FIRST AMENDMENT TO MERGER AGREEMENT

 

1.

The parties to this Amendment entered into the Merger Agreement on August 16, 2011.

 

2.

The Board of Directors of each of the representative companies has determined that it is in the best interests of their respective companies and shareholders to amend the Merger Agreement as set forth below.

 

3.

On August 24, 2011, Joseph Underwood, a shareholder represented by the law firm of Brower Piven, a Professional Corporation, filed a purported class action lawsuit in the Supreme Court of the State of New York, County of Kings against Brooklyn Bancorp, Brooklyn MHC, Brooklyn Federal Savings and their respective directors, and Investors Bancorp, Investors MHC, and Investors Bank (the “Lawsuit”).  The Lawsuit alleges, among other things, that Brooklyn Bancorp’s directors breached their fiduciary duties and obligations to the shareholders of Brooklyn Bancorp, other than Brooklyn MHC (the “Public Shareholders”) and that Investors participated, aided and abetted in such alleged breaches, by failing to obtain the highest available value for Brooklyn Bancorp and to take steps to maximize its value when facilitating its acquisition by entering into the Merger Agreement.  The Lawsuit seeks, among other things, an injunction against Brooklyn Bancorp, Brooklyn MHC and the other defendants from consummating the Mergers, rescissory and compensatory damages and attorney’s fees.  The parties to the Lawsuit began settlement discussions shortly after receiving notice of the existence of the Lawsuit.

 

4.

On September 16, 2011, Russ Bastin, a shareholder represented by the law firm of Brodsky & Smith, LLC, filed a similar and substantially identical shareholder action in the Supreme Court of the State of New York, County of Kings, against the same defendants named in the Lawsuit (individually, the “Bastin Matter,” and collectively with the Lawsuit, the “Shareholder Actions”).  On October 18, 2011, the parties to the Bastin Matter and the Lawsuit filed a Stipulation and Proposed Order Consolidating Related Shareholder Actions and Appointing Interim Co-Lead Counsel for the Plaintiffs with the court (the “Proposed Order”).  The parties’ stipulation provides for, among other things, the consolidation of the Bastin Matter, the Lawsuit, and any other shareholder action filed in or transferred to the court that involves similar questions of law or fact.  The Proposed Order is awaiting approval by the court.

 

5.

On September 20, 2011, plaintiffs to the Lawsuit served defendants with a settlement demand letter requesting, among other things, that additional consideration be paid to the Public Shareholders.  On September 30, 2011, the parties reached an oral agreement in principle to settle the Shareholder Actions, which was memorialized in a memorandum of understanding subsequently executed by the parties (the “Memorandum of Understanding”).

 

6.

Pursuant to the Memorandum of Understanding, the parties contemplate entering into a stipulation of settlement (the “Stipulation of Settlement”) that will settle and release all claims that were asserted and/or could have been asserted by the parties in connection with the Shareholder Actions.   The Stipulation of Settlement will include terms proposing the certification of a non-opt out class with respect to all claims for injunctive, declaratory and other equitable relief.  Non-New York resident members of the class may opt out solely to preserve any right to pursue potential claims for monetary damages, but will otherwise be bound by terms of the settlement.  Investors Bancorp may terminate the settlement if class members holding an agreed-to percentage or number of Brooklyn Bancorp shares opt out of the settlement, as set forth in a supplemental agreement to be executed by the parties.

 

 

 

 

By: Domenick Cama, Senior Executive Vice   President and Chief Operating Officer