Exhibit 10.2

 

STANDSTILL AGREEMENT

 

THIS STANDSTILL AGREEMENT (the “Agreement”), dated this 20th day of February
2018, is by and among MB Bancorp, Inc. (the “Company”) and Jeffrey Thorp, an
individual (the “Nominee”).

 

RECITALS

 

WHEREAS, the Company and the Nominee have agreed that it is in their mutual
interests to enter into this Agreement.

 

NOW THEREFORE, in consideration of the Recitals and the representations,
warranties, covenants and agreements contained herein and other good and
valuable consideration, and intending to be legally bound hereby, the parties
hereto agree as follows:

 

1.            Representations and Warranties of the Nominee. Nominee represents
and warrants to the Company, as follows:

 

(a)       The Nominee has fully disclosed in Exhibit A to this Agreement the
total number of shares of common stock of the Company, par value $0.01 per share
(“Company Common Stock”), as to which he is the beneficial owner, and neither
the Nominee nor any of his affiliates has (i) a right to acquire any interest in
any capital stock of the Company, or (ii) a right to vote any shares of capital
stock of the Company other than as set forth in Exhibit A;

 

(b)       The Nominee has full power and authority to enter into, perform his
obligations under and deliver this Agreement. This Agreement constitutes a valid
and binding obligation of the Nominee and the performance of its terms will not
constitute a violation of any limited partnership agreement, operating
agreement, bylaws, or any agreement or instrument to which the Nominee is a
party;

 

(c)       There are no other persons who, by reason of their personal, business,
professional or other arrangement with the Nominee have agreed, in writing or
orally, explicitly or implicitly, to take any action on behalf of or in lieu of
the Nominee that would be prohibited by this Agreement; and

 

(d)       There are no arrangements, agreements or understandings concerning the
subject matter of this Agreement between the Nominee other than as set forth in
this Agreement.

 

2.Representations and Warranties of the Company.

 

(a)       The Company hereby represents and warrants to the Nominee that the
Company has full power and authority to enter into and perform its obligations
under this Agreement and that the execution and delivery of this Agreement by
the Company has been duly authorized by the Board of Directors of the Company.
This Agreement constitutes a valid and binding obligation of the Company and the
performance of its terms will not constitute a violation of its articles of
incorporation, charter or bylaws or any agreement or instrument to which the
Company is a party; and

 

 

 

 

(b)       The Company hereby represents and warrants to the Nominee that there
are no arrangements, agreements, or understandings concerning the subject matter
of this Agreement between the Nominee and the Company other than as set forth in
this Agreement.

 

3.Covenants.

 

(a)       During the term of this Agreement, the Company covenants and agrees as
follows:

 

(i)       Effective March 27, 2018, the Board of Directors of the Company will
be expanded by one board seat, and the Nominee will be appointed a director of
the Company to serve in the class of directors with terms expiring at the
Company’s 2018 Annual Meeting of Stockholders and will be nominated at the 2018
Annual Meeting of Stockholders to serve until the 2019 Annual Meeting of
Stockholders or, in each case, until his successor, if any, is elected and
qualified. Effective March 27, 2018, the Board of Directors of the Company will
cause the Board of Directors of its wholly owned subsidiary Madison Bank of
Maryland (the “Bank”) to expand the Bank’s Board of Directors by one board seat
and to appoint the Nominee to fill the vacancy created by the expansion of the
Bank’s Board of Directors to serve in the class of directors with terms expiring
at the Bank’s 2018 Annual Meeting of Stockholders and to elect the Nominee for
an additional one year term expiring at the Bank’s 2019 Annual Meeting of
Stockholders or, in each case, until his successor, if any, is elected and
qualified;

 

(ii)       Upon his appointment and qualification to the Company’s and the
Bank’s Boards of Directors, the Nominee shall be treated on a consistent basis
with other members of the Company’s and the Bank’s Boards of Directors with
respect to compensation and benefits, including without limitation, director’s
and officers’ liability insurance coverage and indemnification rights, and with
respect to grants of shares and options to purchase shares;

 

(iii)       Should the Nominee’s position as a director of the Company or the
Bank be terminated during the term of this Agreement due to his resignation,
death, permanent disability or otherwise, or pursuant to Section 3(d)(iv) of
this agreement, the Company shall appoint a replacement director, selected by
the Nominee (“Replacement Director”), subject to the approval of the Company,
which approval shall not be unreasonably withheld, and the Replacement Director
shall, subject to his or her agreement to honor the provisions of Sections 3(c)
and 3(d) hereof, be appointed to the Boards of the Company and the Bank.

 

(b)       During the term of this Agreement, the Nominee covenants and agrees
not to do the following, directly or indirectly, alone or in concert with any
affiliate, other group or other person:

 

(i)       own, acquire, offer or propose to acquire or agree to acquire, whether
by purchase, tender or exchange offer, or through the acquisition of control of
another person or entity (including by way of merger or consolidation) any
additional shares of the outstanding Company Common Stock, any rights to vote or
direct the voting of any additional shares of Company Common Stock (i.e., in
excess of the aggregate number of shares held by the Nominee as of the date
hereof), or any securities convertible into Company Common Stock except for
additional shares acquired by way of (A) stock splits, stock dividends, stock
reclassifications or other distributions or offerings made available and, if
applicable, exercised on a pro rata basis, to holders of the Company Common
Stock generally, (B) inter-company or inter-fund transfers between the Nominee
and/or his affiliates, (C) any securities acquired by the Nominee pursuant to
his directorships contemplated herein (or issued to the Nominee upon exercise or
conversion thereof in the case of convertible securities), or (D) any other
securities acquired directly from the Company;

 

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(ii)       without the Company’s prior written consent, directly or indirectly,
privately (or pursuant to a public tender offer) sell, transfer or otherwise
dispose of any interest in the Nominee’s shares of Company Common Stock to any
person whom the Nominee believes, after reasonable inquiry, would be a
beneficial owner after any such sale or transfer of more than 5% of the
outstanding shares of the Company Common Stock;

 

(iii)       (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 type
of transaction that would result in a change in control of the Company (any such
transaction described in this clause (A) is a “Company Transaction” and any
proposal or other action seeking to effect a Company Transaction as described in
this clause (A) is defined as a “Company Transaction Proposal”), (B) take any
action that might require the Company to make a public announcement regarding
any such Company Transaction, (C) 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, (D) present to the Company, its stockholders or any third party any
proposal constituting or that could reasonably be expected to result in a
Company Transaction, or (E) seek to effect a change in control of the Company;
provided, however, that this subparagraph (iii) shall not prevent Nominee,
acting solely in his capacity as a director of the Company and in a manner
consistent with Nominee’s fiduciary duties to the Company, from participating in
deliberations or discussions of such matters privately with other members of the
Board of Directors at a meeting of the Board of Directors of the Company (the
excepted conduct described in this proviso being referred to herein as the
“Fiduciary Exception”);

 

(iv)       publicly suggest or announce his 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;

 

(v)       initiate, request, induce, encourage or attempt to induce or give
encouragement to any other person to initiate any 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 Company
Transaction Proposal;

 

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(vi)        solicit proxies or written consents or assist or participate in any
other way, directly or indirectly, in any solicitation of proxies or written
consents not approved by the Board, or otherwise become a “participant” in a
“solicitation,” or assist any “participant” in a “solicitation” (as such terms
are defined in Rule 14a-1 of Regulation 14A and Instruction 3 of Item 4 of
Schedule 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 Common Stock, or execute any written consent
in lieu of a meeting of the holders of the Company 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;

 

(vii)       initiate, propose, submit, encourage or otherwise solicit
stockholders of the Company for the approval of one or more stockholder
proposals or induce or attempt to induce any other person to initiate any
stockholder proposal, or seek election to, or seek to place a representative or
other affiliate or nominee on, the Company’s Board of Directors (other than with
respect to the provisions of Sections 3(a)(i) and (iii) hereof, providing for
the possible election of the Nominee) or, subject to the Fiduciary Exception,
seek removal of any member of the Company’s or the Bank’s Boards of Directors;

 

(viii)       form, join in or in any other way (including by deposit of the
Company’s capital stock) participate in a partnership, pooling agreement,
syndicate, voting trust or other group with respect to Company Common Stock, or
enter into any agreement or arrangement or otherwise act in concert with any
other person (excluding any affiliates, family members and trusts for their
benefit) for the purpose of acquiring, holding, voting or disposing of Company
Common Stock;

 

(ix)       (A) join with or assist any person or entity, directly or indirectly,
in opposing, or subject to the Fiduciary Exception 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 stockholders, 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
stockholders in connection with), or subject to the Fiduciary Exception make any
statement in favor of, any proposal submitted to a vote of the Company’s
stockholders that is opposed by the Company’s Board of Directors;

 

(x)       vote for any nominee or nominees for election to the Board of
Directors of the Company or any proposal other than those nominated, proposed or
supported by the Company’s Board of Directors;

 

(xi)       except in connection with the enforcement of this Agreement, initiate
or participate, by encouragement or otherwise, in any litigation against the
Company or the Bank or their respective officers and directors, or in any
derivative litigation on behalf of the Company or the Bank, except for testimony
which may be required by law;

 

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(xii)       advise, assist, encourage or finance (or arrange, assist or
facilitate financing to or for) any other person in connection with any of the
matters restricted by, or otherwise seek to circumvent the limitations of, this
Agreement; and

 

(xiii)       publicly announce or publicly disclose any request to be excused
from any of the foregoing obligations of this Section 3(b).

 

(c)       During the term of this Agreement, the Nominee agrees not to disparage
the Company, the Bank or any of their directors (including nominees supported by
the Company’s Board of Directors), officers or employees in any public or
quasi-public forum, and the Company and the Bank agree not to disparage the
Nominee (or the Alternate or Replacement Director, as the case may be) in any
public or quasi-public forum.

 

(d)       (i)          The Nominee agrees that during the term of this Agreement
he will not take any action, directly or indirectly, which, would be in
violation of or inconsistent with any of the covenants and agreements made by
the Nominee in clauses (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi)
and (xii) of Section 3(b);

 

(ii)       In the event that the Nominee, breaches clause (i) of this Section
3(d), he shall promptly resign his positions as a director of the Company and
the Bank; in the event that the Nominee fails to resign after a breach in
accordance with the provisions of this clause (ii), the Nominee agrees that the
remaining directors of the Company and the Bank, by majority vote thereof, may
remove the Nominee, from his directorship positions with the Company and the
Bank; and

 

(iii)       The Nominee agrees to promptly submit his resignation as a director
in the event of his termination of this Agreement prior to the Company’s 2019
Annual Meeting of Stockholders.

 

(iv)       The Nominee agrees to promptly resign his positions as a director of
the Company and the Bank if any bank regulatory agency having authority over the
Company or the Bank expresses serious written concern regarding the Nominee’s
qualifications to serve as a director of the Company or the Bank.

 

4.Notice of Breach and Remedies.

 

(a)               The parties expressly agree that an actual or threatened
breach of this Agreement by any party will give rise to irreparable injury that
cannot adequately be compensated by damages. Accordingly, in addition to any
other remedy to which it may be entitled, each party shall be entitled to seek a
temporary restraining order or injunctive relief to prevent a breach of the
provisions of this Agreement or to secure specific enforcement of its terms and
provisions.

 

(b)               The Nominee expressly agrees that he will not be excused or
claim to be excused from performance under this Agreement as a result of any
material breach by the Company unless and until the Company is given written
notice of such breach and thirty (30) days either to cure such breach or seek
relief in court. If the Company seeks relief in court, the Nominee irrevocably
stipulates that any failure to perform by the Nominee or any assertion by the
Nominee that he is excused from performing his obligations under this Agreement
would cause the Company irreparable harm, that the Company shall not be required
to provide further proof of irreparable harm in order to obtain equitable relief
and that the Nominee shall not deny or contest that such circumstances would
cause the Company irreparable harm (in the context of opposing equitable
relief). If, after such thirty (30) day period, the Company has not either
reasonably cured such material breach or obtained relief in court, the Nominee
may terminate this Agreement by delivery of written notice to the Company.

 

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(c)               The Company expressly agrees that it will not be excused or
claim to be excused from performance under this Agreement as a result of any
material breach by the Nominee unless and until the Nominee is given written
notice of such breach and thirty (30) business days either to cure such breach
or seek relief in court. If the Nominee seeks relief in court, the Company
irrevocably stipulates that any failure to perform by the Company or any
assertion by the Company that it is excused from performing its obligations
under this Agreement would cause the Nominee irreparable harm, that the Nominee
shall not be required to provide further proof of irreparable harm in order to
obtain equitable relief and that the Company shall not deny or contest that such
circumstances would cause the Nominee irreparable harm. If, after such thirty
(30) day period, the Nominee has not either reasonably cured such material
breach or obtained relief in court, the Company may terminate this Agreement by
delivery of written notice to the Nominee.

 

5.       Term. This Agreement shall be effective upon the execution of the
Agreement, and will remain in effect for a period expiring as of the close of
business on the date of the Company’s 2019 Annual Meeting of Stockholders,
provided, however, the Nominee may terminate this Agreement at any time after
the date of the Company’s 2018 Annual Meeting of Stockholders by delivery of
written notice to the Company, provided further, that the Nominee, Alternate or
Replacement Director, as the case may be, resigns as a director of the Company
and the Bank in accordance with paragraph (iii) of Section 3(d) hereof.

 

6.       Publicity. Any press release or publicity with respect to this
Agreement or any provisions hereof shall be jointly prepared and issued by the
parties hereto. 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 concerning any other party to this Agreement or its
operations without the prior approval of such other party, which approval shall
not be unreasonably withheld, provided that the parties shall be entitled to
make such filings as each deems necessary to comply with applicable securities
laws.

 

7.       Notices. All notices, communications and deliveries required or
permitted by this Agreement shall be made in writing signed by the party making
the same, shall specify the Section of this Agreement pursuant to which it is
given or being made and shall be deemed given or made (a) on the date delivered
if delivered by telecopy or in person, (b) on the third Business Day after it is
mailed if mailed by registered or certified mail (return receipt requested)
(with postage and other fees prepaid), or (c) on the day after it is delivered,
prepaid, to an overnight express delivery service that confirms to the sender
delivery on such day, as follows:

 

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Nominee:   Jeffrey Thorp     437 Madison Avenue, 34th Floor     New York, New
York 10022     Facsimile: 212-897-8051       With a copy to:   Martin Sklar,
Esq.     Kleinberg, Kaplan, Wolff & Cohen, P.C.     551 Fifth Avenue     New
York, New York 10176     Facsimile: 212-986-8866       The Company:   Philip P.
Phillips     President and Chief Executive Officer     MB Bancorp, Inc.     1920
Spring Rock Road     Forest Hill, Maryland 21050     Facsimile: 410-420-3344    
  With a copy to:   Gary R. Bronstein, Esq.     Kilpatrick Townsend & Stockton
LLP     607 14th Street, NW, Suite 900     Washington, DC 20005     Facsimile:
202-204-5616

 

8.       Governing Law and Choice of Forum. Unless applicable federal law or
regulation is deemed controlling, Maryland law shall govern the construction and
enforceability of this Agreement. Any and all actions concerning any dispute
arising hereunder shall be filed and maintained in the United States District
Court for the State of Maryland or, if there is no basis for federal
jurisdiction, in the Circuit Court for Harford County, Maryland. The Nominee
agrees that the United States District Court for the State of Maryland and the
in the Circuit Court for Harford County, Maryland may exercise personal
jurisdiction over the Nominee in any such actions.

 

9.       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.

 

10.       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. Except as otherwise expressly
provided, this Agreement shall not inure to the benefit of, be enforceable by or
create any right or cause of action in any person, including any stockholder of
the Company, other than the parties to the Agreement. Nothing contained herein
shall prohibit the Nominee from transferring any portion or all of the shares of
Company Common Stock owned thereby at any time to any affiliate of the Nominee
but only if the transferee agrees in writing for the benefit of the Company
(with a copy thereof to be furnished to the Company prior to such transfer) to
be bound by the terms of this Agreement (any such transferee shall be included
in the term “the Nominee”).

 

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11.       Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants shall survive the execution and
delivery of this Agreement and shall continue for the term of this Agreement
unless otherwise provided.

 

12.       Amendments. This Agreement may not be modified, amended, altered or
supplemented except by a written agreement executed by all of the parties.

 

13.       Definitions. As used in this Agreement, the following terms shall have
the meanings indicated, unless the context otherwise requires:

 

(a)       The term “acquire” means every type of acquisition, whether effected
by purchase, exchange, operation of law or otherwise.

 

(b)       The term “acting in concert” means (i) knowing participation in a
joint activity or conscious parallel action towards a common goal, whether or
not pursuant to an express agreement, or (ii) a combination or pooling of voting
or other interests in the securities of an issuer for a common purpose pursuant
to any contract, understanding, relationship, agreement or other arrangement,
whether written or otherwise.

 

(c)       The term “affiliate” means, with respect to any person, a person or
entity that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with such other person.

 

(d)       The term “beneficial owner” shall have the meaning ascribed to it, and
be determined in accordance with, Rule 13d-3 of the Securities and Exchange
Commission’s Rules and Regulations under the Securities Exchange Act of 1934.

 

(e)       The term “change in control” denotes circumstances under which: (i)
any person or group becomes the beneficial owner of shares of capital stock of
the Company or the Bank representing 25% or more of the total number of votes
that may be cast for the election of the Boards of Directors of the Company or
the Bank, (ii) the persons who were directors of the Company or the Bank cease
to be a majority of the Board of Directors, in connection with any tender or
exchange offer (other than an offer by the Company or the Bank), merger or other
business combination, sale of assets or contested election, or combination of
the foregoing, or (iii) stockholders of the Company or the Bank approve a
transaction pursuant to which substantially all of the assets of the Company or
the Bank will be sold.

 

(f)       The term “control” (including the terms “controlling,” “controlled
by,” and “under common control with”) means the possession, direct or indirect,
of the power to direct or cause the direction of the management, activities or
policies of a person or organization, whether through the ownership of capital
stock, by contract, or otherwise.

 

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(g)       The term “group” has the meaning as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934.

 

(h)       The term “person” includes an individual, group acting in concert,
corporation, partnership, limited liability company, association, joint stock
company, trust, unincorporated organization or similar company, syndicate, or
any other entity or group formed for the purpose of acquiring, holding or
disposing of the equity securities of the Company.

 

(i)       The term “transfer” means, directly or indirectly, to sell, gift,
assign, pledge, encumber, hypothecate or similarly dispose of (by operation of
law or otherwise), either voluntarily or involuntarily, or to enter into any
contract, option or other arrangement or understanding with respect to the sale,
gift, assignment, pledge, encumbrance, hypothecation or similar disposition of
(by operation of law or otherwise), any Company Common Stock or any interest in
any Company Common Stock; provided, however, that a merger or consolidation in
which the Company is a constituent corporation shall not be deemed to be the
transfer of any common stock beneficially owned by the Nominee.

 

(j)       The term “vote” means to vote in person or by proxy, or to give or
authorize the giving of any consent as a stockholder on any matter.

 

14.       Counterparts; Facsimile. This Agreement may be executed in any number
of counterparts and by the parties in separate counterparts, and signature pages
may be delivered by facsimile or by email attachment (in “.pdf” form), 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.

 

15.       Duty to Execute. 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.

 

16.       Termination. This Agreement shall cease, terminate and have no further
force and effect upon the expiration of the term as set forth in Section 5
hereof, unless earlier terminated pursuant to Section 4 or Section 5 hereof or
by mutual written agreement of the parties.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned and
is effective as of the day and year first above written.

 

 

NOMINEE         /s/ Jeffrey Thorp     Jeffrey Thorp       MB BANCORP, INC.      
  By:   /s/ Philip P. Phillips     Philip P. Phillips     President and Chief
Executive Officer  

 

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EXHIBIT A

 

The Nominee currently holds 180,000 shares of Company Common Stock.

 

  A-1