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Providence Service Corporation Announces That Avalon Correctional Services Has Abandoned Its Consent Solicitation
Date:3/3/2009

ior motive. We find it interesting that, notwithstanding their expressed concern with our corporate governance, at no time in any of our in-person or other interactions with Avalon did they ever approach us with suggested changes to our Bylaws or corporate governance policies or attempt in any way to contact us or engage in any dialogue with us about our Bylaws or any other corporate governance matters prior to their filing of their Consent Solicitation Statement, choosing instead to thrust Providence directly into a costly, disruptive and distracting consent solicitation. As we have previously said, we believe that this consent solicitation was intended to benefit, not ALL the stockholders of Providence, but only Avalon and Don Smith by facilitating their quest for substantial influence and effective control over Providence.

"The decision by Avalon to abandon its consent solicitation came only a few days after Providence made it abundantly clear that it was not going to make changes to its bylaws to facilitate Avalon's ability to engage in proxy contests against Providence. Among other things, Avalon was seeking to prevent Providence from being able to (a) obtain necessary and relevant information regarding a candidate's background and qualifications, (b) have the candidate confirm that he or she is not a party to any agreements that would interfere with the ability of such candidate, if elected as a director, to comply with their fiduciary duties under applicable law, (c) require the candidate to comply with the Company's insider trading, confidentiality, corporate governance, conflicts of interest and other corporate policies and guidelines and (d) fully and properly inform stockholders of any matters that a stockholder may bring before an annual meeting of stockholders."

Mr. McCusker concluded, "We have a strong foundation of solid corporate governance practices. Our committees are already 100% independent and our board is
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SOURCE Providence Service Corporation
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