Exhibit 10.3
SERIES A PREFERRED STOCK
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this "Agreement") is entered into as of
June __, 2002, between PFGI CAPITAL CORPORATION, a Maryland corporation (the
"Issuer") and THE PROVIDENT BANK, an Ohio state-chartered member bank of the
Federal Reserve System ("Provident Bank").
RECITALS
A. The Issuer intends to sell to the public up to 6,900,000 of the
Issuer's Series A non-cumulative preferred stock, $25.00 liquidation preference
per share (the "Series A preferred stock").
B. The Series A preferred stock will be exchangeable into a like number
of Series A non-cumulative preferred stock of Provident Bank, $25.00 liquidation
preference per share (the "Exchange Stock"), under certain circumstances
described below.
C. The parties hereto desire to ensure that, in the event of the
occurrence of circumstances requiring the exchange of the Series A preferred
stock into the Exchange Stock, Provident Bank will be contractually bound
unconditionally to issue to the holders of Series A Preferred Stock Exchange
Stock sufficient for exchange of the Series A preferred stock, and to effect the
exchange of all outstanding Series A preferred stock into Exchange Stock.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby expressly acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Exchange of the Series A Preferred Stock. If at any time after the
issuance and sale of the Series A preferred stock: (i) Provident Bank becomes
less than "adequately capitalized" according to regulations established by the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board")
pursuant to the Federal Deposit Insurance Corporation Investment Act or as
determined by the Ohio Division of Financial Institutions pursuant to the Ohio
Banking Code and regulations thereunder; (ii) Provident Bank is placed into
conservatorship or receivership; (iii) (x) the Federal Reserve Board, in its
sole discretion, or the Ohio Division of Financial Institutions, in its sole
discretion, directs such exchange in writing, and (y) even if Provident Bank is
not less than "adequately capitalized," the Federal Reserve Board or the Ohio
Division of Financial Institutions anticipates Provident Bank becoming less than
"adequately capitalized" in the near term; or (iv) the Federal Reserve Board, in
its sole discretion, or the Ohio Division of Financial Institutions, in its sole
discretion, directs such exchange in writing in the event that Provident Bank
has a Tier 1 risk-based capital ratio of less than 5.0%; then
(a) any holder or holders of the Series A preferred stock (or the
collateral agent on behalf of the holders of Income PRIDES)
shall immediately, in accordance with procedures set forth in
the charter of the Issuer and the prospectus pursuant to which
the Series A preferred stock were sold, exchange (the
"Exchange") the Series A preferred stock for the Exchange
Stock, on a one share for one share basis, by delivering any
and all certificates representing any of the Series A
preferred stock to Provident Bank, properly endorsed for
transfer;
(b) Provident Bank shall immediately and unconditionally issue the
Exchange Stock to the holder or holders of the Series A
preferred stock (or the collateral agent on behalf of the
holders of Income PRIDES), and
(c) any and all accrued but unpaid dividends on the Series A
preferred stock through the date of the conversion shall be
deemed to be accrued and unpaid dividends on the Exchange
Stock.
2. Legend. The certificates representing the Series A preferred stock
shall bear substantially the following legend in conspicuous type:
THE SERIES A PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF THE CHARTER OF THE CORPORATION AND A CERTAIN EXCHANGE AGREEMENT, DATED
JUNE __, 2002, REQUIRING THEIR EXCHANGE IN CERTAIN CIRCUMSTANCES INTO SERIES A
PREFERRED STOCK OF THE PROVIDENT BANK. THE CORPORATION WILL MAIL TO THE
STOCKHOLDER A COPY OF THE CHARTER OF THE CORPORATION AND SUCH AGREEMENT, WITHOUT
CHARGE, WITHIN FIVE DAYS AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
3. Representations as to the Exchange Stock. Provident Bank represents
and warrants to the Issuer that (i) the issuance of the Exchange Stock has been
duly authorized by the Board of Directors of Provident Bank and (ii) all
corporate actions necessary for Provident Bank to issue the Exchange Stock have
been taken.
4. Cancellation. Provident Bank acknowledges and accepts hereby that
upon the occurrence of the Exchange, the Series A Preferred Stock will be
cancelled and no longer outstanding.
5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and the
same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as signatories.
2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
THE PROVIDENT BANK
By:
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Name: Xxxxxx Xxxxx
Title: Senior Vice President, Treasury
PFGI CAPITAL CORPORATION
By:
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Name: Xxxx X. Xxxxx
Title: Secretary
