SHAREHOLDER AGREEMENT
EXHIBIT
10.1
This Agreement ("Agreement") dated the
3rd
day of April 2009, is made by and among Xxxxx Qualified Partners, LLC, Xxxxxx X.
Xxxxxx, FJ Capital Long/Short Equity Fund LLC and Xxxxxx X. Xxxxxxxx
(collectively the "Shareholders" and individually each a "Shareholder"), and GS
Financial Corp. (the "Company") and Guaranty Savings Bank (the
"Bank").
RECITALS
WHEREAS, the Company, the Bank
and the Shareholders 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 the
Shareholders. The Shareholders hereby represent and warrant to
the Company and the Bank as follows:
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(a)
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The
Shareholders have beneficial ownership of an aggregate amount of 198,223
shares of the Company's common stock ("Common Stock"), except with respect
to 17,850 shares held by RAM T., LP to which Xx. Xxxxxx claims dispositive
power, but not the power to vote, and have full and complete authority to
enter into this Agreement and to bind the entire number of shares of the
capital stock of the Company in which they have a beneficial ownership
interest to the terms of this Agreement, and this Agreement constitutes a
valid and binding agreement of the
Shareholders;
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(b)
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The
Shareholders have full power and authority to enter into and perform their
obligations under this Agreement, and the execution and delivery of this
Agreement by the Shareholders have been duly authorized by the principals
of the Shareholders. This Agreement constitutes a valid and
binding obligation of each of the Shareholders, and the performance of its
terms shall not constitute a violation of any limited partnership
agreement, operating agreement, bylaws, or any agreement or instrument to
which the Shareholders or any Shareholder is a
party;
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(c)
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There
are no other persons who, by reason of their personal, business,
professional or other arrangement with the Shareholders or any
Shareholder, have agreed, in writing or orally, explicitly or implicitly,
to take any action on behalf of or in lieu of the Shareholders or any
Shareholder that would be prohibited by this Agreement;
and
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(d)
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There
are no arrangements, agreements or understandings between the Shareholders
or any Shareholder and the Company and the Bank other than as set forth in
this Agreement.
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2. Representations and Warranties of the
Company and the Bank. The Company and the Bank hereby
represent and warrant to the Shareholders as follows:
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(a)
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The
Company and the Bank have full power and authority to enter into and
perform their obligations under this Agreement, and the execution and
delivery of this Agreement by the Company and the Bank have been duly
authorized by the Boards of Directors of the Company and the Bank and
requires no other Board of Directors or shareholder
action. This Agreement constitutes a valid and binding
obligation of the Company and the Bank, and the performance of its terms
does not constitute a violation of the Articles of Incorporation or Bylaws
of the Company and the Charter and Bylaws of the Bank;
and
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(b)
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There
are no arrangements, agreements or understandings between the Company, the
Bank and the Shareholders or any Shareholder, other than as set forth in
this Agreement.
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3. Covenants.
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(a)
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During
the term of this Agreement, the Company and the Bank covenant and agree as
follows:
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(i) Company
Directorship. In connection with the approval of this
Agreement, no later than the date the Company's proxy materials for the 2009
Annual Meeting of Shareholders are first mailed, the Company shall take all
required action to appoint Xxxxxx X. Xxxxxxxx to the class of directors of the
Company for a two-year term expiring in 2011;
(ii) Bank
Directorship. The Company as the sole shareholder of the Bank
shall elect Xx. Xxxxxxxx at the Bank's 2009 Annual Meeting of Shareholders to
the Board of Directors for a two-year term expiring at the Bank's annual meeting
in 2011;
(iii) Committees. For so
long as Xx. Xxxxxxxx is a member of the Boards of Directors of the Company and
the Bank, the Boards of Directors will appoint Xx. Xxxxxxxx to the Audit
Committee and the Compensation Committee; and
(iv) Compensation and
Benefits. Xx. Xxxxxxxx shall be entitled to receive the
compensation and benefits available to directors of the Company and the
Bank.
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(b)
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During
the term of this Agreement, the Shareholders and each Shareholder
individually covenant and agree as
follows:
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(i) Withdrawal of Notice of Intent to
Nominate Three Directors and Schedule 13D Amendment. Promptly
upon the execution and delivery of this Agreement and the nomination of Xx.
Xxxxxxxx to serve as a member of the Boards of Directors of the Company and the
Bank, the Shareholders shall take all necessary action to withdraw their letters
of intent to nominate three directors dated February 19, 2009 and March 10,
2009, including the execution and delivery of the form of letter agreement
attached hereto as Appendix A by and
among the Shareholders and Xx. Xxxxxx X. Xxxxx (the "Letter Agreement"); and
shall amend the Schedule 13D on file with the Securities and Exchange Commission
to reflect their withdrawal of the nominations and the execution of the Letter
Agreement, which Schedule 13D amendment shall be subject to the prior review and
comment of the Company;
(ii) Nominations or Shareholder
Proposals. Neither the Shareholders nor any Shareholder
individually will initiate, propose or submit any shareholder proposal to the
Company, nor encourage or otherwise solicit or induce or attempt to induce any
other person to initiate, propose or submit any shareholder proposal to the
Company, unless such action is supported by a majority of the Company's Board of
Directors. Neither the Shareholders nor any Shareholder individually
will seek election to, or seek to place a representative or other affiliate or
nominee on, or induce or attempt to induce or encourage any other person to
nominate one or more persons to the Company's Board of Directors (other than
with respect to the nomination of Xx. Xxxxxxxx) or seek removal of any member of
the Company's Board of Directors unless such action is supported by a majority
of the Company's Board of Directors. Neither the Shareholders nor any
Shareholder individually will:
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a.
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(A)
join with or assist any person or entity, directly or indirectly, in
opposing, or make any statement in opposition to, any proposal or director
nomination submitted by the Company's Board of Directors to a vote of the
Company's shareholders, or (B) join with or assist any person or entity,
directly or indirectly, in supporting or endorsing (including supporting,
requesting or joining in any request for a meeting of shareholders in
connection with), or make any statement in favor of, any proposal
submitted to a vote of the Company's shareholders that is opposed by the
Company's Board of Directors; or
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b.
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vote
for any nominee or nominees for election to the Board of Directors of the
Company other than those nominated or supported by the Company's Board of
Directors or consent to become a nominee for election as a director of the
Company unless nominated or supported by a majority of the Company's Board
of Directors;
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(iii) Board Nominees and
Proposals. The Shareholders and each Shareholder individually
hereby agree to vote all of the shares of Common Stock which they directly or
indirectly beneficially own and have voting power over in favor of (i) nominees
to the Board of Directors of the Company recommended by the board and (ii)
proposals submitted to the Company’s shareholders which have been approved by a
majority of the Company’s Board of Directors, with the exception of any new
stock compensation plans or amendments to any existing stock compensation plans,
other than tax-qualified plans.
(iv) Solicitations. Neither
the Shareholders nor any Shareholder individually will solicit proxies or
written consents or assist or participate in any other way, directly or
indirectly, in any solicitation of proxies or written consents, or otherwise
become a “participant” in a “solicitation,” or assist any “participant” in a
“solicitation” (as such terms are defined in Instruction 3 of Item 4 of Schedule
14A and Rule 14a-1 of Regulation 14A, respectively, under the Securities
Exchange Act of 1934) in opposition to any recommendation or proposal of the
Company's Board of Directors, or recommend or request or induce or attempt to
induce any other person to take any such actions, or seek to advise, encourage
or influence any other person with respect to the voting of (or the execution of
a written consent in respect of) the Company's Common Stock, or execute any
written consent in lieu of a meeting of the holders of the Company's Common
Stock or grant a proxy with respect to the voting of the capital stock of the
Company to any person or entity other than the Board of Directors of the
Company;
(v) No Company Transaction
Proposals. Neither the Shareholders nor any Shareholder
individually will (A) propose or seek to effect a merger, consolidation,
recapitalization, reorganization, sale, lease, exchange or other disposition of
substantially all the assets of, or other business combination involving, or a
tender or exchange offer for securities of, the Company or the Bank or any
material portion of the Company's or the Bank's business or assets or any other
type of transaction that would result in a change in control of the Company (any
such action described in this clause (A) is a “Company Transaction Proposal”),
(B) seek to exercise any control or influence over the management of the Company
or the Boards of Directors of the Company or the Bank or any of the businesses,
operations or policies of the Company or the Bank; provided, however, that Xx.
Xxxxxxxx, in his capacity as a director of the Company and the Bank, shall not
be restricted or limited in his ability to take action to fulfill his fiduciary
duties as a director, (C) other than a presentation to the Company's Board of
Directors, present to the Company, its shareholders or any third party any
proposal constituting or that could reasonably be expected to result in a
Company Transaction Proposal, or (D) seek to effect a change in control of the
Company. None of the foregoing restrictions shall prevent the
Shareholders from engaging in the foregoing restricted actions if any such
action is supported by a majority of the Company's Board of
Directors. In addition, the Shareholders and each Shareholder
individually will not:
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a.
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publicly
suggest or announce their willingness or desire to engage in a transaction
or group of transactions or have another person engage in a transaction or
group of transactions that would constitute or could reasonably be
expected to result in a Company Transaction Proposal or take any action
that might require the Company to make a public announcement regarding any
such Company Transaction Proposal unless such action is supported by a
majority of the Company's Board of Directors;
or
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b.
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initiate,
request, induce, encourage or attempt to induce or give encouragement to
any other person (other than to members of the Company's Board of
Directors) to initiate any proposal constituting or that can reasonably be
expected to result in a Company Transaction Proposal, or otherwise provide
assistance to any person who has made or is contemplating making, or enter
into discussions or negotiations with respect to, any proposal
constituting or that can reasonably be expected to result in a Company
Transaction Proposal; and
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(vi) Sale of 1% or More of Company Common
Stock; Sale to a 5% Shareholder. In the event that at any time
from the date of this Agreement and through the Term of this Agreement, the
Shareholders intend to sell 1% or more of the Company's outstanding Common
Stock, based on the Company's most recent public filing, in a block trade, in a
private sale or in the open market, or the Shareholders intend to sell shares of
Company Common Stock to any person the Shareholders believe, after reasonable
inquiry, would beneficially own immediately after any such sale or transfer more
than 5% of the outstanding shares of the Company Common Stock, the Shareholders
will provide written notice to the Company of such intent, which notice shall
include the proposed sale price, and the Company shall then have the right to
purchase the Common Stock from the Shareholders at the proposed sale price
(“Right of First Refusal”). Within two (2) business days following
receipt of written notice from the Shareholders, the Company will provide
written notice to the Shareholders as to whether or not the Company will
exercise its Right of First Refusal. The Company can exercise its
Right of First Refusal in full or in part in its sole discretion. If
the Company chooses to exercise the Right of First Refusal in full or in part,
settlement of the purchase of the shares being sold by the Shareholders pursuant
to the Right of First Refusal will be within three (3) business days of such
exercise, with payment by wire transfer to an account identified by the
Shareholders. If the Company does not choose to exercise the Right of
First Refusal, or does not respond to the notice within two (2) business days,
then the selling Shareholder shall be free to sell the shares to the third
party.
4. Public Statements;
Litigation. 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; and
provided there has been no material breach of this Agreement by the Company or
the Bank, none of the Shareholders shall, directly or indirectly:
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(a)
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make
any statement, public or otherwise, in opposition to, or that would
reflect negatively against, the Company, the Bank, the Board of Directors
of the Company or the Bank, or any of the directors or officers of the
Company or the Bank;
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(b)
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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 the Company or the Bank,
or any of their respective officers or directors;
or
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(c)
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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 4 if undertaken by any of them. In addition, during the term of
this Agreement, provided there has been no material breach of this
Agreement by the Shareholders or any Shareholder, neither the Company nor
any officer or director of the Company shall make any statement, public or
otherwise, in opposition to, or that would reflect negatively against the
Shareholders or any Shareholder, 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 Shareholders or any Shareholder
individually.
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5. Remedies. The
Company, the Bank and the Shareholders 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 the
Company and the Bank is that in the event any Shareholder does not vote in favor
of management's nominees during the term of this Agreement, at the request of
the Company's and the Bank’s Board of Directors, Xx. Xxxxxxxx shall resign from
the Boards of Directors of the Company and the Bank immediately following the
related Annual Meeting of Shareholders of the Company. 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 reasonable 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.
6. Term. This
Agreement shall terminate as of June 30, 2011, or if earlier, the date on which
any of the following occurs: (i) the Company ceases to exist by reason of
merger, sale of assets, liquidation, exchange of shares, or otherwise, or (ii)
Xx. Xxxxxxxx ceases to be a member of the Company’s or the Bank’s Board of
Directors other than by reason of his personal resignation (including any
resignation pursuant to Section 5 above), provided that this Agreement shall
remain in effect if the Company's and the Bank’s Boards of Directors agree to
appoint Xx. Xxxxxx, or a representative of Xx. Xxxxxx acceptable to the Company,
to fill Xx. Xxxxxxxx'x vacancy on the Board of Directors for the remainder of
Xx. Xxxxxxxx’x term. If Xx. Xxxxxxxx voluntarily resigns as a
director of the Company and/or the Bank (including any resignation pursuant to
Section 5 above) or voluntarily takes any other action resulting in him no
longer being a director of the Company and/or the Bank, then this Agreement
shall continue to remain in effect for its remaining term.
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7. 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 the Shareholders and the Company
and the Bank below:
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Shareholders:
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Xxxxxx
X. Xxxxxxxx
XX
Capital Long/Short Equity Fund LLC
0000
Xxxxxx Xxxx.
Xxxxxxxxx,
Xxxxxxxx 00000
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Xxxxxx
X. Xxxxxx
Xxxxx
Qualified Partners, LLC
0000
Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
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With
a copy to:
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J.
Xxxxxxx Xxxx, Esq.
Xxxxxx
Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP
Atlantic
Station
000
00xx Xxxxxx, XX, Xxxxx 0000
Xxxxxxx,
Xxxxxxx 00000
Facsimile:
000-000-0000
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The
Company and the Bank:
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Xxxxx
X. Xxxxx, Esq.
Executive
Vice President
Guaranty
Savings Bank
0000
Xxxxxxxx Xxxx.
Xxxxxxxx,
Xxxxxxxxx 00000
Facsimile:
000-000-0000
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With
a copy to:
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Xxxxxxx
X. Xxxxxxx, Esq.
Xxxx
X. Xxxxxx, Esq.
Elias,
Matz, Xxxxxxx & Xxxxxxx L.L.P.
000
00xx Xxxxxx, X.X., 00xx Xxxxx
Xxxxxxxxxx,
X.X. 00000
Facsimile:
000-000-0000
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8. Reimbursement of
Expenses. The Company shall, within five (5) business days of
submission by the Shareholders of reasonable documentation, reimburse the
Shareholders for all legal fees and expenses, up to $15,000 in the aggregate,
incurred in connection with their activities with respect to the Company since
January 1, 2009. Such invoices need not include any detail that may
be deemed to waive the attorney-client privilege between any Shareholder and its
counsel.
9. 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, understandings,
negotiations and discussions of the parties in connection therewith not referred
to herein.
10. 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.
11. Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
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12. Governing Law. This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Louisiana, without giving effect to its principles of
conflicts of laws.
13. Severability. If
any term, provision, covenant or restriction of this Agreement is held by any
governmental 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.
14. 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.
15. Survival of Representations,
Warranties and Agreements. All representations, warranties,
covenants and agreements made herein shall survive the execution and delivery of
this Agreement.
16. 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.
17. Further
Action. 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.
[Remainder of this page
intentionally left blank.]
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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first written
above.
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By:
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/s/ Xxxxxx X. Xxxx, Xx. | |
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Xxxxxx
X. Xxxx, Xx.
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Chairman
of the Board
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GUARANTY
SAVINGS BANK
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By:
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/s/ Xxxxxx X. Xxxx, Xx. | |
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Xxxxxx
X. Xxxx, Xx.
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Chairman
of the Board
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XXXXX
QUALIFIED PARTNERS, LLC
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By:
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/s/ Xxxxxx X. Xxxxxx | |
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Xxxxxx
X. Xxxxxx
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Managing
Member
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XXXXXX
X. XXXXXX
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By:
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/s/ Xxxxxx X. Xxxxxx | |
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XX
CAPITAL LONG/SHORT EQUITY FUND LLC
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By:
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/s/ Xxxxxx X. Xxxxxxxx | |
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Xxxxxx
X. Xxxxxxxx
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Managing
Member
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XXXXXX
X. XXXXXXXX
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By:
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/s/ Xxxxxx X. Xxxxxxxx | |
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Xxxxxx
X. Xxxxxxxx
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8
Appendix
A
April
3, 2009
Board of
Directors
0000
Xxxxxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxx,
Xxxxxxxxx 00000
Dear
Members of the Board of Directors:
By this letter, I am
hereby withdrawing my name from consideration as a nominee to the Board of
Directors of GS Financial Corp. and withdrawing the letters dated February 19,
2009 and March 10, 2009 addressed to the members of the Board and Xx. Xxxx,
Chairman of the Board, respectively.
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Sincerely,
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| /s/ Xxxxxx X. Xxxxx | ||
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| Xxxxxx X. Xxxxx |
