as of December 28, 2012 exceeded $26,000,000, and (ii) the amount, if any, of the net positive  month-end adjustments for December 2012 that were not properly reflected in the PSB Adjusted Capital calculation as of December 28, 2012, as determined by MidSouth (the “Stipulated Amount”). To the extent such charge-offs are less than the Stipulated Amount, 100% of the difference will be payable to the CVRs in the aggregate, subject to the maximum payment of $27.35 per CVR, plus interest in the amount of 4.00% per annum accruing from December 28, 2012 until the maturity date.

The maximum aggregate amount that may be payable under the CVRs is approximately $2,000,000, plus interest in the amount of 4.00% per annum. The CVRs are unsecured obligations of MidSouth, do not constitute equity or voting securities of MidSouth, and have no dividend or voting rights.  MidSouth may redeem the CVRs at any time at a redemption price of $27.35 per CVR plus accrued interest through the redemption date.

This description of the CVRs does not purport to be complete and is qualified in its entirety by reference to the Contingent Value Rights Agreement, which is incorporated by reference to Exhibit 99.1.  For additional information regarding the Merger and the Merger Agreement, see MidSouth’s Current Report on Form 8-K filed on September 27, 2012, which Current Report includes a copy of the Merger Agreement filed as Exhibit 2.1 thereto.

In addition to the completion of the Merger, the merger of The Peoples State Bank with and into MidSouth Bank, N.A., with MidSouth Bank, N.A. being the surviving banking association, was also consummated on December 28, 2012.

Item 3.02      Unregistered Sales of Equity Securities.

The information set forth under Item 2.01 is incorporated herein by reference.  The shares issued in connection with the Merger were exempt from registration pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. MidSouth did not engage in a general solicitation or advertising with regard to the issuance and sale of such shares.

Item 3.03      Material Modifications to Rights of Security Holders.

The information set forth under Item 5.03 below is incorporated herein by reference.

Item 5.02  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Pursuant to the terms of the Merger Agreement, the Board of Directors of MidSouth increased its size by one member and appointed Leonard Q. “Pete” Abington, who was the President and Chairman of PSB prior to the consummation of the Merger, to the Board of Directors of MidSouth to fill the vacancy created, with such appointment effective as of December 28, 2012. Mr. Abington was appointed as a Class II director and will serve until MidSouth’s 2013 annual meeting of shareholders.  It has not yet been determined which committees of the board Mr. Abington will join, other than an agreement pursuant to the Merger Agreement that MidSouth will establish a new committee to administer certain matters with respect to the CVRs, which committee will include Mr. Abington.  In addition, Mr. Abington was also appointed to the Board of Directors of MidSouth’s banking subsidiary, MidSouth Bank, N.A. and was appointed as a member of the Bank Directors Loan Committee, Compliance Committee and the Building Committee of such Board.

MidSouth and Mr. Abington also entered into a Consulting Agreement that provides that for a period of five years after the consummation of the Merger, Mr. Abington will provide consulting services to MidSouth and will be paid $25,000 per year for such services in addition to such amounts paid to Mr. Abington for his service on the MidSouth board of directors.  The Consulting Agreement also provides, among other things, that Mr. Abington will not compete with MidSouth for two years after the termination or expiration of the Consulting Agreement.

Item 5.03  Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On December 28, 2012, MidSouth filed Articles of Amendment to its Amended and Restated Articles of Incorporation (the “Articles of Amendment”) with the State of Louisiana for the purpose of fixing the designations, preferences, limitations and relative rights of the Series C Preferred Stock.  

According to the Articles of Amendment, the Series C Preferred Stock is of perpetual duration with a liquidation value of $100 per share and is entitled to the payment of noncumulative dividends, if and when declared by the MidSouth Board of Directors, at the rate of 4.00% per annum, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, beginning on April 15, 2013.  The Preferred Stock ranks pari passu with MidSouth’s existing Senior Non-Cumulative Perpetual Preferred Stock, Series B, issued in connection with MidSouth’s participation under the U. S. Treasury’s Small Business Lending Fund and senior to MidSouth’s common stock.  Holders of the Series C Preferred Stock do not have any voting rights, except as required by law.  MidSouth may redeem the Series C Preferred Stock, subject to regulatory approval, beginning on or after the fifth anniversary of the closing date of the Merger, at a redemption price equal to the liquidation value of the Series C Preferred Stock, plus declared but unpaid dividends, if any.  MidSouth may also redeem the Series C Preferred Stock, subject to regulatory approval, at the same redemption price prior to the fifth anniversary of the closing date in the event the Series C Preferred Stock no longer qualifies for ‘Tier 1 Capital” treatment by the applicable federal banking regulators.  Holders may convert the Series C Preferred Stock at any time into shares of MidSouth common stock at a conversion price of $18.00 per share, subject to customary antidilution adjustments.  In addition, on or after the fifth anniversary of the closing date, MidSouth will have the option to require conversion of the Series C Preferred Stock if the closing price of MidSouth’s common stock for 20 trading days within any period of 30 consecutive trading days, exceeds 130% of the conversion price.

The terms of the Series C Preferred Stock impose limits on the ability of MidSouth to pay dividends to holders of MidSouth’s common stock.  Since the Series C Preferred Stock ranks senior to MidSouth’s common stock with respect to the payment of dividends and distributions upon liquidation, dissolution or winding-up, no dividends may be declared or paid on MidSouth’s common stock, unless dividends are first paid to the holders of the Series C Preferred Stock in accordance with the terms of the Articles of Amendment.

This description of the Series C Preferred Stock does not purport to be complete and is qualified in its entirety by reference to the Articles of Amendment, which is incorporated by reference to Exhibit 3.1.

Item 9.01                      Financial Statements and Exhibits.

(a)  Financial Statements of Business Acquired

The audited financial statements of PSB will be filed as an amendment to this Current Report on Form 8-K prior to March 15, 2013.

(b)  Pro Forma Financial Information

Pro forma financial information of MidSouth with respect to the Merger will be filed as an amendment to this Form 8-K prior to March 15, 2013.

(d)  Exhibits

2.1 Agreement and Plan of Merger By and Between MidSouth Bancorp, Inc. and PSB Financial Corporation dated as of September 26, 2012 (filed as Exhibit 2.1 to MidSouth’s Current Report on Form 8-K filed on September 27, 2012 and incorporated herein by reference).

3.1 Articles of Amendment to the Articles of Incorporation of MidSouth Bancorp, Inc. filed on December 28, 2012 fixing the designations, preferences, limitations and relative rights of the Series C Preferred Stock.

99.1 Contingent Value Rights Agreement, between MidSouth Bancorp, Inc. and Computershare Shareowner Services, LLC, dated December 28, 2012.

99.2 Press release dated December 28, 2012.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		MIDSOUTH BANCORP, INC.
		(Registrant)
Date:	December 31, 2012	By:	/s/ James R. McLemore
			James R. McLemore Senior Executive Vice President and Chief Financial Officer

EX-3.1

Exhibit 3.1

ARTICLES OF AMENDMENT TO THE

AMENDED AND RESTATED

ARTICLES OF INCORPORATION OF

MIDSOUTH BANCORP, INC.

MidSouth Bancorp, Inc., a corporation organized and existing under the laws of the State of Louisiana (the “Corporation”), through its undersigned President and Chief Executive Officer, hereby certifies that on September 26, 2012, the Board of Directors of the Corporation, pursuant to the Articles of Incorporation and provisions of the Louisiana Business Corporation Law, La.R.S. 12:31 et seq., adopted an amendment to Article III of its Articles of Incorporation, so that the following shall be added as Section G to Article III effective as of December 28, 2012:

G.   Designation of 4.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series C.

Section 1. Designation of Series and Number of Shares. The shares of such series of Preferred Stock shall be designated “4.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series C” (the “Series C Preferred Stock”), and the authorized number of shares that shall constitute such series shall be 100,000 shares and the shares shall have no par value per share. The Corporation may from time-to-time take such appropriate action as may be necessary to reduce the authorized number of shares of Series C Preferred Stock, but not below the number of shares of Series C Preferred Stock then outstanding.

Section 2. Ranking. The Series C Preferred Stock will rank, with respect to the payment of dividends and distributions upon liquidation, dissolution or winding-up, (1) on a parity with the Series B Preferred Stock and each class or series of capital stock the Corporation may issue in the future the terms of which expressly provide that such class or series will not rank senior or junior to the Series C Preferred Stock as to dividend rights and rights on liquidation, winding up or dissolution of the Corporation (collectively, the “Parity Securities”) and (2) senior to Common Stock and each other class or series of capital stock the Corporation may issue in the future the terms of which do not expressly provide that it ranks on a parity with or senior to the Series C Preferred Stock as to dividend rights and rights on liquidation, winding-up or dissolution of the Corporation (the “Junior Securities”).

Section 3. Definitions. As used herein with respect to the Series C Preferred Stock:

(a) “Applicable Conversion Rate” at any given time, means for each share of Series C Preferred Stock, the number of shares of Common Stock equal to the Liquidation Preference divided by the Conversion Price in effect at such time.

(b) “Appropriate Federal Banking Agency” means the “appropriate Federal banking agency” with respect to the Corporation as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor provision.

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(c) “Articles of Incorporation” shall mean the articles of incorporation of the Corporation, as it may be amended from time to time, and shall include this Series C Preferred Stock Designation.

(d) “Board of Directors” means the board of directors of the Corporation or any committee thereof duly authorized to act on behalf of such board of directors.

(e) “Business Day” means any day that is not Saturday or Sunday and that, in Lafayette, Louisiana, is not a day on which banking institutions generally are authorized or obligated by law or executive order to be closed.

(f) “Bylaws” means the Amended and Restated Bylaws of the Corporation, as may be amended from time to time.

(g) “Capital Treatment Event” means the receipt by the Corporation of an opinion of counsel experienced in such matters to the effect that, as a result of the occurrence of any amendment to, or change (including any announced prospective change) in, the laws, rules or regulations of the United States or any political subdivision thereof or therein, or as the result of any official or administrative pronouncement or action or decision interpreting or applying such laws, rules or regulations, which amendment or change is effective or which pronouncement, action or decision is announced on or after the Issue Date, there is more than an insubstantial risk that the Corporation will not, within 90 days of the date of such opinion, be entitled to treat an amount equal to the aggregate Liquidation Preference of the Series C Preferred Stock as “Tier 1 Capital” (or its then equivalent) for purposes of the capital adequacy guidelines of the Appropriate Federal Banking Agency, as then in effect and applicable to the Corporation.

(h) “Closing Price” of the Common Stock on any determination date means the closing sale price or, if no closing sale price is reported, the last reported sale price of the shares of the Common Stock on the NYSE MKT on such date. If the Common Stock is not traded on the NYSE MKT on any determination date, the Closing Price of the Common Stock on such determination date means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S. national or regional securities exchange on which the Common Stock is so listed or quoted, or if the Common Stock is not so listed or quoted on a U.S. national or regional securities exchange, the last quoted bid price for the Common Stock in the over-the-counter market as reported by Pink Sheets LLC or a similar organization, or, if that bid price is not available, the market price of the Common Stock on that date as determined by a nationally recognized independent investment banking firm retained by the Corporation for this purpose.

For purposes of this Series C Preferred Stock Designation, all references herein to the “Closing Price” and “last reported sale price” of the Common Stock on the NYSE MKT shall be such closing sale price and last reported sale price as reflected on the website of the NYSE MKT (http://www.nyse.com) or any successor thereto and as reported by Bloomberg Professional Service or any successor thereto; provided that in the event that there is a discrepancy between the closing sale price or last reported sale price as reflected on the website of the NYSE MKT and as reported by Bloomberg Professional Service or any successor thereto, the closing sale price and last reported sale price on the website of the NYSE MKT shall govern. If a Reorganization Event has occurred and (1) the Exchange Property consists only of shares of common stock, the “Closing Price” shall be based on the closing price per share of such common stock; (2) the Exchange Property consists only of cash, the “Closing Price” shall be the cash amount paid per share; and (3) the Exchange Property consists of securities, cash and/or other property, the “Closing Price” shall be based on the sum, as applicable, of (x) the closing price of such common stock, (y) the cash amount paid per share and (z) the value (as determined by the Board of Directors from time-to-time) of any other securities or property paid to the holders of the Common Stock connection with the Reorganization Event.

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(i) “Common Stock” means the common stock, $0.10 value per share, of the Corporation.

(j) “Corporation” means MidSouth Bancorp, Inc., a Louisiana corporation.

(k) “Conversion Agent” shall mean the Transfer Agent acting in its capacity as conversion agent for the Series C Preferred Stock, and its successors and assigns.

(l) “Conversion Date” has the meaning set forth in Section 9(e)(ii).

(m) “Conversion Price” means for each share of Series C Preferred Stock, $18.00 (subject to adjustment or limitation as provided herein).

(n) “Depositary” means DTC or its nominee or any successor depositary appointed by the Corporation.

(o) “Dividend Payment Date” has the meaning set forth in Section 4(b).

(p) “Dividend Period” has the meaning set forth in Section 4(b).

(q) “DTC” means The Depository Trust Company and its successors or assigns.

(r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(s) “Exchange Property” has the meaning set forth in Section 12(a).

(t) “Holder” means the Person in whose name the shares of the Series C Preferred Stock are registered, which may be treated by the Corporation, Transfer Agent, Registrar, paying agent and Conversion Agent as the absolute owner of the shares of Series C Preferred Stock for the purpose of making payment and settling the related conversions and for all other purposes.

(u) “Issue Date” means the date on which shares of the Series C Preferred Stock are first issued.

(v) “Junior Securities” has the meaning set forth in Section 2.

(w) “Liquidation Preference” means, as to the Series C Preferred Stock, $100.00 per share.

(x) “Mandatory Conversion Date” has the meaning set forth in Section 10(a).

(y) “Notice of Mandatory Conversion” has the meaning set forth in Section 10(b).

(z) “Parity Securities” has the meaning set forth in Section 2.

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(aa) “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company or trust.

(bb) “Preferred Stock” means any and all series of preferred stock of the Corporation, including the Series B Preferred Stock and the Series C Preferred Stock.

(cc) “Record Date” has the meaning set forth in Section 4(b).

(dd) “Registrar” shall mean the Transfer Agent acting in its capacity as registrar for the Series C Preferred Stock, and its successors and assigns or any other registrar duly appointed by the Corporation.

(ee) “Reorganization Event” has the meaning set forth in Section 12(a).

(ff) “Series B Preferred Stock” means the Senior Non-Cumulative Perpetual Preferred Stock, Series B, of the Corporation.

(gg) “Series C Preferred Stock Designation” means this Articles of Amendment relating to the Series C Preferred Stock, as it may be amended from time to time.

(hh) “Trading Day” means a day on which the shares of Common Stock:

(i) are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business; and

(ii) have traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock.

(ii) “Transfer Agent” means Computershare Shareowner Services LLC acting as Transfer Agent, Registrar, paying agent and Conversion Agent for the Series C Preferred Stock, and its successors and assigns, including any successor transfer agent appointed by the Corporation.

Section 4. Dividends.

(a) From and after the Issue Date, Holders shall be entitled to receive, when, as and if authorized by the Board of Directors and declared by the Corporation, out of legally available funds, on a non-cumulative basis, cash dividends in the amount determined as set forth in Section 4(c), and no more.

(b) Subject to Section 4(a), dividends shall be payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year (each, a “Dividend Payment Date”) commencing on April 15, 2013. Each dividend will be payable to Holders of record as they appear in the stock register of the Corporation at the close of business on the first day of the month, whether or not a Business Day, in which the relevant Dividend Payment Date occurs (each, a “Record Date”). Each period from and including a Dividend Payment Date (or the date of the issuance of the Series C Preferred Stock) to but excluding the following Dividend Payment Date is herein referred to as a “Dividend Period.”

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(c) Dividends, if, when and as authorized and declared by the Board of Directors, will be payable, for each outstanding share of Series C Preferred Stock, at an annual rate of 4.00% on the per share Liquidation Preference. Dividends payable for a Dividend Period will be computed on the basis of a 360-day year of twelve 30-day months. If a scheduled Dividend Payment Date falls on a day that is not a Business Day, the dividend will be paid on the next Business Day as if it were paid on the scheduled Dividend Payment Date, and no interest or other amount will accrue on the dividend so payable for the period from and after that Dividend Payment Date to the date the dividend is paid. No interest or sum of money in lieu of interest will be paid on any dividend payment on shares of Series C Preferred Stock paid later than the scheduled Dividend Payment Date.

(d) Dividends on the Series C Preferred Stock are non-cumulative. If the Board of Directors does not authorize and declare a dividend on the Series C Preferred Stock or if the Board of Directors authorizes and declares less than a full dividend in respect of any Dividend Period, the Holders will have no right to receive any dividend or a full dividend, as the case may be, for the Dividend Period, and the Corporation will have no obligation to pay a dividend or to pay full dividends for that Dividend Period, whether or not dividends are authorized, declared and paid for any future Dividend Period with respect to the Series C Preferred Stock or the Common Stock or any other class or series of Preferred Stock.

To the extent the Corporation declares dividends on the Series C Preferred Stock and on any Parity Securities but does not make full payment of such declared dividends, the Corporation shall allocate the dividend payments on a pro rata basis among the Holders of the shares of Series C Preferred Stock and the holders of any Parity Securities then outstanding. For purposes of calculating the pro rata allocation of partial dividend payments, the Corporation shall allocate those payments so that the respective amounts of those payments bear the same ratio to each other as all accrued and unpaid dividends per share on the Series C Preferred Stock and all Parity Securities bear to each other.

The Corporation is not obligated to pay Holders of the Series C Preferred Stock any dividend in excess of the dividends on the Series C Preferred Stock that are payable as described herein. Subject to the foregoing, and not otherwise, such dividends (payable in cash, stock or otherwise) as may be determined by the Board of Directors or any duly authorized committee of the Board of Directors may be declared and paid on any Junior Securities from time to time out of any assets legally available therefor, and the shares of Series C Preferred Stock shall not be entitled to participate in any such dividend.

(f) Payments of cash for dividends will be delivered to the Holder or, in the case of global certificates, through a book-entry transfer through DTC or any successor Depositary.

(g) If a Conversion Date on which a Holder elects to convert Series C Preferred Stock or the Mandatory Conversion Date is on or prior to the Record Date for any declared dividend for the Dividend Period, such Holder will not have the right to receive any declared dividends for that Dividend Period. If a Conversion Date on which a Holder elects to convert Series C Preferred Stock or the Mandatory Conversion Date is after the Record Date for any declared dividend and prior to the corresponding Dividend Payment Date, such Holder shall receive that dividend on the relevant Dividend Payment Date if such Holder was the Holder of record on the Record Date for that dividend. Notwithstanding the preceding sentence, whether or not such Holder was the Holder of record on the Record Date, if such Holder elects to convert Series C Preferred Stock after the Record Date for any declared dividend and prior to the corresponding Dividend Payment Date, such Holder must pay to the Conversion Agent upon conversion of the shares of Series C Preferred Stock an amount in cash equal to the full dividend actually paid on such Dividend Payment Date on the shares being converted, unless the shares of Series C Preferred Stock are converted pursuant to Section 10.

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(h) Notwithstanding anything to the contrary herein, payment of dividends on the Series C Preferred Stock may be limited by the terms and conditions of other series of Preferred Stock that rank senior to the Series C Preferred Stock or that are Parity Securities, including without limitation, the Series B Preferred Stock.

Section 5. Liquidation.

(a) In the event the Corporation voluntarily or involuntarily liquidates, dissolves or winds up, the Holders at the time shall be entitled to receive liquidating distributions in the amount of per share Liquidation Preference, plus an amount equal to any authorized and declared but unpaid dividends thereon to and including the date of such liquidation, out of assets legally available for distribution to the Corporation’s shareholders, before any distribution of assets is made to the holders of the Common Stock or any other Junior Securities. After payment of the full amount of such liquidating distributions, the Holders will not be entitled to any further participation in any distribution of assets by, and shall have no right or claim to any remaining assets of, the Corporation.

(b) In the event the assets of the Corporation available for distribution to shareholders upon any liquidation, dissolution or winding-up of the affairs of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full the amounts payable with respect to all outstanding shares of the Series C Preferred Stock and the corresponding amounts payable on any Parity Securities, Holders and the holders of such Parity Securities shall share ratably in any distribution of assets of the Corporation in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled.

(c) The Corporation’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into the Corporation, or the sale of all or substantially all of the Corporation’s property or business will not constitute its liquidation, dissolution or winding up.

Section 6. Maturity. The Series C Preferred Stock shall be perpetual unless converted or redeemed in accordance with this Series C Preferred Stock Designation.

Section 7. Redemptions.

(a) Optional Redemption.

(i)  Subject to the other provisions of this Section 7:

(1) The Corporation on or after the fifth anniversary of the Issue Date, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time to time, out of funds legally available therefor, the shares of Series C Preferred Stock at the time outstanding; and

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(2)  If, after the Issue Date, there is a Capital Treatment Event, the Corporation may at anytime, subject to the approval of the Appropriate Federal Banking Agency, redeem all of the shares of Series C Preferred Stock at the time outstanding.

 (ii) The per-share redemption price for shares of Series C Preferred Stock shall be equal to the sum of:

(1)  the Liquidation Preference per share; and

(2)  the per-share amount of any declared but unpaid dividends, without accumulation of any undeclared dividends, for the then current Dividend Period to the date fixed for redemption.

The redemption price for any shares of Series C Preferred Stock shall be payable on the redemption date to the Holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends for the then current Dividend Period payable on a redemption date that occurs subsequent to the Record Date for a Dividend Period shall not be paid to the Holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the Holder of record of the redeemed shares on such Record Date relating to the Dividend Payment Date as provided in Section 4 above.

 (b) No Sinking Fund. The Series C Preferred Stock will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders of Series C Preferred Stock will have no right to require redemption or repurchase of any shares of Series C Preferred Stock.

 (c) Notice of Redemption. Notice of every redemption of shares of Series C Preferred Stock shall be given by first class mail, postage prepaid, addressed to the Holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any Holder of shares of Series C Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Series C Preferred Stock. Notwithstanding the foregoing, if shares of Series C Preferred Stock are issued in book-entry form through the Depository, notice of redemption may be given to the Holders of Series C Preferred Stock at such time and in any manner permitted by such Depository. Each notice of redemption given to a Holder shall state: (1) the redemption date; (2) the number of shares of Series C Preferred Stock to be redeemed and, if less than all the shares held by such Holder are to be redeemed, the number of such shares to be redeemed from such Holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of the redemption price.

 (d) Partial Redemption. In case of any redemption of part of the shares of Series C Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro rata or in such other manner as the Board of Directors or a duly authorized committee thereof may determine to be fair and equitable. Subject to the provisions hereof, the Board of Directors or a duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which shares of Series C Preferred Stock shall be redeemed from time to time, subject to the approval of the Appropriate Federal Banking Agency. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the Holder thereof.

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(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been deposited by the Corporation, in trust for the pro rata benefit of the Holders of the shares called for redemption, with a bank or trust company selected by the Board of Directors, so as to be and continue to be available solely therefor, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption from such bank or trust company, without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the Corporation, after which time the Holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption price of such shares.

(f) Status of Redeemed Shares. Shares of Series C Preferred Stock that are redeemed, repurchased or otherwise acquired by the Corporation shall revert to authorized but unissued shares of Preferred Stock, undesignated as to series and available for future issuance.

Section 8. Right to Convert. Each Holder shall have the right, at such Holder’s option, to convert all or any portion of such Holder’s Series C Preferred Stock into shares of Common Stock at the Applicable Conversion Rate per share of Series C Preferred Stock (subject to the conversion procedures of Section 9) plus cash in lieu of fractional shares, subject to the provisions set forth in Section 16.

Section 9. Conversion Procedures.

(a) Effective immediately prior to the close of business on the Mandatory Conversion Date or any applicable Conversion Date, dividends shall no longer be authorized and declared on any converted shares of Series C Preferred Stock and such shares of Series C Preferred Stock shall cease to be outstanding, in each case, subject to the right of Holders to receive any authorized, declared and unpaid dividends on such shares and any other payments to which they are otherwise entitled pursuant to Section 8, Section 10, Section 12 or Section 14, as applicable.

(b) No allowance or adjustment, except pursuant to Section 11, shall be made in respect of dividends payable to holders of the Common Stock of record as of any date prior to the close of business on the Mandatory Conversion Date or any applicable Conversion Date. Prior to the close of business on the Mandatory Conversion Date or any applicable Conversion Date, shares of Common Stock issuable upon conversion of, or other securities issuable upon conversion of, any shares of Series C Preferred Stock shall not be deemed outstanding for any purpose, and Holders shall have no rights with respect to the Common Stock or other securities issuable upon conversion (including voting rights, rights to respond to tender offers for the Common Stock or other securities issuable upon conversion and rights to receive any dividends or other distributions on the Common Stock or other securities issuable upon conversion) by virtue of holding shares of Series C Preferred Stock.

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(c) Shares of Series C Preferred Stock duly converted in accordance with this Series C Preferred Stock Designation will resume the status of authorized but unissued Preferred Stock, undesignated as to series and available for future issuance.

(d) The Person or Persons entitled to receive the Common Stock and/or cash, securities or other property issuable upon conversion of Series C Preferred Stock shall be treated for all purposes as the record holder(s) of such shares of Common Stock and/or securities as of the close of business on the Mandatory Conversion Date or any applicable Conversion Date. In the event that a Holder shall not by written notice designate the name in which shares of Common Stock and/or cash, securities or other property (including payments of cash in lieu of fractional shares) to be issued or paid upon conversion of shares of Series C Preferred Stock should be registered or paid or the manner in which such shares should be delivered, the Corporation shall be entitled to register and deliver such shares, and make such payment, in the name of the Holder and in the manner shown on the records of the Corporation or, in the case of global certificates or uncertificated shares, through book-entry transfer through the Depositary.

(e) conversion into shares of Common Stock will occur on the Mandatory Conversion Date or any applicable Conversion Date as follows:

(i) On the Mandatory Conversion Date, shares of Common Stock shall be issued to Holders or their designee upon presentation and surrender of the certificate evidencing the Series C Preferred Stock to the Conversion Agent, if shares of the Series C Preferred Stock are held in certificated form, and, if required, the furnishing of appropriate endorsements and transfer documents and the payment of all transfer and similar taxes. If a Holder’s interest is a beneficial interest in a global certificate representing Series C Preferred Stock, a book-entry transfer through the Depositary will be made by the Conversion Agent upon compliance with the Depositary’s procedures for converting a beneficial interest in a global security.

(ii) On the date of any conversion at the option of a Holder pursuant to Section 8, if a Holder’s interest is in certificated form, a Holder must do each of the following in order to convert:

(A) complete and manually sign the conversion notice provided by the Conversion Agent, or a facsimile of the conversion notice, and deliver this irrevocable notice to the Conversion Agent;

(B) surrender the shares of Series C Preferred Stock to the Conversion Agent;

(C) if required, furnish appropriate endorsements and transfer documents;

(D) if required, pay all transfer or similar taxes; and

(E) if required, pay funds equal to any authorized, declared and unpaid dividend payable on the next Dividend Payment Date to which such Holder is entitled.

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If a Holder’s interest is a beneficial interest in a global certificate representing Series C Preferred Stock, in order to convert, such Holder must comply with paragraphs (C) through (E) of this clause (ii) and comply with the Depositary’s procedures for converting a beneficial interest in a global security. The date on which a Holder complies with the procedures in this clause (ii) is the “Conversion Date.”

(iii) The Conversion Agent shall, on a Holder’s behalf, convert the Series C Preferred Stock into shares of Common Stock, in accordance with the terms of the notice delivered by such Holder described in Section 9(e)(ii).

Section 10. Mandatory Conversion at the Corporation’s Option.

(a) On or after the fifth anniversary of the Issue Date, the Corporation shall have the right, at its option, at any time or from time to time to cause some or all of the Series C Preferred Stock to be converted into shares of Common Stock at the then Applicable Conversion Rate if, for 20 Trading Days within any period of 30 consecutive Trading Days (including the last Trading Day of such period), ending on the Trading Day preceding the date the Corporation delivers a Notice of Mandatory Conversion, the Closing Price of the Common Stock exceeds 130% of the Conversion Price of the Series C Preferred Stock. The Conversion Date shall be a date selected by the Corporation (the “Mandatory Conversion Date”).

 (b) Notice of Mandatory Conversion. Notice of every mandatory conversion of shares of Series C Preferred Stock (such notice, a “Notice of Mandatory Conversion”) shall be given by first class mail, postage prepaid, addressed to the Holders of record of the shares subject to the mandatory conversion at their respective last addresses appearing on the books of the Corporation. Such mailing shall be at least 30 days and not more than 60 days before the Mandatory Conversion Date.  Any notice mailed as provided in this Subsection shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any Holder of shares of Series C Preferred Stock designated for mandatory conversion shall not affect the validity of the proceedings for the mandatory conversion of any other shares of Series C Preferred Stock. Notwithstanding the foregoing, if shares of Series C Preferred Stock are issued in book-entry form through the Depository, notice of mandatory conversion may be given to the Holders of Series C Preferred Stock at such time and in any manner permitted by such Depository. Each Notice of Mandatory Conversion given to a Holder shall state: (1) the Mandatory Conversion Date; (2) the number of shares of Series C Preferred Stock to be converted and, if less than all the shares held by such Holder are to be converted, the number of such shares to be converted from such Holder; (3) the number of shares of Common Stock to be issued upon conversion of each share of Series C Preferred Stock; and (4) the place or places where certificates for such shares are to be surrendered for conversion.

 (c) Partial Mandatory Conversion. In case of any mandatory conversion of part of the shares of Series C Preferred Stock at the time outstanding, the shares to be converted shall be selected either pro rata or in such other manner as the Board of Directors or a duly authorized committee thereof may determine to be fair and equitable. Subject to the provisions hereof, the Board of Directors or a duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which shares of Series C Preferred Stock shall be mandatorily converted from time to time, subject to the approval of the Appropriate Federal Banking Agency, if applicable. If fewer than all the shares represented by any certificate are converted, a new certificate shall be issued representing the unconverted shares without charge to the Holder thereof.

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Section 11. Anti-Dilution Adjustments. If the Corporation at any time after the Issue Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock obtainable upon conversion of the Series C Preferred Stock will be proportionately increased. If the Corporation at any time after the Issue Date combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased and the number of shares of Common Stock obtainable upon conversion of the Series C Preferred Stock will be proportionately decreased.

Section 12. Reorganization Events.

(a) In the event of:

(i) any consolidation or merger of the Corporation with or into another Person, in each case pursuant to which the Common Stock will be converted into cash, securities or other property of the Corporation or another Person;

(ii) any sale, transfer, lease or conveyance to another Person of all or substantially all of the property and assets of the Corporation, in each case pursuant to which the Common Stock will receive a distribution of cash, securities or other property of the Corporation or another Person;

(iii) any reclassification of the Common Stock into securities including securities other than the Common Stock; or

(iv) any statutory exchange of the Corporation’s securities with another Person (other than in connection with a merger or acquisition);

(each of the foregoing events, a “Reorganization Event”), each share of Series C Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of Holders, become convertible into the kind and amount of securities, cash, and other property or assets that a Holder (that was not the counterparty to the Reorganization Event or an affiliate of such other party) of a number of shares of Common Stock equal to the Applicable Conversion Rate per share of Series C Preferred Stock prior to such Reorganization Event would have owned or been entitled to receive upon such Reorganization Event (such securities, cash, and other property or assets, the “Exchange Property”).

(b) In the event that holders of the shares of Common Stock have the opportunity to elect the form of consideration to be received in such transaction, the consideration that the Holders are entitled to receive shall be deemed to be the types and amounts of consideration received by the majority of the holders of the shares of Common Stock that affirmatively make an election. The amount of Exchange Property receivable upon conversion of any Series C Preferred Stock in accordance with Section 8 or Section 10 shall be determined based upon the Applicable Conversion Rate in effect on such Conversion Date.

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(c) The above provisions of this Section 12 shall similarly apply to successive Reorganization Events and the provisions of Section 11 shall apply to any shares of capital stock of the Corporation (or any successor) received by the holders of the Common Stock in any such Reorganization Event.

(d) The Corporation (or any successor) shall, within 20 days of the occurrence of any Reorganization Event, provide written notice to the Holders of such occurrence of such event and of the kind and amount of the cash, securities or other property or assets that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 12.

Section 13. Voting Rights. The holders of Series C Preferred Stock will not have any voting rights except voting rights, if any, required by law.

Section 14. Fractional Shares.

(a) No fractional shares of Common Stock will be issued as a result of any conversion of shares of Series C Preferred Stock.

(b) In lieu of any fractional share of Common Stock otherwise issuable in respect of any mandatory conversion pursuant to Section 10 or any conversion at the option of the Holder pursuant to Section 8, the Holder shall be entitled to receive an amount in cash (computed to the nearest cent) equal to the same fraction of the Closing Price of the Common Stock determined as of the second Trading Day immediately preceding the effective date of conversion.

(c) If more than one share of the Series C Preferred Stock is surrendered for conversion at one time by or for the same Holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of the Series C Preferred Stock so surrendered.

Section 15. Reservation of Common Stock.

(a) The Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion of shares of Series C Preferred Stock as provided in this Series C Preferred Stock Designation, free from any preemptive or other similar rights, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Series C Preferred Stock then outstanding, assuming that the Conversion Price equaled the Base Price. For purposes of this Section 15(a), the number of shares of Common Stock that shall be deliverable upon the conversion of all outstanding shares of Series C Preferred Stock shall be computed as if at the time of computation all such outstanding shares were held by a single Holder.

(b) All shares of Common Stock delivered upon conversion of the Series C Preferred Stock shall be duly authorized, validly issued, fully paid and non-assessable.

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Section 16. Limitations on Beneficial Ownership. Notwithstanding anything to the contrary contained herein, no holder of Series C Preferred Stock will be entitled to receive shares of Common Stock upon conversion pursuant to Section 8 or Section 10 to the extent (but only to the extent) that such receipt would cause such converting holder to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 11(d) of the Exchange Act and the rules and regulations promulgated thereunder) of more than 9.9% of the shares of Common Stock outstanding at such time. Any purported delivery of shares of Common Stock upon conversion of Series C Preferred Stock shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the converting holder becoming the beneficial owner of more than 9.9% of the shares of Common Stock outstanding at such time. If any delivery of shares of Common Stock owed to a holder upon conversion of Series C Preferred Stock is not made, in whole or in part, as a result of this limitation, the Corporation’s obligation to make such delivery shall not be extinguished and the Corporation shall deliver such shares as promptly as practicable after any such converting holder gives notice to the Corporation that such delivery would not result in it being the beneficial owner of more than 9.9% of the shares of Common Stock outstanding at such time. For the avoidance of doubt (i) (x) any converting holder shall have no right to cast any vote with respect to any shares of Common Stock that are not delivered to such converting holder due to the restrictions set forth in this Section 16 and (y) any dividends payable otherwise by the Corporation with respect to any shares of Common Stock that are not delivered to such converting holder due to the restrictions set forth in this Section 16 shall not be payable to such converting holder prior to the delivery of such shares of Common Stock to such converting holder, and (ii) these limitations on beneficial ownership provided for in this Section 16 shall not limit the number of shares of Series C Preferred Stock the Corporation may cause to be converted, or otherwise constrain in any way the Corporation’s ability to exercise its right to cause Series C Preferred Stock to be converted, pursuant to Section 10.

Section 17. Transfer Agent, Registrar, Paying Agent and Conversion Agent. The duly appointed Transfer Agent, Registrar, paying agent and Conversion Agent for the Series C Preferred Stock shall initially be Computershare Shareowner Services LLC. The Corporation may, in its sole discretion, remove the Transfer Agent; provided that the Corporation shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal.

Section 18. Replacement Certificates.

(a) The Corporation shall replace any mutilated certificate at the Holder’s expense upon surrender of that certificate to the Registrar. The Corporation shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to the Corporation and the Registrar of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Registrar and the Corporation.

(b) The Corporation shall not be required to issue any certificates representing the Series C Preferred Stock on or after any applicable Conversion Date or Mandatory Conversion Date. In place of the delivery of a replacement certificate following any applicable Conversion Date or Mandatory Conversion Date, the Registrar, upon delivery of the evidence and indemnity described in Section 18(a), shall deliver the shares of Common Stock pursuant to the terms of the Series C Preferred Stock formerly evidenced by the certificate.

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Section 19. Miscellaneous. All notices referred to herein shall be in writing, and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three Business Days after the mailing thereof if sent by registered or certified mail (unless first-class mail shall be specifically permitted for such notice under the terms of this Series C Preferred Stock Designation) with postage prepaid, addressed: (i) if to the Corporation, to the principal executive office of the Corporation or to the Transfer Agent at its principal office in the United States of America, or other agent of the Corporation designated as permitted by this Series C Preferred Stock Designation, or (ii) if to any Holder or holder of shares of Common Stock, as the case may be, to such Holder at the address of such Holder as listed in the stock record books of the Corporation (which may include the records of any transfer agent for the Series C Preferred Stock or the Common Stock, as the case may be), or (iii) to such other address as the Corporation or any such Holder, as the case may be, shall have designated by notice similarly given.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, this amendment to the Articles of Incorporation are executed on the Corporation’s behalf on this 28th day of December, 2012.

MidSouth Bancorp, Inc.

By: /s/ C.R. Cloutier

Name:  C.R. Cloutier

Title: President and Chief Executive Officer

ACKNOWLEDGMENT

STATE OF LOUISIANA

PARISH OF LAFAYETTE

BEFORE ME, the undersigned authority, personally appeared C.R. Cloutier, to me known to be the President and Chief Executive Officer of MidSouth Bancorp, Inc. and the person who executed the foregoing Articles of Amendment to the Articles of Incorporation in such capacity, and who, being duly sworn, acknowledged in my presence and in the presence of the undersigned witnesses that he was authorized to and did execute that instrument in such capacity for the said corporation, as his and its free act and deed.

IN WITNESS WHEREOF, the appearer and witnesses and I have hereunto affixed our signatures on this 28th day of December, 2012.

WITNESSES:

Signature:                    /s/ Shaleen B. Pellerin                                                      /s/ C.R. Cloutier

C.R. Cloutier

Print Name:                  Shaleen B. Pellerin                                           

Signature:                    /s/ Sherita Oubre                                           

Print Name:                  Sherita Oubre                                                      

/s/L. Jay Angelle, Jr.                                                                                 

            Notary Public

Print Name:  L. Jay Angelle, Jr.                                                      

Notary or

Bar Roll #:    Bar #22231                                                                  

Commission

EX-99.1

Exhibit 99.1

CONTINGENT VALUE RIGHTS AGREEMENT

THIS CONTINGENT VALUE RIGHTS AGREEMENT, dated as of December 28, 2012 (this “Agreement”), is entered into by and between MidSouth Bancorp, Inc., a Louisiana corporation (“MidSouth”) and Computershare Shareowner Services LLC, a New Jersey limited liability company (the “Rights Agent”).

Preamble

WHEREAS, MidSouth and PSB Financial Corporation, a corporation organized under the laws of the State of Louisiana (“PSB”), have entered into an Agreement and Plan of Merger, dated as of September 26, 2012 (the “Merger Agreement”), pursuant to which PSB shall be merged with and into MidSouth, with MidSouth continuing as the surviving entity, pursuant to the terms and conditions set forth in the Merger Agreement (the “Merger”).

WHEREAS, pursuant to Section 3.1(b) of the Merger Agreement, MidSouth agreed to issue contingent value rights to holders of PSB common stock, no par value, and to holders of PSB Class B Nonvoting common stock, no par value (collectively, the “PSB Common Stock”), as described herein.

WHEREAS, MidSouth has done all things necessary to make the contingent value rights, when issued pursuant to the Merger Agreement and hereunder, the valid obligations of MidSouth and to make this Agreement a valid and binding agreement of MidSouth, in accordance with its terms.

WHEREAS, MidSouth desires to appoint the Rights Agent as rights agent with regard to its contingent value rights, and Rights Agent desires to accept such appointment.

NOW, THEREFORE, for and in consideration of the premises and the consummation of the transactions referred to above, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders (as hereinafter defined), as follows:

ARTICLE I

DEFINITIONS

Section 1.1.Definitions.

(a)For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(i)the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular;

(ii)all accounting terms used herein and not expressly defined herein shall have the meanings assigned to such terms in accordance with U.S. generally accepted accounting principles, as in effect on the date hereof;

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(iii)the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision;

(iv)unless the context otherwise requires, words describing the singular number shall include the plural and vice versa, words denoting any gender shall include all genders; and

(v)all references to “including” shall be deemed to mean including without limitation.

(b)The following terms shall have the meanings ascribed to them below:

“Agreement” has the meaning set forth in the first paragraph of this agreement.

“Board of Directors” means the board of directors of MidSouth.

“Board Resolution” means a copy of a resolution certified by the secretary or an assistant secretary of MidSouth to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.

“Business Day” means any day except Saturday, Sunday and any day that shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of Louisiana generally are authorized or required by law or other governmental action to close.

“Charge-Offs” means the amounts of the Identified Loans that are charged-off as reflected in the books and records of MidSouth Bank in a manner consistent with the past practice of MidSouth Bank, with the preparation of MidSouth Bank’s financial statements and with MidSouth’s or MidSouth Bank’s written policies in effect as of the date of the Merger Agreement and any changes required by applicable law.

“Closing Date” means December 28, 2012.

“Code” means the U.S. Internal Revenue Code of 1986, as amended and the Treasury Regulations promulgated thereunder.

“Credit Losses” means the Charge-Offs for the Identified Loans for the period commencing on the date hereof and ending on the Maturity Date less any recoveries in respect of such Charge-Offs.

“CVRs” means the rights of Holders to receive contingent cash payments pursuant to the Merger Agreement and this Agreement.

“CVR Register” has the meaning set forth in Section 2.3(b).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Group” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.

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“Holder” means a Person in whose name a CVR is registered in the CVR Register.

“Identified Loans” means the loans identified in Section A of the PSB Disclosure Memorandum to the Merger Agreement.

“Maturity Date” means the earlier of (i) December 28, 2015 or (ii) the complete payoff of the Identified Loans.

“Maximum Payment Amount” means an amount equal to $27.35 per CVR, payable in cash, plus interest in the amount of 4.00% per annum accruing from the Closing Date until the Maturity Date.

“Merger” has the meaning set forth in the recitals.

“Merger Agreement” has the meaning set forth in the recitals.

“Merger Consideration” has the meaning set forth in Section 11.1 of the Merger Agreement.

“MidSouth” has the meaning set forth in the first paragraph of this agreement.

“Payment Amount” has the meaning set forth in Section 2.4(a).

“Payment Certificate” has the meaning set forth in Section 2.4(a).

“Payment Date” means the date that a Payment Amount is paid by MidSouth to the Holders, which date shall be established pursuant to Section 2.4.

“Permitted Transfer” means any transfer of a CVR (i) held by a natural person upon the death of such Holder by will or the laws of descent or distribution, in which case the designee, legal representative, legatee, successor trustee of such Holder’s inter vivos trust or the person or persons who acquired the right to the CVR by reason of such death shall succeed to such Holder’s rights with respect to the CVR, (ii) by the Peoples State Bank Employee Stock Ownership Plan to the participants of the Peoples State Bank Employee Stock Ownership Plan in connection with the liquidation of the Peoples State Bank Employee Stock Ownership Plan, (iii) pursuant to a court order, (iv) by operation of law (including a consolidation or merger) or without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; or (v) as provided in Section 2.6 or Section 2.8.

“PSB Common Stock” has the meaning set forth in the recitals.

“Rights Agent” means the Rights Agent named in the first paragraph of this Agreement, until a successor Rights Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter “Rights Agent” shall mean such successor Rights Agent.

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“Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

“PSB” has the meaning set forth in the recitals.

“Redemption Date” means the date that the Redemption Price is paid by MidSouth to the Holders, which date shall be established pursuant to Section 2.5.

“Redemption Price” has the meaning set forth in Section 2.5(a).

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Special CVR Committee” has the meaning set forth in Section 2.4(b).

“Stipulated Amount” means $2,000,000, plus (i) $1,094,000, such amount representing the amount that the PSB Adjusted Capital as of the Closing Date exceeded $26,000,0000, and (ii) an amount, if any, of net positive month-end adjustments for December 2012 that were not properly reflected in the PSB Adjusted Capital calculation as of the Closing Date, as determined by MidSouth.

“Surviving Person” has the meaning set forth in Section 6.1(a).

ARTICLE II

CONTINGENT VALUE RIGHTS

Section 2.1.Appointment of Rights Agent.

MidSouth hereby appoints Computershare as the Rights Agent to act as rights agent for MidSouth in accordance with the instruction hereinafter set forth in this Agreement, and the Rights Agent hereby accepts such appointment.

Section 2.2.CVRs.

The CVRs represent the right of Holders to receive contingent cash payment pursuant to this Agreement.

Section 2.3.Transferability; Attachment

The CVRs shall not be sold, assigned, transferred, pledged, hypothecated, encumbered or in any other manner transferred or disposed of, in whole or in part, other than through a Permitted Transfer. The CVRs shall not be subject, in whole or in part, to attachment, execution, or levy of any kind, and any attempt to sell, assigned, transferred, pledge, hypothecate, encumber or otherwise dispose of the CVRs or any interest therein, other than through a Permitted Transfer, shall be void ab initio.

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Section 2.4.No Certificate; Registration; Registration of Transfer; Change of Address.

(a)The CVRs shall not be evidenced by a certificate or other instrument.

(b)The Rights Agent shall keep a register (the “CVR Register”) for the purpose of registering CVRs in a book-entry position for each Holder, and transfers of CVRs as herein provided.

(c)Subject to the restrictions on transferability set forth in Section 2.2, every request made to transfer a CVR must be in writing and accompanied by a written instrument of transfer in form reasonably satisfactory to the Rights Agent, and MidSouth, duly executed by the Holder thereof, his attorney duly authorized in writing, personal representative or survivor and setting forth in reasonable detail the circumstances relating to the transfer and the authority of the party presenting the CVR for transfer, which authority shall include, if applicable, a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association and any other reasonable evidence of authority that may be required by the Rights Agent.  Upon receipt of such transfer request, MidSouth shall, subject to its reasonable determination that the transfer instrument is in proper form and the transfer otherwise complies with the other terms and conditions herein (including the provisions of Section 2.2), instruct the Rights Agent in writing to register the transfer of the CVRs in the CVR Register.  All duly transferred CVRs registered in the CVR Register shall be the valid obligations of MidSouth, evidencing the same right, and shall entitle the transferee to the same benefits and rights under this Agreement, as those held by the transferor.  No transfer of a CVR shall be valid until registered in the CVR Register, and any transfer not duly registered in the CVR Register will be void ab initio.  Any transfer or assignment of the CVRs shall be without charge (other than the cost of any transfer tax) to the Holder.

(d)A Holder (or a duly appointed legal representative thereof) may make a request to the Rights Agent to change such Holder’s address of record in the CVR Register.  Upon receipt of such request, the Rights Agent shall promptly record the change of address in the CVR Register.

Section 2.5.Payment Procedures.

(a)Promptly following the Maturity Date, but in no event later than twenty-five (25) days after such date, MidSouth shall deliver to the Rights Agent a certificate (the “Payment Certificate”) setting forth (i) the amount of the Credit Losses, on an aggregate and per-CVR basis, and (ii) the calculation of the Payment Amount. The “Payment Amount” shall be equal to:

(i)if the amount of Credit Losses is less than the Stipulated Amount, the lesser of (A) 100% of the excess of the Stipulated Amount over the amount of Credit Losses, to be paid on a pro rata, per CVR basis and (B) the Maximum Payment Amount; and

(ii)if the amount of Credit Losses equals or exceeds the Stipulated Amount, zero.

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(b)All determinations with respect to the calculation of Credit Losses and the Payment Amount shall be made by the members of the special committee of the Board of Directors (the “Special CVR Committee”) in its sole discretion, whose determinations shall be binding on MidSouth, PSB and the Holders. Leonard Q. Abington shall be a member of the Special CVR Committee. If Leonard Q. Abington ceases to be a member of the Board of Directors and/or the Special CVR Committee, a replacement shall be appointed by the full Board of Directors who shall be a Holder. The Special CVR Committee of the Board of Directors, in its sole discretion, may utilize a third party financial advisor to assist in verifying the amount of Credit Losses and the calculation of the Payment Amount and may rely on a report of such financial advisor for purposes of making its determinations hereunder.

(c)Except as otherwise requested by any Holder, the Rights Agent shall promptly (and in no event later than five Business Days after its receipt thereof) send each Holder a copy of the Payment Certificate at its registered address.

(d)If MidSouth delivers a Payment Certificate to the Rights Agent pursuant to Section 2.4(a) above and the Payment Amount is greater than zero, MidSouth shall establish a Payment Date with respect to such Payment Amount that is no later than thirty (30) days after the Maturity Date and no earlier than fifteen (15) days after the complete and final payment instructions are delivered to the Rights Agent. Prior to such Payment Date, MidSouth shall cause an amount in cash equal to the Payment Amount multiplied by the number of CVRs outstanding to be delivered to the Rights Agent, who will in turn, on the Payment Date, pay to each of the Holders an amount in cash equal to the Payment Amount multiplied by the number of CVRs held by such Holder as reflected on the CVR Register by check mailed to the address of each Holder as reflected in the CVR Register as of the close of business ten (10) Business Days prior to such Payment Date. Upon such payment, this Agreement shall terminate as provided in Section 7.10. The Rights Agent shall have no obligation to pay the CVR Amount except to the extent it has received the necessary funds from MidSouth.  For avoidance of doubt, the Rights Agent shall have no obligation to determine or confirm any calculations made pursuant to this Agreement.

(e)MidSouth and the Rights Agent shall be entitled to deduct and withhold, or cause to be deducted or withheld, from each Payment Amount otherwise payable pursuant to this Agreement, such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign tax law.  To the extent that amounts are so withheld or paid over to or deposited with the relevant governmental entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Holder in respect of which such deduction and withholding was made.  Prior to making any such tax withholdings or causing any such tax withholdings to be made with respect to any Holder, the Rights Agent shall, to the extent practicable, provide notice to the Holder of such potential withholding and a reasonable opportunity for the Holder to provide any necessary tax forms (including an IRS Form W-9 or an applicable IRS Form W-8) in order to avoid or reduce such withholding amounts.  The CVRs shall not be treated as an interest in a joint venture or partnership for tax purposes.

(f)Any portion of any Payment Amount that remains undistributed to the Holders for one month after any Payment Date shall be delivered by the Rights Agent to MidSouth, upon demand, and any Holder shall thereafter look only to MidSouth for payment of such Payment Amount, but shall have no greater rights against MidSouth than may be accorded to general unsecured creditors of MidSouth under applicable law.

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(g)Neither MidSouth nor the Rights Agent shall be liable to any person in respect of any Payment Amount delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.  If any Payment Amount has not been paid prior to two years after the Payment Date (or immediately prior to such earlier date on which the Payment Amount would otherwise escheat to or become the property of any Governmental Entity), any such Payment Amount shall, to the extent permitted by applicable law, become the property of MidSouth, free and clear of all claims or interest of any person previously entitled thereto.

(h)MidSouth acknowledges that the bank accounts maintained by Computershare in connection with the services provided under this Agreement will be in Computershare’s name and that Computershare may receive investment earnings in connection with the investment at Computershare’s risk and for its benefit of funds held in those accounts from time to time.

Section 2.6.Redemption.

(a)MidSouth may, at its option, at any time prior to the Maturity Date, redeem the CVRs, in whole or in part, at a redemption price of $27.35 per CVR, plus interest in the amount of 4.00% per annum accruing from the Closing Date until the date of redemption (the “Redemption Price”). The redemption of CVRs by the Board of Directors may be made effective at such time and with such conditions as the Board of Directors, in its sole discretion, may establish provided that any such Redemption Date must occur prior to the Maturity Date.

(b)Immediately upon an action ordering the redemption of CVRs pursuant to Section 2.5(a), and without any further action and without any further notice, each CVR subject to redemption shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease, except for the right to receive the Redemption Price. Within ten (10) days after such action or consummation, MidSouth shall mail, or cause to be mailed, a notice of redemption to each of the Holders of the then outstanding CVRs at such Holders’ registered address.

(c)If MidSouth orders the redemption of the CVRs pursuant to Section 2.5(a), MidSouth shall establish the date of such order or consummation as the Redemption Date. On or immediately following such Redemption Date, MidSouth shall cause an amount in cash equal to the Redemption Price multiplied by the number of CVRs outstanding to be delivered to the Rights Agent, who will in turn, as promptly as practicable, pay to each of the Holders an amount in cash equal to the Redemption Price multiplied by the number of CVRs held by such Holder as reflected on the CVR Register by check mailed to the address of each Holder as reflected in the CVR Register as of the close of business ten (10) Business Days prior to such Redemption Date.

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(d)MidSouth and the Rights Agent shall be entitled to deduct and withhold, or cause to be deducted or withheld, from the Redemption Price otherwise payable pursuant to this Agreement, such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign tax law. To the extent that amounts are so withheld or paid over to or deposited with the relevant governmental entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Holder in respect of which such deduction and withholding was made.

Section 2.7.No Voting, Dividends Or Interest; No Equity Or Ownership Interest In MidSouth.

(a)The CVRs shall not have any voting or dividend rights, and interest shall not accrue on any amounts payable on the CVRs to any Holder.

(b)The CVRs shall not represent any equity or ownership interest in or confer any rights of any kind or nature whatsoever as a shareholder of MidSouth or any of its affiliates either at law or in equity.

Section 2.8.Ability To Abandon The CVR.

The Holder of a CVR may at any time at its option abandon all of its rights in any CVR by transferring the CVR to MidSouth without consideration therefor.  Nothing in this Section 2.6 is intended to prohibit MidSouth from offering to acquire CVRs for consideration or redeeming the CVRs in accordance with Section 2.5 in its sole discretion.

ARTICLE III

COVENANTS

Section 3.1.Payment of Payment Amount

MidSouth shall duly and promptly pay, or cause to be paid to, each Holder the applicable Payment Amount or Redemption Price, if any, in the manner provided for in Sections 2.4 and 2.5 and in accordance with the terms of this Agreement.

ARTICLE IV

THE RIGHTS AGENT

Section 4.1.Certain Duties And Responsibilities.

The Rights Agent shall not have any liability for any actions taken or not taken in connection with this Agreement, except to the extent of its willful misconduct, bad faith or gross negligence. No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.  Notwithstanding anything contained herein to the contrary, the Rights Agent’s aggregate liability during any term of this Agreement with respect to, arising from, or arising in connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by the MidSouth to the Rights Agent as fees and charges, but not including reimbursable expenses.

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Section 4.2.Certain Rights of Rights Agent.

The Rights Agent undertakes to perform such duties and only such duties as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Rights Agent.  In addition:

(a)the Rights Agent may rely and shall be protected in acting or refraining from acting in connection with its performance under this Agreement upon any resolution, certificate, statement, instrument, opinion, report, notice, request, instruction, direction, consent, order or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)whenever the Rights Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Rights Agent may, in the absence of bad faith, gross negligence or willful misconduct on its part, rely upon a certificate signed by the chief executive officer, president, chief financial officer, any vice president, the controller, the treasurer or the secretary, in each case of MidSouth, in his or her capacity as such an officer, and delivered to the Rights Agent;

(c)the Rights Agent may engage and consult with counsel of its selection and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(d)the permissive rights of the Rights Agent to do things enumerated in this Agreement shall not be construed as a duty;

(e)the Rights Agent shall not be required to give any note or surety in respect of the execution of such powers or otherwise in respect of the premises;

(f)MidSouth agrees to indemnify Rights Agent for, and hold Rights Agent harmless against, any loss, liability, claim, demands, suits or expense arising out of or in connection with Rights Agent’s duties under this Agreement, including the costs and expenses of defending Rights Agent against any claims, charges, demands, suits or loss, unless such loss shall have been determined by a court of competent jurisdiction to be a result of Rights Agent’s gross negligence, bad faith or willful or intentional misconduct; and

(g)MidSouth agrees (i) to pay the fees and expenses of the Rights Agent in connection with this Agreement and (ii) to reimburse the Rights Agent for all taxes and governmental charges, reasonable expenses and other charges of any kind and nature incurred by the Rights Agent in the execution of this Agreement (other than taxes measured by the Rights Agent’s net income). The Rights Agent shall also be entitled to reimbursement from MidSouth for all reasonable and necessary out-of-pocket expenses (including reasonable fees and expenses of the Rights Agent’s counsel and agent) paid or incurred by it in connection with the administration by the Rights Agent of its duties hereunder. An invoice for any out-of-pocket expenses and per item fees realized will be rendered and payable within thirty (30) days after receipt by MidSouth, except for postage and mailing expenses, which funds must be received one (1) Business Day prior to the scheduled mailing date. MidSouth agrees to pay to the Rights Agent any amounts, including fees and expenses, payable in favor of the Rights Agent in connection with any dispute, resolution or arbitration arising under or in connection with this Agreement; provided, however, that in the event of a resolution in favor of MidSouth, any amounts, including fees and expenses, payable in favor of the Rights Agent related to such dispute, resolution or arbitration shall be offset against the amount payable to the Rights Agent.

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Section 4.3.Resignation and Removal; Appointment of Successor.

(a)The Rights Agent may resign at any time by giving written notice thereof to MidSouth specifying a date when such resignation shall take effect, which notice shall be sent at least 60 days prior to the date so specified.  MidSouth shall have the right to remove Rights Agent at any time by a Board Resolution specifying a date when such removal shall take effect.  Notice of such removal shall be given by MidSouth to Rights Agent, which notice shall be sent at least 60 days prior to the date so specified.

(b)If the Rights Agent shall resign, be removed or become incapable of acting, MidSouth, by a Board Resolution, shall promptly appoint a qualified successor Rights Agent, which may be MidSouth or a Holder.  The successor Rights Agent so appointed shall, forthwith upon its acceptance of such appointment in accordance with this Section 4.3(b), become the successor Rights Agent.

(c)MidSouth shall give notice of each resignation and each removal of a Rights Agent and each appointment of a successor Rights Agent by mailing written notice of such event by first-class mail, postage prepaid, to the Holders as their names and addresses appear in the CVR Register.  Each notice shall include the name and address of the successor Rights Agent.  If MidSouth fails to send such notice within ten days after acceptance of appointment by a successor Rights Agent, the successor Rights Agent shall cause the notice to be mailed at the expense of MidSouth.

Section 4.4.Acceptance of Appointment By Successor.

Every successor Rights Agent appointed hereunder shall execute, acknowledge and deliver to MidSouth and to the retiring Rights Agent an instrument accepting such appointment and a counterpart of this Agreement, and thereupon such successor Rights Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Rights Agent; but, on request of MidSouth or the successor Rights Agent, such retiring Rights Agent shall execute and deliver an instrument transferring to such successor Rights Agent all the rights, powers and trusts of the retiring Rights Agent.

ARTICLE V

AMENDMENTS

Section 5.1.Amendments Without Consent of Holders.

(a)Without the consent of any Holders, MidSouth, when authorized by a Board Resolution, the Rights Agent, in the Rights Agent’s sole and absolute discretion, at any time and from time to time, may enter into one or more amendments hereto, for any of the following purposes:

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(i)subject to Section 6.1, to evidence the succession of another Person as a successor Rights Agent and the assumption by any such successor of the covenants and obligations of the Rights Agent herein;

(ii)to add to the covenants of MidSouth such further covenants, restrictions, conditions or provisions as the Board of Directors, the Rights Agent and MidSouth shall consider to be for the protection of the Holders; provided, that in each case, such provisions shall not adversely affect the interests of the Holders in any material respect;

(iii)to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Agreement; provided, that in each case, such provisions shall not adversely affect the interests of the Holders in any material respect;

(iv)as may be necessary or appropriate to ensure that the CVRs are not subject to registration under the Securities Act or the Exchange Act; provided, that in each case, such provisions shall not adversely affect the interests of the Holders in any material respect; or

(v)any other amendments hereto for the purpose of adding, eliminating or changing any provisions of this Agreement, unless such addition, elimination or change is adverse to the interests of the Holders in any material respect.

(b)Promptly after the execution by MidSouth and the Rights Agent of any amendment pursuant to the provisions of this Section 5.1, MidSouth shall mail (or cause the Rights Agent to mail) a notice thereof by first class mail to the Holders at their addresses as they shall appear on the CVR Register, setting forth in general terms the substance of such amendment, or shall publish such information in a manner reasonably calculated to inform the Holders of such amendment (which may, for the avoidance of doubt, including the filing of a report with the SEC including such information).

Section 5.2.Amendments With Consent of Holders.

(a)Subject to Section 5.1 (which amendments pursuant to Section 5.1 may be made without the consent of the Holders), with the consent of the Holders of not less than a majority of the outstanding CVRs, whether evidenced in writing or taken at a meeting of the Holders, MidSouth, when authorized by a Board Resolution, and the Rights Agent may enter into one or more amendments hereto for the purpose of adding, eliminating or changing any provision of this Agreement, even if such addition, elimination or change is in any way adverse to the interest of the Holders.

(b)Promptly after the execution by MidSouth and the Rights Agent of any amendment pursuant to the provisions of this Section 5.2, MidSouth shall mail a notice thereof by first class mail to the Holders at their addresses as they shall appear on the CVR Register, setting forth in general terms the substance of such amendment, or shall publish such information in a manner reasonably calculated to inform the Holders of such amendment (which may, for the avoidance of doubt, include the filing of a report with the SEC including such information).

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Section 5.3.Execution of Amendments.

In executing any amendment permitted by this Article V, the Rights Agent shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel selected by MidSouth stating that the execution of such amendment is authorized or permitted by this Agreement. No such amendment that affects the Rights Agent’s own rights, privileges, covenants or duties under this Agreement or otherwise shall be effective without the express written agreement of the Rights Agent.

Section 5.4.Effect of Amendments.

Upon the execution of any amendment under this Article IV, this Agreement shall be modified in accordance therewith, such amendment shall form a part of this Agreement for all purposes and every Holder shall be bound thereby.

ARTICLE VI

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Section 6.1.MidSouth May Consolidate, Etc.

(a)MidSouth shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless the Person formed by such consolidation or into which MidSouth is merged or the Person that acquires by conveyance or transfer, or that leases, the properties and assets of MSL substantially as an entirety (the “Surviving Person”) shall expressly assume payment of amounts on all the CVRs and the performance of every duty and covenant of this Agreement on the part of MidSouth to be performed or observed.

(b)For purposes of this Section 6.1, “convey, transfer or lease its properties and assets substantially as an entirety” shall mean properties and assets contributing in the aggregate at least 80% of MidSouth’s total consolidated revenues as reported in MidSouth’s last available periodic financial report (quarterly or annually, as the case may be).

Section 6.2.Successor Substituted.

Upon any consolidation of or merger by MidSouth with or into any other Person, or any conveyance, transfer or lease of the properties and assets substantially as an entirety to any Person in accordance with Section 6.1, the Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of, MidSouth under this Agreement with the same effect as if the Surviving Person had been named as MidSouth herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Agreement and the CVRs.

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ARTICLE VII

OTHER PROVISIONS OF GENERAL APPLICATION

Section 7.1.Notices to the Rights Agent and MidSouth.

Any notice, request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted by this Agreement to the Rights Agent and MidSouth shall be sufficient for every purpose hereunder if in writing and sent by facsimile transmission, delivered personally, or by certified or registered mail (return receipt requested and first-class postage prepaid) or sent by a nationally recognized overnight courier (with proof of service), addressed as follows:

(a)           if to MidSouth, to:

MidSouth Bancorp, Inc.

102 Versailles Boulevard

Lafayette, LA 70501

Attention:                      C.R. “Rusty” Cloutier, President

        and Chief Executive Officer

with a copy to (which copy alone shall not constitute notice):

Thomas O. Powell, Esquire

Troutman Sanders LLP

600 Peachtree Street NE

Suite 5200

Atlanta, Georgia 30308

 (b)          if to the Rights Agent, to

Computershare

480 Washington Blvd.

Jersey City, NJ 07310

Attention: Mark C. Smith

with a copy to:

Computershare

100 Crescent Court

Suite 7002

Dallas, TX 75201

Attention: Janis Mason, Relationship Manager

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Section 7.2.Notice to Holders.

Where this Agreement provides for notice to Holders, except as otherwise set forth in this Agreement, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his, her or its address as it appears in the CVR Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders.

Section 7.3.Effect of Headings.

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

Section 7.4.Successors and Assigns.

All covenants and agreements in this Agreement by MidSouth shall bind its successors and assigns, whether so expressed or not.

Section 7.5.Benefits of Agreement.

Nothing in this Agreement, express or implied, shall give to any Person (other than the parties hereto, the Holders and their permitted successors and assigns hereunder) any benefit or any legal or equitable right, remedy or claim under this Agreement or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto, the Holders and their permitted successors and assigns.

Section 7.6.Governing Law.

This Agreement and the CVRs shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its rules of conflicts of laws.

Section 7.7.Legal Holidays.

In the event that a Payment Date or Redemption Date shall not be a Business Day, then, notwithstanding any provision of this Agreement to the contrary, any payment required to be made in respect of the CVRs on such date need not be made on such date, but may be made on the next succeeding Business Day, without the incurrence of any interest, with the same force and effect as if made on the applicable payment date.

Section 7.8.Severability Clause.

In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.  Upon such determination that any term or other provision is invalid, illegal or unenforceable, the court or other tribunal making such determination is authorized and instructed to modify this Agreement so as to effect the original intent of the parties as closely as possible so that the transactions and agreements contemplated herein are consummated as originally contemplated to the fullest extent possible.

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Section 7.9.Counterparts.

This Agreement and any amendments thereto may be signed in any number of counterparts (which may be effectively delivered by facsimile or other electronic means), each of which shall be deemed to constitute but one and the same instrument.

Section 7.10.Termination.

This Agreement shall be terminated and of no force or effect, the parties hereto shall have no liability hereunder, upon the earlier to occur of (a) the payment of the Payment Amount required to be paid under the terms of this Agreement, (b) if the Payment Certificate reflects a Payment Amount of zero, the date such Payment Certificate is sent to Holders pursuant to Section 2.4, and (c) the payment of the Redemption Price pursuant to Section 2.5.

Section 7.11.Entire Agreement.

This Agreement represents the entire understanding of the parties hereto with reference to the transactions and matters contemplated hereby and this Agreement supersedes any and all other oral or written agreements hereto made.

Section 7.12.Survival.

Notwithstanding anything in this Agreement to the contrary, all provisions regarding indemnification, warranty, liability and limits thereon, and confidentiality and protection of proprietary rights and trade secrets shall survive the termination or expiration of this Agreement.

Section 7.13.Force Majeure.

Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war or civil unrest.

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Section 7.14.Confidentiality.

Definition.  “Confidential Information” shall mean any and all technical or business information relating to a party, including, without limitation, financial, marketing and product development information, stockholder information (including any non-public information of such stockholder), proprietary information, and the terms and conditions (but not the existence) of this Agreement, that is disclosed or otherwise becomes known to the other party or its affiliates, agents or representatives before or during the term of this Agreement.  Confidential Information constitutes trade secrets and is of great value to the owner (or its affiliates).  Confidential Information shall not include any information that is: (a) already known to the other party or its affiliates at the time of the disclosure; (b) publicly known at the time of the disclosure or becomes publicly known through no wrongful act or failure of the other party; (c) subsequently disclosed to the other party or its affiliates on a non-confidential basis by a third party not having a confidential relationship with the owner and which rightfully acquired such information; or (d) independently developed by one party without access to the Confidential Information of the other.

 Use and Disclosure.  All Confidential Information of a party will be held in confidence by the other party with at least the same degree of care as such party protects its own confidential or proprietary information of like kind and import, but not less than a reasonable degree of care.  Neither party will disclose in any manner Confidential Information of the other party in any form to any person or entity without the other party's prior consent.  However, each party may disclose relevant aspects of the other party's Confidential Information to its officers, affiliates, agents, subcontractors and employees to the extent reasonably necessary to perform its duties and obligations under this Agreement and such disclosure is not prohibited by applicable law.  Without limiting the foregoing, each party will implement such physical and other security measures and controls as are necessary to protect (a) the security and confidentiality of Confidential Information; (b) against any threats or hazards to the security and integrity of Confidential Information; and (c) against any unauthorized access to or use of Confidential Information.  To the extent that a party delegates any duties and responsibilities under this Agreement to an agent or other subcontractor, the party ensures that such agent and subcontractor are contractually bound to confidentiality terms consistent with the terms of this Section 7.14.

Required or Permitted Disclosure.  In the event that any requests or demands are made for the disclosure of Confidential Information, other than requests to Rights Agent for stockholder records pursuant to standard subpoenas from state or federal government authorities (e.g., divorce and criminal actions), the party receiving such request will promptly notify the other party to secure instructions from an authorized officer of such party as to such request and to enable the other party the opportunity to obtain a protective order or other confidential treatment, unless such notification is otherwise prohibited by law or court order.  Each party expressly reserves the right, however, to disclose Confidential Information to any person whenever it is advised by counsel that it may be held liable for the failure to disclose such Confidential Information or if required by law or court order.

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Unauthorized Disclosure.  As may be required by law and without limiting any party's rights in respect of a breach of this Section 7.14, each party will promptly:

(i)   notify the other party in writing of any unauthorized possession, use or disclosure of the other party's Confidential Information by any person or entity that may become known to such party;

(ii)   furnish to the other party full details of the unauthorized possession, use or disclosure; and

(iii)   use commercially reasonable efforts to prevent a recurrence of any such unauthorized possession, use or disclosure of Confidential Information.

Costs.  Each party will bear the costs it incurs as a result of compliance with this Section 7.14.

Section 7.15.Assignment.

Except for assignments occurring through the operation of law, neither party shall, in whole or in part, assign any of its rights or obligations under this Agreement; provided that the Rights Agent may, without further consent of the other parties hereto, assign any of its rights and obligations hereunder to any affiliated transfer agent registered under Rule 17Ac2-1 promulgated under the Securities Exchange Act of 1934, as amended.

[Signature page follows.]

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by its duly authorized officers as of the day and year first above written.

MIDSOUTH BANCORP, INC.
By:	/s/ C.R. Cloutier
	Name:	C.R. Cloutier
	Title:	President and Chief Executive Officer
COMPUTERSHARE SHAREOWNER SERVICES LLC
By:	/s/ Lennie M. Kaufman
	Name:	Lennie M. Kaufman
	Title:	Vice President and Regional Manager

[Signature Page to Contingent Value Rights Agreement]

EX-99.2

Exhibit 99.2

Investor Contacts:

Rusty Cloutier

President and CEO

Jim McLemore, CFA

Senior Executive Vice President and CFO

 337.237.8343

MidSouth Bancorp, Inc. Completes Merger with

PSB Financial Corporation

LAFAYETTE, LA., December 28, 2012 /PRNewswire-FirstCall/ -- MidSouth Bancorp, Inc. (“MidSouth”) (NYSE MKT: MSL), the parent company for MidSouth Bank N.A., announced the completion of the merger with PSB Financial Corporation (“PSB”), the holding company of Many, Louisiana based Peoples State Bank.  This transaction continues MidSouth’s strategic growth and enhances the connection between Louisiana and Texas by expanding MidSouth Bank’s presence north from Acadiana all the way up to Texarkana.

Under the terms of the definitive agreement, MidSouth will issue up to 756,536 shares of MidSouth common stock and $10 million liquidation value of a newly created MidSouth series of 4.00% noncumulative convertible preferred stock plus $16 million in cash. In addition, the merger agreement provides for potential additional cash consideration of up to $2 million, plus interest, based on the resolution of certain identified loans over a three-year period.

As part of the transaction, PSB’s preferred stock issued under the U.S. Treasury’s Community Development Capital Initiative has been redeemed in full and Leonard Q. “Pete” Abington, Chairman and President of PSB, has been named to the board of directors of MidSouth and its subsidiary, MidSouth Bank, and John J. “JJ” Blake III, President and CEO of Peoples State Bank, has been named Senior Vice President and Regional President of MidSouth Bank’s Timber Region.

Over the weekend, signs on all 15 Peoples State Bank branch buildings will be changed to MidSouth Bank, the first step in a two-phase conversion plan.  Full conversion of systems, products and services will take place in late March 2013.  Additional information on the merger can be found on the Investor Relations tab of MidSouth’s website at www.midsouthbank.com.

“We are excited to welcome Peoples State Bank to the MidSouth team” commented MidSouth Bank President and CEO Rusty Cloutier.   "We've known each other for more than a decade and have always viewed Peoples as an attractive partner for so many reasons, chief among them are the quality of the employees, the diversity of our loan portfolios and our philosophical similarities about community involvement, customer service and the basic principles of banking," Cloutier said.

“Together, our combined organizations will be able to provide significant value to our shareholders, customers and employees as we continue our expansion efforts to enhance our competitive stance and position us for successful growth in the future," Cloutier said.

About MidSouth Bancorp, Inc.

MidSouth Bancorp, Inc. is a bank holding company headquartered in Lafayette, Louisiana, with assets of $1.9 billion as of December 28, 2012. Through its wholly owned subsidiary, MidSouth Bank, N.A., MidSouth offers a full range of banking services to commercial and retail customers in Louisiana and Texas.  MidSouth Bank currently has 57 banking centers in Louisiana and Texas and is connected to a worldwide ATM network that provides customers with access to more than 43,000 surcharge-free ATMs.  Additional corporate information is available at www.midsouthbank.com.

Forward-Looking Statements

Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties.  These statements include, among others, statements regarding the anticipated impacts of the transaction on shareholders, employees and customers, future expansion plans, future operating results and the integration of PSB into MidSouth's systems.  Actual results may differ materially from the results anticipated in these forward-looking statements.  Factors that might cause such a difference include, among other matters, the effect of the acquisition on relations with customers and employees; changes in interest rates and market prices that could affect the net interest margin, asset valuation, and expense levels; changes in local economic and business conditions, including, without limitation, changes related to the oil and gas industries, that could adversely affect customers and their ability to repay borrowings under agreed upon terms, adversely affect the value of the underlying collateral related to their borrowings, and reduce demand for loans; the timing and ability to reach any agreement to restructure nonaccrual loans;  increased competition for deposits and loans which could affect compositions, rates and terms; the timing and impact of future acquisitions, the success or failure of integrating operations, and the ability to capitalize on growth opportunities upon entering new markets; loss of critical personnel and the challenge of hiring qualified personnel at reasonable compensation levels; legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators, changes in the scope and cost of FDIC insurance and other coverage; and other factors discussed under the heading “Risk Factors” in MidSouth’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC on March 15, 2012 and in its other filings with the SEC.  MidSouth does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise, except as required by law.