CUSIP No. 000000000 Page 25 of 54 Pages
EXHIBIT 6
VIA FACSIMILE AND OVERNIGHT MAIL
October 22, 2002
The Board of Directors
c/o Xxxxx X. Xxxxxxx
Chairman of the Board
Provident Financial Holdings, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xxxxx:
This letter is in response to your letter dated October 1, 2002 (attached hereto
as exhibit A) and the subsequent draft Agreement I received (attached hereto as
exhibit B). I am writing because two weeks have passed since you said you would
get back to me, and I can only assume that your silence is an indication of your
unwillingness to respond to the changes I suggested to the draft Agreement. The
most egregious of the restrictive provisions in your draft standstill agreement
is Article III, section 1(d) which essentially removes any ability for me to act
as a director, especially in the areas where I can add the most value including
valuation, merger strategy, capital management and corporate strategy. In the
current era of corporate governance matters, I cannot understand how you could
ask a board member to restrict himself in this manner nor could I willingly sign
such an agreement. Furthermore, we continue to believe that the two proposed
board members we submitted would add more value than just one. My experience as
a bank analyst and institutional shareholder and Xxxx Xxxxxx' experience as a
former President of a publicly owned bank will add separate and important skills
to the board.
Therefore, please be informed that I decline your offer to join the Board of
Directors under the terms outlined in the letter and draft Agreement, and that I
demand that you hold an annual meeting of shareholders as is required by the
Provident Financial Holdings, Inc. bylaws and Delaware law. At this meeting, we
intend to run an alternative slate of directors including Xxxx Xxxxxx and
myself.
With respect to the annual meeting of shareholders, your letter to me dated
August 20, 2002 detailed the procedures for the announcement, filing and
scheduling of the meeting. Yet, nowhere in that letter and nowhere have we since
seen such announcement, filing or scheduling. My understanding of the bylaws and
Delaware law is that the company must hold an annual meeting of shareholders
within 13 months of the previous meeting. Given that last year's meeting was
held on October 27, 2001 and your August 20th representation that you would hold
the annual meeting within approximately 60 days
CUSIP No. 000000000 Page 26 of 54 Pages
from giving public notice of such meeting, I would expect that this year's
meeting would be held in late December 2002 or early January 2003. As a
Provident shareholder, I must demand that the board schedule the annual meeting
of shareholders of Provident Financial Holdings, Inc. at its Board of Directors
meeting on Thursday, October 24th. I trust that scheduling the annual meeting of
shareholders is an important enough issue to be added to your agenda.
If we do not see an announcement of the scheduling of the annual meeting coming
out of the October 24 board meeting, you can expect us, on November 27th, to
seek a ruling by the Delaware Chancery Court to force you to hold that meeting
as soon as possible in accordance with Section 211 of the Delaware code.
Sincerely,
/s/ Xx Xxxxxx
Xx Xxxxxx
Managing Member
JAM Managers, L.L.C.
As General Partner for
JAM Partners, L.P.
cc: Xxxx Xxxxxx
Xxxxxxx Xxxxxxxx (Xxxxx & Xxxxxxx)
Xxxxx Xxxxxxxxx
Xxx Xxxxx
CUSIP No. 000000000 Page 27 of 54 Pages
EXHIBIT A
October 1, 2002
Xx. Xxxxxxx Xxxxxx
Managing Member
JAM Partners, L.P.
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sy:
We once again want to thank you for coming to California to meet with
representatives of the Board of Directors of Provident Financial Holdings, Inc.
("Provident"). We believe our discussions were informative and beneficial and we
were impressed with your presentation and knowledge of the banking and thrift
industry.
The purpose of this meeting was to follow-up on the issues you raised
in your letters to the Board of Directors of May 29, 2002 and July 11, 2002 and
to provide you with the opportunity to discuss these concerns with
representatives of the Board of Directors. In particular, you raised a number of
concerns about the capital management and financial performance of Provident.
Your conclusion was that these problems could be best addressed by having
institutional investor representation on Provident's Board of Directors.
As an initial point, we respectfully disagree with your May 29, 2002
letter relative to your assessment of our profitability. The past several years
have included periods of tumultuous conditions both in the national and regional
economies that have generally affected the operations and performance of
financial institutions. Particularly in recent periods, there have been
challenges to Provident's profitability as a result of the prepayment of loans
in the loan portfolio and a reduction in qualifying loans that we can originate
for our portfolio. Since the initial public offering in 1996, however, the
compound annual growth rate of Provident's earnings per share has been 27% and
the compound growth rate of the stock price during this period has been 22%.
In spite of these successes, we, as board members and individual
stockholders of Provident, share many of your concerns. Accordingly, we have
made a number of decisions in which we have sought to address Provident's
capital management and
CUSIP No. 000000000 Page 28 of 54 Pages
financial performance. These decisions are reflected in a number of actions,
which are briefly described below.
On May 29, 2002 Provident declared a 3-for-2 stock split in the form of
a 50 percent stock dividend. The dividend was paid on July 12, 2002 and
increased the number of shares outstanding, creating additional liquidity in the
shares, which is a benefit to all of Provident's shareholders. On July 24, 2002,
Provident initiated a quarterly cash dividend policy for the purpose of
rewarding shareholders as Provident continues to build long-term value. On
September 17, 2002, we announced the continuation of our stock repurchase
program and the authorization by the Board for management to repurchase up to
10% of its outstanding stock, or approximately 529,600 shares. The repurchase
program helps us to reduce excess capital and improve Provident's earnings per
share. Since Provident's initial public offering we have repurchased
approximately 2,420,000 shares or approximately 31% of the outstanding stock.
Our efforts have not been limited to capital management. We also have sought to
improve net earnings and have announced plans for a productivity enhancement
program. As a key element of this program, in July, we reduced Provident's
workforce by 10%. As we noted in our July 23, 2002 press release, it is
anticipated that these actions will result in annual non-interest expense
savings of approximately $1.38 million.
We do not believe, nor are we suggesting, that we have attained our
goals; however, we believe that we have taken action that will improve our
performance and result in better leverage of our capital within the regulations
and other parameters imposed by the regulatory agencies.
Following our meeting with you, the Board of Directors met to discuss
your request for Board representation. The focus of the Board's discussions was
to obtain a result that would be acceptable to you and your group and also be in
the best interest of all of Provident's shareholders.
In response to your request, we would propose to expand the size of the
Board by one member, increasing the number of directors from seven to eight
members, and to nominate you for the new seat on Provident's Board of Directors.
We believe, based on our discussions with other institutional investors, that
the addition of one director to Provident's Board, who will represent the
investment community's views, satisfies their concerns and that there is no need
for the addition of a second director for this purpose. As is customary, your
nomination would be subject to the negotiation of a mutually acceptable
standstill agreement, similar to what you have entered into in the past.
In reaching this decision to offer you a board seat, Provident's Board
of Directors considered the interests of all of its shareholders. We believe
that your presence on the Board will address the concerns you have articulated
in your correspondence to us. Also, we believe it is beneficial to direct our
efforts to our mutual objective of continuing to enhance shareholder value
rather than focus management time on, and for each of us to incur the
significant costs of, a proxy contest. We concluded that your experience and
CUSIP No. 000000000 Page 29 of 54 Pages
expertise would be valuable to the Board of Directors in addressing our shared
concerns and would represent the views of the investment community.
We look forward to working with you on a mutually acceptable standstill
agreement with the goal of having you join the Board. If you have any questions,
please do not hesitate to call.
Best regards,
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Chairman of the Board
CGB/sm
CUSIP No. 000000000 Page 30 of 54 Pages
EXHIBIT B
AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of _________, 2002 by and
among Provident Financial Holdings, Inc., a Delaware corporation (the
"Company"), Provident Savings Bank, F.S.B., a federally chartered stock savings
bank ("Savings Bank"), and JAM Partners, L.P. including also JAM Special
Opportunities Fund, L.P., JAM Managers, L.L.C. and Xxxxxxx X. Xxxxxx; Xxxxxxxx
Partners L. P. including also Xxxxxxxx Partners II, L.P., Endicott Offshore
Investors, Ltd., X.X. Xxxxxxxx, L.L.C., X.X. Xxxxxxxx XX, L.L.C., Xxxxxxxx
Management Co., Xxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxx; and Xxxx X. Xxxxxx
(collectively, the "Investors").
RECITALS
WHEREAS, the Investors have notified the Company that they wish to
nominate certain persons for election to the Company's Board of Directors at the
Company's Annual Meeting of Stockholders (the "Annual Meeting"); and
WHEREAS, the Investors have determined that their and the Company's
best interests would be served by (i) the Investors not engaging in a
solicitation of proxies for the Annual Meeting for the election of the
Investors' nominees in opposition to nominees of the Board of Directors (a
"Proxy Contest"), (ii) the nomination of the Investors' representative to the
Boards of Directors of the Company and the Savings Bank as provided herein and
(iii) the other arrangements set forth herein; and
WHEREAS, the Company has determined that the best interests of the
Company and its stockholders would be served by (i) the Investors not engaging
in a Proxy Contest for the Annual Meeting, (ii) the nomination of the Investors'
representative to the Boards of Directors of the Company and the Savings Bank as
provided herein and (iii) the other arrangements set forth herein.
NOW, THEREFORE, in consideration of the promises, mutual covenants and
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by each of the parties
hereto, and intending to be legally bound hereby, each of the parties hereby
agree as follows:
I.
REPRESENTATIONS
1. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. The Investors represent
and warrant to the Company as follows:
a. Such Investors have the requisite legal power and authority to
execute, deliver and carry out this Agreement and the execution and
delivery of this Agreement by the Investors has been duly authorized
by the principals to which an Investor or the Investors is a party.
Such Investors have taken all necessary legal action to authorize
the execution, delivery and performance of this Agreement and the
transactions contemplated hereby.
b. This Agreement has been duly and validly authorized, executed and
delivered by such
CUSIP No. 000000000 Page 31 of 54 Pages
Investor or by the principals to which an Investor or the Investors
is a party and constitutes a valid and binding obligation of the
Investors, enforceable in accordance with its terms. The performance
of the terms of this Agreement shall not constitute a violation of
any limited partnership agreement, by-laws or any agreement or
instrument to which an Investor or the Investors is a party.
c. There are no other persons who, by reason of their personal,
business, professional or other arrangement with an Investor or the
Investors, whether written or oral and whether existing as of the
date hereof or in the future, have agreed, explicitly or implicitly,
to take any action on behalf of or in lieu of an Investor or the
Investors that would otherwise be prohibited by this Agreement.
d. The Investors and their affiliates beneficially own an aggregate of
417,150 [Confirm] shares of the Company's common stock, $0.01 par
value per share (the "Common Stock"). The Investors and their
affiliates do not beneficially own any equity or debt securities of
the Company or any subsidiary, other than the foregoing.
2. REPRESENTATIONS AND WARRANTS OF THE COMPANY AND THE SAVINGS BANK. The
Company and the Savings Bank represents and warranties to the Investors as
follows:
a. The Company is duly organized and validly existing and in good
standing under the laws of the State of Delaware and the Savings
Bank is duly organized and validly existing and in good standing
under the laws of the United States, and have the requisite
corporate power and authority to execute, deliver and carry out this
Agreement, and have taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby.
b. This Agreement has been duly and validly authorized, executed and
delivered by the Company the Savings Bank and constitutes a valid
and binding agreement of the Company and the Savings Bank,
enforceable in accordance with its terms.
II.
BOARD OF DIRECTORS AND MANAGEMENT
1. ANNUAL MEETING; INVESTOR DESIGNEE.
a. The Annual Meeting shall be held on ________ ___, 2002, or such
later date as the Board of Directors may determine. The parties
hereby agree that the slate of the nominees for election to the
Board of Directors at the Annual Meeting to be proposed by the Board
of Directors shall be each of the two current members of the Board
of Directors up for reelection, namely Xxxxx X. Xxxxxxx and Xxx X.
Xxxxxx, and the parties hereto further agree that they shall
nominate, recommend and support such slate at the Annual Meeting and
shall vote, and shall cause their affiliates to vote, all shares of
Common Stock or proxies which they are entitled to vote in favor of
the election of such nominees at the Annual Meeting.
b. The Company and the Savings Bank each shall promptly commence action
necessary to
CUSIP No. 000000000 Page 32 of 54 Pages
increase the size of their respective Boards of Directors from seven
to eight members and to nominate, recommend and support for election
at the Annual Meeting one representative of the Investors (the
"Investor Designee"), namely Xxxxxxx X. Xxxxxx, to the Board of
Directors of the Company and the Savings Bank for a term to expire
at the _____ Annual Meeting of Shareholders.
c. While serving as director, the Investor Designee shall have the same
legal duties and responsibilities and the same rights and privileges
as the other nonemployee directors of the Company and the Savings
Bank, including without limitation, with respect to expense
reimbursement, director compensation, notice, indemnification,
confidentiality, trading blackouts and other trading restrictions
and access to Company and Savings Bank information and personnel.
2. OTHER OBLIGATIONS. The Investors shall not engage in any solicitation of
proxies in connection with the Annual Meeting. If, at any time after the
date hereof, the Investors and their affiliates beneficially own less than
264,800 shares of Common Stock, at the Company's option, the Investors
shall cause the Investor Designee to immediately thereafter resign from
the Boards of Directors of each of the Company and the Savings Bank. The
Investors agree to provide the Company with reasonable evidence of the
number of shares of Common Stock and other securities of the Company and
its subsidiaries beneficially owned by them, upon request of the Company
from time to time following the election of the Investor Designee to the
Board.
III.
STANDSTILL AND VOTING AGREEMENT
1. STANDSTILL PROVISIONS. The Investors agree that, for so long as the
Investor Designee serves on the Board of Directors of either the Company
or the Savings Bank, and for three months thereafter (it being understood,
in the case of resignation, that such three month period shall commence
upon the date the Company receives notice of resignation from such
boards), without the Company's prior written consent, no Investor shall:
a. acquire, announce an intention to acquire, offer or propose to
acquire, or agree to acquire, directly or indirectly, by purchase or
otherwise, beneficial ownership of any Common Stock, or direct or
indirect rights to options to acquire (through purchase, exchange,
conversion or otherwise) any Common Stock, if, immediately after any
such acquisition, the Investors would beneficially own, in the
aggregate, Common Stock representing more than 9.9% of the
outstanding Common Stock;
b. 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 l4a-l of Regulation 14A and
Instruction 3 of Item 4 of Schedule 14A, respectively, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) in
opposition to the recommendation or proposal of the Company's Board
or 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 Common
Stock of the Company, or execute any written
CUSIP No. 000000000 Page 33 of 54 Pages
consent in lieu of a meeting of the holders of the Common Stock of
the Company or grant a proxy with respect to the voting of the
Common Stock of the Company to any person other than to the Board of
Directors of the Company;
c. initiate, propose, submit, encourage or otherwise solicit
stockholders of the Company for the approval of one or more
stockholder proposals or induce or attempt to induce any other
person to initiate any stockholder proposal, or seek election to or
seek to place a representative or other affiliate or nominee on the
Company's Board or Directors or seek removal of any member of the
Company's Board of Directors;
d. make any statement or proposal, whether written or oral, to the
Board of Directors of the Company, or to any director, officer or
agent of the Company, or make any public announcement or proposal
whatsoever with respect to a merger, acquisition of control or other
business combination, sale or transfer of assets, recapitalization,
dividend, share repurchase, liquidation or other extraordinary
corporate transaction with the Company or any other transaction
which could result in a change of control, or solicit or encourage
any other person to make any such statement or proposal;
e. form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) for the purpose of
acquiring, holding, voting or disposing of any securities of the
Company, other than the group which the Investors is a member of as
of the date hereof;
f. 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, and no Investor other than as
provided herein shall consent to become a nominee for election as a
Director of the Company:
g. deposit any Common Stock into a voting trust or subject any Common
Stock to any arrangement or agreement with respect to the voting of
any Common Stock other than this Agreement;
h. execute any written consent with respect to the Company, except in
accordance with Section III.3;
i. otherwise act, alone or in concert with others, to seek to exercise
any control over the management, Board of Directors or policies of
the Company;
j. make a public request to the Company (or its directors, officers,
shareholders, employees or agents) to amend or waive any provisions
of this Agreement, the Certificate of Incorporation or Bylaws of the
Company, including without limitation any public request to permit
the Investors or any other person to take any action in respect of
the matters referred to in this Section III.1;
k. take any action which might require the Company to make a public
announcement regarding the possibility of any transaction referred
to in paragraph (d) above or similar transaction or, advise, assist
or encourage any other persons in connection with the foregoing; or
CUSIP No. 000000000 Page 34 of 54 Pages
l. disclose publicly, or privately in a manner that could reasonably be
expected to become public, any intention, plan or arrangement
inconsistent with the foregoing;
provided that nothing in this Section III.1 shall prohibit any person who is
serving as a director of the Company as contemplated herein from, solely in his
or her capacity as such director, (a) taking any action or making any statement
at any meeting of the Board of Directors or of any committee thereof; (b) making
any statement to any director, officer or agent of the Company, or (c) making
any statement or disclosure required under the federal securities laws or other
applicable laws and provided, further, that nothing in this Section shall
restrict any private communications between the Investors and the Investor
Designee, provided that all such communications by such person remain subject to
the fiduciary duties of such person as a director and the other obligations
contained in this Agreement.
2. TRANSFER LIMITATIONS. The Investors agree that, for so long as the
Investor Designee serves on the Board of Directors of either the Company
or the Savings Bank, and for three months thereafter (it being understood,
in the case of resignation, that such three month period shall commence
upon the date the Company receives notice of resignation from such
boards):
a. Without the Company's prior written consent, which may not
unreasonably be withheld, no Investor shall, directly or indirectly,
sell, transfer or otherwise dispose of any interest in the Investors
shares, provided, that the Investors may transfer the investors'
shares: (i) to any person who the Investors believe, after due
inquiry, would beneficially own immediately after any such sale or
transfer less than 5% of the outstanding Common Stock; (ii) to any
person who the Investors believe, after due inquiry, would be
entitled to report beneficial ownership of Common Stock on Schedule
13G under the Exchange Act; (iii) in a registered broad-distribution
underwritten public offering; (iv) to the Company; (v) pursuant to
any tender offer or exchange offer which is recommended by the Board
of Directors of the Company; (vi) to any other person who enters
into a standstill agreement with the Company on terms and conditions
substantially equivalent to those in this Agreement; (vii) to any
corporation, partnership or other entity wholly-owned by the
Investors or to any other Investor; or (viii) to any trust the sole
beneficiaries of which are family members or any charitable trust or
charitable foundation established by the Investors, provided that
such trust, charitable trust or charitable foundation either (y)
enters into a standstill agreement with the Company containing terms
and conditions substantially equivalent to those in this Agreement
or (z) is and remains during the term of this Agreement an affiliate
of an Investor.
b. In the event of any proposed sale or transfer of shares of Common
Stock (other than as described in 2(a)(vii or viii above)), such
Investor shall give written notice to the Company of such proposed
sale and the bona fide terms on which the sale is proposed to be
made. For these purposes, such notice may state an intention of the
Investor to sell into the public market at the market price
prevailing on the date of sale. The Company, and if the Company is
unable or unwilling to make such purchase, the then current members
of the Board of Directors, shall have a right of first refusal on
such shares to buy some or all of them at the price and terms stated
in the notice, which may be exercised no later than seven days from
the date of notice. If all of such shares are not purchased by the
Company or the members of the Board of Directors, the Investor may
sell them to the third party (subject to the limitations in 2(a)
above) at the price and terms stated in the notice, at any time
within the 30 days following the failure of the
CUSIP No. 000000000 Page 35 of 54 Pages
Company or the Board of Directors to exercise its option.
3. VOTING. The Investors agree that, during the term specified in III.2
above, for so long as the Investors beneficially own any Common
Stock, the Investors will (a) be present, in person or represented
by proxy, at all shareholder meetings of the Company so that all
Common Stock beneficially owned by the Investors may be counted for
the purpose of determining the presence of a quorum at such meetings
and (b) with respect to the election of directors, vote or consent,
or cause to be voted or a consent to be given, with respect to all
Common Stock beneficially owned by the Investors on all matters
submitted to shareholders for a vote or consent in the same
proportion as Common Stock are voted by holders unaffiliated with
the Investors.
IV.
ADDITIONAL AGREEMENTS
1. PRESS RELEASE. Upon the effectiveness of this Agreement, the Company shall
issue a press release in a form that shall have been previously approved
by the Investors, such approval not to be unreasonably withheld. Neither
the Company nor the Investors nor any of their affiliates, associates or
representatives shall issue any other press release or other publicly
available document that is inconsistent with, or is otherwise contrary to,
the statements in such Company press release. The Company shall make all
filings with the Securities Exchange Commission ("SEC") appropriate in
connection with the execution of this Agreement, including a Current
Report on Form 8-K.
2. WITHDRAWAL OF NOTICES. The Investors hereby withdraw their request made by
letters dated May 29, 2002 and July 11, 2002 giving notice to the Company
of the Investors' wish to nominate directors at the Annual Meeting. The
Investors hereby withdraw the letter of August 16, 2002 from Xx. Xxxxxx to
the Company's Board of Directors requesting, among other things, a list of
the Company's shareholders. The Investors agree to promptly amend their
Schedule 13D filing to reflect, as appropriate, the substance of this
Agreement and that their intention no longer involves a change in the
Board of Directors or management of the Company except as specified in
this Agreement.
3. CHALLENGES TO AGREEMENT; DISPARAGING REMARKS. Each party hereto shall not,
and shall use its best efforts to cause each of its affiliates, associates
and representatives not to, challenge the validity of any provisions of
this Agreement. In the event that any part of this Agreement or any
transaction contemplated hereby is temporarily, preliminarily or
permanently enjoined or restrained by a court of competent jurisdiction,
the parties hereto shall use their reasonable best efforts to cause any
such injunction or restraining order to be vacated or dissolved or
otherwise declared or determined to be of no further force or effect.
During the term of this Agreement, each of the Investors agrees not to
make any public statement or comment or private statement or comment which
could reasonably be expected to become public which could in any way be
deemed to diminish the reputation of or otherwise disparage the Company,
the Savings Bank, or or any subsidiary or the Board of Directors of the
Company or any subsidiary or any of the directors or officers of the
Company or any subsidiary; PROVIDED, HOWEVER, this section shall in no way
(i) estop either party from making factual statements which are reasonably
necessary or appropriate in the ordinary course of its business or (ii)
limit the ability of any party to pursue any remedy under this Agreement
or otherwise.
CUSIP No. 000000000 Page 36 of 54 Pages
4. SPECIFIC PERFORMANCE. The Company and the Investors acknowledge and agree
that in the event of any breach of this Agreement, the non-breaching party
would be irreparably harmed and could not be made whole by monetary
damages. It is accordingly agreed that the Company and the Investors, in
addition to any other remedy to which they may be entitled at law or in
equity, shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and/or to compel specific performance of this
Agreement in any action instituted in any federal court of the United
States having subject matter jurisdiction.
5. MATERIAL NONPUBLIC INFORMATION. In connection with this Agreement and the
Investors' ongoing relationship with the Company, there may be instances
in which material nonpublic information concerning either the Company or
the Savings Bank will be divulged to the Investors by the Company, the
investor Designee, or other Investor representatives or agents. The
Investors and their representatives expressly acknowledge that federal and
state securities laws prohibit any person who misappropriates material
nonpublic information about a company from purchasing or selling
securities of such company, or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable
that such person is likely to purchase or sell such securities. The
Investors and the Investor Designee acknowledge that the Investor Designee
will be subject to the Company's xxxxxxx xxxxxxx and disclosure policies,
as in effect from time to time, at any time while he is on the Company or
the Savings Bank's Boards of Directors to the same extent as the other
directors of the Company and the Savings Bank. To the extent SEC
Regulation FD may apply, in accordance with Section 243.100 (2)(ii) of
Regulation FD, the Investors expressly agree to maintain material
nonpublic information concerning the Company and the Savings Bank in
confidence.
V.
MISCELLANEOUS
1. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding of
the parties with respect to the subject matter hereof and may be amended
only by an agreement in writing executed by all the parties hereto.
2. HEADINGS. Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement.
3. COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties, and each
such executed counterpart shall be an original instrument.
4. NOTICES. All notices, consents, requests, instructions, approvals and
other communications provided for in this Agreement and all legal
processes in regard to this Agreement shall be validly given, made or
served, if in writing and delivered personally, by hand or by telecopy, or
sent by registered mail postage paid:
if to the Company or the Savings Bank at:
Provident Financial Holdings, Inc.
0000 Xxxxxxx Xxxxxx
CUSIP No. 000000000 Page 37 of 54 Pages
Riverside, CA 92506
Attn: Xxxxx X. Xxxxxxx
Fax:(000) 000-0000
with a copy, which shall not constitute notice, to:
Breyer & Associates PC
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Xx.
Fax:(703) 000-0 000
and if to the Investors as follows:
If to JAM/Xxxxxx:
Xx. Xxxxxxx X. Xxxxxx
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax:(000) 000-0000
If to Xxxxxxxx Partners and related entities:
Xx. Xxxxx X. Xxxxxxxxx
000 Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Fax:(000) 000-0000
If to Xx. Xxxx X. Xxxxxx:
0000 Xxxxxx Xxxxxx, Xxxx 0
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Fax:(000) 000-0000
with a copy, which shall not constitute notice, to:
Xxxxx & Xxxxxxx
One IBM Plaza, Suite 0000
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000-3608
Attn: Xxxxxxx X. Xxxxxxxx
Fax:(000) 000-0000
or to such other address or telecopy number as any party may, from time
to time, designate in a written notice given in a like manner. Notice given by
hand or by telecopy shall be deemed given on the date on which so hand delivered
or telecopied. Notice given by mail as set out above shall be deemed delivered
five business days after the date the same is postmarked.
5. SUCCESSORS AND ASSIGNS. This Agreement shall bind the successors and
assigns of the
CUSIP No. 000000000 Page 38 of 54 Pages
parties, and inure to the benefit of any successor or assign of any of the
parties; PROVIDED, HOWEVER, that no party may assign this Agreement
without the other party's prior written consent.
6. GOVERNING LAW. This Agreement shall be governed by and constricted and
enforced in accordance with the internal laws of the State of Delaware,
without giving effect to the conflict of the laws principles thereof.
7. CERTAIN TERMS. As used herein, (i) the terms "affiliate" and "associate"
shall have the meanings set forth in Rule 2b-2 under the Exchange Act, and
(ii) "beneficial ownership" shall mean beneficial ownership as determined
under Rule l3d-3 under the Exchange Act.
8. SURVIVAL OF REPRESENTATIONS. All representations, warranties and
agreements made by the Investors and the Company in this Agreement or
pursuant hereto shall survive the date hereof through the term of this
Agreement.
9. CONSENT TO SERVICE. Each of the parties hereto hereby consents to the
personal jurisdiction of the United States District Court for the Central
District of California, Riverside Branch, or if jurisdiction does not lie
in the federal court, then the California Superior Court for the County of
Riverside, in any action, suit or proceeding arising under this Agreement
and each agrees further that service of process or notice in any action,
suit or proceeding shall be effective if given in the manner set forth in
Section V.4 hereof.
10. NO WAIVER. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
[SIGNATURES FOLLOW]
CUSIP No. 000000000 Page 39 of 54 Pages
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first referred to above.
Provident Financial Holdings, Inc.
By:
-----------------------------------------
Xxxxx X. Xxxxxxx
Its:Chairman of the Board
Provident Savings Bank, F.S.B.
By:
-----------------------------------------
Xxxxx X. Xxxxxxx
Its:Chairman of the Board
JAM Partners, L.P.
By:
-----------------------------------------
Xxxxxxx X. Xxxxxx
General Partner
JAM Special Opportunities Fund, L.P.
By:
-----------------------------------------
Xxxxxxx X. Xxxxxx
General Partner
JAM Managers, L.L.C.
By:
-----------------------------------------
Xxxxxxx X. Xxxxxx
Managing Member
Xxxxxxxx Partners, L.P.
By:
-----------------------------------------
X.X. Xxxxxxxx, L.L.C.
General Partner
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Managing Member
CUSIP No. 000000000 Page 40 of 54 Pages
Xxxxxxxx Partners II, L.P.
By:
-----------------------------------------
X.X. Xxxxxxxx, L.L.C.
General Partner
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Managing Member
Endicott Offshore Investors, Ltd.
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Director
X.X. Xxxxxxxx, L.L.C.
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Managing Member
X.X. Xxxxxxxx XX, L.L.C.
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Managing Member
Xxxxxxxx Management Co.
By:
-----------------------------------------
Xxxxxx X. Xxxxx
President
Xxxxxxx X. Xxxxxx
By:
-----------------------------------------
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx
By:
-----------------------------------------
Xxxxx X. Xxxxxxxxx
CUSIP No. 000000000 Page 41 of 54 Pages
Xxxxxx X. Xxxxx
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Xxxx X. Xxxxxx
By:
-----------------------------------------
Xxxx X. Xxxxxx
