Page 15 of 23 – SEC Filing
| CUSIP No. 743868101 | SCHEDULE 13D | Page 15 of 23 |
Malvern Bancorp,
Inc. (“MLVF”) – We filed our original Schedule 13D reporting our position on May 30, 2008. When we announced our
reporting position, a majority of MLVF’s shares were held by a mutual holding company controlled by MLVF’s board. On
October 26, 2010, we demanded that MLVF pursue a derivative action against its directors for breach of their fiduciary duties.
MLVF failed to pursue the action and, on June 3, 2011, we sued MLVF’s directors in Chester County, Pennsylvania, demanding
that the court, among other things, order the directors to properly consider pursuing a second step conversion. On November 9,
2011, Judge Howard F. Riley Jr. overruled the director defendants’ preliminary objections to the derivative lawsuit.
On January 17, 2012,
MLVF announced its intention to undertake a second step conversion and we withdrew the lawsuit. The conversion and stock offering
were completed on October 11, 2012, and our shares were converted into shares of Malvern Bancorp, Inc. On September 5, 2013, we
notified MLVF of our intention to nominate John P. O’Grady for election as a director at its 2014 annual meeting, but we
later reached an agreement with MLVF for Mr. O’Grady to join its board of directors and executed a standstill agreement.
Subsequently, MLVF’s long-standing CEO resigned, its chairman of the board stepped down and several directors resigned from
the board of directors. On November 25, 2014, we terminated our standstill agreement with MLVF, including the agreement’s
performance targets. John P. O’Grady continued to serve as an independent director on the board but no longer as our nominee.
After meeting with
the new CEO and the new chairman of the board, we believed that management and the board of directors were focused on maximizing
shareholder value and were successful in doing so. On December 7, 2016, we disclosed that we sold shares in the open market, decreasing
our holdings below 5%.
FSB Community Bankshares,
Inc. (“FSBC”) – We filed our original Schedule 13D reporting our position on October 26, 2015. We urged management
and the board to provide meaningful returns to shareholders either through a second-step conversion or by effectuating a shareholder-friendly
capital allocation program. On March 3, 2016, FSBC announced and later completed a second-step conversion which we believe maximized
shareholder value. On December 9, 2016, we disclosed that we sold shares of the converted Company, FSB Bancorp, Inc., in the open
market, decreasing our holdings below 5%.
Pinnacle Bancshares,
Inc. (“PCLB”) – We filed our original Schedule 13D reporting our position on September 23, 2014. On November 14,
2014, PCLB announced the continuation of its share repurchase plan and announced a new repurchase plan on May 25, 2016. We believe
management and the board acted in good faith to maximize shareholder value through multiple share repurchases. On December 13,
2016, we disclosed that we sold our shares in the open market.
Sugar Creek Financial
Corp. (“SUGR”) – We filed our original Schedule 13D reporting our position on April 21, 2014. We believe management
and the board acted in good faith to maximize shareholder value through share repurchases. In our estimation, SUGR’s market
price increased to reflect fair value; on July 28, 2017, we disclosed that we sold our shares in the open market.
IV. After successfully
seeking board representation, we seated directors who currently serve on the boards of the following issuers:
Kingsway Financial
Services Inc. (“KFS”) – We filed our original Schedule 13D reporting our position on November 7, 2008. We requested
a meeting with its CEO and chairman to discuss ways to maximize shareholder value and minimize both operational and balance sheet
risks, but the CEO was unresponsive. We then requisitioned a special shareholder meeting to remove the CEO and chairman from the
KFS board and replace them with our two nominees. On January 7, 2009, we entered into a settlement agreement with KFS whereby,
among other things, the CEO resigned from the KFS board and KFS expanded its board from nine to ten seats and appointed our nominees
to fill the two vacant seats. By April 23, 2009, the board was reconstituted with just three of the original ten legacy directors
remaining. Also, Joseph Stilwell was appointed to fill the vacancy created by the resignation of one of our nominees, Larry G.
Swets, Jr., and our other nominee was elected chairman of the board. In addition, the CEO and CFO were fired for incompetence and
insubordination.
By November 3, 2009,
all of the legacy directors had resigned from the board. On May 23, 2010, Mr. Stilwell and the Group’s other representative
were re-elected to the board. On June 1, 2010, Mr. Swets was appointed CEO. During the time the Group has had board representation,
KFS has sold non-core assets, repurchased public debt at a discount to face value, sold a credit-sensitive asset, disposed of its
subsidiary Lincoln General, substantially reduced its expenses, and reduced other balance sheet and operations risks.
