AGREEMENT BETWEEN CAPE BANCORP, INC. AND JAMES J. LYNCH AND PATRIOT FINANCIAL PARTNERS, L.P.
Exhibit
2
CAPE
BANCORP, INC.
AND
XXXXX
X. XXXXX AND PATRIOT FINANCIAL PARTNERS, L.P.
This Agreement is made this 9th day of
February 2009 by and between (i) Xxxxx X. Xxxxx (“Xxxxx”) and Patriot Financial
Partners, L.P. (“Patriot”), as that term is defined in paragraph 4(vi), each
having an office at Xxxx Center, 0000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, and (ii) Cape Bancorp, Inc. (“Cape”), having an office at
000 Xxxxx Xxxx Xxxxxx, Xxxx May Xxxxx Xxxxx, Xxx Xxxxxx
00000.
RECITALS
WHEREAS,
Xxxxx has confirmed his interest in serving on the Board of Directors of Cape
and Cape Bank;
WHEREAS,
Cape’s Board has received a recommendation from the Nominating and Corporate
Governance Committee to appoint Xxxxx to the Board, and the Board has met and
interviewed Xxxxx and has reviewed his qualifications and experience, and
believes that Xxxxx’x membership on the Board of Directors of Cape would serve
the long-term interests of Cape and its stockholders;
and
WHEREAS, in
consideration of the Board’s decision to appoint Xxxxx to the Board of Directors
of Cape, Patriot and Xxxxx have agreed to enter into this Agreement with
Cape;
NOW,
THEREFORE, in consideration of the recitals and the representations,
warranties, covenants and agreements contained herein, and other good and
valuable consideration, the parties hereto agree as
follows:
1. Representations
and Warranties of Patriot. Patriot
hereby represents and warrants to Cape as follows:
(i) Exhibit
A sets forth the total number of shares of capital stock of Cape which are
beneficially owned by Patriot or any affiliate of Patriot (as such terms are
defined in paragraphs 4(vi) and 4(ii) hereof, respectively, with each entity or
individual included in the definition of Patriot referred to individually as a
“Patriot Group Member”).
(ii) Patriot
has fully disclosed in Exhibit A the total number of shares of capital stock of
Cape which it and each Patriot Group Member beneficially owns (and to the best
of their knowledge, each affiliate of Patriot owns), and neither Patriot nor any
Patriot Group Member has a right to vote any shares of the capital stock of Cape
other than as disclosed in Exhibit A.
(iii)
Patriot has full and complete authority to enter into this Agreement and to bind
to the terms of this Agreement the entire number of shares of the capital stock
of Cape in which it or any Patriot Group Member has a beneficial ownership
interest and this Agreement constitutes a valid and binding agreement of
Patriot.
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(iv) Xxxxx hereby represents and warrants
that he has the authority to bind Patriot to this Agreement and that by his
signature below he binds himself and Patriot.
2. Covenants
of Cape. Cape
covenants and agrees that during the Term of this Agreement, as defined in
paragraph 6 hereof:
(i) Simultaneous with the execution and
delivery of this Agreement, the Board of Directors of Cape will appoint Xxxxx to
fill the current vacancy on the Board of Directors of Cape for an
initial term commencing at the February 2009 meeting of Cape’s Board of
Directors and ending at the time of Cape’s 2011 annual meeting of
stockholders.
(ii) Simultaneous with the execution and
delivery of this Agreement, Cape shall take such action as may be necessary to
(a) appoint Xxxxx to fill the current vacancy on the Board of Directors of Cape
Bank for an initial term commencing at the February 2009 meeting of Cape Bank’s
Board of Directors and ending at the time of Cape Bank’s 2009 annual meeting
of sole stockholder, and (b) elect Xxxxx to the Board of Directors of
Cape Bank at the 2009 annual meeting of sole stockholder to the class of
directors whose terms expire at the 2011 annual meeting of sole stockholder
..
(iii) After
such appointments effected pursuant to paragraphs 2(i) and 2(ii) above, so long
as Patriot beneficially owns at least 4.9% of the issued and outstanding shares
of common stock of Cape, Cape will be required to nominate Xxxxx to its Board of
Directors and to recommend to Cape’s stockholders the election of Xxxxx at
Cape's annual meeting of stockholders, subject to the exercise of each Cape
director’s fiduciary duties. If Patriot no longer beneficially owns the minimum
number of shares of common stock of Cape specified in the prior sentence, Cape
will have no further obligations under this paragraph 2(iii). Cape shall use its
reasonable best efforts to have Xxxxx elected as a director of Cape and Cape
shall solicit proxies for Xxxxx to the same extent as it does for any of its
other nominees to the Board of Directors. In addition to the
foregoing, so long as Patriot owns at least 4.9% of Cape’s issued and
outstanding shares of common stock, Cape shall take all necessary steps to have
Xxxxx continue to be elected as a director of Cape Bank and shall vote its
shares of Cape Bank stock in favor of Xxxxx’x election as a director of Cape
Bank, in each case subject to the exercise of Cape’s fiduciary
duties.
3. Covenants
of Xxxxx and Patriot. Each
of Xxxxx and Patriot covenants and agrees that during the Term of this
Agreement:
(i) They
shall not acquire, or offer or agree to acquire, or act in concert with any
affiliate, group or other person to acquire, or offer or agree to acquire,
directly or indirectly, beneficial ownership of, or the right to vote, any
shares of capital stock of Cape or any securities convertible into such capital
stock that would result in Patriot’s beneficial ownership (as would be reported
pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended) in
the aggregate of 19.9 % or more of any class of voting securities of
Cape.
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(ii) They
shall not directly or indirectly solicit, or act in concert with any affiliate,
group or other person to solicit, “proxies,” or directly or indirectly become a
“participant” or otherwise engage in any “solicitation” (as such terms are
defined in Regulation 14A under the Securities Exchange Act of 1934, as amended)
with respect to any matter not recommended or approved by Cape’s Board of
Directors or engage in any of the foregoing activities on behalf of any nominee
for election as a director who is not supported or was not nominated by Cape’s
Board of Directors.
(iii) They
shall not directly or indirectly submit or encourage the submission of any
nomination for election as director or any stockholder proposal for business at
a meeting of Cape’s stockholders.
(iv) They
shall vote, and shall require each Patriot Group Member to vote, all shares
beneficially owned (a) in favor of any nominee for election as director
submitted by Cape’s Board of Directors, (b) against any nominee for election as
director not submitted by, or who is opposed by Cape’s Board of Directors, and
(c) in accordance with the recommendations of Cape’s Board of Directors on all
procedural matters. Furthermore, they shall not, nor shall they act in concert
with any affiliate, group or other person to join with or assist any person or
entity, directly or indirectly in opposing, or make any statement in opposition
to, any director nomination submitted by Cape’s Board of Directors to a vote of
Cape’s stockholders.
(v) They
shall not vote, nor shall they act in concert with any affiliate, group or other
person to vote, for any nominee or nominees for election to the Board of
Directors of Cape, other than those nominated by Cape’s Board of Directors, and
no Patriot Group Member shall consent to become a nominee for election as a
director of Cape unless such person has been nominated by Cape’s Board of
Directors.
(vi) They
shall not directly or indirectly act in concert with any group or other person
to acquire Cape, and if any offer or inquiry concerning an offer to acquire Cape
shall be received they shall refer such offer or inquiry directly and solely to
the Chairman of the Board of Directors and/or to the Chief Executive Officer of
Cape.
(vii) They
shall not directly or indirectly participate or act in concert with any
affiliate, group or other person to participate, by encouragement or otherwise,
in any litigation against or derivatively on behalf of Cape, except for
testimony which may be required by law, and except as may occur in the ordinary
course of business with respect to any loan, deposit or other transaction where
a Patriot Group Member or an affiliate is dealing with Cape as a
customer.
(viii) They
shall not provide, nor shall they act in concert with any person to provide, any
funds, services or facilities, to any person in support of any activity by such
person that would be a violation of their covenants under the provisions of this
paragraph 3 if undertaken by any of them.
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(ix) Nothing
contained in this paragraph 3 shall be interpreted to prohibit Xxxxx from
voting, as a director, in such manner as he deems appropriate on any matter
which may come before the Board of Directors or any committee of Cape or Cape
Bank, nor shall the same prohibit him from including in any disclosure by Cape
under the Securities Exchange Act of 1934, any statement explaining his vote if
he is required by law or regulation to include such an explanation in such
disclosure.
4. Definitions. As
used in this Agreement, the following terms shall have the meanings indicated,
unless the context otherwise requires:
(i) The
term “acquire” means every type of acquisition, whether effected by purchase,
exchange, operation of law or otherwise.
(ii) The
term “acting in concert” means (i) knowing participation in a joint activity or
conscious parallel action towards a common goal whether or not pursuant to an
express agreement, or (ii) a combination of pooling of voting or other interests
in the securities of an issuer for a common purpose pursuant to any contract,
understanding, relationship, agreement or other arrangement, whether written or
otherwise.
(iii) The
term “affiliate” means a person or entity that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, another person.
(iv) The
terms “beneficial ownership” or “beneficially owned” shall be determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934.
(v) The
term “control” (including the terms “controlling,” “controlled by,” and “under
common control with”) means the possession, direct or indirect, or the power to
direct or cause the direction of the management, activities or policies of a
person or organization, whether through the ownership of capital stock, by
contract, or otherwise.
(vi) The
term “Patriot Financial Partners, L.P.” or “Patriot” shall mean Patriot
Financial Partners, L.P., a Delaware limited partnership; Patriot Financial
Partners Parallel, L.P., a Delaware limited partnership; Patriot Financial
Partners GP, L.P., a Delaware limited partnership; Patriot Financial Partners
GP, LLC, a Delaware limited liability company; W. Xxxx Xxxxxx; Xxx X. Xxxxxx;
Xxxxx X. Xxxxx; and/or any person affiliated with the persons specified in this
paragraph.
(vii) The
term “person” includes an individual, group acting in concert, a corporation, a
partnership, an association, a joint stock company, a trust, an unincorporated
organization or similar company, a syndicate, or any other group formed for the
purpose of acquiring, holding or disposing of the equity securities of
Cape.
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(viii)
The term “vote” means to vote in person or by proxy, or to give or authorize the
giving of any consent as a stockholder on any matter.
5. Remedies. Cape
and Patriot acknowledge and agree that a breach or threatened breach by either
party may give rise to irreparable injury inadequately compensable in damages,
and accordingly each party shall be entitled to injunctive relief to prevent a
breach of the provisions hereof and to enforce specifically the terms and
provisions hereof in any state or federal court having jurisdiction, in addition
to any other remedy to which such aggrieved party may be entitled to at law or
in equity. In the event either party institutes any legal action to enforce such
party’s rights under, or recover damages for breach of, this Agreement, the
prevailing party or parties in such action shall be entitled to recover from the
other party or parties all costs and expenses, including but not limited to
actual attorneys’ fees, court costs, witness fees, disbursements and any other
expenses of litigation or negotiation, incurred by such prevailing party or
parties. Each Patriot Group Member shall have the right of contribution from the
each other Patriot Group Member for any damages paid or expenses incurred
(including attorneys’ fees) pursuant to this
provision.
6. Term. This
Agreement shall remain in effect (the “Term of this Agreement”) until the later
of (i) the completion of the 2011 annual meeting of stockholders of Cape, and
(ii) the date Xxxxx is no longer a member of the Board of Directors of Cape and
Cape Bank.
7. Publicity. Any press
release or other publicity with respect to this Agreement or any provisions
hereof shall be jointly prepared and issued by the parties hereto. During the
Term of this Agreement, no party to this Agreement shall cause, discuss,
cooperate or otherwise aid in the preparation of any press release or other
publicity concerning any other party to this Agreement or its operations without
prior approval of such other party.
8. Notices. All notice
requirements and other communications shall be deemed given when delivered or on
the third succeeding business day after being mailed by registered or certified
mail, return receipt requested, addressed to Patriot and Cape
below:
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Patriot:
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Xxxxx
X. Xxxxx
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Xxxx
Center, 0000 Xxxx Xxxxxx
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||
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00xx
Xxxxx
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Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
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With
a copy to:
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Xxxxxxx
X. Xxxxxxx, Esq.
|
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Elias,
Matz, Xxxxxxx & Xxxxxxx L.L.P.
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||
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000
00xx
Xxxxxx, XX, 00xx
Xxxxx
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Xxxxxxxxxx,
X.X.
00000
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Cape:
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Xxxxxxx
X. Xxxxxx, President
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| and Chief Executive Officer | ||
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Cape
Bancorp, Inc.
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000
Xxxxx Xxxx Xxxxxx
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Xxxx
May Court House, New Jersey 08210
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||
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With
a copy to:
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Xxxx
Xxxx, Esq.
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Xxxx
Xxxxxx Xxxxxxxx & Xxxxxx, PC
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||
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0000
Xxxxxxxxx Xxxxxx, X.X.
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Xxxxxxxxxx,
X.X. 00000
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9. Governing
Law and Choice of Forum. Maryland
law, unless applicable federal law or regulation is deemed controlling, shall
govern the construction and enforceability of this Agreement. Any and all
actions concerning any dispute arising hereunder shall be filed and maintained
in a state or federal court, as appropriate, sitting in the State of New Jersey,
in either Cape May County or Atlantic County.
10. Severability. If any
term, provision, covenant or restriction of this Agreement is held by any
governmental or regulatory authority or a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
11. Survival
of Representations. Warranties and Agreements. All
representations, warranties, covenants and agreements made herein shall survive
the execution and delivery of this Agreement.
12. Amendments. This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by all of the parties
hereto.
13. Counterparts. This
Agreement may be executed in counterparts, each of which shall be an original,
but each of which together shall constitute one and the same
agreement.
14. Duty
to Execute. Each party
agrees to execute any and all documents, and to do and perform any and all acts
and things necessary or proper to effectuate or further evidence the terms and
provisions of this Agreement.
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IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
undersigned or duly authorized officers thereof as of the day and year first
above written.
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/s/ Xxxxx X.
Xxxxx
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Xxxxx
X. Xxxxx, personally and as agent for the persons and entitites named
in Paragraph 4(vi)
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/s/ Xxxxxxx X.
Xxxxxx
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Xxxxxxx
X. Xxxxxx, President and Chief Executive Officer, Cape Bancorp, Inc.
and Cape Bank
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7
Exhibit
A
The
following are members of the Patriot Financial Group:
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·
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Patriot
Financial Partners, L.P., a Delaware limited partnership (the “Patriot
Fund”);
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·
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Patriot
Financial Partners Parallel, L.P., a Delaware limited partnership (the
“Patriot Parallel Fund” and together with the Patriot Fund, the
“Funds”);
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·
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Patriot
Financial Partners GP, L.P., a Delaware limited partnership and general
partner of the Funds (“Patriot
GP”);
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·
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Patriot
Financial Partners GP, LLC, a Delaware limited liability company and
general partner of Patriot GP (“Patriot LLC”);
and
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·
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W.
Xxxx Xxxxxx, Xxx X. Xxxxxx and Xxxxx X. Xxxxx as general partners of the
Funds and Patriot GP and as members of Patriot
LLC.
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The
members of Patriot Financial Group and their affiliates beneficially own the
following number of shares of common stock of Cape:
Patriot
Fund beneficially owns 655,051 shares of common stock of Cape.
Patriot
Parallel Fund beneficially owns 221,154 shares of common stock of
Cape.
Because
(i) Messrs. Xxxxxx, Xxxxxx and Xxxxx serve as general partners of the Funds and
Patriot GP and as members of Patriot LLC, (ii) Patriot LLC serves as general
partner of Patriot GP and (iii) Patriot GP serves as general partner of the
Funds, each of Messrs Xxxxxx, Xxxxxx and Xxxxx, Patriot LLC and Patriot GP may
be deemed to beneficially own the 876,205 shares of common stock of Cape held by
the Funds.
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