STANDSTILL AGREEMENT
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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, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (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:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
BCSB Bancorp, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (410) 256 - 0261
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the PL Capital Parties:
▇▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇ Capital, LLC
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & Lardner, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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IN WITNESS WHEREOF, the Parties hereto have each executed this
Agreement on the date set forth below.
Dated: March 20, 2009
For: Financial Edge Fund, L.P. For BCSB Bancorp, Inc.:
Financial Edge - Strategic Fund, ▇.▇.
▇▇▇▇▇▇▇▇/PL Capital, L.P.
PL Capital, LLC
PL Capital Advisors, LLC /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Goodbody/PL Capital, LLC ---------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Member
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Member
For ▇▇▇▇ ▇. ▇▇▇▇▇▇:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
For ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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