Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is effective as of November 6, 2013 (“Effective Date”) between Oglethorpe Power Corporation (An Electric Membership Corporation) (“the Company”) and Michael L. Smith (“Employee”).  The Company desires to employ Employee, and Employee desires to accept employment with the Company, under the following terms and conditions.  Therefore, in consideration of Employee’s employment with the Company and the mutual promises and conditions contained in this Agreement, the adequacy of which the parties hereby acknowledge, Employee and the Company agree as follows:

 

1.     Term.  Subject to the provisions for automatic renewal and termination as provided below, the term of this Agreement shall commence on the Effective Date and shall terminate at 12:01 a.m. on December 31, 2016.

 

(a)   Automatic Renewal.  The Agreement shall automatically be extended for an unlimited number of one-year periods, unless on or before November 30, 2014 (for the initial term), or twenty-five (25) months before the expiration of any extended term, either Party to the Agreement provides the other written notice of its desire not to automatically renew this Agreement.

 

2.     Position and Duties.

 

(a)   Employee’s Title; Duties.  Employee shall serve the Company in the position of President and Chief Executive Officer.  Employee shall perform all duties of this position, as assigned by the Board of Directors of the Company (or other designee).

 

(b)   Conflict of Interest.  During Employee’s employment, Employee shall not engage in any business activity which, in the reasonable judgment of the Board of Directors, conflicts with the duties of the Employee under this Agreement, whether or not such activity is pursued for gain, profit or other pecuniary advantage.

 

(c)   Participation in Other Boards or Similar Activities.  Notwithstanding subsection 2(b), Employee may receive compensation for participation on boards of directors or similar part-time associations, provided that such participation does not interfere with the performance of Employee’s employment obligations to the Company and that such participation has been approved in advance by the Company’s Board of Directors.  The foregoing restrictions also shall not limit or prohibit Employee from engaging in passive investment and community, charitable and social activities not interfering with Employee’s performance and obligations under this Agreement.

 

3.     Compensation and Related Matters.

 

(a)   Base Salary.  For all services rendered by Employee during the term of this Agreement, the Company shall pay Employee a minimum annual base salary of $630,000.00, payable in equal semi-monthly installments, less applicable withholdings.  Employee’s base salary will be subject to review and possible upward adjustment, subject to the sole discretion of the Board of Directors.

 

 

(b)   Benefits.  During the term of employment, Employee shall be entitled to receive and shall be allowed to participate in the Company’s standard comprehensive benefits package on the terms and conditions as provided in the policies and practices of the Company, which may be modified from time-to-time in the sole discretion of the Company’s Board of Directors.  Employee agrees that no claim will arise against the Company by virtue of its Board of Directors’ exercise of its rights to modify the Company’s benefits package.  Employee shall be entitled to a minimum of thirty-three (33) days of paid time off and an automobile or an automobile allowance and such benefits shall not be reduced during the term of this Agreement (including any extensions).

 

(c)   Bonus Eligibility; Performance Pay Program.  Employee will be eligible for consideration for an annual bonus and other incentive compensation plans generally available to other similarly situated employees, including but not limited to the OPC Performance Pay Program.  Such a bonus, if awarded, will be an amount determined by the Company in its sole discretion.  Employee must be employed by the Company as of December 31st of the award year in order to receive it; however, in the event Employee is terminated not for Cause during the last quarter of an award year, Employee will be eligible to receive a prorated bonus based on attainment of the applicable goals during Employee’s employment.  Any prorated bonus will be paid in accordance with the Company’s regular bonus payment schedule.

 

(d)   Business Expenses. Employee is authorized to incur reasonable and documented business expenses incurred or paid by Employee on behalf of the Company in performing Employee’s duties.  Such reasonable expenses shall be promptly paid (or reimbursed as applicable) by the Company upon presentation of expense statements in accordance with the Company’s policy.

 

4.     Termination and Severance.

 

(a)   Termination for Cause.  The Company may terminate Employee’s employment with the Company at any time if it believes in good faith that it has Cause to do so.  “Cause” shall be defined as: (i) Employee’s failure to perform Employee’s duties which causes or is likely to cause material harm to the Company or material interference with its operations; (ii) Employee’s substantial, material failure to comply with the Company’s written directions or policies; or (iii) Employee’s engaging in conduct that is unlawful or disreputable, to the possible material detriment of the Company, its affiliates, its predecessors or successors, or Employee’s own reputation; provided, however, that with respect to (i) and (ii) above, Employee has been given prompt notice of the failure and a reasonable opportunity to cure it.  In the event of a termination for Cause, or in the event of Employee’s death or disability (which shall be defined as an inability to perform the essential functions of Employee’s position, with or without accommodation, consistent with the Company’s obligations under the Americans With Disabilities Act), all salary and other benefits provided to Employee under this Agreement shall cease as of the date of termination except for any portion of Salary that is accrued and owing and any life and/or disability insurance proceeds that become payable by reason of Employee’s death or disability.

 

(b)   Termination Not for Cause; Resignation with Good Reason.  The Company may terminate Employee’s employment at any time upon two weeks’ notice to the Employee.  In

 

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the event the Company terminates Employee’s employment not for Cause or in the event Employee resigns with Good Reason (as defined below), Employee shall receive as severance pay (in addition to accrued salary and benefits, including amounts earned during the previous year but unpaid) the following amounts in lump-sum form payable within thirty (30) days of such termination without cause: all Base Salary (at the then-applicable yearly rate) he would be entitled to receive through the then applicable term of the Agreement, provided, however, in no event shall this amount be greater than two (2) years’ Base Salary nor less than one (1) years’ Base Salary (at the then-applicable yearly rate, less applicable withholdings) (referred to as “Severance Pay”).

 

i)             Definition of “Good Reason”.  For purposes of this Section, “Good Reason” shall be defined as: (a) a demotion or material reduction or alteration of Employee’s job title or job duties and responsibilities inconsistent with Employee’s current position; (b) a material reduction of Employee’s base salary; or (c) a relocation of Employee’s principal office by more than fifty (50) miles; and further provided that Good Reason may be found under this subsection 4(b)(i) without regard to whether there has been a sale or transfer of any or all of the Company’s assets.

 

ii)            Medical Allowance and Outplacement Services.  In addition to the payment provided in subsection 4(b), the Company will provide (i) outplacement services to be determined by the Company for the remaining term of the Agreement or one (1) year, whichever is longer; and (ii) an amount equal to the Employee’s cost for medical and dental continuation coverage pursuant to COBRA for the remaining term of the Agreement or one (1) year, whichever is longer, at the coverage type and level as is in effect as of the date of the Employee’s termination of employment.

 

iii)           Release.  Employee will only receive Severance Pay and the additional benefits provided in subsection 4(b)(ii) if Employee signs a form releasing all claims against the Company which shall be furnished by the Company no later than 20 days after the effective termination date (or within 45 days after an arbitrator determines that Employee is entitled to such payments), and Employee does not thereafter revoke the release within 7 days.

 

iv)           No Duty to Mitigate.  In the event Employee’s employment is terminated in a manner that gives Employee a right to receive payment described in subsections 4(b) and 4(b)(ii) (collectively, “damages”), Employee shall have no obligation to mitigate such damages through subsequent employment or other earnings.

 

(c)   Resignation Without Good Reason.  Employee may resign employment at any time upon sixty (60) days’ notice to the Company.  In such event, if requested by the Company, Employee shall continue to render services and shall be paid Employee’s regular salary and receive normal benefits up to the effective date of termination.  In the event of a resignation without Good Reason, all salary and other benefits provided to Employee under this Agreement shall cease as of the date of termination.

 

5.     Inventions and Confidential Information Agreement.  As a pre-condition to the effectiveness of this Agreement, Employee has executed or shall execute a standard Company

 

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Inventions and Confidential Information Agreement.  Employee acknowledges and agrees that any breach by Employee of such Agreement shall constitute a violation of subsection 4(a)(ii) of this Agreement for Cause, and the Company shall have all rights and obligations provided for.

 

6.     Arbitration of Disputes.  Final and binding arbitration shall be the exclusive remedy for all disputes between the Company and Employee regarding the validity, interpretation or effect of this Agreement.

 

(a)   Procedure.  Any such arbitration shall be in accordance with the procedures of the American Arbitration Association (“AAA”).  The arbitration hearing will be held before an experienced employment arbitrator or panel of arbitrators licensed to practice law in the state of Georgia and selected in accordance with the rules of the AAA.  The forum for such arbitration shall be Atlanta, Georgia.

 

(b)   Required Notice.  The party seeking arbitration of a dispute under this Section must give specific written notice of any claim to the other party within six (6) months of the date the party seeking arbitration first has knowledge of the event giving rise to the dispute; otherwise, the claim shall be void and deemed waived, even if there is a federal or state statute of limitations which would have given more time to pursue the claim.

 

(c)   Expenses.  The Company shall initially be responsible for payment of arbitration costs, excluding Employee’s attorneys’ fees; provided, however, that the arbitrator shall have the authority to fashion an equitable division of costs if the arbitrator finds that such costs are unduly burdensome with respect to either party.  All other costs and expenses associated with the arbitration, including but not limited to attorneys’ fees, shall be borne by the party incurring the expense, unless applicable law provides for a different allocation, in which event the arbitrator can order that costs and expenses be allocated in accordance with applicable law.  In any arbitration related to the breach of the terms of this Agreement, the arbitrator shall have the authority to award attorneys’ fees and costs to the prevailing party.

 

7.     Miscellaneous.

 

(a)   Governing Law.  This Agreement shall be construed under, governed by, and enforced in accordance with the laws of the State of Georgia, without regard to its choice of law provisions.  The Agreement shall further be construed to be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended (“409A”), and shall be interpreted accordingly.  To the extent (a) any payments or benefits to which Employee becomes entitled under this Agreement, or under any agreement or plan referenced herein, in connection with Employee’s termination of employment constitute deferred compensation subject to 409A and (b) Employee is deemed at the time of such termination of employment to be a “specified employee” under 409A, such payments shall not be made or commence or benefits provided until the earliest of (i) the expiration of the six (6)-month period measured from the date of Employee’s “separation from service”; or (ii) the date of Employee’s death following such separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Employee, including (without limitation) the additional twenty percent (20%) tax for which Employee would otherwise be liable under Section 409 in the absence of such deferral.  Upon the expiration of the applicable deferral period, any payments

 

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which would have otherwise been made or benefits provided during that period in the absence of this subsection shall be paid to Employee or Employee’s beneficiary in one lump sum (without interest).  Any termination of Employee’s employment is intended to constitute a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1.  The Company may, but is not required to, amend the Agreement to avoid imposition of any additional tax or income recognition prior to the actual payment to the Employee under 409A and any Treasury Regulations and Internal Revenue Service guidance thereunder.  Neither the Company nor any of its affiliates shall have any liability to any person with respect to the failure of the Agreement to comply with 409A.

 

(b)   Notice.  Any notice required or desired to be given under this Agreement by Employee to the Company shall be provided in writing via hand-delivery, facsimile (with confirmation of delivery), recognized express courier, or Certified Mail to the Chairman of the Board of Directors, Oglethorpe Power Corporation, 2100 East Exchange Place, Tucker, Georgia 30085-1359, fax number: 770-270-7676.  Any notice required or desired to be given under this Agreement by Company to the Employee shall be provided in writing via hand-delivery, recognized express courier, or Certified Mail to Employee at the address listed below Employee’s signature or at Employee’s Company office.  Notice shall be deemed given upon the date of delivery.  Addresses or facsimile numbers may be changed by providing notice in accordance with this Section.

 

(c)   Assignment and Successorship.  The rights and obligations of the Company under this Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Company.  This Agreement shall also be binding upon and shall inure to the benefit of Employee and Employee’s estate, but Employee may not assign any rights or delegate any duties or obligations under this Agreement, except to the extent permitted under the Company’s benefit plans.

 

(d)   Complete Agreement.  This Agreement shall constitute the entire agreement between the parties with respect to the subjects addressed in this Agreement.  Any subsequent alteration or modification to this Agreement must be made in writing and signed by both parties.

 

(e)   Severability.  Should any provision of this Agreement or portion be ruled void, invalid, unenforceable or contrary to public policy by any court of competent jurisdiction, then any remaining portion of such provision and all other provisions of this Agreement shall survive and be applied and any invalid or unenforceable portion shall be construed or performed to preserve as much of the original words, terms, purpose and intent as shall be permitted by law.

 

(f)    Counterparts.  This Agreement shall be executed in duplicate counterparts.  Each counterpart is deemed an original of equal dignity with the other.  The official executing this Agreement on behalf of the Company represents and warrants that he or she has full requisite authority to do so.

 

(g)   Waiver of Breach.   The waiver by the Company or Employee of a breach of any provision of this Agreement by the other shall not operate or be construed as a waiver of any subsequent breach by Employee or the Company, respectively.

 

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(h)   Prior Employment Contract.  This Agreement shall supersede and replace any and all prior contracts for employment between the Company and Employee.

 

So agreed, effective as of the date written on page 1 above.

 

 

	
EMPLOYEE:
    	
 
    	
COMPANY:
    
	
 
    	
 
    	
 
    
	
/s/   Michael L. Smith
    	
 
    	
/s/   Benny W. Denham
    
	
 
    	
 
    	
 
    
	
Date:   October 11, 2013
    	
 
    	
Date:   October 11, 2013
    
	
 
    	
 
    	
 
    
	
Printed   Name: Michael L. Smith
    	
 
    	
Printed   Name: Benny W. Denham
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:   Chairman of the Board
    

 

6exh101.htm

 

EXHIBIT 10.1

 

 

 

STANDSTILL AGREEMENT

 

 

THIS STANDSTILL AGREEMENT (the “Agreement”), dated this 15th day of October 2013, is by and among Malvern Bancorp, Inc. (the “Company”) and Malvern Federal Savings Bank (the “Bank,” and collectively with the Company, “Malvern”), Stilwell Value Partners VI, L.P. (“Stilwell Value Partners”), Stilwell Activist Fund, L.P. (“Activist Fund”), Stilwell Activist Investments, L.P. (“Activist Investments”), Stilwell Associates, L.P. (“Associates”), Stilwell Partners, L.P., Stilwell Value LLC and Joseph Stilwell, an individual (collectively, the “Stilwell Group,” and individually, a “Stilwell Group Member”), John P. O’Grady, an individual (the “Nominee”), and Gregg H. Kanter, an individual (the “Alternate”).

 

RECITALS

 

WHEREAS, Malvern, the Stilwell Group, the Nominee and the Alternate 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 Stilwell Group Members.  The Stilwell Group Members represent and warrant to Malvern, as follows:

 

(a)           The Stilwell Group 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 it is the beneficial owner, and neither the Stilwell Group nor any Stilwell Group Member nor any of their 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 Stilwell Group and the Stilwell Group Members 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 Stilwell Group and Stilwell Group Members has been duly authorized by the Stilwell Group and the Stilwell Group Members.  This Agreement constitutes a valid and binding obligation of the Stilwell Group and the Stilwell Group Members 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 Stilwell Group or any Stilwell Group Member is a party;

 

(c)           There are no other persons who, by reason of their personal, business, professional or other arrangement with the Stilwell Group or any Stilwell Group Member, have agreed, in writing or orally, explicitly or implicitly, to take any action on behalf of or in lieu of the Stilwell Group or any Stilwell Group Member 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 Stilwell Group or any Stilwell Group Member and Malvern or between the Stilwell Group or any Stilwell Group Member and either of the Nominee or the Alternate other than as set forth in this Agreement other than the Nominee Agreements and Stock Option Agreements attached as Exhibits 3 through 6 to the Stilwell Group’s Amendment No. 2 to its Schedule 13D filed with the U.S. Securities and Exchange Commission with respect to the Company Common Stock.

 

 

  

  

  

 

 

2.            Representations and Warranties of the Company and the Bank.

 

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

 

(b)           The Company and the Bank hereby represent and warrant to the Stilwell Group that there are no arrangements, agreements, or understandings concerning the subject matter of this Agreement between the Stilwell Group or any Stilwell Group Member and Malvern other than as set forth in this Agreement.

 

3.           Covenants.

 

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

 

  (i)           In conjunction with the Annual Meeting of Shareholders of the Company to be held in February 2014, the Company will nominate and support the election of John P. O’Grady as a director of the Company to serve a three-year term expiring at the Annual Meeting of Shareholders to be held in 2017.  Alternatively, upon the written request of the Stilwell Group delivered to the Company’s Corporate Secretary no later than December 1, 2013, the Company will nominate and support the election of Gregg H. Kanter rather than Mr. O’Grady. Upon his election as a director of the Company, the Company and the Bank shall take all necessary and appropriate action to appoint the Nominee or the Alternate, as the case may be, to the Board of Directors of the Bank and to the Compensation Committee of each of the Board of Directors of the Company and the Bank. The parties hereto understand and agree that any new director of the Company and the Bank, including the Nominee and the Alternate, must receive all necessary regulatory approvals and non-objections, including those of the Board of Governors of the Federal Reserve System (the “FRB”) and the Office of the Comptroller of the Currency (the “OCC”), before commencing service as a director of the Company and the Bank. The Company and the Bank agree to act in good faith and cooperate with the Nominee and the Alternate in promptly submitting all necessary applications and notices to the FRB and the OCC contemplated hereby;

 

(ii)           Upon his election and qualification to the Company’s and the Bank’s Boards of Directors, the Nominee or Alternate, as the case may be, shall be treated on a consistent basis with other members of the Company’s and the Bank’s Board of Director with respect to compensation and benefits;

 

(iii)           Should the Nominee’s or Alternate’s, as the case may be, 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, the Company shall appoint a replacement director, selected by Mr. Stilwell (“Replacement Director”), subject to the approval of the Company, which approval shall not be unreasonably withheld, and the Replacement Director shall, subject to the receipt of any necessary approvals of the FRB and/or the OCC and 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; and

 

(iv)           The Company and its Board of Directors are cognizant of their duties to shareholders and other constituents. The Company has been, and will continue to be, diligent in its efforts to build value in the Company and the Company Common Stock.  In the event that the Company does not achieve a return on average equity (“ROE”) greater than the weighted average for all publicly traded thrifts in the United States with assets between $500.0 million and $1.0 billion, excluding 

 

 

  

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any institution which reports a negative ROE for the period (the “Industry Group”) for the 12 month periods ending September 30, 2015 and 2016, respectively, in each case based on the SNL U.S. Thrift $500M-$1B Index published by SNL Financial LC1/, it will request its regularly engaged investment banking firm to assist the Company’s Board of Directors in evaluating all reasonable alternatives available to the Company.

 

(b)        During the term of this Agreement, the Stilwell Group and each Stilwell Group Member covenant and agree 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, or any securities convertible into Company Common Stock (except by way of 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);

 

(ii)           without the Company’s prior written consent, directly or indirectly, sell, transfer or otherwise dispose of any interest in the Stilwell Group’s shares of Company Common Stock to any person the Stilwell Group believes, after reasonable inquiry, would be 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) 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, (C) 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, or (D) seek to effect a change in control of the Company;

 

(iv)           publicly suggest or announce its 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 or take any action that might require the Company to make a public announcement regarding any such 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;

 

(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, 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;

 

_________________________

	
  

	
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(vii)           initiate, propose, submit, encourage or otherwise solicit shareholders of the Company for the approval of one or more shareholder proposals or induce or attempt to induce any other person to initiate any shareholder 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), providing for the possible election of the Nominee, Alternate or Replacement Director) or 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, 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 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;

 

(x)           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;

 

(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; and

 

(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.

 

(c)           During the term of this Agreement, each Stillwell Group Member and the Nominee and the Alternate agree 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 Stillwell Group and the Nominee or the Alternate, as the case may be, in any public or quasi-public forum.

 

(d)           (i)           The Nominee and the Alternate agree that during the term of this Agreement they will not take any action, directly or indirectly, which, if the Nominee or Alternate, as the case may be, were deemed to be a Stilwell Group Member, would be in violation of or inconsistent with any of the covenants and agreements made by the Stilwell Group in clauses (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi) and (xii) of Section 3(b) hereof, provided, however, that nothing herein shall prevent or limit the Nominee or the Alternate, as the case may be, upon his election and qualification as a director of the Company and the Bank, from expressing his views or positions on matters related to the Company’s or the Bank’s business, operations or policies to other members of the Company’s or the Bank’s Board of Directors at duly convened meetings of the Company’s or the Bank’s Board of Directors in such manner as may be necessary and appropriate in order to fulfill his duties as a director;

 

 

  

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

 

(iii)           The Nominee or the Alternate, as the case may be, and any Replacement Director, agrees to promptly submit his resignation as a director in the event of the termination of this Agreement prior to the Company’s 2017 Annual Meeting of Shareholders.

 

(e)         Upon election of the Nominee or the Alternate, as the case may be, and the commencement of his services as a director of the Company after the receipt of all necessary regulatory approvals or non-objections, the Company, the Stilwell Group and the Nominee or the Alternate, as the case may be, will enter into a Non-Disclosure Agreement, substantially in the form attached as Exhibit B hereto, which shall remain in force through the Nominee’s or Alternate’s tenure on the Board of Directors.

 

4.          Notice of Breach and Remedies.

 

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.

 

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

 

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

 

 

  

5

  

 

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 2017 Annual Meeting of Shareholders, provided, however, the Stilwell Group may terminate this Agreement at any time after the date of the Company’s 2016 Annual Meeting of Shareholders by delivery of written notice to Malvern, 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.  Promptly upon the execution and delivery of this Agreement, Malvern and the Stilwell Group shall issue the joint press release attached as Exhibit C, which has been mutually agreed to by the parties.  In addition, during the term of this Agreement, Malvern and the Stilwell Group shall each provide to the other party for such party’s prior review and approval any additional disclosure proposed to be made by Malvern or the Stilwell Group concerning this Agreement unless such additional disclosure is substantially identical to or consistent with the disclosures mutually agreed to in Exhibit C.  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 other than press releases or other publicity substantially identical to or consistent with the disclosures mutually agreed to in Exhibit C.

 

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:

 

 

	 	Stilwell Group:	Joseph Stilwell
	 	 	111 Broadway, 12th Floor
	 	 	New York, New York 10006
	 	 	Facsimile: 212-269-2675
	 	 	 
	 	
With a copy to:

	E.J. Borrack, Esq.
	 	 	c/o The Stilwell Group
	 	 	111 Broadway, 12th Floor
	 	 	New York, New York 10006
	 	 	Facsimile: 212-269-2675
	 	 	 
	 	Nominee:	John P. O’Grady
	 	 	Renasco Investments, LLC
	 	 	30 Two Bridges Road, #220
	 	 	Fairfield, NJ 07004
	 	 	Facsimile

 

 

 

 

  

6

  

 

	 	Alternate:	Greg H. Kanter, Esq.
	 	 	2222 Pine Street
	 	 	Philadelphia, PA 19103
	 	 	 
	 	Malvern:	Ronald Anderson
	 	 	President and Chief Executive Officer
	 	 	Malvern Bancorp, Inc.
	 	 	Malvern Federal Savings Bank
	 	 	42 East Lancaster Avenue
	 	 	Paoli, Pennsylvania 19301
	 	 	Facsimile: 610-647-1511
	 	 	 
	 	With a copy to:	
Raymond A. Tiernan., Esq.

	 	 	Hugh T. Wilkinson, Esq.
	 	 	Elias, Matz, Tiernan & Herrick L.L.P.
	 	 	734 15th Street, 11th Floor
	 	 	Washington, DC 20005
	 	 	Facsimile: 202-347-2172
	 	 	 
	 	 	and
	 	 	 
	 	 	Edward M. Posner, Esq.
	 	 	William M. McSwain, Esq.
	 	 	Drinker Biddle & Reath LLP
	 	 	One Logan Square
	 	 	18th & Cherry Streets
	 	 	Philadelphia, Pennsylvania 19103-6996
	 	 	Facsimile: 215-988-2757

 

8.           Governing Law and Choice of Forum.  Unless applicable federal law or regulation is deemed controlling, Pennsylvania 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 Eastern District of Pennsylvania or, if there is no basis for federal jurisdiction, in the Chester County Court of Common Pleas.  The Stilwell Group, the Stilwell Group Members the Nominee and the Alternate agree that the United States District Court for the Eastern District of Pennsylvania and the Chester County Court of Common Pleas may exercise personal jurisdiction over them 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 shareholder of the Company, other than the parties to the Agreement.  Nothing contained herein shall prohibit any Stilwell Group Member from transferring any portion or all of the shares of Company Common Stock owned thereby at any time to any affiliate of Stilwell or any other Stilwell Group Member but only if the transferee agrees in writing for the benefit of Malvern (with a copy thereof to be furnished to Malvern prior to such transfer) to be bound by the terms of this Agreement (any such transferee shall be included in the terms “Stilwell Group” and “Stilwell Group Member”).

 

 

  

7

  

 

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) shareholders 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.

 

(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, association, joint stock company, trust, unincorporated organization or similar company, syndicate, or any other 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 Stilwell Group or a Stilwell Group Member.

 

  

8

  

 

(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, 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, unless earlier terminated pursuant to Section 4 or Section 5 hereof or by mutual written agreement of the parties.

 

 

[Remainder of this page intentionally left blank.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

9

  

 

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

 

	 STILWELL VALUE PARTNERS VI, L.P.	 
	 By: 	Stilwell Value LLC 	 	JOSEPH STILWELL
	 	General Partner	 	 

 

 

	By:	/s/Joseph Stilwell	 	/s/Joseph Stilwell
	 	Joseph Stilwell 	 	Joseph Stilwell
	 	Managing Member	 	 

 

             

	
STILWELL ACTIVIST INVESTMENTS, L.P.

	 	 
	By: 	Stilwell Value LLC 	 	JOHN P. O’GRADY
	 	General Partner	 	 

 

 

	By:	/s/Joseph Stilwell	 	/s/John P. O'Grady
	 	Joseph Stilwell 	 	John P. O'Grady
	 	Managing Member	 	 

 

 

	STILWELL PARTNERS, L.P.	 	 
	By:	/s/Joseph Stilwell	 	GREGG H. KANTER
	 	Joseph Stilwell 	 	 
	 	General Partner	 	 

 

 

	STILWELL VALUE LLC	 	/s/Gregg H. Kanter
	By:	/s/Joseph Stilwell	 	Gregg H. Kanter
	 	Joseph Stilwell 	 	 
	 	Managing Member	 	 

 

	STILWELL ACTIVIST FUND, L.P.	 	MALVERN BANCORP, INC.
	By:	Stilwell Value LLC	 	 	 
	 	General Partner	 	 	 
	 	 	 	By:	/s/Ronald Anderson
	 	 	 	 	Ronald Anderson
	 	 	 	 	President and Chief Executive
	By:	/s/Joseph Stilwell	 	 	Officer
	 	Joseph Stilwell	 	 
	 	Managing Member	 	 

 

 

	STILWELL ASSOCIATES, L.P.	 	MALVERN FEDERAL SAVINGS BANK
	By:	Stilwell Value LLC	 	 	 
	 	 	 	 	 
	 	 	 	By:	/s/Ronald Anderson
	 	 	 	 	Ronald Anderson
	By:	/s/Joseph Stilwell	 	 	President and Chief Executive
	 	Joseph Stilwell	 	 	Officer
	 	Managing Member	 	 

 

  

10

  

 

EXHIBIT A

 

 

The Stilwell Group currently holds 645,524 shares of Company Common Stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

A-1

  

 

EXHIBIT B

 

NON-DISCLOSURE AGREEMENT

 

THIS NON-DISCLOSURE AGREEMENT (this “Agreement”), is made and entered into as of the date on which it is fully executed, as indicated by signatures below, by and among Malvern Bancorp, Inc. (the “Company”), the Stilwell Group (composed of Stilwell Associates, L.P., Stilwell Value Partners VI, L.P., Stilwell Partners, L.P., Stilwell Value LLC, Stilwell Activist Fund, L.P., Stilwell Activist Investments, L.P., and Joseph Stilwell, an individual, and their employees and representatives), and ______________, a director whose name was placed in nomination by the Stilwell Group (“Director”).

 

WHEREAS, the Director is a member of the Board of Directors of the Company and its wholly owned subsidiary, Malvern Federal Savings Bank (the “Bank”);

 

WHEREAS, the Company, the Stilwell Group and the Director have agreed that it is in their mutual interests to enter into this Agreement as hereinafter described.

 

NOW THEREFORE, for good and valuable consideration, and intending to be legally bound hereby, the parties hereto mutually agree as follows:

 

1.  In connection with the Director serving on the Boards of Directors of the Company and the Bank, the Director and other Company employees, directors, and agents may divulge nonpublic information concerning the Company and its subsidiaries to the Stilwell Group and such information may be shared among the Stilwell Group's employees and agents who have a need to know such information.  The Stilwell Group expressly agrees to maintain all nonpublic information concerning the Company and its subsidiaries in confidence.  The Stilwell Group expressly acknowledges that federal and state securities laws may prohibit a person from purchasing or selling securities of a company, or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such other person is likely to purchase or sell such securities, while the first-mentioned person is in possession of material nonpublic information about such company.  The Stilwell Group agrees to comply with the Company's insider trading policies and procedures, as in effect from time to time, to the same extent as if it were a director of the Company.  To the extent the nonpublic information concerning the Company and its subsidiaries received by the Stilwell Group is material, this Agreement is intended to satisfy the confidentiality agreement exclusion of Regulation FD of the U.S. Securities and Exchange Commission (the “SEC”) set forth in Rule 100(b)(2)(ii) of Regulation FD of the SEC.

 

2.  Each of the Stilwell Group and the Director represents and warrants to the Company that this Agreement has been duly and validly authorized (in the case of the entity members of the Stilwell Group), executed and delivered by them, and is a valid and binding agreement enforceable against them in accordance with its terms.

 

3.  The Director hereby further confirms to the Company that no event has occurred with respect to the Director that would require disclosure in a document filed by the Company with the SEC pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, under Item 401(f) or Item 404(a) of SEC Regulation S-K.

 

 

4.  The Stilwell Group acknowledges that with regard to its obligations to maintain the confidentiality of nonpublic information of the Company and its subsidiaries, monetary damages may not be a sufficient remedy for any breach or threatened breach of this Agreement and that, in addition to all other remedies, the Company may be entitled to seek specific performance and injunctive or other equitable relief as a remedy for such breach, and agrees that in conjunction therewith the Company shall not be required to post any bond.

 

 

 

  

B-1

  

 

 

5.  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.

 

6.  This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania, without regard to choice of law principles that may otherwise compel the application of the laws of any other jurisdiction.  Each of the parties hereby irrevocably consents to the exclusive jurisdiction of the state and federal courts sitting in the Commonwealth of Pennsylvania to resolve any dispute arising from this Agreement and waives any defense of inconvenient or improper forum.

 

7.  The terms and provisions of this Agreement shall be deemed severable and, in the event any term or provision hereof or portion thereof is deemed or held to be invalid, illegal or unenforceable, such provision shall be conformed to prevailing law rather than voided, if possible, in order to achieve the intent of the parties, and, in any event, the remaining terms and provisions of this Agreement shall nevertheless continue and be deemed to be in full force and effect and binding upon the parties.

 

8.  All representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Agreement.

 

9.  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.

 

10.   This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement.

 

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

 

	  	
THE STILWELL GROUP

	  	  	
MALVERN BANCORP, INC.

	  	  	  	  	  
	  	
_________________________

	  	  	
_______________________________

	
By:

 

 

Date

	
Joseph Stilwell

 

 

__________ __, 2014

	  	
By:

 

 

 Date

	
Ronald Anderson, President and

  Chief Executive Officer

 

___________ __, 2014

 

DIRECTOR

 

                                          

 

Date:  _____________ ___, 2014

 

 

 

 

 

 

  

B-2

  

 

EXHIBIT C

 

	
CONTACTS:

	
For Malvern Bancorp, Inc.

Ronald Anderson, President and CEO

(610) 644-9400

	 	 
	  	
For The Stilwell Group

Megan Parisi

(212) 269-1551

Release Date:           October __, 2013

For Immediate Release

 

MALVERN BANCORP, INC. ANNOUNCES AGREEMENT WITH MAJOR SHAREHOLDER

 

Paoli, Pennsylvania – Malvern Bancorp, Inc. (the “Company”) (NASDAQ:MLVF), the holding company for Malvern Federal Savings Bank (the “Bank”), and Joseph Stilwell today announced that they have entered into a Standstill Agreement (the “Agreement”) pursuant to which, among other things, the Company has agreed to include John P. O’Grady as a nominee of the Company’s Board of Directors at the upcoming Annual Meeting of Shareholders to be held in February 2014. Mr. O’Grady’s name was submitted by Stilwell Value Partners VI, L.P., certain affiliated entities and Mr. Stilwell (collectively, “The Stilwell Group”). Subject to receipt of the requisite vote of the Company’s shareholders at the Annual Meeting as well as the requisite approval or non-objection of all necessary regulatory agencies, including the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, Mr. O’Grady will, subject to the terms of the Agreement, be added to the Boards of Directors of the Company and the Bank, for a three-year term, and be appointed to the Compensation Committee.

 

During the term of the Agreement, which is scheduled to continue through the date of the Company’s Annual Meeting in 2017, The Stilwell Group and Mr. O’Grady will not, among other things, solicit proxies in opposition to any recommendations or proposals of the Company’s Board of Directors, initiate or solicit shareholder proposals or seek to place any additional representatives on the Company’s Board of Directors other than Mr. O’Grady (or his alternate if he does not stand for election and any replacement director), oppose any proposal or director nomination submitted by the Board of Directors to the Company’s shareholders, vote for any nominee to the Company’s Board of Directors other than those nominated or supported by the Board of Directors, seek to exercise any control or influence over the management of the Company or the Boards of Directors of the Company or the Bank (although nothing in the Agreement will prevent Mr. O’Grady, from expressing his views to other members of the Board at duly convened meetings of the Board of Directors), propose or seek to effect a merger or sale of the Company or initiate litigation against the Company.

 

The parties will also enter into a Non-Disclosure Agreement, in the form attached to the Agreement, providing that The Stilwell Group will maintain the confidentiality of any non-public information regarding the Company or the Bank in full compliance with federal securities laws. The Company has also agreed that in the event that its return on average equity (“ROE”) for the fiscal years ending September 30, 2015 and 2016 is not greater than the weighted average ROE for all publicly traded thrifts in the United States with assets between $500 million and $1.0 billion, excluding any institutions reporting a negative ROE in the subject period, it will request its investment banking firm to assist the Company’s Board of Directors in evaluating all reasonable alternatives available to the Company. The Agreement is subject to early termination by the Stilwell Group following the Company’s Annual Meeting of Shareholders in 2016, provided that Mr. O’Grady resigns his positions with the Company and the Bank.

 

The Company’s Chairman of the Board, F. Claire Hughes, Jr., said “We carefully considered the materials submitted by Mr. Stilwell and Mr. O’Grady and believe that it is in the best interests of the Company and its shareholders to reach this agreement with The Stilwell Group and include Mr. O’Grady on the Company’s slate at the upcoming Annual Meeting.” Ronald Anderson, the Company’s President and Chief Executive Officer, said “This Agreement will permit us to focus on improving the Company’s financial performance and profitability over the next several years.”

 

 

 

 

  

C-1

  

Joseph Stilwell said, “We are pleased that our nominee will be joining the Board and that the Company has agreed to take additional actions if its ROE levels in future periods are not better than average.”

 

Malvern Bancorp, Inc. is the holding company for Malvern Federal Savings Bank.  Malvern Federal Savings Bank is a federally-chartered, FDIC-insured savings bank that was originally organized in 1887.  The Bank conducts business from its headquarters in Paoli, Pennsylvania, a suburb of Philadelphia, as well as eight other financial centers located throughout Chester and Delaware Counties, Pennsylvania.

 

This press release contains certain forward looking statements that involve risks and uncertainties that may be affected by various factors that may cause actual results to differ materially from those in the forward looking statements.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts.  They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.”  Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business of Malvern Bancorp Inc., and changes in the securities markets.   Except as required by law, the Company does not undertake any obligation to update any forward-looking statements to reflect changes in beliefs, expectations or events.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-2

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