UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)
NSS Bancorp
(Name of Issuer)
Common Stock
(Title of Class of Securities)
62938H109
(CUSIP Number)
Bennett Lindenbaum
Basswood Partners, L.P.
52 Forest Avenue
Paramus, New Jersey 07652
(201) 843-3644
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 31, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-l(b)(3) or (4), check the following box [ ].
Check the following line if a fee is being paid with this statement [ ]. (A
fee is not required only if the filing person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of class. See
Rule 13d-7).
<PAGE>
CUSIP No. 62938H109
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Basswood Partners, L.P.
2. Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [x]
3. SEC Use Only
4. Source of Funds
WC
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2 (d) or 2 (e)
[ ]
6. Citizenship or Place of Organization
Delaware
Number of Shares Beneficially Owned by Each Reporting Person With:
7. Sole Voting Power:
8. Shared Voting Power:
241,411
9. Sole Dispositive Power:
10. Shared Dispositive Power:
241,411
11. Aggregate Amount Beneficially Owned by Each Reporting Person
241,411
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<PAGE>
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
13. Percent of Class Represented by Amount in Row (11)
9.83%
14. Type of Reporting Person
PN
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<PAGE>
CUSIP No. 62938H109
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Matthew Lindenbaum
2. Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [x]
3. SEC Use Only
4. Source of Funds
AF, PF
5. Check box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2 (d) or 2 (e)
[ ]
6. Citizenship or Place of Organization
United States
Number of Shares Beneficially Owned by Each Reporting Person With:
7. Sole Voting Power:
100
8. Shared Voting Power:
241,511
9. Sole Dispositive Power:
10. Shared Dispositive Power:
241,511
11. Aggregate Amount Beneficially Owned by Each Reporting Person
241,511
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<PAGE>
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
13. Percent of Class Represented by Amount in Row (11)
9.83%
14. Type of Reporting Person
IN
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<PAGE>
CUSIP No. 62938H109
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Bennett Lindenbaum
2. Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [x]
3. SEC Use Only
4. Source of Funds
AF, PF
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
[ ]
6. Citizenship or Place of Organization
United States
Number of Shares Beneficially Owned by Each Reporting Person With:
7. Sole Voting Power:
8. Shared Voting Power:
241,411
9. Sole Dispositive Power:
10. Shared Dispositive Power:
241,411
11. Aggregate Amount Beneficially Owned by Each Reporting Person
241,411
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<PAGE>
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
9.83%
14. Type of Reporting Person
IN
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<PAGE>
This Amendment No. 4 has been filed by Basswood Partners, L.P.
("Basswood") and Matthew Lindenbaum for the purposes of amending the
disclosure in Item 4 (originally filed, under cover of a Form F-11,
with the Federal Deposit Insurance Corporation (the "FDIC"))
relating to shares of voting common stock of NSS Bancorp ("NSS").
NSS's principal executive office is located at 48 Wall Street, P.O.
Box 28, Norwalk, Connecticut 06852.
Item 1. Security and Issuer.
--------------------
No change.
Item 2. Identity and Background.
------------------------
No change.
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<PAGE>
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
No change.
Item 4. Purpose of Transaction.
-----------------------
As previously described, on November 13, 1997 Basswood and Matthew
Lindenbaum requested certain records of NSS relating to its list of
shareholders (the "Shareholder List Information"). Subsequently, NSS
informed Basswood that NSS would not allow Basswood or Matthew
Lindenbaum access to such records.
On December 22, 1997, Basswood and Mr. Lindenbaum filed a verified
complaint, together with a motion for temporary mandamus, in the
Superior Court for the judicial district of Stamford/Norwalk seeking
an order compelling NSS to make available to Basswood and Mr.
Lindenbaum the Shareholder List Materials. The court has issued an
order, dated December 29, 1997 summoning NSS to show cause why NSS
should not be required to permit Basswood and Mr. Lindenbaum to
examine and copy the Shareholder List Materials. Pursuant to that
Order, a copy of the complaint and motion was served on NSS on
December 31, 1997.
Reference is made to Exhibits (1) and (2) for more detailed
information regarding Baswood's request, the documents contained in
such exhibits being incorporated herein by such reference.
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<PAGE>
Item 5. Interest in Securities of Issuer.
---------------------------------
No change.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
------------------------------------
No change.
Item 7. Material to be Filed as Exhibits.
---------------------------------
The Verified Complaint and the Motion for Temporary Mandamus, each
dated December 22, 1997, in the action captioned Basswood Partners,
L.P. and Matthew Lindenbaum v. NSS Bancorp, Inc. are together filed
as Exhibit (1). The Order to Show Cause, dated December 29, 1997,
issued by the Superior Court for the Judicial District of
Stamford/Norwalk in said action is filed as Exhibit (2). An
agreement relating to the filing of a joint statement as required by
Rule 13a-1(f) under the Securities Exchange Act of 1934 is filed as
Exhibit (3).
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
BASSWOOD PARTNERS, L.P.
By: Basswood Management, Inc.,
its General Partner
By: /s/ Matthew Lindenbaum
----------------------------------
Matthew Lindenbaum, President
/s/ Matthew Lindenbaum
----------------------------------
(Matthew Lindenbaum)
/s/ Bennett Lindenbaum
----------------------------------
(Bennett Lindenbaum)
January 2, 1998
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Exhibit (1)
RETURN DATE: JANUARY 6, 1998 : SUPERIOR COURT
:
BASSWOOD PARTNERS, L.P., :
AND MATTHEW LINDENBAUM : J. D. OF STAMFORD/NORWALK
: AT STAMFORD
v. :
:
NSS BANCORP, INC. : DECEMBER 22, 1997
VERIFIED COMPLAINT
Basswood Partners, L.P. ("Basswood") and Matthew Lindenbaum
("Lindenbaum") (collectively, "Petitioners"), by their undersigned attorneys,
petition this Court pursuant to Section 33-948 of the Connecticut General
Statutes (the "Connecticut Business Corporation Act" or the "Act") for a writ of
mandamus compelling respondent NSS Bancorp, Inc. ("NSS") to produce for
inspection and copying records of NSS described in Section 33-946(b) of the Act.
Despite Petitioners' clear entitlement to such corporate records and two written
requests for their production, NSS has repeatedly and without justification
refused to provide them and has failed to comply with its obligations under the
Act.
The Parties
1. Basswood is a Delaware limited partnership with its principal place of
business at 52 Forest Avenue, Paramus, New Jersey. Basswood, through a number of
investment partnerships, beneficially owns 241,411 shares of Common Stock of NSS
(the "NSS shares").
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<PAGE>
2. Lindenbaum is a principal of Basswood Management, Inc., Basswood's general
partner. Lindenbaum, in an individual capacity, owns 100 NSS shares. Basswood
and Lindenbaum collectively own 9.83% of NSS's outstanding shares and, upon
information and belief, collectively constitute NSS's second largest
shareholder.
3. NSS is a Connecticut corporation with its principal office at 48 Wall Street,
Norwalk, Connecticut 06852.
The Statutory Framework
4. Sections 33-945 through 33-948 of the Act govern the obligations of a
corporation to maintain corporate records, the rights of shareholders to inspect
and copy such records, and judicial proceedings to enforce those shareholders'
rights. Section 33-946(b) of the Act, which identifies corporate records,
including the record of shareholders, that shareholders of the corporation are
entitled to inspect and copy upon five days written notice by a demand made in
good faith for a proper purpose, provides that:
A shareholder of a corporation is entitled to inspect and copy, during
regular business hours at a reasonable location specified by the
corporation, any of the following records of the corporation if the
shareholder meets the requirements of subsection (c) of this section
and gives the corporation written notice of his demand at least five
business days before the date on which he wishes to inspect and copy:
(1) Excerpts from minutes of any meeting of the board of directors,
records of any action of a committee of the board of directors while
acting in place of the board of directors on behalf of the corporation,
minutes of any meeting of the shareholders and records of action taken
by the shareholders or board of directors without a meeting, to the
extent not subject to inspection
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<PAGE>
under subsection (a) of this section; (2) accounting records of the
corporation; and (3) the record of shareholders.
5. Section 33-946(c) of the Act states:
A shareholder may inspect and copy the records described in subsection
(b) of this section only if: (1) His demand is made in good faith and
for a proper purpose; (2) he describes with reasonable particularity
his purpose and the records he desires to inspect; and (3) the records
are directly connected with his purpose.
6. Section 33-948(b) of the Act permits a shareholder who has been denied access
to corporate records identified in Section 33-946(b) of the Act to seek
expedited judicial relief, and states as follows (emphasis added):
If a corporation does not within a reasonable time allow a shareholder
to inspect and copy any other record, the shareholder who complies with
subsections (b) and (c) of section 33-946 may apply to the superior
court for the judicial district where the corporation's principal
office or, if none in this state, its registered office is located for
an order to permit inspection and copying of the records demanded. The
court shall dispose of an application under this subsection on an
expedited basis.
7. Section 33-948(c) further provides that a petitioner can seek costs and
reasonable attorney's fees incurred as a result of proceeding under Section
33-948:
If the court orders inspection and copying of the records demanded, it
shall also order the corporation to pay the shareholder's costs,
including reasonable attorney's fees incurred to obtain the order
unless the corporation proves that it refused inspection in good faith
because it had a reasonable basis for doubt about the right of the
shareholder to inspect the records demanded.
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<PAGE>
Basswood and Lindenbaum
Request NSS's Corporate Records
8. On November 13, 1997, Basswood wrote to NSS's board of directors
(hereinafter, the "NSS Board") requesting "the right to inspect and copy the
records of the Company described in Sections 33-945(e) and 33-946(b) of the Act
during regular business hours on the sixth business day following the date of
this letter or as promptly thereafter as possible." (A copy of Basswood's
November 13 letter and the accompanying Annex A (the "November 13 Request") is
attached hereto as Exhibit A). The November 13 Request also asked NSS to
"provide to [Basswood] the other information and permit us to take the other
actions set forth in Annex A [specifying certain stockholder list information in
greater detail] as expeditiously as possible." The records of NSS described in
Section 33-945(e) of the Act, which Plaintiffs are entitled to inspect
automatically, irrespective of purpose, are not presently in issue.
9. The November 13 Request stated that Basswood had been an NSS shareholder
since June 1994 and had "become convinced that the best means of maximizing
value for all of the Company's shareholders is to sell the Company." The
November 13 Request also stated that the "financial performance of the Company
since its conversion to public ownership has been disappointing" and that it
appeared "unlikely that the Company will approach a 15% core return on equity in
1997." Basswood further informed the NSS Board that "a failure by the [NSS]
Board to explore seriously the sale option would be inconsistent with its
fiduciary obligations to the shareholders."
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<PAGE>
10. In accordance with Section 33-946(c) of the Act, the November 13 Request
explicitly disclosed the purpose for which Basswood was seeking NSS's list of
shareholders and the other information requested in Section 33-946(b):
Because we believe that the [NSS] board does not share our view, we
intend to communicate with other shareholders of our Company on matters
relating to our mutual interests as shareholders, including but not
limited to communicating with the Company's shareholders regarding the
financial under performance by the Company in the recent past and
methods to improve the Company's future financial performance and the
Company's value to its shareholders. To facilitate this, and to enable
the shareholders -- the true owners of the Company -- to communicate
their views and better understand their options, pursuant to Section
33-946 of the [Act], Basswood Partners request the right to inspect and
copy the records of the Company described in Sections 33-945(e) and
33-946(b) of the Act.
NSS Rejects Basswood's Request
11. On November 21, 1997, NSS's President and CEO, Robert T. Judson, replied to
the November 13 Request. Although Mr. Judson's November 21 letter (hereinafter,
the "November 21 Response") allowed Basswood to inspect the records of NSS
described in Sections 33-945(e) (albeit on the Friday after Thanksgiving day),
NSS refused access to the information described in Section 33-946(b) and Annex A
to the November 13 Request. In other words, NSS denied Lindenbaum and Basswood
access to NSS's list of shareholders -- information critical to Basswood's and
Lindenbaum's ability to communicate with NSS's other shareholders.
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<PAGE>
12. The NSS November 21 Response conclusorily stated that Basswood was not
entitled to inspect the records listed is Section 33-946(b) "because [Basswood]
ha[s] not met any of the requirements of Section 33-946(c) of the Act,"
including, in particular, the requirement of the Act that Petitioners specify a
proper purpose for such inspection.
13. In light of the disclosures in the November 13 Request and the proper
purpose explicitly stated therein, NSS lacked a reasonable basis to reach this
conclusion in good faith.
14. NSS also claimed that "the primary purpose of [the November 13 Request] was
not the stated purpose, but was instead to create a basis for filing an
amendment to [Basswood's] Schedule 13D intended to put NSS Bancorp 'in play.'"
NSS lacked a reasonable basis to reach this conclusion in good faith as well.
NSS's statement was particularly puzzling because Basswood and Lindenbaum could
have filed an amendment to the Schedule 13D irrespective of whether a formal
request for corporate records was made.
15. Ultimately, without any good faith reasonable basis for doubt about the
right of the Petitioners to inspect the records demanded in the NSS November 21
Response, NSS rejected the particularized request for information in Annex A to
the November 13 Request.
Basswood and Lindenbaum
Renew Their November 13 Request and NSS Again Rejects it.
16. On December 2, 1997, Lindenbaum and Basswood renewed their request for the
information listed in Section 33-946(b) of the Act and Annex A to the November
13
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<PAGE>
Request and reiterated the good faith nature of, and proper purpose behind,
their demand for such corporate records. Lindenbaum's December 2, 1997 letter
(the "December 2 Request") is attached as Exhibit B. The December 2 Request
informed NSS that if it failed to make the requested information available by
December 5, 1997, Lindenbaum and Basswood would be "forced to take appropriate
measures to enforce [their] rights as stockholders."
17. On December 5, 1997, NSS replied to the December 2 Request but failed to
make the information identified in Section 33-946(b) or Annex A to the November
13 Request available, conclusorily stating the December 2 Request "does not
assert any new information which would cause us to change our position relative
to your desire to inspect records described in Section 33-946(b) of the Act.
There would be no purpose in repeating our position in this letter." The
December 5 Response again demonstrated the lack of a good faith reasonable basis
to doubt the Petitioners' right to inspect the records demanded.
CLAIM FOR RELIEF
18. Petitioners' November 13 Request and December 5 Request constitute good
faith demands for corporate records identified in Section 33-946(b) of the Act.
19. Petitioners' purpose in seeking the records identified in Section 33-946(b)
and Annex A to the November 13 Request is to communicate with other shareholders
regarding, inter alia, the maximizing of value to NSS's shareholders, the
financial underperformance of NSS, and NSS's future financial performance.
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<PAGE>
20. Petitioners own approximately 9.83% of NSS's outstanding shares and together
constitute NSS's second largest shareholder. Petitioners believe that discussion
of NSS's performance with other shareholders and communication with such
shareholders regarding potential options to increase the value to shareholders
will be beneficial to all shareholders.
21. Such purpose is clearly proper and lawful under the Act and Petitioners'
request for the corporate records to further such purpose is made in good faith.
22. The November 13 Request and the December 5 Request described in detail and
with particularity the purpose for which Petitioners seek the records identified
therein and the records that Petitioners desire to inspect.
23. The records identified in Section 33-946(b) of the Act and detailed in Annex
A to the November 13 Request are obviously and directly connected to
Petitioners' purpose. In fact, without access to NSS's shareholder list,
Petitioners will be unable to communicate with other shareholders regarding
their mutual interests concerning NSS and the maximization of shareholder value.
24. NSS's November 21 Response and December 5 Response have made it clear that
it disagrees with Petitioners' beliefs regarding the financial performance of
the Company. However, such a disagreement does not constitute a proper,
reasonable or lawful basis to deny Petitioners access to the corporate records
described in Section 33-946(b) of the Act and detailed in Annex A to the
November 13 Request. If NSS and the NSS Board believe that Petitioners are
mistaken in their views about the past and future
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<PAGE>
performance of the Company and the proper means to maximize shareholder value,
then the appropriate remedy is to put their case to NSS's shareholders; it is
neither lawful, justifiable nor proper under the Act to quash the debate by
denying Petitioners the right to communicate with other NSS shareholders.
25. NSS's refusal to provide Petitioners access to corporate records has no
reasonable factual or legal basis; rather, such conduct amounts to a bad faith
effort to prevent Petitioners from communicating with other NSS shareholders.
26. Pursuant to Section 33-948(c), in addition to being compelled to produce
the records requested, NSS should also be ordered to pay costs incurred by
Petitioners in bringing these proceedings, including reasonable attorney's fees.
WHEREFORE, Petitioners request judgment as follows:
(a) That a Temporary Writ of Mandamus issue forthwith commanding NSS
to provide for inspection and copying, within 5 business days,
corporate records requested in Petitioners' November 13 Request
and Annex A thereto, specifically:
(1) Magnetic computer tape lists of the shareholders of NSS as of
a recent date showing the name and address of, and number of
shares held by, each shareholder of record, together with such
computer processing data as is necessary to make use of such
magnetic computer tape, and printouts of such magnetic computer
tape for verification purposes;
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<PAGE>
(2) All daily transfer sheets showing changes in the names and
addresses of, and number of shares held by, shareholders of record
of NSS which are in or come into the possession or control of NSS
or its transfer agent, or which can reasonably be obtained from
brokers, dealers, banks, clearing agencies or voting trustees or
their nominees, from the date of the shareholder lists referred to
in paragraph (1) above through the date of the Court's order;
(3) All information in or which comes into the possession or
control of NSS or its transfer agent, or which can reasonably be
obtained by brokers, dealers, banks, clearing agencies or voting
trustees or their nominees, concerning the names and addresses,
and number of shares held by, the participating brokers and banks
name in the individual nominee names of Cede & Co., and other
similar nominees, including omnibus proxies and all "Weekly
Security Position Listing Daily Closing Balances" reports issued
by The Depository Trust Company, and a list or lists containing
the name and address of, and the number of shares attributable to,
any participant in the Company employee stock ownership, dividend
reinvestment, stock purchase or comparable plan in which the
decision how to vote or whether to dispose of shares held by such
plan is made, directly or indirectly, individually or
collectively, by the participants in the plan;
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<PAGE>
(4) All information in or which comes into the possession or
control of NSS or its transfer agent, or which can reasonably be
obtained from brokers, dealers, banks, clearing agencies or voting
trustees or their nominees, relating to the names of the
Non-Objecting Beneficial Owners of shares ("NOBO's") in the format
of a printout and magnetic tape in descending order balance;
(5) A stop list or lists relating to any shares and any changes,
corrections, additions or deletions from the date of the
shareholder lists referred to in paragraph (1) above through the
date of the Court's order; and
(6) Lists of all holders of record of shares owning 1,000 or more
shares arranged in descending order as of a recent date.
(b) That a permanent Writ of Mandamus issue commanding NSS to provide,
in addition to the information referred to in paragraph (a) above,
modifications, additions or deletions to any and all information
referred to in paragraph (a) above immediately as such
modifications, additions or deletions become available to the
Company or its agent or representatives.
(c) An order compelling NSS to pay costs, including reasonable
attorney's fees, incurred by Petitioners in prosecuting this
action; and
(d) any other relief that the Court deems just and proper.
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<PAGE>
PETITIONERS,
BASSWOOD PARTNERS, L.P. and
MATTHEW LINDENBAUM
___________________________
James F. Stapleton
Jonathan B. Tropp
DAY, BERRY & HOWARD
One Canterbury Green
Stamford, CT 06901-2047
Tel.: (203) 977-7300
Fax: (203) 977-7301
Juris No. 14230
Their Attorneys
Of Counsel:
John L. Hardiman
Tariq Mundiya
SULLIVAN & CROMWELL
125 Broad Street
New York, NY 10004
(212) 558-4000
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<PAGE>
VERIFICATION
Matthew Lindenbaum, individually and as principal of Basswood
Management, Inc., the general partner of Basswood Partners, L.P., being duly
sworn, deposes and says that he has reviewed the allegations of the foregoing
complaint and finds them to be true and correct and that he is duly authorized
by plaintiff Basswood Partners, L.P. to make this verification upon oath.
_______________________________
Matthew Lindenbaum
Subscribed and sworn to before me
this _____ day of December, 1997
______________________________
Notary Public
My commission expires
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<PAGE>
RETURN DATE: JANUARY 6, 1998 : SUPERIOR COURT
:
BASSWOOD PARTNERS, L.P., :
AND MATTHEW LINDENBAUM : J. D. OF STAMFORD/NORWALK
: AT STAMFORD
v. :
:
NSS BANCORP, INC. : DECEMBER 22, 1997
MOTION FOR TEMPORARY MANDAMUS
Plaintiffs Basswood Partners, L.P. ("Basswood") and Matthew Lindenbaum
("Lindenbaum") (collectively, "Petitioners") hereby move for issuance of a
temporary mandamus in aid of the pending action. In support hereof, Petitioners
represent as follows:
1. This motion is brought in aid of the pending action, in which Petitioners
allege as follows by way of verified complaint:
Basswood Partners, L.P. ("Basswood") and Matthew Lindenbaum
("Lindenbaum") (collectively, "Petitioners"), by their undersigned
attorneys, petition this Court pursuant to Section 33-948 of the
Connecticut General Statutes (the "Connecticut Business Corporation
Act" or the "Act") for a writ of mandamus compelling respondent NSS
Bancorp, Inc. ("NSS") to produce for inspection and copying records
of NSS described in Section 33-946(b) of the Act. Despite
Petitioners' clear entitlement to such corporate records and two
written requests for their production, NSS has repeatedly and
without justification refused to provide them and has failed to
comply with its obligations under the Act.
The Parties
1. Basswood is a Delaware limited partnership with its principal
place of business at 52 Forest Avenue, Paramus, New Jersey.
Basswood, through a number of investment partnerships, beneficially
owns 241,411 shares of Common Stock of NSS (the "NSS shares").
<PAGE>
2. Lindenbaum is a principal of Basswood Management, Inc.,
Basswood's general partner. Lindenbaum, in an individual capacity,
owns 100 NSS shares. Basswood and Lindenbaum collectively own 9.83%
of NSS's outstanding shares and, upon information and belief,
collectively constitute NSS's second largest shareholder.
3. NSS is a Connecticut corporation with its principal office at 48
Wall Street, Norwalk, Connecticut 06852.
The Statutory Framework
4. Sections 33-945 through 33-948 of the Act govern the obligations
of a corporation to maintain corporate records, the rights of
shareholders to inspect and copy such records, and judicial
proceedings to enforce those shareholders' rights. Section 33-946(b)
of the Act, which identifies corporate records, including the record
of shareholders, that shareholders of the corporation are entitled
to inspect and copy upon five days written notice by a demand made
in good faith for a proper purpose, provides that:
A shareholder of a corporation is entitled to inspect and
copy, during regular business hours at a reasonable location
specified by the corporation, any of the following records of
the corporation if the shareholder meets the requirements of
subsection (c) of this section and gives the corporation
written notice of his demand at least five business days
before the date on which he wishes to inspect and copy: (1)
Excerpts from minutes of any meeting of the board of
directors, records of any action of a committee of the board
of directors while acting in place of the board of directors
on behalf of the corporation, minutes of any meeting of the
shareholders and records of action taken by the shareholders
or board of directors without a meeting, to the extent not
subject to inspection under subsection (a) of this section;
(2) accounting records of the corporation; and (3) the record
of shareholders.
5. Section 33-946(c) of the Act states:
A shareholder may inspect and copy the records described in
subsection (b) of this section only if: (1) His demand is made
in good faith and for a proper purpose; (2) he describes with
reasonable particularity his purpose and the
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<PAGE>
records he desires to inspect; and (3) the records are
directly connected with his purpose.
6. Section 33-948(b) of the Act permits a shareholder who has been
denied access to corporate records identified in Section 33-946(b)
of the Act to seek expedited judicial relief, and states as follows
(emphasis added):
If a corporation does not within a reasonable time allow a
shareholder to inspect and copy any other record, the
shareholder who complies with subsections (b) and (c) of
section 33-946 may apply to the superior court for the
judicial district where the corporation's principal office or,
if none in this state, its registered office is located for an
order to permit inspection and copying of the records
demanded. The court shall dispose of an application under this
subsection on an expedited basis.
7. Section 33-948(c) further provides that a petitioner can seek
costs and reasonable attorney's fees incurred as a result of
proceeding under Section 33-948:
If the court orders inspection and copying of the records
demanded, it shall also order the corporation to pay the
shareholder's costs, including reasonable attorney's fees
incurred to obtain the order unless the corporation proves
that it refused inspection in good faith because it had a
reasonable basis for doubt about the right of the shareholder
to inspect the records demanded.
Basswood and Lindenbaum
Request NSS's Corporate Records
-------------------------------
8. On November 13, 1997, Basswood wrote to NSS's board of directors
(hereinafter, the "NSS Board") requesting "the right to inspect and
copy the records of the Company described in Sections 33-945(e) and
33-946(b) of the Act during regular business hours on the sixth
business day following the date of this letter or as promptly
thereafter as possible." (A copy of Basswood's November 13 letter
and the accompanying Annex A (the "November 13 Request") is attached
hereto as Exhibit A). The November 13 Request also asked NSS to
"provide to [Basswood] the other information and permit us to take
the other actions set forth in Annex A [specifying certain
stockholder list information in greater detail] as expeditiously as
possible." The records of NSS described in
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Section 33-945(e) of the Act, which Plaintiffs are entitled to
inspect automatically, irrespective of purpose, are not presently in
issue.
9. The November 13 Request stated that Basswood had been an NSS
shareholder since June 1994 and had "become convinced that the best
means of maximizing value for all of the Company's shareholders is
to sell the Company." The November 13 Request also stated that the
"financial performance of the Company since its conversion to public
ownership has been disappointing" and that it appeared "unlikely
that the Company will approach a 15% core return on equity in 1997."
Basswood further informed the NSS Board that "a failure by the [NSS]
Board to explore seriously the sale option would be inconsistent
with its fiduciary obligations to the shareholders."
10. In accordance with Section 33-946(c) of the Act, the November 13
Request explicitly disclosed the purpose for which Basswood was
seeking NSS's list of shareholders and the other information
requested in Section 33-946(b):
Because we believe that the [NSS] board does not share our
view, we intend to communicate with other shareholders of our
Company on matters relating to our mutual interests as
shareholders, including but not limited to communicating with
the Company's shareholders regarding the financial
underperformance by the Company in the recent past and methods
to improve the Company's future financial performance and the
Company's value to its shareholders. To facilitate this, and
to enable the shareholders -- the true owners of the Company
-- to communicate their views and better understand their
options, pursuant to Section 33-946 of the [Act], Basswood
Partners request the right to inspect and copy the records of
the Company described in Sections 33-945(e) and 33-946(b) of
the Act.
NSS Rejects Basswood's Request
------------------------------
11. On November 21, 1997, NSS's President and CEO, Robert T. Judson,
replied to the November 13 Request. Although Mr. Judgson's November
21 letter (hereinafter, the "November 21 Response") allowed Basswood
to inspect the records of NSS described in Sections 33-945(e)
(albeit on the Friday after Thanksgiving day), NSS refused access to
the information described in Section 33-946(b) and Annex A to the
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<PAGE>
November 13 Request. In other words, NSS denied Lindenbaum and
Basswood access to NSS's list of shareholders -- information
critical to Basswoods's and Lindenbaum's ability to communicate with
NSS's other shareholders.
12. The NSS November 21 Response conclusorily stated that Basswood
was not entitled to inspect the records listed is Section 33-946(b)
"because [Basswood] ha[s] not met any of the requirements of Section
33-946(c) of the Act," including, in particular, the requirement of
the Act that Petitioners specify a proper purpose for such
inspection.
13. In light of the disclosures in the November 13 Request and the
proper purpose explicitly stated therein, NSS lacked a reasonable
basis to reach this conclusion in good faith.
14. NSS also claimed that "the primary purpose of [the November 13
Request] was not the stated purpose, but was instead to create a
basis for filing an amendment to [Basswood's] Schedule 13D intended
to put NSS Bancorp 'in play.'" NSS lacked a reasonable basis to
reach this conclusion in good faith as well. NSS's statement was
particularly puzzling because Basswood and Lindenbaum could have
filed an amendment to the Schedule 13D irrespective of whether a
formal request for corporate records was made.
15. Ultimately, without any good faith reasonable basis for doubt
about the right of the Petitioners to inspect the records demanded
in the NSS November 21 Response, NSS rejected the particularized
request for information in Annex A to the November 13 Request.
Basswood and Lindenbaum
Renew Their November 13 Request and NSS Again Rejects it.
--------------------------------------------------------
16. On December 2, 1997, Lindenbaum and Basswood renewed their
request for the information listed in Section 33-946(b) of the Act
and Annex A to the November 13 Request and reiterated the good faith
nature of, and proper purpose behind, their demand for such
corporate records. Lindenbaum's December 2, 1997 letter (the
"December 2 Request") is attached as Exhibit B. The December 2
Request informed NSS that if it failed to make the requested
information available by December 5, 1997, Lindenbaum and Basswood
would be "forced to take appropriate measures to enforce [their]
rights as stockholders."
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<PAGE>
17. On December 5, 1997, NSS replied to the December 2 Request but
failed to make the information identified in Section 33-946(b) or
Annex A to the November 13 Request available, conclusorily stating
the December 2 Request "does not assert any new information which
would cause us to change our position relative to your desire to
inspect records described in Section 33-946(b) of the Act. There
would be no purpose in repeating our position in this letter." The
December 5 Response again demonstrated the lack of a good faith
reasonable basis to doubt the Petitioners' right to inspect the
records demanded.
CLAIM FOR RELIEF
18. Petitioners' November 13 Request and December 5 Request
constitute good faith demands for corporate records identified in
Section 33-946(b) of the Act.
19. Petitioners' purpose in seeking the records identified in
Section 33-946(b) and Annex A to the November 13 Request is to
communicate with other shareholders regarding, inter alia, the
maximizing of value to NSS's shareholders, the financial
underperformance of NSS, and NSS's future financial performance.
20. Petitioners own approximately 9.83% of NSS's outstanding shares
and together constitute NSS's second largest shareholder.
Petitioners believe that discussion of NSS's performance with other
shareholders and communication with such shareholders regarding
potential options to increase the value to shareholders will be
beneficial to all shareholders.
21. Such purpose is clearly proper and lawful under the Act and
Petitioners' request for the corporate records to further such
purpose is made in good faith.
22. The November 13 Request and the December 5 Request described in
detail and with particularity the purpose for which Petitioners seek
the records identified therein and the records that Petitioners
desire to inspect.
23. The records identified in Section 33-946(b) of the Act and detailed
in Annex A to the November 13 Request are obviously and directly
connected to Petitioners' purpose. In fact, without access to NSS's
shareholder list, Petitioners will be unable to communicate with other
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<PAGE>
shareholders regarding their mutual interests concerning NSS and the
maximization of shareholder value.
24. NSS's November 21 Response and December 5 Response have made it
clear that it disagrees with Petitioners' beliefs regarding the
financial performance of the Company. However, such a disagreement
does not constitute a proper, reasonable or lawful basis to deny
Petitioners access to the corporate records described in Section
33-946(b) of the Act and detailed in Annex A to the November 13
Request. If NSS and the NSS Board believe that Petitioners are
mistaken in their views about the past and future performance of the
Company and the proper means to maximize shareholder value, then the
appropriate remedy is to put their case to NSS's shareholders; it is
neither lawful, justifiable nor proper under the Act to quash the
debate by denying Petitioners the right to communicate with other
NSS shareholders.
25. NSS's refusal to provide Petitioners access to corporate records
has no reasonable factual or legal basis; rather, such conduct
amounts to a bad faith effort to prevent Petitioners from
communicating with other NSS shareholders.
26. Pursuant to Section 33-948(c), in addition to being compelled to
produce the records requested, NSS should also be ordered to pay
costs incurred by Petitioners in bringing these proceedings,
including reasonable attorney's fees.
2. Defendant is required to provide Petitioners with access to its corporate
records pursuant to Section 33-946 of the Connecticut General Statutes.
3. Defendant has failed and refuses to do so.
4. By reason of the foregoing, plaintiff has suffered and continues to suffer
irreparable injury.
5. Pursuant to Section 33-948, Petitioners are entitled to an expedited remedy
for Defendant's improper refusal to comply with Section 33-946.
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<PAGE>
6. A recognizance to prosecute the present action has been taken in the
appropriate and sufficient amount of $250. The giving of a further bond to
answer damages should the Petitioners fail to prosecute this action to effect is
unnecessary because there will not be any consequences or cost to the defendant
and the Petitioners have the financial wherewithal to pay any costs.
WHEREFORE, the Petitioners pray that an order be issued summoning the
said Defendant NSS Bancorp, Inc. before this Court to show cause, if any there
by, why it should not permit Petitioners access to its corporate records as set
forth in the Verified Complaint, as required by law.
PETITIONERS, BASSWOOD
PARTNERS, L.P. and MATTHEW
LINDENBAUM
By _________________________________
James F. Stapleton
Jonathan B. Tropp
For DAY, BERRY & HOWARD
One Canterbury Green
Stamford, CT 06901-2047
Tel.: (203) 977-7300
Fax: (203) 977-7301
Juris No. 14230
Their Attorneys
Of Counsel:
John L. Hardiman
Tariq Mundiya
SULLIVAN & CROMWELL
125 Broad Street
New York, NY 10004
(212) 558-4000
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<PAGE>
VERIFICATION
Matthew Lindenbaum, individually and as principal of Basswood
Management, Inc., the general partner of Basswood Partners, L.P., being duly
sworn, deposes and says that he has reviewed the allegations of the foregoing
Motion for Temporary Mandamus and finds them to be true and correct and that he
is duly authorized by plaintiff Basswood Partners, L.P. to make this
verification upon oath.
_________________________________
Matthew Lindenbaum
Subscribed and sworn to before me
this _____ day of December, 1997
_________________________________
Notary Public
My commission expires
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<PAGE>
ORDER TO SHOW CAUSE
WHEREAS, Petitioners presented this Court with a Verified Complaint
seeking an order in the nature of a mandamus together with a Motion for
Temporary Mandamus requesting immediate issuance of a temporary writ of
mandamus;
NOW, THEREFORE, IT IS ORDERED THAT the Defendant be summoned to appear
before the Superior Court for the Judicial District of Stamford/Norwalk at
Stamford in Room ____ at 123 Hoyt Street, Stamford, Connecticut on
____________________, 1998 at _________ then and there to show cause why the
Defendant should not permit Petitioners to examine and copy its corporate
records specified in Section 33-946(b) of the Connecticut General Statutes for
the purposes stated in the Verified Complaint and as prayed in the verified
Motion for Temporary Mandamus, by the Petitioners causing some proper officer to
serve a true and attested copy of the Verified Complaint, of the foregoing
verified Motion for Temporary Mandamus, and of this order upon the said
Defendant on or before the 31st of December, 1997 and return make to this Court.
By the Court.
__________________________
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<PAGE>
SUMMONS
To Any Proper Officer:
By authority of the State of Connecticut, you are hereby commanded
forthwith to make service of the above order by leaving a true and attested copy
of the Verified Complaint, of the above verified Motion for Temporary Mandamus
and Order to Show Cause, and of this Summons with an appropriate officer or
agent of the defendant NSS Bancorp, Inc. at its principal place of business at
48 Wall Street, Norwalk, Connecticut in the County of Fairfield, on or before
December 31, 1997.
Hereof fail not but due service and return make.
Dated at Stamford, Connecticut this ____ day of December, 1997.
___________________________________
Commissioner of the Superior Court
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Exhibit (2)
ORDER TO SHOW CAUSE
WHEREAS, Petitioners presented this Court with a Verified Complaint
seeking an order in the nature of a mandamus together with a Motion for
Temporary Mandamus requesting immediate issuance of a temporary writ of
mandamus;
NOW, THEREFORE, IT IS ORDERED THAT the Defendant be summoned to appear
before the Superior Court for the Judicial District of Stamford/Norwalk at
Stamford in Room * at 123 or 115 Hoyt Street, Stamford, Connecticut on January
20, 1998 at 9:30 A.M. then and there to show cause why the Defendant should not
permit Petitioners to examine and copy its corporate records specified in
Section 33-946(b) of the Connecticut General Statutes for the purposes stated in
the Verified Complaint and as prayed in the verified Motion for Temporary
Mandamus, by the Petitioners causing some proper officer to serve a true and
attested copy of the Verified Complaint, of the foregoing verified Motion for
Temporary Mandamus, and of this order
- --------
* See Posted Special Proceedings calendar for courtroom assignment.
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<PAGE>
upon the said Defendant on or before 12 days prior to the hearing date and
return make to this Court.
By the Court,
__________________________
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Exhibit (3)
AGREEMENT
The undersigned agree that the attached Schedule 13D relating to the
Common Stock of NSS Bancorp (amending the Form F-11 previously filed with
respect to the Common Stock of Norwalk Savings Society, the predecessor of
NSS Bancorp) shall be filed on behalf of the undersigned.
Dated: January 2, 1998
BASSWOOD PARTNERS, L.P.
By: Basswood Management, Inc.,
its General Partner
By: /s/ Matthew Lindenbaum
----------------------------------
Matthew Lindenbaum, President
/s/ Matthew Lindenbaum
----------------------------------
(Matthew Lindenbaum)
/s/ Bennett Lindenbaum
----------------------------------
(Bennett Lindenbaum)
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