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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
People's Bancshares, Inc.
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(Name of Registrant as Specified In Its Charter)
RCG Kingston Fund, Ltd.
RCG Kingston, L.L.C.
Kingston Fund, LP
Ramius Capital Group, LLC
C4S & Co., LLC
Jennings & Gillen
D.B. Jennings, Inc.
Donald B. Jennings
Thomas F. Gillen
The Partnership for Bank Capital, L.P.
Vincent A. Smyth
Mary E. Smyth
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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RCG Kingston, L.L.C.
Chrysler Center
666 Third Ave., 26th Floor
New York, NY 10017
May 11, 2000
TO OUR FELLOW PEOPLE'S BANCSHARES, INC.
SHAREHOLDERS
As you may be aware, RCG Kingston and Vincent A. Smyth have formed a
shareholder group for the purpose of communicating our concerns for maximizing
shareholder value to the management and shareholders of People's Bancshares,
Inc., ("PBKB"). We presented our concerns to the board in a meeting last fall
and requested that the board retain an investment banker to evaluate strategic
alternatives including the sale of the company. Unfortunately, the board of your
company rejected our request and dismissed it as "inappropriate". As a result,
our only alternative is to ask you, our fellow shareholders and rightful owners
of the company, to send the board a mandate to maximize shareholder value by
selecting the BLUE proxy card to elect our three nominees to the board at the
annual meeting on June 16, 2000.
The excuse the board gives for its unwillingness to attempt to seek
strategic alternatives is that the board does not think it benefits shareholders
to have a "fire sale of the company". WE THINK WHAT BENEFITS SHAREHOLDERS, THE
RIGHTFUL OWNERS OF THE COMPANY, IS THE OPPORTUNITY TO DECIDE FOR THEMSELVES
WHETHER OR NOT AN OFFER TO SELL IS ACCEPTABLE! NO SALE OF THE COMPANY CAN OCCUR
WITHOUT SHAREHOLDER APPROVAL, AND WE BELIEVE THE SHAREHOLDERS ARE CAPABLE AND
ENTITLED TO MAKE THAT DECISION.
We believe the board should actively seek to maximize shareholder value
through evaluating strategic alternatives, including the sale of the company for
the following reasons:
. The shares of PBKB have consistently traded at a discount on a p/e basis (see
the table of comparison in our proxy statement) to its peers among
Massachusetts' thrifts. We believe the reason for this discount is the result of
investor concerns over risks associated with the board's decision to pursue a
leveraging strategy (i.e., borrowing funds) to purchase securities instead of
building a "core" banking franchise.
. Currently, the securities portfolio has swelled to $578 million (equal to 54%
of the company's assets) at the quarter ended March 31, 2000, from $311 million
at March 31, 1998, an increase of 90%. DURING THE SAME PERIOD, THE LOAN
PORTFOLIO HAS DECLINED BY 12% TO $438 MILLION.
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. Moreover, the securities portfolio had incurred an unrealized loss of $48
MILLION at the period ended March 31, 2000, far EXCEEDING tangible shareholders'
equity of $39 million! IS THAT A STRATEGY OF CREATING SHAREHOLDER VALUE?
. SNL Securities, the expert source the board quoted in the board's letter to
shareholders as having given PBKB a high ranking among thrifts, agrees with our
viewpoint and severely criticized leveraging strategies in a September 1999
article that poignantly titled "Destroying Shareholder Value". In the report,
SNL stated "owning securities can lead to substantial erosion of shareholder
equity". As a result, SNL concluded that thrifts utilizing such a strategy would
better serve shareholders by using the thrift's capital "for value-creating
enterprises." WE STRONGLY AGREE, AND URGED MANAGEMENT TO CONSIDER ALTERNATIVES
IN A MEETING WITH THEM, BUT WE WERE TOLD OUR REQUEST WAS "INAPPROPRIATE".
. The board blames the "UNFAVORABLE ENVIRONMENT FOR FINANCIAL INSTITUTIONS" as
its reason NOT to explore alternatives to maximize shareholder value. We think
this is a strong reason for seeking alternative strategies. HOW CAN THE BOARD BE
SO SURE THE UNFAVORABLE ENVIRONMENT FOR FINANCIAL INSTITUTIONS WILL NOT BECOME
EVEN MORE UNFAVORABLE?
WE URGE YOU TO VOTE ONLY THE BLUE PROXY CARD FOR OUR NOMINEES WHO WILL SEEK
TO GIVE ALL SHAREHOLDERS THE OPPORTUNITY TO DETERMINE THEIR COMPANY'S
FUTURE AND PROVIDE THE COMPANY WITH STRONG AND RESPONSIBLE LEADERSHIP!
REMEMBER: THIS YOUR COMPANY!
DO NOT RETURN THE WHITE PROXY CARD.
Please read our accompanying proxy statement and if you have any questions
or comments you either can contact us at the phone numbers listed below or our
proxy firm, Beacon Hill Partners, Inc., at 800-755-5001.
Sincerely yours,
Thomas F. Gillen Donald B. Jennings
212-845-7942 212-845-7941
Fax: 212-845-7997 Fax: 212-845-7941
E-Mail: [email protected] E-Mail: [email protected]
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