STANDSTILL AGREEMENT
Execution
Copy
This Standstill Agreement (this
“Agreement”) is
entered into as of March 12, 2009, by and among Bancorp Rhode Island, Inc., a
Rhode Island corporation (the “Company”), and each
of Financial Edge Fund, L.P., Financial Edge-Strategic Fund, L.P., PL
Capital/Focused Fund, L.P., Goodbody/PL Capital, L.P., Goodbody/PL Capital, LLC,
PL Capital Advisors, LLC, PL Capital, LLC, Xxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx
(each a “PL Capital
Party” and collectively the “PL Capital Parties”).
Except as the context otherwise requires, all capitalized terms shall have the
meaning as defined in Section 1.1
hereof.
RECITALS
WHEREAS, on February 4, 2009,
the PL Capital Parties filed an amendment to their Schedule 13D with the SEC
reporting that the PL Capital Parties were the beneficial owners of 378,631
shares of the Common Stock and that they planned to cause the submission of
certain shareholder proposals to be presented to the Company’s shareholders for
consideration at the Company’s 2009 Annual Meeting of Shareholders (the “Meeting”);
WHEREAS, on February 16, 2009,
Xxxxxxx X. Xxxxxxx, a PL Capital Party, sent written notice to the Company,
pursuant to Section 2.03 of the Company’s By-Laws, of his intent to bring six
proposals before the Meeting to be voted upon by the Company’s shareholders (the
“Written
Notice”);
WHEREAS, the Board has
determined to adopt a Majority Voting Policy to be effective for the Meeting and
to reduce the number of directors from fifteen (15) to twelve (12) directors
over three years (the “Governance
Changes”);
WHEREAS, in view of the
decision of the Board with respect to the Governance Changes, the PL Capital
Parties have agreed to withdraw the Written Notice; and
WHEREAS, the Company and the
PL Capital Parties desire to establish in this Agreement certain agreements and
restrictions between the parties.
AGREEMENT
NOW THEREFORE, the parties do
hereby agree as follows:
ARTICLE
I
DEFINITIONS
AND CONSTRUCTION
1.1 Definitions. Except
for the names of the parties hereto (which shall be referenced herein as defined
above), the following capitalized terms used in this Agreement shall, unless the
context otherwise requires, have the following meaning:
“Affiliate” of a
specified person is a person that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the person specified.
“Board” means the
Board of Directors of the Company.
“Common Stock” means
the Company’s common stock, $.01 par value per share.
“Consent” means any
consent, approval, waiver, agreement, license, or report or
notice
to, any Person.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended
“Governmental
Approval” means any consent, approval, authorization, waiver, permit,
concession, franchise, agreement, license, exemption or order of, declaration or
filing with, or report or notice to, any Governmental Authority.
“Governmental
Authority” means any federal, state, local or foreign court, legislative,
executive or regulatory authority or agency.
“Law” means all
applicable provisions of all (a) constitutions, treaties, statutes, laws
(including the common law), codes, rules, regulations, ordinances or orders of
any Governmental Authority, (b) Governmental Approvals and (c) orders,
decisions, injunctions, judgments, awards and decrees of or agreements with any
Governmental Authority.
“Person” means any
individual, partnership, joint venture, corporation, limited liability company,
trust, unincorporated organization, government or department or agency of a
government.
“SEC” means the
Securities and Exchange Commission.
“Securities Act” means
the Securities Act of 1933, as amended.
1.2 Construction. The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Agreement.
Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement. Terms
defined in the singular shall include the plural, and vice versa, and pronouns
in any gender shall include the masculine, feminine, and neuter, as the context
requires. Any reference to any federal, state, local, or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word “including” shall
mean including without limitation, and use of the term "or" is not intended to
be exclusive, unless the context clearly requires otherwise. All references to a
“Section” refer to this
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Agreement,
and all references to an “Exhibit” refer to the documents attached to this
Agreement, unless the context otherwise requires.
ARTICLE
II
SHARES
SUBJECT TO AGREEMENT
The shares of Common Stock subject to
this Agreement are all shares of Common Stock beneficially owned (as determined
pursuant to Rule 13d-3 of the Exchange Act) by the PL Capital Parties as of the
date of this Agreement, together with any other shares of voting capital stock
of the Company hereafter acquired and beneficially owned by the PL
Capital Parties (collectively referred to herein as the “PL Capital
Shares”).
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE PL CAPITAL PARTIES
The PL Capital Parties represent and
warrant to the Company as follows:
3.1 Authorization. The
PL Capital Parties each have the requisite power, authority and legal capacity
to execute, deliver and perform and to consummate the transactions contemplated
by this Agreement. The PL Capital Parties each have duly executed and delivered
this Agreement. This Agreement constitutes the legal, valid and binding
obligations of the PL Capital Parties, enforceable against them in accordance
with its terms.
3.2 No Conflicts;
Consents. The execution, delivery and performance by the PL
Capital Parties of this Agreement and the consummation of the transactions
contemplated by this Agreement do not conflict with, contravene, result in a
violation or breach of or default under (with or without the giving of notice or
the lapse of time or both), or give rise to a claim or right of termination,
amendment, modification, vesting, acceleration or cancellation of any right or
obligation or loss of any material benefit under any Law applicable to the PL
Capital Parties or any material contract, agreement, or instrument to which any
of the PL Capital Parties are a party. No Consent of any Governmental Authority
or other person is required to be obtained by any of the PL Capital Parties in
connection with the execution and delivery by the PL Capital Parties of this
Agreement.
3.3 The PL Capital
Shares. Each PL Capital Party, or together with any other PL
Capital Party, has the sole right to vote the PL Capital Shares held by such
party, and none of the PL Capital Shares are subject to any agreement,
arrangement or restriction with respect to the voting of such shares, except as
contemplated by this Agreement.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The Company represents and warrants
to the PL Capital Parties as follows:
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4.1 Existence. The
Company is duly organized, validly existing, and in good standing under the laws
of the State of Rhode Island and is duly authorized to conduct business and
enter into contracts under the laws of the State of Rhode Island.
4.2 Authorization. The
Company has full power and authority to execute and deliver this Agreement, and
to perform its obligations hereunder, and such execution, delivery, and
performance are duly authorized by all necessary corporate action of the
Company. This Agreement constitutes the valid and legally binding obligation of
the Company, enforceable in accordance with its terms and
conditions.
4.3 No Conflicts;
Consents. The execution, delivery and performance by the
Company of this Agreement and the consummation of the transactions contemplated
by this Agreement do not conflict with, contravene, result in a violation or
breach of or default under (with or without the giving of notice or the lapse of
time or both), or give rise to a claim or right of termination, amendment,
modification, vesting, acceleration or cancellation of any right or obligation
or loss of any material benefit under any Law applicable to the Company or any
material contract, agreement, or instrument to which the Company is a party. No
Consent of any Governmental Authority or other person is required to be obtained
by the Company in connection with the execution and delivery by the Company of
this Agreement.
ARTICLE
V
COVENANTS
OF THE PL CAPITAL PARTIES
5.1
Voting for Company
Proposals. From the date of this Agreement and continuing
through the third business day following the date on which the Company files its
Quarterly Report on Form 10-Q for the quarter ending September 30, 2009 with the
SEC (the “Termination
Date”), the PL Capital Parties hereby agree:
(a) that
at the Meeting the PL Capital Parties shall vote (or cause to be voted) the PL
Capital Shares in favor of the directors nominated by the Board for election to
the Board;
(b) that
on matters at the Meeting not involving the election of directors of the Company
(which for the Meeting will be limited to approval of (i) a 25,000 share
increase in the number of shares of Common Stock reserved for issuance under the
Company's Amended and Restated Non-Employee Director Stock Plan, (ii) a “Say on
Pay” proposal regarding executive compensation and (iii) ratification of the
appointment of KPMG LLP as independent registered public accounting firm for the
Company), to vote all of the PL Capital Shares in the manner recommended by the
Board;
(c) not
to seek to remove or support anyone else in seeking to remove, without cause,
any member of the Board, or encourage any other Person to do so;
and
(d) not
to nominate or recommend a candidate for election to the Board, provided that
the PL Capital Parties may submit suggestions for nominees to the Governance and
Nominating Committee pursuant to the nomination policy adopted by the
Board.
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The PL
Capital Parties will use their reasonable best efforts to cause their respective
Affiliates to be bound by and comply with the provisions of this Section
5.1.
5.2 Standstill. From
the date of this Agreement and continuing until the Termination Date (the “Standstill Period”),
except pursuant to a transaction approved by the Board, the PL Capital Parties
and their respective Affiliates will not, in any manner, directly or
indirectly:
(a) make, effect, initiate, cause or
participate in (i) any acquisition of beneficial ownership of any securities of
the Company, (ii) any acquisition of any assets of the Company or its
subsidiaries, (iii) any tender offer, exchange offer, merger, business
combination, recapitalization, restructuring, liquidation, dissolution or
extraordinary transaction involving the Company or its subsidiaries, or
involving any securities or assets of the Company or its subsidiaries or (iv)
any “solicitation” of “proxies” (as those terms are used in the proxy rules of
the SEC promulgated pursuant to Section 14 of the Exchange Act) or consents with
respect to any securities of the Company;
(b) form, join or participate in a
“group” (as defined in Section 13(d)(3) of the Exchange Act, and the rules
promulgated thereunder), pooling agreement, syndicate or voting trust with
respect to the beneficial ownership of any securities of the Company, or
otherwise act in concert with another shareholder of the Company for the purpose
of acquiring, holding, voting or disposing of the Company’s
securities;
(c) act, alone or in concert with
others, to seek to control the management, Board or policies of the
Company;
(d) take any action which would
require the Company, in the reasonable opinion of counsel, to make a public
announcement regarding any of the types of matters set forth in clause “(a)” of
this Section
5.2;
(e) agree or offer to take, or
encourage or propose (publicly or otherwise) the taking of, any action referred
to in clauses “(a)”, “(b)”, “(c)” or“(d)” of this Section
5.2;
(f) assist, induce or encourage any
other Person to take any action referred to in clauses “(a)”, “(b)”, “(c)” or
“(d)” of this Section
5.2;
(g) enter into any discussions or
arrangements with any third party with respect to the taking of any action
referred to in clauses “(a)”, “(b)”, “(c)” or “(d)” of this Section
5.2;
(h) vote the PL Capital Shares in
favor of, or initiate, propose or otherwise solicit shareholders of the Company
for the approval of one or more shareholder proposals or induce or attempt to
induce any other individual, firm, corporation, partnership, or other entity to
initiate any shareholder proposal;
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(i) otherwise act, alone
or in concert with others, to encourage, facilitate, incite, or seek to cause
others to withhold votes for the directors nominated by the Board in any
election of directors of the Company; or
(j) other than in
connection with enforcement of the PL Capital Parties’ rights under this
Agreement, otherwise act, alone or in concert with others, to encourage,
facilitate, incite, or seek to cause others to instigate legal proceedings
against the Company, or any of its subsidiaries or their respective officers,
directors, or employees.
Notwithstanding
any other provision of this Section 5.2, the
restrictions on the acquisition of any of the Company’s securities contained in
clause (i) of Section
5.2(a) hereof shall be from the date of this Agreement until the date
immediately following the Meeting 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 the
Company’s securities.
5.3
Withdrawal of PL Capital
Proposals. Upon the execution of this Agreement by the PL
Capital Parties and the Company, the PL Capital Parties shall be deemed to have
withdrawn any and all proposals intended to be submitted at the Meeting and any
notice given pursuant to Section 2.03 of the Company’s By-Laws or under any
applicable rules or regulations of the Federal securities laws, including
without limitation Rule 14a-8 of the Exchange Act, of the PL Capital Parties’
intent to submit any proposals at the Meeting shall be null and
void.
5.4
Transferees to be
Bound. Any transferee of any of the PL Capital Shares
beneficially owned by any of the PL Capital Parties shall acknowledge and agree
to be bound by the terms of this Agreement; except that the terms of this Section 5.4 shall not
be binding on any transfer of any of the PL Capital Shares made in a “brokers’
transaction” as such term is defined in Section 4(4) of the Securities Act and
Rule 144(g) of the Securities Act. Any sale or transfer of the PL
Capital Shares not in compliance with the terms and conditions of this Section 5.4 shall be
null and void.
ARTICLE
VI
COVENANTS
OF THE COMPANY
6.1 Majority Voting
Policy. Prior to the Meeting, the Board shall take the
necessary actions to adopt a majority voting policy with respect to the election
of directors of the Company in uncontested elections substantially in the form
attached hereto as Exhibit
A. This policy shall be in effect commencing with the
Meeting.
6.2 Decrease in Size of Board of
Directors. Commencing with the Meeting, the Board shall take
the necessary actions to decrease the size of the Board from fifteen (15)
directors to twelve (12) directors as follows:
(a) At or prior to the Meeting, the
Board shall take the necessary action to decrease the size of the Board from
fifteen (15) directors to fourteen (14) directors;
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(b) At or prior to the 2010 Annual
Meeting of the Shareholders of the Company, the Board shall take the necessary
action to decrease the size of the Board to no more than thirteen (13)
directors; and
(c) At or prior to the 2011 Annual
Meeting of the Shareholders of the Company, the Board shall take the necessary
action to decrease the size of the Board to no more than twelve (12)
directors.
Notwithstanding
the above, the Company shall not be bound by the terms of this Section 6.2 in the
event the Company consummates any merger, consolidation or other business
combination requiring the approval of its shareholders under applicable Rhode
Island law or NASDAQ Marketplace Rules and the terms of such transaction require
an increase in the size of the Board.
6.3
Reimbursement of
Expenses. The Company agrees to reimburse the PL Capital
Parties for their out-of-pocket expenses incurred in connection with the PL
Capital Parties’ intent to submit certain proposals at the Meeting as set forth
the Written Notice and the negotiation and preparation of this Agreement, in an
amount not to exceed $30,000. Such amount shall be payable by the
Company within five (5) business days following the later of (a) receipt of
invoices, receipts or other supporting documents evidencing such expenses and
(b) the date of this Agreement.
ARTICLE
VII
GENERAL
PROVISIONS
7.1
Non-Disparagement. During
the Standstill Period, neither the Company nor any of the PL Capital Parties
shall directly or indirectly make or issue or cause to be made or issued any
disclosure, announcement, or statement (including without limitation the filing
of any document or report with the SEC or any other governmental agency unless
required by law or any disclosure to any journalist, member of the media, or
securities analyst) concerning the other party or, with respect to the Company,
any of its past, present or future directors, officers, employees or other
affiliates, which disparages such other party or any of such other party's
respective past, present, or future directors, officers, employees or other
affiliates.
7.2
Fees and
Expenses. Except as contemplated by this Agreement, all costs
and expenses incurred in connection with this Agreement and the consummation of
the transactions contemplated hereby shall be paid by the party incurring such
expenses.
7.3
Disclosure of
Agreement. The parties contemplate that the PL Capital Parties
will file with the SEC an amendment to their Schedule 13D with respect to the
Company attaching this Agreement and that the Company will file with the SEC a
current report on Form 8-K attaching this Agreement. Except as
required by applicable SEC rules and regulations or NASDAQ Marketplace Rules
applicable to the Company, or any factually correct summary of the terms of this
Agreement included in the aforementioned filings or any press release by the
Company regarding the entering into and/or terms of this Agreement, the parties
agree during the Standstill Period that there will be no other public comments
by the parties regarding this Agreement.
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7.4
Severability. If
any term, provision, covenant or restriction of this Agreement is held by 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. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
7.5
Entire
Agreement. This Agreement (including the documents set forth
in
any
exhibits hereto) contains the entire understanding of the parties with respect
to the transactions contemplated hereby.
7.6
Counterparts. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more of the counterparts have been signed by each party and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
7.7
Notices. All
notices, consents, requests, instructions, approvals and other communications
hereunder shall be in writing and shall be deemed to have been duly given (a) if
personally delivered; (b) if sent by telecopy or facsimile (except for legal
process); or (c) if mailed by overnight or by first class, certified or
registered mail, postage prepaid, return receipt requested, and properly
addressed as follows:
To the Company:
Bancorp Rhode Island,
Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx
00000
Attn: Xxxxxxx X. Xxxxxxx, President
& CEO
Facsimile: (000)
000-0000
with a copy to:
Xxxxxxxx X. Xxxxxxx,
Esq.
Xxxxxxxx, Xxxxx & Xxxxxx
LLP
00 Xxxxxxx Xxxxx, Xxxxx
0000
Xxxxxxxxxx, Xxxxx Xxxxxx
00000
Facsimile: (000)
000-0000
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To the PL Capital
Parties:
PL
Capital, LLC
00 Xxxx
Xxxxxxxxx Xxxxxx
Xxxxx
00
Xxxxxxxxxx,
XX 00000
Attn:
Xxxx Xx. Xxxxxx
Facsimile:
(000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxx & Xxxxxxx LLP
000 Xxxx
Xxxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
Such
addresses may be changed, from time to time, by means of a notice given in the
manner provided above. Notice will conclusively be deemed to have been given
when personally delivered (including, but not limited to, by messenger or
courier); or if given by mail, on the third day after being sent by first class,
certified or registered mail; or if given by Federal Express or other similar
overnight service, on the date of delivery; or if given by telecopy or facsimile
machine during normal business hours on a business day, when confirmation of
transmission is indicated by the sender’s machine; or if given by telecopy or
facsimile machine at any time other than during normal business hours on a
business day, the first business day following when confirmation of transmission
is indicated by the sender’s machine. Notices, requests, demands and other
communications delivered to legal counsel of any party hereto, whether or not
such counsel shall consist of in-house or outside counsel, shall not
constitute
duly
given notice to any party hereto.
7.8
Amendments; Waivers,
etc. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth
in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies of any party based upon, arising
out of or otherwise in respect of any inaccuracy or breach of any
representation, warranty, covenant or agreement or failure to fulfill any
condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement as to which there is no inaccuracy or
breach.
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7.9 Further
Assurances. The PL Capital Parties and the Company agree to
take, or cause to be taken, all such further or other actions as shall
reasonably be necessary to make effective and consummate the transactions
contemplated by this Agreement.
7.10 Successors and
Assigns. All covenants and agreements contained herein shall
bind and inure to the benefit of the parties hereto and their respective
successors and assigns.
7.11 Governing
Law. This Agreement, and the rights of the parties hereunder,
shall be governed by and construed in accordance with the laws of the State of
Rhode Island without reference to its conflicts of laws rules.
7.12 Venue. The
parties hereby agree that all actions or proceedings arising directly or
indirectly hereunder, whether instituted by the PL Capital Parties or the
Company, shall be litigated in courts having situs within the State of Rhode
Island, County of Providence, and the each of the parties hereby expressly
consents to the jurisdiction of any local, state or federal court located within
said state and county, and consent that any service of process in such action or
proceeding may be made by personal service upon the parties wherever such
parties may be located, respectively, or by certified or registered mail
directed to the parties at his/its last known address. The parties hereby waive
any objection based on forum non conveniens and any
objection
to venue of any action instituted hereunder.
7.13 Waiver of Jury
Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OR ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO
THIS
AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
[Signatures Appear on Following
Page]
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IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed as of the date first written
above.
COMPANY:
Bancorp
Rhode Island, Inc.
By:
/s/Xxxxxxx X.
Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
President & CEO
PL CAPITAL
PARTIES:
Financial
Edge Fund, L.P.
By: PL
Capital, LLC, its General Partner
By:
/s/Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Managing Member
By:
/s/Xxxxxxx X.
Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Managing Member
Financial
Edge-Strategic Fund, L.P.
By: PL
Capital, LLC, its General Partner
By:
/s/Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Managing Member
By:
/s/Xxxxxxx X.
Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Managing Member
PL
Capital/Focused Fund, L.P.
PL Capital/Focused Fund,
L.P.
By: PL
Capital, LLC, its General Partner
By:
/s/Xxxx X.
Xxxxxx
Name:
Xxxx X. XxxxxxTitle:
Managing Member
By:
/s/Xxxxxxx X.
Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Managing Member
Goodbody/PL Capital, L.P.
By:
Goodbody/PL Capital, LLC, its General Partner
By:
/s/Xxxx X.
Xxxxxx
Name:
Xxxx X. XxxxxxTitle:
Managing Member
By:
/s/Xxxxxxx X.
Xxxxxxx
Name:
Xxxxxxx X. XxxxxxxTitle:
Managing Member
Goodbody/PL Capital, LLC
By:
/s/Xxxx X.
Xxxxxx
Name:
Xxxx X. XxxxxxTitle:
Managing Member
By:
/s/Xxxxxxx X.
Xxxxxxx
Name:
Xxxxxxx X. XxxxxxxTitle:
Managing Member
PL Capital Advisors, LLC
By:
/s/Xxxx X.
Xxxxxx
Name:
Xxxx X. XxxxxxTitle:
Managing Member
By:
/s/Xxxxxxx X.
Xxxxxxx
Name:
Xxxxxxx X. XxxxxxxTitle:
Managing Member
PL Capital, LLC
By:
/s/Xxxx X.
Xxxxxx
Name:
Xxxx X. XxxxxxTitle:
Managing Member
By:
/s/Xxxxxxx X.
Xxxxxxx
Name:
Xxxxxxx X. XxxxxxxTitle:
Managing Member
/s/Xxxx X. Xxxxxx
Xxxx X.
Xxxxxx
/s/Xxxxxxx X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx
Exhibit
A
Form
of Majority Voting Policy
BANCORP
RHODE ISLAND, INC.
MAJORITY
VOTING POLICY
Commencing
with the Bancorp Rhode Island, Inc. (the “Company”) 2009
director nominations and elections, this Majority Voting Policy shall go into
effect for the Company. As a requirement of nomination and in accordance with
RIGL §7-1.2-802 and any successor statute, each director nominee of the Company
shall tender his or her irrevocable resignation as a director of the Company and
Bank Rhode Island, the Company’s wholly-owned subsidiary (the “Bank”), which
resignations shall be conditioned upon the director receiving a Majority
Withhold Vote (as defined below) for election to the Company’s Board of
Directors (the “Board”). The Board
shall nominate for election as a director only candidates who agree to tender
such irrevocable resignations that will be effective upon (i) the failure to
receive the required vote at the next annual meeting at which they face
election, and (ii) Board acceptance of such resignation.
In the
case of an uncontested election of directors, if a Company nominee for election
as a director of the Company receives more “Withhold” votes than “For” votes (a
“Majority Withhold
Vote”), the nominee’s resignation from the Company shall be delivered for
consideration by the Company’s Governance and Nominating Committee (the “Committee”) and the
Board. An uncontested election shall be any election of directors at
which the number of nominees for election does not exceed the number of
positions on the Board to be filled by election at the meeting, and shall
include any election where (i) by the record date for the meeting, none of the
Company’s shareholders have provided the Company with notice of an intention to
nominate one or more candidates to compete with the Board’s nominees in a
director election for the meeting, or (ii) the Company’s shareholders have
withdrawn all such nominations by the day before the Company mails its notice of
meeting to shareholders in connection with any meeting at which directors are to
be elected. In a contested election, this Majority Voting Policy
shall not apply and nominees shall be elected by plurality voting.
Abstentions
will not be considered in the determination of a Majority Withhold
Vote.
The
following procedures shall apply when considering any director resignation
tendered in connection with a Majority Withhold Vote:
The
Committee shall promptly consider such tendered resignation and recommend to the
Board the action to be taken with respect to such tendered resignation. The
recommendation of the Committee may be, among other things, to (i) accept
the resignation; (ii) defer acceptance of the resignation until a
replacement director with certain necessary qualifications held by the subject
director can be identified and elected to the Board; (iii) reject the
resignation, but address what the Committee believes to be the underlying
reasons for the failure of the director to be re-elected; (iv) reject the
resignation, but resolve that the director will not be re-nominated in the
future for election; or (v) reject the resignation. If the
Committee recommends that the Board accept the tendered resignation, the
Committee shall also recommend to the Board whether to fill the vacancy
resulting from the resignation or to reduce the size of the Board.
In
considering a tendered resignation, the Committee is authorized to consider all
factors it deems relevant to the best interests of the Company and its
shareholders, including (i) any stated reasons why shareholders voted
“withhold” with respect to the subject director; (ii) what the Committee
believes to be the underlying reasons for the Majority Withhold Vote, including
whether these reasons relate to the incumbent director’s performance as a
director; whether these reasons relate to the Company or another company; and
whether these reasons are curable and alternatives for effecting any cure;
(iii) the tenure and qualifications of the director; (iv) the
director’s past and expected future contributions to the Company; (v) the
other policies of the Board; (vi) the overall composition of the Board,
including whether accepting the resignation would cause the Company to fail to
meet any applicable requirements of the Securities and Exchange Commission, the
NASDAQ Stock Market or any other regulatory or self-regulatory requirements; and
(vii) whether the resignation of the director could result in the triggering of
change in control or similar provisions under any contract by which the Company
is bound or any benefit plan of the Company and, if so, the potential impact
thereof.
The Board
will act on the recommendation of the Governance and Nominating Committee no
later than 90 days following certification of the shareholder vote for the
shareholders’ meeting at which the director received a Majority Withhold
Vote. In considering the Committee’s recommendation, the Board is
authorized to consider the information and factors considered by the Committee
and any additional information and factors as the Board deems relevant to the
best interests of the Company and its shareholders. In the event the
Board determines to accept any director’s resignation from the Board in
connection with this Majority Voting Policy, such director’s resignation from
the Bank’s Board of Directors shall also be accepted. Following the
Board’s decision, the Company will promptly file a Current Report on Form 8-K or
issue a press release describing the Board’s decision and providing an
explanation of the process by which the decision was reached and, if applicable,
the reasons for rejecting the tendered resignation.
Any
director who receives a Majority Withhold Vote will not participate in the
Committee’s or the Board’s consideration of his or her tendered resignation
provided that any director may provide to the Committee and/or the Board any
information or a statement he or she deems relevant to the Committee’s and/or
the Board’s consideration of his or her tendered resignation.
In the
event that a majority of the members of the Committee receive a Majority
Withhold Vote, then, a committee comprised of all independent directors, which
shall be appointed by the Board, shall consider and act upon the tendered
resignations in accordance with the factors described above; provided that each
independent director required to tender his or her resignation pursuant to this
Majority Voting Policy shall recuse himself or herself from consideration of his
or her resignation.
The Board
believes this policy enhances its accountability to shareholders by formalizing
the consequences of a Majority Withhold Vote and demonstrating its
responsiveness to director election results, while at the same time protecting
the long-term interests of the Company and its shareholders.
3
This
Majority Voting Policy will be summarized in each proxy statement relating to
the election of directors of the Company.
4
