<PAGE>
SCHEDULE 14A INFORMATION
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))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or
(Sec) 240.14a-12
People's Bancshares, Inc.
(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
(Name of Person(s) Filing Proxy Statement)
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:
------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------
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):
------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
[ ] 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:
------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------
3) Filing Party:
------------------------------------------------
4) Date Filed:
------------------------------------------------
<PAGE>
PEOPLE'S BANCSHARES, INC.
----------------------------------------
2000 ANNUAL MEETING OF STOCKHOLDERS
----------------------------------------
PROXY STATEMENT OF THE KINGSTON GROUP IN OPPOSITION TO THE BOARD OF DIRECTORS
OF PEOPLE'S BANCSHARES, INC.
This Proxy Statement is being furnished to holders of common stock, par
value $0.10 per share ("Common Stock"), of People's Bancshares, Inc., a
Massachusetts corporation (the "Company"), in connection with the solicitation
of proxies for use at the 2000 Annual Meeting of Stockholders of the Company
and at any and all adjournments or postponements thereof (the "Annual
Meeting"). The solicitation is being conducted by the Kingston Group.
Information concerning the persons comprising the Kingston Group is set forth
below under "The Kingston Group." Members of the Kingston Group collectively
own approximately 9.2% of the outstanding Common Stock. As more fully discussed
below, the Kingston Group is soliciting proxies in connection with the Annual
Meeting for the election of William G. Foster, Jr., John R. Kennedy and Vincent
A. Smyth as directors of the Company (collectively, the "Kingston Group
Nominees" and each, a "Kingston Group Nominee"), to serve until their
successors are duly elected and qualified.
The Company has announced that the Annual Meeting will be held at Stone
Forge Public House, 90 Paramount Drive, Raynham, Massachusetts, on Friday, June
16, 2000, at 10:00 a.m., local time. Only stockholders of record at the close
of business on April 28, 2000 (the "Record Date") will be entitled to notice of
and to vote at the Annual Meeting.
The enclosed Blue proxy card may be executed by holders of record as of the
Record Date. You are urged to sign and date the enclosed Blue proxy card and
return it in the enclosed envelope whether or not you attend the meeting.
YOUR VOTE IS IMPORTANT. If you agree with the reasons for the Kingston
Group's solicitation set forth in this Proxy Statement and believe that the
election of the Kingston Group Nominees to the Board of Directors can make a
difference, we urge you to vote for the election of the Kingston Group's
nominees, no matter how many or how few shares you own.
The Kingston Group urges you NOT to sign any proxy card that is sent to you
by the Company.
If you have any questions, please call:
Beacon Hill Partners, Inc.
90 Broad Street
20th Floor
New York, NY 10004
(212) 843-8500 (call Collect)
or
Call Toll-Free (800) 755-5001
This Proxy Statement and the accompanying Blue proxy card are first being
sent or given to stockholders on or about May 11, 2000.
<PAGE>
GENERAL
At the Annual Meeting, three directors are to be elected to the Company's
Board of Directors (the "Board of Directors") to hold office for a three-year
term and until their successors have been elected and qualified. The Kingston
Group is seeking your proxy for the election to the Board of Directors of
William G. Foster, Jr., John R. Kennedy and Vincent A. Smyth.
The Company has reported in its proxy statement relating to the Annual
Meeting (the "Company Proxy Statement") that, as of the Record Date, the
Company's outstanding voting securities consisted of 3,251,734 shares of Common
Stock. Each share of Common Stock entitles its owner to one vote, and a
plurality of votes cast at a meeting at which a quorum is present or otherwise
represented is necessary to elect each of the Kingston Group Nominees. For
information concerning voting procedures at the Annual Meeting, see "Voting and
Proxy Procedures."
REASONS FOR THIS SOLICITATION
The members of the Kingston Group originally joined together in August 1999
so that they could express to the Company and other shareholders the group's
concerns about management's unwillingness to pursue all strategic alternatives
to maximize shareholder value, including a sale of the Company. The members of
the Kingston Group collectively own 298,302 shares of Common Stock,
representing approximately 9.2% of the outstanding shares of Common Stock. The
Kingston Group has nominated the Kingston Group Nominees for election as
directors to help ensure that the Board of Directors addresses the Kingston
Group's concerns regarding maximizing shareholder value. Specifically, if
elected, the Kingston Group Nominees will seek to cause the Board of Directors
to retain an investment banking firm, which would be charged with reviewing all
strategic alternatives available to the Company, including a sale of the
Company.
The Kingston Group believes that it is the responsibility of a board of
directors to pursue a business strategy that will produce the highest and best
returns to shareholders. The true measurement of how investors assess a
management's strategy is the market price of the company's shares. Although the
Company's stock price increased on a percentage basis slightly more than the
Nasdaq Banks Index from 1996 through 1999 (68.6% versus 67.6%)(/1/), the
Company's stock price has traded at a lower multiple of earnings than the stock
price of its peer banks during this period. The Kingston Group believes the
past price performance of the Company's stock as a multiple of estimated
earnings indicates that investors have serious reservations regarding the
Company's operating strategy. While the Company's stock trades at a price to
estimated 2000 earnings of 6.29x (p/e ratio), other Massachusetts thrifts with
over $500 million in assets (the "Peer Banks")(/2/) trade at an average p/e of
8.41x.(/3/)
- --------
(1) Does not include any reinvestment of dividends.
(2) The Peer Banks consist of Abington Bancorp, Inc., Andover Bancorp, Inc.,
BostonFed Bancorp, Inc., First Essex Bancorp, Inc., MASSBANK Corp., Medford
Bancorp, Inc. and MetroWest Bank. Excludes thrifts which converted from
mutual to stock form after 1996.
(3) Estimates of 2000 earnings for the Company and for Peer Banks are from
I/B/E/S. Prices for 2000 are as of April 24, 2000.
1
<PAGE>
The Company's Price/Earnings Ratio Versus Peer Banks
The following table sets forth the price/earnings ratio for the Company and
each of the Peer Banks for the periods indicated. For 1996 through 1999, the
ratio is the stock price on the final trading day of the year to earnings for
that year. For 2000, the ratio is the stock price on April 24, 2000 to
estimated 2000 earnings from I/B/E/S.
<TABLE>
<CAPTION>
1996 1997 1998 1999 2000E
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Abington Bancorp, Inc..................... 10.96x 19.09x 11.86x 8.80x 7.75x
Andover Bancorp, Inc...................... 10.68 16.18 13.32 9.93 9.22
BostonFed Bancorp, Inc.................... 30.73 17.64 12.33 9.28 6.74
First Essex Bancorp, Inc.................. 8.93 18.60 12.77 8.82 8.22
MASSBANK Corp............................. 11.08 17.19 13.17 9.08 7.97
Medford Bancorp, Inc...................... 11.60 16.49 12.79 11.55 9.17
MetroWest Bank............................ 11.44 16.98 10.64 10.80 9.79
AVERAGE................................... 13.63x 17.45x 12.41x 9.75x 8.41x
People's Bancshares, Inc.................. 9.75x 15.48x 9.11x 6.30x 6.29x
</TABLE>
In the view of the Kingston Group, this valuation discount results from
management's decision to pursue a leveraging strategy and concentrate on its
mortgage origination operation rather than building a core banking franchise.
As illustrated in the table below, in 1999, the Company used substantially more
leverage on a proportionate basis than did other Massachusetts thrifts with
over $500 million in assets.
Leverage Comparison
<TABLE>
<CAPTION>
Leverage Factor*
(At December 31, 1999)
----------------------
<S> <C>
People's Bancshares,
Inc.................. 8.4
Peer Bank Average..... 3.5
</TABLE>
- --------
* Leverage factor equals Total Borrowings / (Trust Preferred Securities +
Tangible Equity)
The Company has used funds from deposits and borrowings to increase
significantly its securities holdings. The Company's securities portfolio
increased to $578 million (or 54% of the Company's assets) at March 31, 2000
from $311 million (or 54% of the Company's assets) at March 31, 2000. In
contrast, the company's loan portfolio decreased to $438 million at March 31,
2000 from $495 million at March 31, 1998. Although the Company's securities
portfolio has contributed to earnings, the Kingston Group believes that
investors have not given the Company full credit for those earnings because of
the risks associated with incurring significant leverage to support the
investment program.
Even though interest rates were rising throughout 1999 and aggregate
originations of mortgages for one to four family residences in the United
States were declining as a result,(/4/) Company management nonetheless spent
approximately $1.8 million to acquire Allied Mortgage, a mortgage company
operating in Maryland, Virginia and Florida. Prior to acquiring Allied
Mortgage, the Company's mortgage subsidiary had experienced declining earnings
during 1999. Through the third quarter of 1999, the per share net income
attributable to the Company's mortgage subsidiary was $0.04 compared to $0.34
in the first three quarters of 1998. The Kingston Group believes that expanding
the mortgage origination business in the current business environment is not a
strategy that is likely to enhance shareholder value.
In the fall of last year, representatives of the Kingston Group discussed
the Kingston Group's concerns with management and board members and asked that
they consider seeking alternatives to enhance shareholder value. In particular,
the Kingston Group suggested that the Company retain an investment banking firm
to
- --------
(4) Source: Mortgage Bankers Association of America web site.
2
<PAGE>
review strategic alternatives to maximize shareholder value, including the sale
of the Company. Company management has dismissed the Kingston Group's concerns
as "inappropriate."
Following the Kingston Group's filing of formal notice of its nomination of
the Kingston Group Nominees, members of Company management suggested that the
Company would consider appointing one representative of the Kingston Group to
stand for election with the Company's nominees at the Annual Meeting, provided
that the Kingston Group would enter into a standstill agreement precluding it
from purchasing additional shares of Common Stock or engaging in any proxy
solicitation. The Kingston Group declined this offer because Company management
was unwilling to publicly commit to the Company's exploring all strategic
alternatives and retaining an investment banking firm. In addition, the
Kingston Group does not believe that a single director will necessarily ensure
an adequate voice for the shareholders who are interested in examining all
strategies to maximize shareholder value.
The Kingston Group informed the Company's management that it would consider
withdrawing its nomination of the Kingston Group Nominees if the Company
appointed two representatives of the Kingston Group to the Board of Directors,
publicly announced that it was retaining an investment banking firm and
reimbursed the Kingston Group for any expenses it incurred in connection with
the nomination of the Kingston Group Nominees. The Kingston Group also informed
the Company that it was reluctant to enter into a standstill agreement. The
Company did not accept the Kingston Group's proposal.
The Kingston Group believes that the Board of Directors should examine all
business strategies to maximize shareholder value. Because of the current Board
of Directors' lack of responsiveness to the Kingston Group's concerns, the
Kingston Group believes it will be in the best interests of shareholders to
elect to the Board members who will actively pursue the realization of
shareholder value. If elected, the Kingston Group Nominees will seek to cause
the Board of Directors to engage an investment banking firm to review strategic
alternatives to maximize shareholder value, including the sale of the Company.
The Kingston Group has not undertaken to obtain a third party analysis of the
effect that these alternatives would have on shareholder value. Shareholder
value may not be maximized or enhanced if a sale of the Company is pursued.
The Kingston Group strongly recommends a vote FOR the election of the
Kingston Group Nominees.
NOMINEES FOR ELECTION AS DIRECTORS
The Company Proxy Statement discloses that the Board of Directors currently
consists of 10 directors divided into three classes, with the directors in each
class serving a term of three years. According to the Company Proxy Statement,
three directors are to be elected at the Annual Meeting. The directors so
elected will serve in such capacity for a three-year term to expire at the 2003
Annual Meeting of Stockholders and until their successors are elected and
qualified.
The Kingston Group is proposing the election of the three Kingston Group
Nominees to the Board of Directors. The Kingston Group does not expect that any
of the Kingston Group Nominees will be unable to stand for election, but in the
event that a vacancy in the slate of the Kingston Group Nominees should occur
unexpectedly, the shares of Common Stock represented by the proxy card
furnished by the Kingston Group will be voted for a substitute candidate
selected by the Kingston Group.
The following information concerning age, principal occupation and business
experience during the last five years, and current directorships has been
furnished to the Kingston Group by the Kingston Group Nominees, all of whom
have expressed their willingness to serve on the Board of Directors if elected.
William G. Foster, Jr. has been President of LACE/Foster Advisory Services,
a firm providing consulting services to financial institutions, since 1996.
From July 1994 to April 1996, Mr. Foster was a Managing Director of Sandler,
O'Neill & Partners, an investment bank, specializing in banks and thrifts. He
is 57 years old.
3
<PAGE>
John R. Kennedy has been an independent financial and management consultant
with Kennedy Consulting since May 1997. From January 1974 through May 1997, Mr.
Kennedy held various positions with Bank Boston of Boston, Massachusetts,
including Senior International Project Director and Senior Financial Officer.
He is 54 years old.
Vincent A. Smyth has been a partner with the law firm of Smyth & Lack in
Huntington, New York since 1976. From 1985 to 1994, while he was a partner with
Smyth & Lack, he was also general counsel to Bayside Federal Savings Bank. He
is 62 years old.
If elected, each Kingston Group Nominee would receive such directors' fees
as may be payable by the Company in accordance with its practice at the time.
There are no other understandings or arrangements between any person in the
Kingston Group and any Kingston Group Nominee relating to the matters
contemplated by this Proxy Statement.
Additional information concerning the Kingston Group Nominees is set forth
in Appendices A and B to this Proxy Statement.
THE KINGSTON GROUP
The following persons are collectively referred to as the Kingston Group:
(i) RCG Kingston Fund, Ltd., (ii) RCG Kingston, L.L.C., (iii) Kingston Fund,
LP, (iv) Ramius Capital Group, LLC, (v) C4S & Co., LLC, (vi) Jennings & Gillen,
(vii) D.B. Jennings, Inc., (viii) Donald B. Jennings, (ix) Thomas F. Gillen,
(x) The Partnership For Bank Capital, L.P. and (xi) Vincent A. Smyth and Mary
E. Smyth.
RCG Kingston Fund, Ltd., a Cayman Islands company, is engaged in the
business of investment.
RCG Kingston, L.L.C., a Delaware limited liability company, is the
investment advisor to RCG Kingston Fund, Ltd. and the general partner of
Kingston Fund, LP.
Kingston Fund, LP, a Delaware limited partnership, is an investment fund
that owns a majority of the outstanding shares of RCG Kingston Fund, Ltd.
Ramius Capital Group, LLC, a Delaware limited liability company, and
Jennings & Gillen, a Delaware general partnership, are the co-managing members
of RCG Kingston, L.L.C.
C4S & Co., LLC, a Delaware limited liability company, is the managing member
of Ramius Capital Group, LLC.
D.B. Jennings, Inc., a Delaware corporation, and Thomas F. Gillen are co-
general partners of Jennings & Gillen. Donald B. Jennings is the president of
D.B. Jennings, Inc.
The Partnership For Bank Capital, L.P., a Delaware limited partnership, is
engaged in the business of investment. D.B. Jennings, Inc. and Donald B.
Jennings are the general partners of The Partnership For Bank Capital, L.P.
Vincent A. Smyth and Mary E. Smyth are an attorney and housewife,
respectively.
As of the Record Date, members of the Kingston Group collectively
beneficially owned (as determined in accordance with the rules under of the
Securities Exchange Act of 1934 (the "Exchange Act")) 298,302 shares of Common
Stock or approximately 9.2% of the outstanding shares of Common Stock.
Additional information concerning the Kingston Group is set forth in
Appendices A and B.
4
<PAGE>
SOLICITATION; EXPENSES
Proxies may be solicited by mail, advertisement, telephone, facsimile,
telegraph and personal solicitation. Proxies may be similarly solicited by the
Kingston Group and by the Kingston Group Nominees. No additional compensation
will be paid to the Kingston Group and to the Kingston Group Nominees for the
solicitation of proxies. Banks, brokerage houses and other custodians, nominees
and fiduciaries will be requested to forward the Kingston Group solicitation
material to their customers for whom they hold shares and the Kingston Group
will reimburse them for their reasonable out-of-pocket expenses.
The Kingston Group has retained Beacon Hill Partners, Inc. ("Beacon Hill")
to assist in the solicitation of proxies and for related services. The Kingston
Group will pay Beacon Hill an estimated fee of up to $30,000 and has agreed to
reimburse it for its reasonable out-of-pocket expenses. Approximately 25
persons will be used by Beacon Hill in its solicitation efforts.
The entire expense of preparing, assembling, printing and mailing this Proxy
Statement and related materials and the cost of soliciting proxies will be
borne by the Kingston Group.
The Kingston Group estimates that the total expenditures relating to its
proxy solicitation incurred by the Kingston Group will be approximately
$250,000, approximately $120,000 of which has been incurred to date. RCG
Kingston, L.L.C. and Vincent A. Smyth have agreed that the obligation for those
expenses will be allocated evenly between them. The Kingston Group intends to
seek reimbursement from the Company for those expenses incurred by the Kingston
Group if the Kingston Group Nominees are elected to the Board of Directors. It
does not intend to submit the question of such reimbursement to a vote of the
Company's stockholders.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS AND MANAGEMENT
See Appendix C for information regarding persons who beneficially own more
than 5% of the Common Stock and the ownership of the Common Stock by Company
management and the members of the Board of Directors.
VOTING AND PROXY PROCEDURES
For the proxy solicited hereby to be voted, the enclosed Blue proxy card
must be signed, dated and returned to the Kingston Group, c/o Beacon Hill
Partners Inc., 90 Broad Street, 20th Floor, New York, NY 10004 in the enclosed
envelope in time to be voted at the Annual Meeting. If you wish to vote for the
Kingston Group Nominees, you must submit the enclosed Blue proxy card and must
Not submit the Company's proxy card, even if you wish to vote for any of the
Company Nominees. If you have already returned the Board of Directors' proxy
card to the Company, you have the right to revoke it as to all matters covered
thereby and may do so by subsequently signing, dating and mailing the enclosed
Blue proxy card. Only your latest dated Proxy will count at the Annual Meeting.
If your shares are held in the name of a brokerage firm, bank or nominee,
only that entity can vote such shares and only upon receipt of your specific
instruction. Accordingly, please contact the person responsible for your
account and instruct that person to execute on your behalf the Blue proxy card.
Execution of a Blue proxy card will not affect your right to attend the
Annual Meeting and to vote in person. Any proxy may be revoked as to all
matters covered thereby at any time prior to the time a vote is taken by (i)
filing with the Clerk of the Company a later dated written revocation, (ii)
submitting a duly executed proxy bearing a later date to the Clerk of the
Company or (iii) attending and voting at the Annual Meeting in person.
Attendance at the Annual Meeting will not in and of itself constitute a
revocation.
5
<PAGE>
Election of the Kingston Group Nominees requires the affirmative vote of a
plurality of the votes cast on the matter at the Annual Meeting, assuming a
quorum is present or otherwise represented at the Annual Meeting. Consequently,
only shares of Common Stock that are voted in favor of a particular nominee
will be counted toward such nominee's attaining a plurality of votes. Shares of
Common Stock present at the Annual Meeting that are not voted for a particular
nominee (including broker non-votes) and shares of Common Stock present by
proxy where the stockholder properly withheld authority to vote for such
nominee will not be counted toward such nominee's attainment of a plurality.
Shares of Common Stock represented by a valid, unrevoked Blue proxy card
will be voted as specified. You may vote FOR the election of the Kingston Group
Nominees or withhold authority to vote for the election of the Nominees by
marking the proper box on the Blue proxy card. You may also withhold your vote
from any of the Kingston Group Nominees by writing the name of such nominee in
the space provided on the Blue proxy card. If no specification is made, such
shares will be voted FOR the election of all of the Kingston Group Nominees.
Except as set forth in this Proxy Statement, the Kingston Group is not aware
of any other matter to be considered at the Annual Meeting. However, if the
Kingston Group learns of any other proposals made at a reasonable time before
the Annual Meeting, the Kingston Group will either supplement this Proxy
Statement and provide an opportunity to stockholders to vote by proxy directly
on such matter or will not exercise discretionary authority with respect
thereto. If other proposals are made thereafter the persons named as proxies on
the enclosed Blue proxy card will vote proxies solicited hereby in their
discretion.
Only holders of record of Common Stock on April 28, 2000, the Record Date
established by the Board of Directors for the Annual Meeting, will be entitled
to vote at the Annual Meeting. If you are a stockholder of record on the Record
Date, you will retain the voting rights in connection with the Annual Meeting
even if you sell such shares after the Record Date. Accordingly, it is
important that you vote the shares of Common Stock held by you on the Record
Date, or grant a proxy to vote such shares on the Blue proxy card, even if you
sell such shares after such date.
The Kingston Group believes that it is in your best interest to elect the
Kingston Group Nominees at the Annual Meeting. The Kingston Group strongly
recommends a vote FOR the election of the Kingston Group Nominees.
ADDITIONAL INFORMATION
Reference is made to the proxy statement that will be furnished by the Board
of Directors for information concerning the Company's management, the
procedures for submitting proposals for consideration at the next Annual
Meeting of Stockholders of the Company and certain other matters regarding the
Company and the Annual Meeting. The Company also is required to provide to
stockholders its Annual Report to Stockholders for the year ended December 31,
1999, which contains certain information as to the Company's financial
condition and other matters. The Kingston Group will not verify, and assumes no
responsibility for, the accuracy or completeness of any such information.
The Kingston Group
May 11, 2000
6
<PAGE>
Appendix A
INFORMATION CONCERNING PARTICIPANTS IN THE PROXY SOLICITATION
The following sets forth the name, business address, and the number of
shares of Common Stock of the Company beneficially owned (as determined in
accordance with Rule 13d-3 under the Exchange Act) as of April 28, 2000 by each
of (i) the Kingston Group Nominees and (ii) each member of the Kingston Group:
<TABLE>
<CAPTION>
Number of Shares
of Common Percent of
Stock of Common
the Company Stock of the
Name Business Address Beneficially Owned(1) Company(1)(2)
---- ---------------- --------------------- -------------
<C> <S> <C> <C>
William G. Foster, Jr. .... c/o RCG Kingston, L.L.C., 500 *
666 Third Avenue, 26th Floor,
New York, New York 10017
John R. Kennedy............ c/o RCG Kingston, L.L.C., 1,000 *
666 Third Avenue, 26th Floor,
New York, New York 10017
Vincent A. Smyth........... 143 Main Street, 136,500(3) 4.20%
Huntington, New York 11743
RCG Kingston Fund, Ltd..... c/o Citco Fund Services 129,800 3.99%
(Cayman Islands) Ltd.,
Corporate Centre, West Bay
Road,
Grand Cayman, Cayman Islands,
British West Indies
RCG Kingston, L.L.C. ...... 666 Third Avenue, 26th Floor, 129,800(4) 3.99%
New York, New York 10017
Kingston Fund, LP.......... c/o RCG Kingston, L.L.C., 129,800(5) 3.99%
666 Third Avenue, 26th Floor,
New York, New York 10017
Ramius Capital Group, LLC.. c/o RCG Kingston, L.L.C., 129,800(6) 3.99%
666 Third Avenue, 26th Floor,
New York, New York 10017
C4S & Co., LLC............. c/o RCG Kingston, L.L.C., 129,800(7) 3.99%
666 Third Avenue, 26th Floor,
New York, New York 10017
Jennings & Gillen.......... c/o RCG Kingston, L.L.C., 129,800(6) 3.99%
666 Third Avenue, 26th Floor,
New York, New York 10017
D.B. Jennings, Inc......... c/o RCG Kingston, L.L.C., 161,802(8) 4.98%
666 Third Avenue, 26th Floor,
New York, New York 10017
Donald B. Jennings......... c/o RCG Kingston, L.L.C., 161,802(9) 4.98%
666 Third Avenue, 26th Floor,
New York, New York 10017
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
of Common Percent of
Stock of Common
the Company Stock of the
Name Business Address Beneficially Owned(1) Company(1)(2)
---- ---------------- --------------------- -------------
<C> <S> <C> <C>
Thomas F. Gillen......................... c/o RCG Kingston, 129,800(10) 3.99%
L.L.C.,
666 Third Avenue, 26th
Floor, New York, New
York 10017
The Partnership For Bank Capital, L.P. .. 666 Third Avenue, 26th 32,002 *
Floor,
New York, New York 10017
Mary E. Smyth............................ 143 Main Street, 136,500(3) 4.20%
Huntington, New York
11743
</TABLE>
- --------
* Less than 1%.
(1) The members of the Kingston Group collectively beneficially own 298,302
shares of Common Stock, representing approximately 9.2% of the outstanding
shares of Common Stock. Each of 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 and Thomas F.
Gillen expressly disclaims beneficial ownership of any shares of Common
Stock beneficially owned by Vincent A. Smyth and Mary E. Smyth. Each of
RCG Kingston Fund, Ltd., RCG Kingston, L.L.C., Kingston Fund, LP, Ramius
Capital Group, LLC, C4S & Co., LLC, Jennings & Gillen and Thomas F. Gillen
expressly disclaims beneficial ownership of any shares of Common Stock
beneficially owned by The Partnership For Bank Capital, L.P.
(2) All percentages are based on the 3,251,734 shares of Common Stock
outstanding as of April 28, 2000 according to the Company Proxy Statement.
(3) Vincent A. and Mary E. Smyth own their shares of Common Stock jointly.
They regularly effect purchases of securities through margin accounts
maintained for them with Sandler O'Neill & Partners, L.P. which extends
credit to Vincent A. and Mary E. Smyth as and when required to open or
carry positions in the margin accounts, subject to applicable Federal
margin regulations, stock exchange rules and the firm's credit policies.
(4) RCG Kingston, L.L.C. may be deemed to be the beneficial owner of the
129,800 shares held for the account of RCG Kingston Fund, Ltd. as a result
of its acting as investment advisor to RCG Kingston Fund, Ltd.
(5) Kingston Fund, LP may be deemed to be the beneficial owner of 129,800
shares held for the account of RCG Kingston Fund, Ltd. as a result of its
being a holder of a majority of the outstanding shares of RCG Kingston
Fund, Ltd.
(6) Ramius Capital Group, LLC and Jennings & Gillen may be deemed to be the
beneficial owner of 129,800 shares held for the account of RCG Kingston
Fund, Ltd. as a result of their being co-managing members of RCG Kingston,
L.L.C.
(7) C4S & Co., LLC may be deemed to be the beneficial owner of 129,800 shares
held for the account of RCG Kingston Fund, Ltd. as a result of its being
the managing member of Ramius Capital Group, LLC.
(8) D.B. Jennings, Inc. may be deemed to be the beneficial owner of 161,802
shares held for the accounts of RCG Kingston Fund, Ltd. and The
Partnership For Bank Capital, L.P. as a result of its being a co-general
partner of Jennings & Gillen and a co-general partner of The Partnership
For Bank Capital, L.P.
(9) Donald B. Jennings may be deemed to be the beneficial owner of 161,802
shares held for the accounts of RCG Kingston Fund, Ltd. and The
Partnership For Bank Capital, L.P. as a result of his being the president
of D.B. Jennings, Inc. and a co-general partner of The Partnership For
Bank Capital, L.P.
(10) Thomas F. Gillen may be deemed to be the beneficial owner of 129,800
shares held for the account of RCG Kingston Fund, Ltd. as a result of his
being a co-general partner of Jennings & Gillen.
----------------
Except as set forth in this Proxy Statement or in the Appendices hereto, to
the best knowledge of the Kingston Group, none of the Kingston Group, any of
the persons participating in this solicitation on behalf of the Kingston Group,
any of the Kingston Group Nominees nor any associate of any of the foregoing
persons (i)
A-2
<PAGE>
owns beneficially, directly or indirectly, or has the right to acquire, any
securities of the Company or any parent or subsidiary of the Company, (ii) owns
any securities of the Company of record but not beneficially, (iii) has
purchased or sold any securities of the Company within the past two years, (iv)
has incurred indebtedness for the purpose of acquiring or holding securities of
the Company, (v) is or has been a party to any contract, arrangement or
understanding with respect to any securities of the Company within the past
year, (vi) has been indebted to the Company or any of its subsidiaries since
the beginning of the Company's last fiscal year or (vii) has any arrangement or
understanding with respect to future employment by the Company or with respect
to any future transactions to which the Company or any of its affiliates will
be or may be a party. In addition, except as set forth in this Proxy Statement
or in the Appendices hereto, to the best knowledge of the Kingston Group, none
of the Kingston Group, any of the persons participating in this solicitation on
behalf of the Kingston Group, any of the Kingston Group Nominees, nor any
associate of any of the foregoing persons has had or is deemed to have a direct
or indirect material interest in any transaction with the Company since the
beginning of the Company's last fiscal year, or in any proposed transaction, to
which the Company or any of its affiliates was or is a party.
None of the corporations or organizations in which any of the Kingston Group
Nominees has conducted his principal occupation or employment was a parent,
subsidiary or other affiliate of the Company, and none of the Kingston Group
Nominees holds any position or office with the Company, has any family
relationship with any executive officer or director of the Company or each
other, or has been involved in any legal proceedings of the type required to be
disclosed by the rules governing this solicitation.
A-3
<PAGE>
Appendix B
TRANSACTIONS IN SHARES OF PEOPLE'S BANCSHARES, INC.
The following table sets forth information with respect to all purchases and
sales of shares of Common Stock by members of the Kingston Group and their
associates, affiliates and the Kingston Group Nominees during the past two
years:
<TABLE>
<CAPTION>
Price
Date of Nature of Number of Per
Transaction Transaction Shares Share
For the account of: ----------- ----------- --------- ------
<S> <C> <C> <C> <C>
RCG Kingston Fund, Ltd............... 5/1/98 Purchase 3,000 $27.88
5/1/98 Purchase 8,000 27.87
6/3/98 Purchase 5,000 26.63
6/10/98 Purchase 5,000 25.25
10/30/98 Purchase 5,000 21.03
11/6/98 Purchase 3,000 21.13
11/17/98 Purchase 5,000 20.75
12/9/98 Purchase 7,500 20.94
12/31/98 Purchase 2,800 20.47
9/13/98 Purchase 3,000 18.13
9/14/98 Purchase 3,000 18.25
<CAPTION>
Price
Date of Nature of Number of Per
Transaction Transaction Shares Share
For the account of: ----------- ----------- --------- ------
<S> <C> <C> <C> <C>
The Partnership for Bank Capital,
L.P................................. 8/26/98 Purchase 2,000 $16.53
11/6/98 Purchase 3,000 21.13
11/17/98 Purchase 2,500 20.76
12/11/98 Purchase 8,000 20.89
2/2/99 Purchase 2,000 20.98
2/9/99 Purchase 4,000 20.53
9/13/99 Purchase 2,000 18.14
9/14/99 Purchase 2,000 18.26
<CAPTION>
Price
Date of Nature of Number of Per
Transaction Transaction Shares Share
For the account of: ----------- ----------- --------- ------
<S> <C> <C> <C> <C>
Vincent A. Smyth and Mary E. Smyth... 6/20/97 Purchase 5,000 $14.63
9/25/97 Purchase 5,000 16.00
1/22/98 Purchase 10,000 20.50
5/29/98 Purchase 5,000 25.75
6/9/98 Purchase 5,000 25.00
7/8/98 Purchase 2,500 23.50
8/13/98 Purchase 5,000 19.63
9/15/98 Purchase 5,000 15.13
2/10/99 Purchase 2,500 20.63
2/11/99 Purchase 2,500 20.68
3/1/99 Purchase 2,500 20.50
3/17/99 Purchase 5,000 19.88
3/19/99 Purchase 7,500 19.75
3/23/99 Purchase 7,000 19.83
6/9/99 Purchase 5,000 19.63
6/10/99 Purchase 3,000 19.38
6/11/99 Purchase 10,000 19.63
6/17/99 Purchase 10,000 19.63
</TABLE>
B-1
<PAGE>
<TABLE>
<CAPTION>
Date of Nature of Number of Price Per
Transaction Transaction Shares Share
For the account of: ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
6/25/99 Purchase 2,500 $20.250
8/27/99 Purchase 16,500 18.875
9/1/99 Purchase 5,000 18.094
9/27/99 Purchase 10,000 18.750
12/3/99 Purchase 5,000 19.125
<CAPTION>
Date of Nature of Number of Price Per
Transaction Transaction Shares Share
For the account of: ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
William G. Foster, Jr.............. 11/3/99 Purchase 500 $ 17.75
<CAPTION>
Date of Nature of Number of Price Per
Transaction Transaction Shares Share
For the account of: ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
John R. Kennedy.................... 3/21/00 Purchase 1,000 $ 17.25
</TABLE>
B-2
<PAGE>
Appendix C
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, to the knowledge of Kingston Group based on
a review of publicly available information filed with the Securities and
Exchange Commission, each person (who is not a director) reported to own
beneficially more than 5% of the outstanding Common Stock:(1)
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Ownership of
Name and Address of Beneficial Owner Common Stock Percent of Class
- ------------------------------------ ------------ ----------------
<S> <C> <C>
Dearden, Maguire & Weaver....................... 226,133 6.60%
One Tower Bridge,
Suite 560
West Conshohocken, PA 19428
Dimensional Fund Advisors, Inc. ................ 168,669 4.93%
1299 Ocean Avenue,
11th Floor
Santa Monica, CA 90401
Kingston Group.................................. 298,302(2) 9.17%
c/o RCG Kingston, L.L.C.
666 Third Avenue,
26th Floor
New York, New York 10017
Tontine Partners, L.P. ......................... 194,598 5.68%
200 Park Avenue,
Suite 3900
New York, NY 10166
</TABLE>
- --------
(1) All such information was obtained from the Company Proxy Statement.
(2) Each of 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 and Thomas F. Gillen expressly
disclaims beneficial ownership of any shares of Common Stock beneficially
owned by Vincent A. Smyth and Mary E. Smyth. Each of RCG Kingston Fund,
Ltd., RCG Kingston, L.L.C., Kingston Fund, LP, Ramius Capital Group, LLC,
C4S & Co., LLC, Jennings & Gillen and Thomas F. Gillen expressly disclaims
beneficial ownership of any shares of Common Stock beneficially owned by
The Partnership For Bank Capital, L.P.
C-1
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of April 28, 2000 with respect
to the beneficial ownership of shares of Common Stock by each of the Company's
directors and executive officers and all directors and executive officers as a
group:(1)
<TABLE>
<CAPTION>
Number of Shares of Percent of
Common Stock Common
Name Beneficially Owned Stock(2)
- ---- ------------------- ----------
<S> <C> <C>
Directors (Other than Executive Officers)
Frederick W. Adami, III....................... 11,516(3) *
B. Benjamin Cavallo........................... 223,272(4) 6.52%
John R. Eaton................................. 17,996(5) *
Terrence A. Gomes............................. 5,016(6) *
Dr. Loring C. Johnson......................... 11,391(7) *
Richard D. Matthews........................... 28,319(8) *
Scott W. Ramsay............................... 2,600(9) *
Davis H. Scudder.............................. 17,825(10) *
Stanley D. Siskind............................ 14,117(11) *
Executive Officers.............................
Colin C. Blair................................ 104,150(12) 3.04%
Richard S. Straczynski........................ 68,000(13) 1.99%
All directors and executive officers as a group
including persons named above (11 persons).... 482,661(14) 14.73%
</TABLE>
- --------
* Less than 1 percent.
(1) All such information was obtained from the Company Proxy Statement.
(2) For purposes of calculating the percentage of the outstanding shares of
Common Stock at February 1, 2000 for each listed person, the number of
shares of Common Stock includes shares that may be acquired by such person
within 60 days of February 1, 2000 through the exercise of vested stock
options under the Company's Amended and Restated Incentive and
Nonqualified Stock Option Plan (the "1986 Employee Option Plan"), the
Company's Amended and Restated Directors' Stock Option Plan (the "1986
Director Option Plan") and the Company's 1996 Stock Option and Incentive
Plan (the "1996 Option Plan" and collectively the "Stock Option Plans")
but does not include the number of shares underlying such options held by
any other person.
(3) Includes 9,516 shares which Mr. Adami has the right to acquire within 60
days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 1,500 shares owned by Mr. Adami jointly with his wife, and 500
shares owned by Mr. Adami's daughters.
(4) Includes 4,916 shares which Mr. Cavallo has the right to acquire within 60
days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 2,112 shares held by Mr. Cavallo's son, 115,514 shares held by
Mr. Cavallo's wife, and 55,060 shares held by a partnership in which Mr.
Cavallo is a partner.
(5) Includes 9,516 shares which Mr. Eaton has the right to acquire within 60
days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 7,980 shares owned by Mr. Eaton jointly with his wife.
(6) Includes 4,916 shares which Mr. Gomes has the right to acquire within 60
days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
C-2
<PAGE>
(7) Includes 9,516 shares which Dr. Johnson has the right to acquire within 60
days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(8) Includes 9,516 shares which Mr. Matthews has the right to acquire within
60 days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 4,871 shares owned by Mr. Matthews jointly with his wife.
(9) Includes 2,000 shares which Mr. Ramsay has the right to acquire within 60
days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan and 600
shares owned by Mr. Ramsay jointly with his wife.
(10) Includes 9,516 shares which Mr. Scudder has the right to acquire within 60
days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 340 shares owned by members of Mr. Scudder's immediate family,
2,555 shares owned by Scudder Bros. Fuel Company, Inc., of which Mr.
Scudder is a principal and 1,200 shares owned by Campello Salvage of which
Mr. Scudder is a partner.
(11) Includes 4,916 shares which Mr. Siskind has the right to acquire within 60
days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(12) Includes 23,500 shares which Mr. Blair has the right to acquire within 60
days of February 1, 2000, through the exercise of vested stock options
granted under the 1986 Employee Option Plan and 1996 Option Plan. Also
includes approximately 23,675 shares which may be deemed beneficially
owned by Mr. Blair through his interest in the Bank's 401(k) plan, which
invests in the Company's Common Stock.
(13) Includes 49,500 shares which Mr. Straczynski has the right to acquire
within 60 days of February 1, 2000, through the exercise of vested stock
options granted under the 1986 Option Plan.
(14) Includes 137,328 shares which directors and executive officers have the
right to acquire within 60 days of February 1, 2000, through the exercise
of vested stock options granted under one or more of the Stock Option
Plans.
C-3
<PAGE>
PEOPLE'S BANCSHARES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE KINGSTON GROUP
The undersigned stockholder of People's Bancshares, Inc. (the "Company") hereby
appoints Thomas F. Gillen, Donald B. Jennings and Vincent A. Smyth, and each of
them, with several powers of substitution, as proxies to cast all votes which
the undersigned stockholder is entitled to cast at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held at 10:00 a.m., local time, on
Friday, June 16, 2000 at Stone Forge Public House, 90 Paramount Drive, Raynham,
Massachusetts, and at any adjournments or postponements thereof. The
undersigned stockholder hereby revokes any proxy or proxies heretofore given.
This proxy will be voted as directed by the undersigned stockholder. UNLESS
CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE
NOMINEES LISTED IN PROPOSAL 1 AND IN ACCORDANCE WITH THE DETERMINATION OF THE
PROXY HOLDERS AS TO OTHER MATTERS. The undersigned stockholder hereby
acknowledges receipt of the Kingston Group Proxy Statement.
The undersigned stockholder may revoke this proxy at any time prior to its
exercise by filing a written notice of revocation with, or by delivering a duly
executed proxy bearing a later date to, the Clerk of the Company or by attending
the Annual Meeting of Stockholders.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
X PLEASE MARK
- --- VOTED AS IN
THIS EXAMPLE
<TABLE>
<S> <C> <C> <C> <C>
PEOPLE'S BANCSHARES, INC. 1. Election of Directors. For All With- For All
Nominees hold Except
William G. Foster, Jr.
John R. Kennedy [ ] [ ] [ ]
Vincent A. Smyth
</TABLE>
If you do not wish your shares voted
"For" a particular nominee, mark the
"For All Except" box and strike a line
through the name(s) of the nominee(s).
Your shares will be voted for the
remaining nominee(s).
To transact such other business as may
properly come before the meeting or any
adjournment thereof.
The undersigned stockholder(s)
authorize(s) the proxies to vote on the
above matter as indicated and to vote, in
their discretion, upon such other matters
as may properly come before the Annual
Meeting or any adjournments or
postponements thereof .
Please be sure to sign and date Date
this Proxy. ---------------
- --------------------------------------------------------------------------------
Stockholder sign here Co-owner sign here
