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[letterhead]
LUTIN & COMPANY
575 Madison Avenue
New York, New York 10022
Telephone (212) 605-0335
Facsimile (212) 605-0325
August 10, 2005
By telecopier: 415-278-6028
Mr. Joseph W. Saunders
Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
Dear Mr. Saunders:
As indicated in my telephone message, your cooperation is
requested to facilitate an independent, shareholder controlled analysis of
investor interests in your proposed transaction with Washington Mutual.
It is assumed that you will appreciate the perceived need of
many Providian shareholders for a clearly objective professional analysis of
the alternatives being presented for their consideration, particularly in
the context of a large unaffiliated shareholder’s publicly stated
disagreement with the opinions of the investment bankers engaged by the
transaction’s proponents. In this case, investors may find it especially
difficult to rely on the opinions of investment bankers who have interests
in contingent transaction fees as well as in continuing relationships with
both the seller’s and buyer’s corporate management.
Efforts will be made to select a securities analyst and define
the engagement arrangements within a week, so that a report can be made
public in time for consideration by shareholders in their voting decisions.
Knowing whether we may expect the cooperation of Providian management will
help us plan a more efficient process and minimize costs. Specifically, it
is hoped that you would respond voluntarily to the independent analyst’s
information requests, since the formal procedures for demanding records
would not allow completion of a rigorous review before your currently
scheduled August 31 meeting date. And regarding a matter that concerns many
institutional investors, your willingness to assume corporate responsibility
for the reasonable expenses of an independent analysis – by means of a
contribution to a not-for-profit institute that can manage the arrangements
– would fairly allocate its costs among all Providian shareholders who
benefit from it, eliminating the need for some investors to bear a
disproportionate burden for their leadership.
For a preliminary indication of the standards that will be
followed to assure the integrity of the process, you may wish to review the
conditions that have been defined for participation in various shareholder
“Forum” programs posted on the following web site:
www.shareholderforum.com
Please let me know what additional information will be useful to
you in your consideration of this request. I will of course welcome any
suggestions you may have to make the contemplated independent offer analysis
as useful as possible to Providian’s shareholders, and look forward to
discussing your views.
Sincerely yours,
Gary Lutin
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