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EXHIBIT 4
STANDSTILL AGREEMENT
This Agreement ("Agreement") dated the 6th day of September 2000, is
made by and between Security Financial Bancorp, Inc. ("Security Financial") and
the PL Capital Group, consisting of PL Capital LLC, Financial Edge Fund, L.P.,
Financial Edge - Strategic Fund, L.P., ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ (collectively the "PL Capital Group," and individually a "PL Capital
Group Member").
Recitals
Whereas, Security Financial and the PL Capital Group and each PL
Capital Group Member have agreed that it is in their mutual interests to enter
into this Agreement as hereinafter described.
Now, therefore, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and
other good and valuable consideration, the parties hereto mutually agree as
follows:
1. Representations and Warranties of PL Capital Group and the PL Capital
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Group Members
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The PL Capital Group and the PL Capital Group Members hereby represent and
warrant to Security Financial as follows:
a. The PL Capital Group and the PL Capital Group Members have beneficial
ownership of the number of shares set forth for each in the
preliminary proxy materials filed with the Securities and Exchange
Commission ("Commission") wherein total ownership was stated to be
168,000 shares and have full and complete authority to enter into this
Agreement and to bind the entire number of shares of the capital stock
of Security Financial in which they have, or have a right to acquire a
beneficial ownership interest, to the terms of this Agreement and this
Agreement constitutes a valid and binding agreement of the PL Capital
Group and each PL Capital Group Member.
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b. There are no arrangements, agreements or understandings between the PL
Capital Group (or any PL Capital Group Member) and Security Financial
other than as set forth in this Agreement.
2. Representations and Warranties of Security Financial
----------------------------------------------------
Security Financial hereby represents and warrants to the PL Capital Group
and each PL Capital Group Member as follows:
a. Security Financial has full power and authority to enter into and
perform its obligations under this Agreement, and the execution and
delivery of this Agreement by Security Financial has been duly
authorized by the Board of Directors of Security Financial and
requires no other Board of Directors or stockholder action. This
Agreement constitutes a valid and binding obligation of Security
Financial and the performance of its terms does not constitute a
violation of its certificate of incorporation or bylaws.
b. There are no arrangements, agreements or understandings between
Security Financial and the PL Capital Group or any of the PL Capital
Group Members, other than as set forth in this Agreement.
3. Directorships and Committees
----------------------------
Each of ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be appointed to the Board of
Directors of Security Financial and the Board of Directors of Security Federal
Bank & Trust (the "Bank") subject to any required prior notice or approval by
regulatory authorities. Once the size of the Board of Directors of Security
Financial and the Bank is increased as necessary and any required regulatory
notice and or approval has been satisfied, ▇▇▇▇▇▇ shall be appointed to the
Class of Directors that is up for election in 2000, and ▇▇▇▇▇▇▇ shall be
appointed to the Class of Directors that is up for election in 2002. Not later
than September 8, 2000, Security Financial shall take all necessary action,
including the amendment of the bylaws of Security Financial and the Bank by the
respective Boards of Directors, as may be required to permit such appointments.
a. For so long as ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ are members of the Board of
Directors of Security Financial and the Bank, the Chairman of the
Board will consider both ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ for appointment to the
various Committees of the Board of
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Directors of Security Financial and of the Bank; provided that one of
▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ shall be appointed to each of the following
Committees: Asset/Liability and Executive.
▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall be entitled to receive the compensation and
benefits available to directors of Security Financial and the Bank.
4. Directorships in 2000
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The Board of Directors of Security Financial shall nominate and support
▇▇▇▇▇▇ for election to the Board of Directors of Security Financial in 2000,
unless after the date of this Agreement, the PL Capital Group or any PL Capital
Group Member shall have submitted a nomination to Security Financial not
supported by management for the 2000 Annual Meeting of Stockholders or a
shareholder proposal not supported by management, or publicly supported a
nomination or shareholder proposal for such meeting.
5. Voting at 2000 Annual Meeting of Stockholders
---------------------------------------------
The PL Capital Group and each PL Capital Group Member shall vote all of the
shares of Security Financial common stock beneficially owned by them for each of
Security Financial's nominees for election and for the ratification of the
appointment of Security Financial's independent auditors at the 2000 Annual
Meeting of Stockholders of Security Financial, and shall vote all of the stock
of Security Financial beneficially owned by them in favor of the Proposal to
approve the Security Financial Bancorp, Inc. 2000 Stock-Based Incentive Plan at
the 2000 Annual Meeting of Shareholders or any adjournment thereof. The Board of
Directors of Security Financial shall endorse ▇▇▇▇▇▇'▇ election in 2000 and
recommend to stockholders, in the same manner as for management nominees, that
stockholders vote for ▇▇▇▇▇▇'▇ election.
6. PL Capital Group Withdrawal of Notice of Intent to Nominate Two Directors
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and Amendment to Schedule 13D
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Promptly upon the execution and delivery of this Agreement and the
appointment of ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ to the Board of Directors, the PL Capital
Group shall take all necessary action to withdraw its Notice of Intent to
Nominate Two Directors dated July 12, 2000 and May 19, 2000 and shall amend the
Schedule 13D on file with the Commission to reflect its withdrawal
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of its Notice and properly reflect the PL Capital Group's present stock
ownership in Security Financial.
7. Publicity
---------
Promptly upon the execution and delivery of this Agreement, each of the
parties shall issue a joint press release disclosing the terms and provisions of
this Agreement, the support of the PL Capital Group of Security Financial's
nominees, including the support by Security Financial for ▇▇. ▇▇▇▇▇▇'▇ election,
and other proposals at the 2000 Annual Meeting of Stockholders, which press
release shall be subject to the prior review and comment of the other party.
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 other than filings required by securities laws, concerning any
other party to this Agreement or its operations without prior approval of such
other party unless required by law, in which case notice of such requirement
shall be given to the other party.
8. Public Statements; Litigation
-----------------------------
From and after the date hereof, until and through the date of the 2000
Annual Meeting of Security Financial Stockholders, provided there has been no
material breach of this Agreement by Security Financial, no member of the PL
Capital Group shall, directly or indirectly:
a. make any statement, public or otherwise, in opposition to, or that
would reflect negatively against, Security Financial, the Bank, the
Board of Directors of Security Financial or the Bank, or any of the
directors or officers of Security Financial or the Bank;
b. 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
Security Financial or the Bank, or any of their respective officers or
directors; or
c. provide, or 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 Section 8 if undertaken by any of them.
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In addition, from and after the date hereof, through and including the date of
the 2000 Annual Meeting of Security Financial Stockholders, provided there has
been no material breach of this Agreement by the PL Capital Group or any PL
Capital Group Member, neither Security Financial, nor any director of Security
Financial shall make any statement, public or otherwise, in opposition to, or
that would reflect negatively against the PL Capital Group or any PL Capital
Group member, nor 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 PL Capital Group or any
PL Capital Group member.
9. Reimbursement of Expenses
-------------------------
Security Financial shall, upon submission by the PL Capital Group of
reasonable documentation, reimburse the PL Capital Group for all costs and
expenses incurred in connection with its activities with respect to Security
Financial since March 1, 2000.
10. Remedies
--------
Security Financial and the PL Capital Group acknowledge and agree that a
breach or threatened breach by any 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. Notwithstanding any
other provision contained herein, a specific remedy that will be available to
Security Financial is that in the event any PL Capital Group Member does not
vote in favor of management's nominees and the 2000 Stock-Based Incentive Plan
to be presented at Security Financial's upcoming Annual Meeting, ▇▇. ▇▇▇▇▇▇ and
▇▇. ▇▇▇▇▇▇▇ must resign from the Board of Directors immediately following the
2000 Annual Meeting of Stockholders of Security Financial. 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.
11. Term
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This Agreement shall terminate if Security Financial shall cease to exist
by reason of merger, sale of assets, liquidation, exchange of shares, or
otherwise; or if both ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ cease to be members of the Board of
Directors of Security Financial.
12. Notices
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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 the PL
Capital Group and Security Financial below:
PL Capital Group: Mr. ▇▇▇▇ ▇▇▇▇▇▇, Principal
PL Capital, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ & Lardner One IBM Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Security Financial ▇▇▇▇ ▇. ▇▇▇▇▇▇
Bancorp, Inc.: Security Financial Bancorp, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
With copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
13. Entire Agreement
---------------
This Agreement constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements,
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understandings, negotiations and discussions of the parties in connection
therewith not referred to herein.
14. Counterparts; Facsimile
-----------------------
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, and signature pages may be delivered by
facsimile, each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same agreement.
15. Headings
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The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
16. Governing Law
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This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without giving effect to its
principles of conflicts of laws.
17. Severability
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In the event one or more of the provisions of this Agreement should, 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, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provisions had never been contained herein.
18. Successors and Assigns
----------------------
This Agreement shall be binding upon and shall inure to the benefit of and
be enforceable by the successors and assigns, and transferees by operation of
law, of the parties.
19. Survival of Representations, Warranties and Agreements
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All representations, warranties, covenants and agreements made herein shall
survive the execution and delivery of this Agreement.
20. Amendments
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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.
21. Further Action
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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 of further
evidence the terms and provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SECURITY FINANCIAL BANCORP, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Chairman of the Board
PL CAPITAL, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Principal
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Principal
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
FINANCIAL EDGE FUND, L.P.
By: PL Capital, LLC
General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Managing Member
FINANCIAL EDGE-STRATEGIC FUND, L.P.
By:
PL Capital, LLC
General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Managing Member
