AGREEMENT
---------
This Agreement is made by and between Central Bancorp, Inc. ("Central
Bancorp"), Xxxxx X. Xxxx, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxxxx,
Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxx, Xxxx
X. Xxxxxx, Xx., the Xxxxxx X. Xxxxxxx Family Limited Partnership, L.P., the
Central Cooperative Bank Employee Stock Ownership Plan Trust and Central
Cooperative Bank (collectively, the "Central Bancorp Parties") and PL Capital,
LLC, Financial Edge Fund, L.P., Financial-Edge Strategic Fund, L.P., Goodbody/PL
Capital, L.P., Goodbody/PL Capital, LLC ("PL Capital"), Xxxxxxx Xxxxxxx, Xxxx X.
Xxxxxx, Xxxxxxx X. Fates, the Estate of Xxxxxxx Xxxxxxxx (collectively, the "PL
Capital Parties") on behalf of themselves and their respective affiliates (the
Central Bancorp Parties and the PL Capital Parties together, collectively, the
"Parties"). The Parties agree that they have entered into this Agreement in
order to avoid the expense and inconvenience of continued litigation captioned
Xxxxxxx, et No. 02-11931-EFH (D. Mass.); Central Bancorp, Inc., et al. v. PL
Capital, LLC, et al., Civ. No. 03-10179-EFH (D. Mass.); Xxxxxxx, et al. v.
Central Bancorp, Inc., et al., Civ. No. 03-0547-BLS (Mass. Super. Ct.); PL
Capital, LLC, et al. v. Central Bancorp, Inc., et al., Civ. No. 03-0554-BLS
(Mass. Super. Ct.); Central Bancorp, Inc., et al. v. PL Capital, LLC, et al.,
Civ. No. 03-2287-BLS (Mass. Super. Ct.); and Central Bancorp, Inc., et al. v. PL
Capital, LLC, et al., Civ. No. 03-3585-BLS (Mass. Super. Ct.) (the "Litigation")
and without admitting any liability. 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. Board Expansion And Membership
Upon the execution of this Agreement, the board of directors of Central
Bancorp will be expanded from its present eight member size to ten members, and
Xxxxxxx Xxxxxxx will be elected director of Central Bancorp to serve the
remaining term of Xxxxxxx X. Xxxxxx who is retiring as a director. Xx. Xxxxxxx
will therefore be added to the Company's slate of directors nominated for
election to a three-year term to be voted upon at this year's annual meeting
dated September 30, 2003, or any adjournment or postponement thereof. At all
times from and after the date of this Agreement, Central Bancorp's board will
also appoint, at its sole discretion, all other persons to fill remaining
director positions or vacancies on the ten member Central Bancorp board of
directors. Messrs. Xxxxxxx and Fates shall receive the normal compensation and
benefits paid to directors of Central Bancorp and Central Cooperative Bank while
they serve as directors thereof.
Upon the execution of this Agreement, the board of directors of Central
Cooperative Bank will be expanded to ten members, Messrs. Xxxxxxx Fates and
Xxxxxxx Xxxxxxx will be elected as two of those members and the board of Central
Bancorp, at its sole discretion, will elect such other persons to fill remaining
positions or vacancies on that board as it deems fit.
2. Standstill
The PL Capital Parties each agree that, for so long as Xxxxxxx Fates and/or
Xxxxxxx Xxxxxxx (or, in the event of death, disability or resignation of either
of them, a substitute nominee of PL Capital whose substitution shall be subject
to the approval of the Central Bancorp Board of Directors, such approval not to
be unreasonably withheld) remains a director of Central Bancorp or Central
Cooperative Bank or PL Capital beneficially owns 5 percent or more of the
outstanding Central Bancorp shares (based on the 1,663,133 shares outstanding at
the date of execution of this Agreement), after the date hereof (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 Central 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 Central Bancorp ("Securities"), provided that
PL Capital may sell shares without the prior approval of the Board of Directors
of Central Bancorp subject to the Right of First Refusal in Paragraph 8 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 Central Bancorp, except pursuant to Central Bancorp's
publication of its proxy statement;
(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
Central 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 Central Bancorp or (b) direct or
indirect rights, warrants or options to acquire any assets of Central 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 Central
Bancorp;
(vi) otherwise act, alone or in concert with others (except in their
expressing views as directors at meetings of the board of directors or a
committee of the board of directors of Central Bancorp or Central Cooperative
Bank), to seek to offer to Central Bancorp or any of its stockholders any
business combination, restructuring, recapitalization or similar transaction to
or with Central Bancorp or otherwise seek, alone or in concert with others to
control or change the management, board of directors or policies of Central
Bancorp or nominate any person as a director of Central Bancorp who is not
nominated by the then incumbent directors, or propose any matter to be voted
upon by the stockholders of Central 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; and
At the September 30, 2003 Central Bancorp annual meeting, PL Capital agrees to
vote the 154,268 shares it presently beneficially owns in favor of the nominees
for election or reelection as director of Central Bancorp selected by the board
of directors of Central Bancorp and otherwise to support such director
candidates, and to vote against the election of any candidates not so nominated
by the board of directors of Central Bancorp. Thereafter, during the Standstill
Period, the PL Capital Parties agree to vote all shares they or any of them
beneficially own of Central Bancorp in favor of the nominees for election or
reelection as director of Central Bancorp selected by the board of directors of
Central Bancorp and agree otherwise to support such director candidates, and
agree to vote against the election of any candidates not so nominated by the
board of directors of Central Bancorp.
3. Re-nomination
The board of directors of Central Bancorp agrees to renominate each of
Xxxxxxx Fates and Xxxxxxx Xxxxxxx (or, in the event of death, disability or
resignation of either of them, a substitute nominee of PL Capital whose
substitution shall be subject to the approval of the Central Bancorp Board of
Directors, such approval not to be unreasonably withheld) as a director of
Central Bancorp and to reelect each of them as a director of Central Cooperative
Bank so long as (i) he does not seasonably give Notice (as defined herein) that
he does not seek such renomination or reelection at the time of such occurrence
and (ii) PL Capital beneficially owns 5 percent or more of Central Bancorp's
outstanding shares.
4. Xxxxxxx Financial Advisors
With respect to Xxxxx X. Xxxxxxx and Xxxxxxx Financial Advisors, Inc., the
PL Capital Parties agree that Central Bancorp's board of directors, or a
committee thereof, may from time to time engage Xxxxxxx Financial Advisors, Inc.
and/or Xxxxx X. Xxxxxxx as financial advisor without objection of any of the PL
Capital Parties, and Messrs. Fates and Xxxxxxx may express their views thereon
as directors at meetings of the board of directors or a committee of the board
of directors of Central Bancorp or Central Cooperative Bank.
5. ESOP
The Central Cooperative Bank Employee Stock Ownership Plan ("ESOP") may use
its present $1,941,797.40 loan authorization from Central Bancorp to acquire
shares from any of the PL Capital Parties pursuant to the Right of First Refusal
granted by Paragraph 8 of this Agreement or to acquire shares sold by former
employees or retirees of Central Bancorp or Central Cooperative Bank to maintain
the ESOP's present level of ownership as a percentage of the outstanding Central
Bancorp shares (in addition to participants' reinvestment of dividends). Other
than the ESOP purchasing PL Capital shares or purchasing shares sold by former
employees or retirees (and participants' reinvestment of dividends), during the
next two years, the ESOP will not acquire additional Central Bancorp shares,
unless the PL Capital Parties' beneficial ownership of Central Bancorp shares
becomes less than 5 percent of the outstanding Central Bancorp shares (based on
the 1,663,133 shares outstanding at the date of execution of this Agreement).
6. Non-Disparagement
During the Standstill Period, the PL Capital Parties agree not to disparage
any of the Central Bancorp Parties or any officers, directors (including
director nominees) or employees of Central Bancorp or Central Cooperative Bank
in any public forum, and the Central Bancorp Parties agree not to disparage any
of the PL Capital Parties or any officers or employees of PL Capital in any
public forum.
7. PL Capital Nominees
Provided the respective boards of directors are expanded to ten members
each and Xxxxxxx Xxxxxxx is appointed to the boards of directors of Central
Bancorp and he and Xxxxxxx Fates are appointed to the board of directors of
Central Cooperative Bank and renominated as provided in this Agreement, pursuant
to this Agreement, the PL Capital Parties agree not to nominate any other
candidate for director of either entity at any time (except, in the event of
death, disability or resignation of either of them, a substitute nominee of PL
Capital whose substitution shall be subject to the approval of the Central
Bancorp Board of Directors, such approval not to be unreasonably withheld).
8. Right of First Refusal
The PL Capital Parties, and each of them, hereby grant an irrevocable Right
of First Refusal to Central Bancorp to purchase at the then prevailing market
price on the date of exercise, any or all shares of Central Bancorp stock
beneficially owned by any of the PL Capital Parties. 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 Central Bancorp
of intent to sell together with the quantity of shares to be sold. Central
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 Central 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 Central 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 Central Bancorp to give timely Notice to such selling PL Capital
Party will excuse PL Capital 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 Central 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.
9. Release Of The Central Bancorp Parties
Except for the rights and obligations expressly created or reserved by this
Agreement, each of the PL Capital Parties hereby releases, acquits and forever
discharges each of the Central Bancorp Parties from any and all causes of
action, claims, damages, costs and/or attorneys' fees from the beginning of time
to the present, known or unknown, that any of the PL Capital Parties ever had,
now has or hereafter may acquire against any of the Central Bancorp Parties that
were asserted or could have been asserted in the Litigation.
10. Release Of The PL Capital Parties
Except for the rights and obligations created or reserved by this
Agreement, each of the Central Bancorp Parties hereby releases, acquits and
forever discharges each of the PL Capital Parties from any and all causes of
action, claims, damages, costs and/or attorneys' fees from the beginning of time
to the present, known or unknown, that any of the Central Bancorp Parties ever
had, now has or hereafter may acquire against any of the PL Capital Parties that
were asserted or could have been asserted in the Litigation.
11. Notice of Dismissal
Immediately upon delivery of the executed Agreement, counsel for the
Central Bancorp Parties shall execute a Notice Of Voluntary Dismissal With
Prejudice, without costs or attorneys' fees, in the form attached as Exhibit A
hereto (the "Notice of Dismissal"), and file such Notice of Dismissal in the
Massachusetts Superior Court in and for Suffolk County in Civil Action No.
03-3585-BLS. Counsel for the Parties shall execute a Stipulation Of Dismissal Of
Claims With Prejudice, without costs or attorneys' fees, in the form attached as
Exhibit B hereto (the "Stipulation of Dismissal"), and file such Stipulation of
Dismissal in the United States District Court for the District of Massachusetts
in Civil Action No. 03-10179-EFH. Counsel for the Parties shall execute a
Stipulation Of Waiver Of Appeal in the form attached as Exhibit C hereto (the
"Stipulation of Waiver of Appeal"), and file such Stipulation of Waiver of
Appeal in the Massachusetts Superior Court in and for Suffolk County in Civil
Action Nos. 03-0547-BLS, 03-0554-BLS and 03-2287-BLS. Central Bancorp will fax
and mail to counsel for PL Capital, Xxxxxxx X. Xxxxxxxx, file-stamped copies of
the Notice of Dismissal, Stipulation of Dismissal and Stipulation of Waiver of
Appeal upon filing.
12. Bylaw And Rights Plan
Effective upon the execution of this Agreement, the board of directors of
Central Bancorp shall rescind the amendment to the Central Bancorp Bylaws
adopted July 24, 2003 and shall exempt the PL Capital Parties from Amendment No.
3 to the Central Bancorp Shareholder Rights Agreement adopted July 24, 2003.
13. Other Consideration
In consideration of the Standstill, the Right of First Refusal and other
promises and undertakings herein by PL Capital, Central Bancorp shall pay to PL
Capital $400,000 in immediately available funds upon the execution of this
Agreement.
14. 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.
15. 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.
16. 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 Commonwealth of
Massachusetts 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 Business Litigation Session of the Massachusetts
Superior Court in and for Suffolk County, or in the ordinary session of that
Court if the Business Litigation Session is discontinued.
17. 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.
18. 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.
19. Non-Assignment
The Parties represent and warrant that they are the sole owners of the
claims released by Paragraphs 9 and 10 hereof, respectively, that they are
relinquishing such claims by executing this Agreement, and that no other person
or entity has any interest in those claims.
20. Documents Exchanged In Connection With The Litigation
Copies of documents exchanged in the Litigation which were generated by one
party but which are in the possession of another party may be retained but used
only in relation to Central Bancorp and not for any other subject matter.
21. Disclosure Of This Agreement
The parties contemplate that PL Capital will file a Schedule 13D amendment
attaching this Agreement, that Central Bancorp will file a Form 8-K attaching
this Agreement and that 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 Central Bancorp stating in substance that the
matter was settled, factually summarizing this Agreement and referring to the
Form 8-K filing.
22. 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).
23. 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 Central Bancorp Parties:
Xxxx X. Xxxxxxx, President
Central Bancorp, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxxxx
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
If to the PL Capital Parties:
Xxxx X. Xxxxxx
PL Capital, LLC
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 00
Xxxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxx
Xxxxx & Lardner
000 Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
IN WITNESS WHEREOF, the Parties hereto have each executed this Agreement on the
date set forth below.
Dated: August 4, 2003
For: PL Capital, LLC For Central Bancorp, Inc.:
Financial Edge Fund, L.P.
Financial-Edge Strategic /s/Xxxx X. Xxxxxxx
Fund, L.P. -------------------------------
Goodbody/PL Capital, L.P. By: Xxxx X. Xxxxxxx
Goodbody/PL Capital, LLC President
/s/Xxxxxxx Xxxxxxx
-------------------------------
By: Xxxxxxx Xxxxxxx For Central Cooperative Bank:
Managing Member
/s/Xxxx X. Xxxxxxx
-------------------------------
/s/Xxxx X. Xxxxxx By: Xxxx X. Xxxxxxx
------------------------------- President
By: Xxxx X. Xxxxxx
Managing Member
For Xxxxxxx Xxxxxxx: For Xxxxx X. Xxxx:
/s/Xxxxxxx Xxxxxxx /s/ Xxxxx X. Xxxx
------------------------------- -------------------------------
Xxxxxxx Xxxxxxx Xxxxx X. Xxxx
For Xxxx X. Xxxxxx:
For Xxxxxxx X. Xxxxxx:
/s/Xxxx X. Xxxxxx
------------------------------- /s/Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxx -------------------------------
Xxxxxxx X. Xxxxxx
For Xxxxxxx X. Fates:
For Xxxx X. Xxxxxx:
/s/Xxxxxxx X. Fates
------------------------------- /s/Xxxx X. Xxxxxx
Xxxxxxx X. Fates -------------------------------
Xxxx X. Xxxxxx
For the Estate of Xxxxxxx Xxxxxxxx:
For Xxxx X. Xxxxxxx:
/s/Xxx Xxxxxxxx
------------------------------- /s/Xxxx X. Xxxxxxx
-------------------------------
Name: Xxx Xxxxxxxx Xxxx X. Xxxxxxx
Title: Executor
For Xxxxxx X. Xxxxxxx:
/s/Xxxxxx X. Xxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxx
For Xxxxxxx X. Xxxxxx:
/s/Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
For Xxxxx X. Xxxxxxxx
/s/Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
For Xxxxx X. Xxxxxxx
/s/Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx
For Xxxx X. Xxxxxx, Xx.
/s/Xxxx X. Xxxxxx, Xx.
-------------------------------
Xxxx X. Xxxxxx, Xx.
For the Xxxxxx X. Xxxxxxx Family Limited
Partnership, L.P.:
/s/Xxxxxx X. Xxxxxxx
-------------------------------
By: Xxxxxx X. Xxxxxxx
General Partner
For the Central Cooperative Bank
Employee Stock Ownership Plan Trust:
/s/Xxxxxxx X. Xxxxxx
-------------------------------
By: Xxxxxxx X. Xxxxxx, Trustee
/s/Xxxxxxx X. Xxxxxx
-------------------------------
By: Xxxxxxx X. Xxxxxx, Trustee
