STANDSTILL AGREEMENT
This
Standstill Agreement (this “Agreement”) is made by and between BCSB Bancorp,
Inc., a Maryland corporation (“BCSB Bancorp”), on the one hand, and Financial
Edge Fund, L.P., Financial Edge - Strategic Fund, L.P., Goodbody/PL Capital,
L.P., PL Capital, LLC, PL Capital Advisors, LLC, Goodbody/PL Capital,
LLC, Xxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx (collectively, the “PL
Capital Parties”), on the other hand, on behalf of themselves and their
respective affiliates (BCSB Bancorp and the PL Capital Parties together,
collectively, the “Parties”). In consideration of the covenants,
promises and undertakings set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
1. Bylaw
Amendment
Upon the
execution of this Agreement, the Board of Directors of BCSB Bancorp agrees to
amend BCSB Bancorp’s Bylaws to delete Article II, Section 3(b)
thereof. BCSB Bancorp agrees that so long as the PL Capital Parties
beneficially own 5% or more of BCSB Bancorp’s outstanding common stock, the BCSB
Bancorp Board of Directors will not amend BCSB Bancorp’s Bylaws to impose
residency requirements as a qualification for service as a
director.
2. Standstill
The PL
Capital Parties each agree that, after the date hereof and until September 30,
2010 (the “Standstill Period”), they and their affiliates or associates (as
defined in Rule 12b-2 promulgated pursuant to the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) will not (and they will not assist or
encourage others to), directly or indirectly, in any manner, without prior
written approval of the Board of Directors of BCSB Bancorp:
(i) acquire,
offer to acquire, solicit an offer to sell or agree to acquire directly or
indirectly, alone or in concert with others, by purchase, gift or otherwise, any
direct or indirect beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) or any direct or indirect interest in any securities or direct
or indirect rights, warrants or options to acquire, or securities convertible
into or exchangeable for (collectively, an “Acquisition”), any securities of
BCSB Bancorp (“Securities”), provided that the PL Capital Parties may sell
shares without the prior approval of the Board of Directors of BCSB Bancorp
subject to the Right of First Refusal in Paragraph 5 of this
Agreement;
(ii) make,
or in any way participate in, directly or indirectly, alone or in concert with
others, any “solicitation” of “proxies” to vote (as such terms are used in the
proxy rules of the Securities and Exchange Commission promulgated pursuant to
Section 14 of the Exchange Act) or seek to advise or influence in any manner
whatsoever any person with respect to the voting of any voting securities of
BCSB Bancorp;
(iii) form,
join or in any way participate in a “group” within the meaning of Section
13(d)(3) of the Exchange Act with respect to any voting securities of BCSB
Bancorp;
(iv) acquire,
offer to acquire or agree to acquire, directly or indirectly, alone or in
concert with others, by purchase, exchange or otherwise, (a) any of the assets,
tangible and intangible, of BCSB Bancorp or (b) direct or indirect rights,
warrants or options to acquire any assets of BCSB Bancorp;
(v) arrange,
or in any way participate, directly or indirectly, in any financing (except for
margin loan financing for shares presently beneficially owned) for the purchase
of any securities or securities convertible or exchangeable into or exercisable
for any securities or assets of BCSB Bancorp;
(vi) otherwise
act, alone or in concert with others, to seek to offer to BCSB Bancorp or any of
its stockholders any business combination, restructuring, recapitalization or
similar transaction to or with BCSB Bancorp or otherwise seek, alone or in
concert with others to control or change the management, Board of Directors or
policies of BCSB Bancorp or nominate any person as a director of BCSB Bancorp
who is not nominated by the then incumbent directors (provided that in the event
there is a vacancy on the BCSB Bancorp Board of Directors, the PL
Capital Parties may submit suggestions for nominees to the nominating committee
of the Board of Directors for its consideration pursuant to the policies adopted
by the nominating committee of the Board of Directors), or propose any matter to
be voted upon by the stockholders of BCSB Bancorp; or
(vii) announce
an intention to do, or enter into any arrangement or understanding with others
to do, any of the actions restricted or prohibited under clauses (i) through
(vi) of this Paragraph 2, or publicly announce or disclose any request to be
excused from any of the foregoing obligations of this Paragraph 2.
Notwithstanding
any other provision of this Paragraph 2, the restrictions on the acquisition of
securities contained in clause (i) of Paragraph 2 shall be from the date of this
Agreement until the date immediately following the 2009 annual meeting of
stockholders and any adjournment thereof, provided that in no event during the
Standstill Period shall the PL Capital Parties acquire in the aggregate
beneficial ownership of more than 9.9% of any class of voting
Securities.
At BCSB Bancorp’s 2009 annual meeting
of stockholders, BCSB Bancorp intends to submit for a vote a proposal to approve
an equity incentive plan that would allow for the grant of stock options and
stock awards (the “2009 Equity Incentive Plan”). At such 2009 annual
meeting of stockholders, the PL Capital Parties hereby agree to vote all the
BCSB Bancorp shares they beneficially owns in favor of the 2009 Equity Incentive
Plan. In addition, at any BCSB Bancorp annual meeting of stockholders
during the Standstill Period, the PL Capital Parties agree (i) to vote all the
BCSB Bancorp shares they beneficially own in favor of the nominees for election
or reelection as directors of BCSB Bancorp selected by the Board of Directors of
BCSB Bancorp or the nominating committee of such Board of Directors and
otherwise to support such director candidates, and (ii) with respect to any
other proposal submitted by any BCSB Bancorp stockholder to a vote of the BCSB
Bancorp stockholders, to vote all the BCSB Bancorp shares they beneficially own
in accordance with the recommendation of the BCSB Bancorp Board of Directors
with respect to any such stockholder proposal.
Upon the execution of this Agreement by
the PL Capital Parties and BCSB Bancorp, the PL Capital Parties shall be deemed
to have withdrawn their stockholder proposal submitted to BCSB
Bancorp by letter dated December 10, 2008 pursuant to Rule 14a-8
under the Exchange Act.
3. Option
Pricing
BCSB
Bancorp agrees that so long as the PL Capital Parties beneficially own 5% or
more of BCSB Bancorp’s outstanding common stock, any options to acquire BCSB
Bancorp common stock granted under the 2009 Equity Incentive Plan will be
granted at an exercise price equal to the greater of (i) $10.00 per share, and
(ii) the fair market value of a share of BCSB Bancorp common stock on the date
of grant.
4. Non-Disparagement
During
the Standstill Period, the PL Capital Parties agree not to disparage BCSB
Bancorp or any officers, directors (including director nominees) or employees of
BCSB Bancorp or its affiliates or subsidiaries in any public or quasi-public
forum, and BCSB Bancorp agrees not to disparage any of the PL Capital Parties or
any officers or employees of the PL Capital Parties in any public or
quasi-public forum.
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5. Right
of First Refusal
The PL
Capital Parties, and each of them, hereby grant an irrevocable Right of First
Refusal to BCSB Bancorp to purchase at the then prevailing market price on the
date of exercise, any or all shares of BCSB Bancorp stock beneficially owned by
any of the PL Capital Parties, that the PL Capital Parties are
selling. Such Right of First Refusal shall be exercised in the
following manner: the PL Capital Party intending to sell any such shares shall
provide Notice (as defined herein) to BCSB Bancorp of intent to sell together
with the quantity of shares to be sold. BCSB Bancorp shall have two
business days to give Notice (as defined herein) to such PL Capital Party of its
intent to exercise its Right of First Refusal to acquire such
shares. If BCSB Bancorp gives timely Notice of its intent to exercise
such Right of First Refusal with respect to such shares, then it shall have five
business days to tender the Exercise Price (as defined herein) for such shares
to the selling PL Capital Party, and that PL Capital Party shall then convey
title to such shares to BCSB Bancorp or its designee. The Exercise
Price shall be the volume-weighted average price as derived from Bloomberg for
the five trading days prior to the date on which such PL Capital Party gave
Notice. Failure of BCSB Bancorp to give timely Notice to such selling
PL Capital Party will excuse the PL Capital Parties from any obligation with
respect to those shares so long as that PL Capital Party sells such shares
within 30 days of the date on which that PL Capital Party gave its Notice of its
intent to sell shares, but will not affect BCSB Bancorp’s Right of First Refusal
with respect to any other shares beneficially owned by that or any other PL
Capital Party which were not the subject of the PL Capital Party’s Notice of its
intent to sell shares.
6. Authority
Each of
the Parties which is a corporation or other legal entity and each individual
Party executing this Agreement on behalf of a corporation or other legal entity,
represents and warrants that: (a) such corporation or other legal entity is duly
organized, validly authorized and in good standing, and possesses full power and
authority to enter into and perform the terms of this Agreement; (b) the
execution and delivery, and performance of the terms of this Agreement have been
duly and validly authorized by all requisite acts and consents of the company or
other legal entity and do not contravene the terms of any other obligation to
which the corporation or other legal entity is subject; and (c) this Agreement
constitutes a legal, binding and valid obligation of each such entity,
enforceable in accordance with its terms.
7. Amendment
In Writing
This
Agreement and each of its terms may only be amended, waived, supplemented or
modified in a writing signed by the signatories hereto or their respective
clients.
8. Governing
Law/Venue/Jurisdiction
This
Agreement, and the rights and liabilities of the Parties hereto, shall be
governed by and construed in accordance with the laws of the State of Maryland
without regard to conflict of law provisions. The venue and
jurisdiction for adjudication of any and all disputes between the Parties to
this Agreement shall be in the State of Maryland Circuit Court in and for
Baltimore County.
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9. Counterparts
This
Agreement may be executed in counterparts, each of which shall be considered to
be an original or true copy of this Agreement. Faxed signatures shall
be presumed valid.
10. Nonwaiver
The
failure of any one of the Parties to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver thereof or
deprive the Parties of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
11. Disclosure
Of This Agreement
The
parties contemplate that the PL Capital Parties will file a Schedule 13D
amendment attaching this Agreement, that BCSB Bancorp will file a Form 8-K
attaching this Agreement and that during the Standstill Period there will be no
other public comments (except as required by applicable SEC regulations) by the
Parties regarding this Agreement other than a press release by BCSB Bancorp
factually summarizing this Agreement and referring to the Form 8-K filing, which
press release shall be subject to approval by the PL Capital Parties (such
approval not to be unreasonably withheld).
12. Entire
Agreement
This
Agreement constitutes the full, complete and entire understanding, agreement,
and arrangement of and between the Parties with respect to the subject matter
hereof and supersedes any and all prior oral and written understandings,
agreements and arrangements between them. There are no other
agreements, covenants, promises or arrangements between the Parties other than
those set forth in this Agreement (including the attachments
hereto).
13. Notice
All
notices and other communications which are required or permitted hereunder shall
be in writing, and sufficient if by same-day hand delivery (including delivery
by courier) or sent by fax, addressed as follows:
If to the
BCSB Bancorp Parties:
Xxxxxx X.
Xxxxxxxx
President
and Chief Executive Officer
BCSB
Bancorp, Inc.
000 X.
Xxxxx Xxxx
Xxxxxxxxx,
Xxxxxxxx 00000
Fax:
(410) 256 - 0261
with a
copy to:
Xxxx X.
Xxxxxxxxx, Esq.
Xxxxxxxxxx
Xxxxxxxx LLP
000
00xx
Xxxxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
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If to the
PL Capital Parties:
Xxxx Xx.
Xxxxxx
XX
Capital, LLC
00 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxxx,
Xxxxxxxx 00000
Fax:
(000) 000-0000
with a
copy to:
Xxxxx X.
Xxxxxx, Esq.
Xxxxx
& Lardner, LLP
000 Xxxx
Xxxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxx 00000
Fax:
(000) 000-0000
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IN
WITNESS WHEREOF, the Parties hereto have each executed this Agreement on the
date set forth below.
Dated: March
19, 2009
For:
Financial Edge Fund,
L.P. For
BCSB Bancorp, Inc.:
Financial Edge - Strategic Fund,
X.X.
Xxxxxxxx/PL Capital,
L.P.
PL Capital, LLC
PL Capital Advisors,
LLC
Goodbody/PL Capital,
LLC By:
/s/Xxxxxx X.
Xxxxxxxx
Xxxxxx X.
Xxxxxxxx
President
By: /s/Xxxxxxx X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx
Managing Member
By: /s/Xxxx X. Xxxxxx
Xxxx X.
Xxxxxx
Managing Member
For Xxxx
X. Xxxxxx:
/s/Xxxx
X. Xxxxxx
Xxxx X.
Xxxxxx
For
Xxxxxxx X. Xxxxxxx:
/s/Xxxxxxx
X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx
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