IRVINE, Calif--(BUSINESS WIRE)--Led by Commerce Street Investment Management (“CSIM”), shareholders representing 13.48% of OCBB common stock sent the following letter to the Corporate Secretary and the Board of Directors of Orange County Business Bank (OTCQB: OCBB) on the evening of Feb. 24, 2015. "Such a rapid and large response to CSIM from our first public communication regarding OCBB on February 9 suggests that there are significantly more dissatisfied OCBB shareholders than the signatories on our February 24 letter to the Corporate Secretary and Board," said Mark R. Ruh, a Managing Director at CSIM. CSIM is the manager of three private equity funds that invest growth equity in community banks. Service Equity Partners, LP, one of the funds managed by CSIM, is one of the largest, non-inside shareholders in OCBB and has been invested in OCBB since 2004.
February 24, 2015
Ms. Elaine Crouch
Orange County Business Bank
17901 Von Karman Avenue
Irvine, CA 92614
Dear Ms. Crouch:
The undersigned write to invoke their collective and individual rights as shareholders of Orange County Business Bank (hereinafter referred to as the “Bank” or “Corporation”) pursuant to the Bylaws adopted by the Corporation on March 24, 2006, and implemented on August 1, 2006. [Note: You were kind enough to forward a copy of both the Articles of Incorporation of Orange County Business Bank (the “Articles”) and the Bylaws of Orange County Business Bank (the “Bylaws”) to Service Equity Partners, LP (“SEP”) on June 21, 2010 (the “SEP Correspondence”).]
The purpose of this correspondence is to formally request certain information from the Bank pursuant to the Bank’s Articles and Bylaws. The undersigned are entitled to make these requests as they are holders in aggregate of 636,782 shares, representing 13.48% of the Bank’s common equity entitled to cast votes at the annual meeting of shareholders.
The first request concerns Article VII of the Bylaws entitled “AMENDMENTS.” Sections 7.1 and 7.2 describe the process by which amendments to the Articles and Incorporation and Bylaws may be proposed and approved.
First Request: Please provide to Service Equity Partners, LP (“SEP”) copies of any amendments to the Articles and Bylaws since August 1, 2006 which were proposed, and indicate whether these amendments were adopted or rejected by the Bank’s Board. If there were no amendments proposed and therefore, none adopted, please provide us with this information as the last versions of the Articles and Bylaws were provided as an attachment to the SEP Correspondence. If you determine not to provide the requested information, then the undersigned formally invokes the rights provided under Article VI, Section 6.2 entitled “INSPECTION OF BYLAWS.” For the purpose of this request and pursuant to Article VI, Section 6.1(d), the undersigned designate Mark R. Ruh as their agent for the purpose of inspection and copying of the Bylaws as amended to date.
Second Request: This request is made pursuant to the “absolute right” granted to the Bank’s shareholders in Article VI of the Bylaws entitled “OTHER PROVISIONS.” Specifically, Section 6.1(a) entitles the undersigned in their collective capacity to “inspect and copy the record of shareholders’ names and addresses and shareholdings during normal business hours upon five business days’ prior written demand upon the corporation” (hereinafter referred to as “Shareholders List”). This letter constitutes prior written notice. The designated agent(s) for the purpose of inspecting and copying the Shareholders List on behalf of the undersigned will be Mark R. Ruh and/or Thomas J. Lykos, Jr. pursuant to Article VI, Section 6.1(d). Experience has informed SEP that providing a copy of the Shareholders List at an agreed time (during business hours) and date as soon as practical after the fifth business day with a designated official of the Bank facilitates the delivery of the requested information.
If the timely provision of a copy of the Shareholders List should prove an inconvenience to the Corporation, then the undersigned invoke their right to receive a copy of the list from the Bank’s transfer agent pursuant to the provisions of Article VI, Section 6.1(a) (ii). We will take every reasonable step to work with the transfer agent to obtain the list even though “[t]he corporation shall have a responsibility to cause the transfer agent to comply with this Section 6.1.” To avoid any delay or misunderstanding, please provide the name and contact information for the transfer agent and a copy of the Corporation’s instruction to the transfer agent directing the release of the Shareholders List pursuant to this request of the undersigned. The most recent record date for which the list should be completed for the purpose of this request is March 5, 2015, as this is a date five business days after the receipt of this demand.
Third Request: In addition, pursuant to Section 6.1(b) and Section 6.1(c), this correspondence shall constitute a written demand and notice to inspect the Shareholders List as provided in Section 6.1(b) and the “accounting books and records and minutes of the proceedings of the shareholders and the board and committees of the board shall be open to inspection upon written demand on the corporation by any shareholder… at any reasonable time during usual business hours for a purpose reasonably related to such holder’s interest as a shareholder….” as provided in Section 6.1(c). The purpose for the inspection of these records is to review the Board’s strategy for pursuing its stated objectives of pursuing material organic growth, acquisitive growth, and top quartile peer profitability, and whether its actions have been consistent with the maximization of shareholder value consistent with the exercise of the fiduciary duties owed to all shareholders. The undersigned shareholders have serious concerns about the Board’s execution of its duties due to the recent “stonewalling” of SEP’s December 9, 2014 request for a meeting to discuss the issues identified in this correspondence to the Board and its Chairman.
Should you have any questions regarding these requests for information, or wish to dispute the rights to provide the undersigned shareholders with the requested information, please contact Mr. Thomas J. Lykos, Jr. (at TLykos@CStreetInv.com). Otherwise, please inform Mr. Mark R. Ruh (at MRuh@CStreetInv.com) of the date the Shareholders List will be provided and a mutually convenient date, time and representative of the Bank with whom he can inspect the other requested documents as provided by the Bylaws.
Mark R. Ruh, Managing Director & Thomas J. Lykos, Managing Director & General Counsel
Commerce Street Investment Management/ Service Equity Partners, LP
Craton Capital Management, LLC/ Craton Capital LP
Brad L. Champlin
Former Director, Orange County Business Bank
Allan T. Gibson
Former EVP & Chief Operating Officer, Orange County Business Bank
Former EVP & Chief Credit Officer, Orange County Business Bank
[Note: Five additional OCBB shareholders signed the letter sent on February 24, 2015.]
Roger D. Billingsley, Founding Director
Viola C. Chisholm, Founding Director
Raymond J. DeRiggi, Founding Director
Eric D. Figueroa, Director
James J. Florance, Founding Director
JP Gough, Chairman, President & CEO
Ralph H. Haberfeld, Founding Director
Larry O. Hintz, Founding Director
William T. Morris, Founding Director
Clairmont A. Ruff, III, Director
Christian A. Schmidt, Founding Director
Allan R. Uyesugi, Founding Director
Gregory J. Vigoren, Director
About Commerce Street Investment Management
Commerce Street Capital, LLC (Member FINRA/SIPC) and Commerce Street Investment Advisor LLC (“CSIA”), dba Commerce Street Investment Management (“CSIM”), are wholly-owned subsidiaries of Commerce Street Holdings LLC, a Texas limited liability company. The firm is headquartered at 1445 Ross Avenue, Suite 2700, Dallas, TX 75202. CSIM provides asset management services for private equity and credit opportunity funds which invest in bank and financial institution-related securities.
This press release is for information purposes only and does not constitute a solicitation or offer by Commerce Street Investment Management to buy or sell any securities, futures, options, foreign exchange or other financial instrument or to provide any investment advice or service.