SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the SEC Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PSB GROUP, INC.
(Name of Registrant as Specified in Its Charter)
__________________________________________
(Name of Person(s) Filing Proxy Statement,
if other than 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)(1) 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:
_______________________________
(5) Total fee paid: _________________________________________________
[ ] 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:_ ______________________
(3) Filing Party: ___________________________________________________
(4) Date Filed: _____________________________________________________
PSB GROUP, INC.
1800 EAST 12 MILE ROAD
MADISON HEIGHTS, MI 48071-2600
(248) 548-2900
November __, 2008
Dear Shareholder:
I am pleased to invite you to attend a special meeting of shareholders of
PSB Group, Inc. to be held on __________, December __, 2008. We will hold the
meeting at 9:00 a.m. at the Ukrainian Cultural Center, 26601 Ryan Road, Warren,
Michigan. The purpose of the special meeting is to consider an amendment to the
Articles of Incorporation of the Company to increase the number of authorized
shares of common stock and to authorize the issuance of preferred stock by the
Company.
On the page following this letter, you will find the Notice of Meeting.
Following the Notice of Meeting is the proxy statement which describes these
matters. Also enclosed you will find your proxy card, which allows you to vote
on these matters.
Your vote is important. A majority of the common stock must be represented,
either in person or by proxy, to constitute a quorum for the conduct of
business. PLEASE COMPLETE AND MAIL IN YOUR PROXY CARD PROMPTLY, EVEN IF YOU PLAN
TO ATTEND THE MEETING. You can attend the meeting and vote in person, even if
you have sent in a proxy card.
The Board of Directors recommends that shareholders vote FOR each of the
proposals stated in the proxy statement.
The rest of the Board and I look forward to seeing you at the meeting.
Whether or not you can attend, we greatly appreciate your cooperation in
returning the proxy card.
Sincerely,
Michael J. Tierney
President and Chief Executive Officer
PSB GROUP, INC.
1800 EAST 12 MILE ROAD
MADISON HEIGHTS, MI 48071-2600
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TIME.......................... 9:00 a.m. on ___________, December __, 2008
PLACE......................... Ukrainian Cultural Center
26601 Ryan Road
Warren, Michigan
ITEMS OF BUSINESS............. (1) To amend the Company's articles of
incorporation to increase the number of
authorized common shares and to authorize
the issuance of preferred stock by the
Company.
(2) To consider and act upon a proposal to
adjourn or postpone the meeting, if
necessary, in the event that an
insufficient number of shares is present
in person or by proxy to approve and adopt
the proposal to amend the articles of
incorporation.
(3) To transact such other business as may
properly come before the Meeting.
RECORD DATE................... You can vote if you are a shareholder of record
on November __, 2008.
QUORUM........................ A majority of the shares of common stock must
be represented at the meeting. If there are
insufficient shares, the meeting may be
adjourned.
November __, 2008 David A. Wilson
Secretary
TABLE OF CONTENTS
SOLICITATION AND VOTING..................................................... 1
Shareholders Entitled to Vote............................................ 1
Voting Procedures........................................................ 1
Voting Procedures for Shares in the Company's 401(k) Plan................ 2
Required Vote............................................................ 2
No Rights of Dissenting Shareholders..................................... 2
Revoking a Proxy......................................................... 2
List of Shareholders..................................................... 2
Cost of Proxy Solicitation............................................... 2
Inspector of Election.................................................... 3
Other Matters............................................................ 3
Authority to Adjourn Special Meeting to Solicit Additional Proxies....... 3
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION............................. 3
SECURITY OWNERSHIP OF SHAREHOLDERS HOLDING 5% OR MORE....................... 6
WHERE YOU CAN FIND MORE INFORMATION......................................... 7
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS,
NOMINATION OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS............... 7
PSB GROUP, INC.
1800 EAST 12 MILE ROAD
MADISON HEIGHTS, MI 48071-2600
SOLICITATION AND VOTING
We are sending you this Proxy Statement and the enclosed proxy card because
the Board of Directors of PSB Group, Inc. (the "Company" "we" or "us") is
soliciting your proxy to vote at a Special Meeting of Shareholders (the "Special
Meeting"). This Proxy Statement summarizes the information you need to know to
vote intelligently at the Special Meeting.
You are invited to attend our Special Meeting of Shareholders on December
__, 2008 beginning at 9:00 a.m. The Special Meeting will be held at the
Ukrainian Cultural Center, 26601 Ryan Road, Warren, Michigan.
This Proxy Statement and the enclosed form of proxy are being mailed
starting on or around November __, 2008.
SHAREHOLDERS ENTITLED TO VOTE
Holders of record of common stock of the Company at the close of business
on November __, 2008 are entitled to receive this notice. Each share of common
stock of the Company is equal to one vote.
As of the record date, there were __________ common shares outstanding.
VOTING PROCEDURES
You can vote on matters to come before the meeting in one of three ways:
- you can come to the Special Meeting and cast your vote there;
- you can vote by giving a proxy to another person who can cast
your vote at the Special Meeting; or
- you can vote by signing and returning the enclosed proxy card. If
you do so, the individuals named as proxies on the card will vote
your shares in the manner you indicate.
You may also choose to vote for each proposal by simply signing, dating and
returning the enclosed proxy card without further direction. All signed and
returned proxies that contain no direction as to vote will be voted FOR each of
the proposals.
The Board of Directors has selected itself as the persons to act as proxies
on the proxy card.
If you plan to attend the Special Meeting and vote in person, you should
request a ballot when you arrive. IF YOUR SHARES ARE HELD IN THE NAME OF YOUR
BROKER, BANK OR OTHER NOMINEE, THE INSPECTOR OF ELECTION WILL REQUIRE YOU TO
PRESENT A POWER OF ATTORNEY OR PROXY IN YOUR NAME FROM SUCH BROKER, BANK OR
OTHER NOMINEE FOR YOU TO VOTE SUCH SHARES AT THE SPECIAL MEETING. Please contact
your broker, bank or nominee.
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VOTING PROCEDURES FOR SHARES IN THE COMPANY'S 401(K) PLAN
If you participate in the Company's 401(k), Profit Sharing and Employee
Stock Ownership Plan (the "401(k) Plan"), please return your proxy in the
envelope on a timely basis to ensure that your proxy is voted. If you own or are
entitled to give voting instructions for shares in the 401(k) Plan and do not
vote your shares or give voting instructions, generally, the Plan Administrator
or Trustee will vote your shares in the same proportion as the shares for all
plan participants for which voting instructions have been received. Holders of
shares in the 401(k) Plan will not be permitted to vote such shares at the
Special Meeting, but their attendance is encouraged and welcome.
REQUIRED VOTE
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the shareholders at the Special Meeting is
necessary to constitute a quorum. Abstentions and broker "non votes" are counted
as present and entitled to vote for purposes of determining a quorum. A broker
"non vote" occurs when a broker, bank or other nominee holding shares for a
beneficial owner does not vote on a particular proposal because such broker,
bank or nominee does not have discretionary authority to vote and has not
received instructions from the beneficial owner.
Once a quorum is achieved, the affirmative vote of a majority of the issued
and outstanding shares entitled to vote is required to approve the amendment to
articles of incorporation. Abstentions and broker non votes have the effect of a
vote against the proposed amendment.
Any other matter that may properly come before the special meeting requires
that more shares be voted in favor of the matter than are voted against the
matter. Abstentions and broker non votes are not counted.
NO RIGHTS OF DISSENTING SHAREHOLDERS
Under applicable Michigan laws and the Company's articles of incorporation
and bylaws, shareholders do not have the right to dissent and to receive the
fair value of their shares in cash.
REVOKING A PROXY
If you give a proxy, you may revoke it at any time before it is exercised.
You may revoke your proxy in any one of three ways:
- You may send in another proxy with a later date;
- You may notify the Company's Secretary in writing at PSB Group,
Inc., 1800 East 12 Mile Road, Madison Heights, Michigan
48071-2600; or
- You may revoke by voting in person at the Special Meeting.
If you choose to revoke your proxy by attending the Special Meeting, you
must vote in accordance with the rules for voting at the Special Meeting.
Attending the Special Meeting alone will not constitute revocation of a proxy.
LIST OF SHAREHOLDERS
A list of shareholders entitled to vote at the Special Meeting will be
available at the Company's offices at 1800 East 12 Mile Road, Madison Heights,
Michigan for a period of ten days prior to the Special Meeting. A list will also
be available at the Special Meeting itself.
COST OF PROXY SOLICITATION
We will pay the expenses of soliciting proxies. Proxies may be solicited on
our behalf by directors, officers or employees in person or by telephone, mail
or telegram. Directors, officers and employees who solicit proxies will not
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be compensated for such activities. We have not hired and do not intend to hire
a proxy solicitation firm to assist us in the distribution and solicitation of
proxies. The Company will also request persons, firms and corporations holding
shares in their names for other beneficial owners to send proxy materials to
such beneficial owners. The Company will reimburse these persons for their
expenses.
INSPECTOR OF ELECTION
Your proxy returned in the enclosed envelope will be delivered to the
Company's Secretary, David A. Wilson. The Board of Directors has designated
Barbara Heath and Rhonda Kozlowski of PSB Group, Inc. to act as inspectors of
election and to tabulate the votes at the Special Meeting. After the final
adjournment of the Special Meeting, the proxies will be returned to the Company.
OTHER MATTERS
The Board of Directors knows of no business which will be presented for
consideration at the Special Meeting other than as stated in the Notice of
Special Meeting of Shareholders. If, however, other matters are properly brought
before the Special Meeting, it is the intention of the persons named in the
proxies to vote the shares on such matters in their discretion.
AUTHORITY TO ADJOURN SPECIAL MEETING TO SOLICIT ADDITIONAL PROXIES
In the event that there are not sufficient votes to constitute a quorum or
to approve the proposal to amend the articles of incorporation at the time of
the special meeting, the proposal cannot be approved unless the special meeting
is adjourned or postponed to a later date or dates in order to permit further
solicitation of proxies. In order to allow proxies that have been received by
the Company at the time of the special meeting to be voted for an adjournment or
postponement, if deemed necessary, the Company has submitted the question of
adjournment or postponement to its shareholders as a separate matter for their
consideration. If it is deemed necessary to adjourn the special meeting, no
notice of the adjourned meeting is required to be given to the Company's
shareholders, other than an announcement at the special meeting of the place,
date and time to which the special meeting is adjourned.
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
GENERAL
In October 2008, the U.S. Department of Treasury announced a voluntary
Capital Purchase Program under the Emergency Economic Stabilization Act of 2008
whereby it would purchase senior preferred stock of qualifying bank holding
companies on what our board considers to be favorable terms (the "Treasury
program"). Participants in the Treasury program are also required to issue
warrants to purchase a number of shares of common stock having an aggregate
market price equal to 15% of the senior preferred amount. The U.S. Department of
Treasury's term sheet summarizing the terms of its proposed investment is
attached hereto as Appendix A.
Our Board of Directors has unanimously approved and recommended that our
shareholders adopt an amendment to the Company's articles of incorporation to
authorize the issuance of up to 200,000 shares of preferred stock with such
rights and preferences as the Board may determine in order to participate in the
Treasury program. The Board of Directors believes that authorizing the Board to
issue preferred stock will enable the Company to raise capital to help ensure
that its wholly-owned bank subsidiary, Peoples State Bank, remains
well-capitalized. We are also asking our shareholders to approve an increase in
the number of authorized common shares from 5,000,000 to 7,000,000. Management
considers the increase in authorized shares of common stock desirable to permit
the issuance of common stock warrants under the Treasury program and to provide
maximum flexibility with respect to our ability to augment the Company's capital
in the future and to provide flexibility for declaration of stock dividends and
for other proper corporate purposes in the long term.
Currently, we are not authorized to issue preferred stock. If the amendment
is adopted by the shareholders of the Company, the shares of preferred stock
will be available for issuance in connection with the Treasury program
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and from time to time for such purposes and consideration as the Board may
approve. No further vote of the shareholders of the Company will be required,
except as provided under Michigan law. The Board of Directors believes that it
is advisable to increase the Company's authorized capital to include preferred
stock in order take advantage of the Treasury program and to help ensure that
its wholly-owned bank subsidiary, Peoples State Bank, remains well-capitalized.
The Company's preferred stock may have such terms, including dividend or
interest rates, conversion prices, voting rights, redemption prices, maturity
dates, and other rights, preferences and limitations, as determined by the Board
in its sole discretion. The Board will also have the sole authority to issue
such shares of preferred stock to whomever and for whatever purposes it may deem
appropriate. The Board currently anticipates that it will issue the maximum
amount available (3% of risk adjusted assets) under the Treasury program with
the terms, rights and preferences set forth on Appendix A and will issue a
number of warrants exercisable for Company common stock equal to 15% of the
senior preferred amount. The exercise price for the warrants, and the market
price for determining the number of shares of common stock subject to the
warrant is the market price for the Company's common stock on the date of the
senior preferred investment (calculated on a 20-trading day trailing average).
The warrants will have additional terms and features set forth on Appendix A.
POTENTIAL EFFECTS OF THE PROPOSED AMENDMENT
In deciding whether to issue shares of preferred or common stock, the Board
of Directors will consider the terms of such capital stock and the effect of the
issuance on the operating results of the Company and its existing shareholders.
With the exception of stock dividends, issuances of common stock or one or more
series of preferred stock may result in dilution to the investments of existing
shareholders. Issuances of common or preferred stock could be used to discourage
or make it more difficult for a person to acquire control of the Company or
remove management. The Board of Directors did not propose this amendment for the
purpose of discouraging mergers or changes in control of the Company.
The text of the proposed amendment to the articles of incorporation is set
forth in Appendix B attached hereto. Shareholders are urged to read Appendix B
carefully.
The Board intends to issue shares of preferred stock and common stock
warrants as soon as possible under the Treasury program. None of our directors
or executive officers has any financial or other personal interest in this
proposal except as described herein.
REQUIRED VOTE
The affirmative vote of a majority of issued and outstanding shares of the
Company's common stock entitled to vote is required for approval of this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT
TO THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED COMMON
SHARES AND TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK BY THE COMPANY.
4
SECURITY OWNERSHIP OF DIRECTORS, NOMINEES FOR DIRECTORS
MOST HIGHLY COMPENSATED EXECUTIVE OFFICERS AND
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP
The following tables show, as of November __, 2008, the name and capital
stock ownership of each director and executive officer of the Company and the
Bank, and capital stock ownership of all officers and directors of the Company
as a group.
BENEFICIAL OWNERSHIP
Name CURRENT SHARES(1) PERCENT
- ------------------------------------------------------------- -------------------- -------
David L. Wood (Director-Chairman) 57,699(2) 1.69%
Michael J. Tierney (Director and Executive Officer) 38,708(3) 1.13%
James B. Jacobs (Director) 4,286(4) *
Michael J. Kowalski (Director) 38,098(5) 1.11%
Longine V. Morawski (Director) 71,538(6) 2.09%
Sydney L. Ross (Director) 56,377(7) 1.65%
Edward H. Turner (Director) 15,981(8) *
Michael J. Banks (Executive Officer) 14,251(9) *
Tami Janowicz (Executive Officer) 4,138(10) *
Vincent J. Szymborski (Executive Officer) 14,799(11) *
David A. Wilson (Executive Officer) 13,142(12) *
All directors and executive officers as a group (13 persons) 350,015 10.23%
* less than one percent.
- ----------
(1) The securities "beneficially owned" by an individual are determined as of
November __, 2008 by information obtained from the persons listed above, in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission. Accordingly, they
may include securities owned by or for, among others, the spouse and/or
minor children of the individual and any other relative who has the same
home as such individual, as well as other securities as to which the
individual has or shares voting or investment power. Unless otherwise
indicated therein, the persons named in this table have sole voting and
sole investment power or share voting and investment power with their
respective spouses, with respect to all shares beneficially owned.
Beneficial ownership may be disclaimed as to certain of the securities.
(2) Includes 480 shares of restricted stock which vest on February 21, 2011.
Also includes 17,071 phantom stock units acquired by Mr. Wood under the
Company's Deferred Compensation Plan for which payment is to be made in the
form of Company common stock.
(3) Includes 1,250 shares of restricted stock which vest on July 5, 2010, 2,500
shares which vest on February 27, 2010 and 2,500 shares which vest on
February 21, 2011.
(4) Includes 200 shares of restricted stock which vest on February 21, 2011.
(5) Includes 240 shares of restricted stock which vest on February 21, 2011.
Also includes 20,040 phantom stock units acquired by Mr. Kowalski under the
Company's Deferred Compensation Plan for which payment is to be made in the
form of Company common stock.
(6) Includes 370 shares of restricted stock which vest on February 21, 2011.
Also Includes 17,366 shares owned by MP Tooling & Engineering, Inc. and
2,261 shares owned by LVM Enterprises, Inc., both of which companies are
100% owned by Mr. Morawski.
(7) Includes 210 shares of restricted stock which vest on February 21, 2011.
(8) Includes 220 shares of restricted stock which vest on February 21, 2011.
(9) Includes 10,000 shares of restricted stock which vest on March 15, 2010 and
1,200 shares which vest on February 21, 2011.
(10) Includes 750 shares of restricted stock which vest on February 27, 2010 and
900 shares which vest on February 21, 2011.
(11) Includes 8,600 shares of restricted stock which vest on March 19, 2010 and
1,200 shares which vest on February 21, 2011.
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(12) Includes 1,250 shares of restricted stock which vest on February 27, 2010
and 1,200 shares which vest on February 21, 2011.
SECURITY OWNERSHIP OF SHAREHOLDERS HOLDING 5% OR MORE
The table below contains shareholder information for persons believed by
the Company to own five percent or more of the Company's common stock. Ownership
of the Company's common stock is shown in terms of "beneficial ownership." A
person generally "beneficially owns" shares if he has either the right to vote
those shares or dispose of them. More than one person may be considered to
beneficially own the same shares.
In this Proxy Statement, unless otherwise noted, a person has sole voting
and dispositive power for those shares shown as beneficially owned by him. The
percentages shown below compare the persons beneficially owned shares with the
total number of shares of the Company's common stock outstanding on November __,
2008 (__________ shares).
NUMBER
NAME AND ADDRESS OF PERCENT
OF BENEFICIAL OWNER SHARES OF CLASS
- ------------------------------------ --------- --------
Christopher S. Olson 276,277(1) 8.91%
22641 Statler
St. Clair Shores, MI 48081
Lance K. Olson 226,277(2) 7.30%
305 Lincoln
Grosse Pointe, MI 48230
Madison Holdings Limited Partnership 237,157(3) 7.65%
27301 Dequindre Road
Madison Heights, Michigan 48071
Dr. Leon Fill Foundation 5,351(3) .17%
27301 Dequindre Road
Madison Heights, Michigan 48071
Norman M. Fill 597(3) .02%
27301 Dequindre Road
Madison Heights, Michigan 48071
- ----------
(1) Based upon information disclosed in a Schedule 13G filed on July 6, 2006.
(2) Based upon information disclosed in a Schedule 13G filed on July 6, 2006.
(3) Based upon information disclosed in Schedules 13D filed on or around August
31, 2001 and records of the Company's stock transfer agent. Madison
Holdings Limited Partnership ("Madison"), Dr. Leon Fill Foundation (the
"Foundation"), and Norman M. Fill ("Fill") disclosed that they had sole
power to vote or dispose of certain shares. Fill is the managing partner of
Madison and the sole trustee of the Foundation. Madison, the Foundation and
Fill are believed to own an aggregate of 243,105 shares of common stock or
approximately 8.0%.
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WHERE YOU CAN FIND MORE INFORMATION
The Company files reports, proxy statements and other information with the
SEC under the Securities Exchange Act of 1934, as amended. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. You may
read and copy, at the prescribed rates, this information at the SEC's Public
Reference Room, 100 F Street, N.W., Washington, D.C. 20549.
The SEC also maintains an Internet world wide website that contains
reports, proxy statements and other information about issuers including the
Company, who file electronically with the SEC. The address of that site is
http://www.sec.gov. The Company maintains a website at
http://www.psbnetbank.com.
REQUIREMENTS, INCLUDING DEADLINES,
FOR SUBMISSION OF PROXY PROPOSALS, NOMINATION OF DIRECTORS
AND OTHER BUSINESS OF SHAREHOLDERS
In order to have a shareholder proposal included in next year's proxy
statement, under the SEC's proxy rules, a proposal in compliance with SEC Rule
14a-8 must be received by us in writing addressed to: David A. Wilson, Secretary
at the office address set forth above no later than November 26, 2008.
Under our Bylaws, certain procedures are provided which a shareholder must
follow to nominate persons for director or to introduce an item of business at
an Annual Meeting of Shareholders outside of SEC Rule 14a-8. Nominations for
directors or introduction of an item of business should be submitted in writing
to the Company's president at 1800 East 12 Mile Road, Madison Heights, Michigan
48071-2600. The nomination or proposed item must be received:
- no later than 90 days before the first anniversary of the
preceding year's annual meeting of shareholders; and
- no earlier than the close of business on the 120th day before the
first anniversary of the preceding year's annual meeting of
shareholders.
The nomination must contain the following information about the nominee:
- name and address;
- a description of all arrangements or understandings between the
shareholder and the nominee;
- the number and kinds of securities of the Company held by the
nominee;
- such other information regarding the proposed nominee as may be
requested by the board of directors; and
- a signed consent of the nominee to serve as a director of the
Company, if elected.
Notice of a proposed item of business outside of SEC Rule 14a-8 must
include:
- a brief description of the matter and the reasons for introducing
such matter at the Annual Meeting;
- the shareholder's name and address;
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- the class and number of shares of the Company's capital stock
held by the shareholder; and
- any material interest of the shareholder in such business.
The chairman of the meeting may refuse to allow the transaction of any
business not presented beforehand, or to acknowledge the nomination of any
person not made in compliance with the foregoing procedures.
The discussion above is intended merely as a summary. Persons wishing to
submit a proposal or a nominee for director should consult the Company's bylaws,
a copy of which can be obtained free of charge by writing to David A. Wilson,
Secretary at the office address set forth above.
Whether or not you plan to attend the meeting, please vote by marking,
signing, dating and promptly returning the enclosed proxy in the enclosed
envelope.
By Order of the Board of Directors,
David A. Wilson
Secretary
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APPENDIX A
TARP CAPITAL PURCHASE PROGRAM
SENIOR PREFERRED STOCK AND WARRANTS
SUMMARY OF SENIOR PREFERRED TERMS
ISSUER: Qualifying Financial Institution ("QFI") means (i) any U.S.
bank or U.S. savings association not controlled by a Bank
Holding Company ("BHC") or Savings and Loan Holding Company
("SLHC"); (ii) any U.S. BHC, or any U.S. SLHC which engages
only in activities permitted for financial holdings
companies under Section 4(k) of the Bank Holding Company
Act, and any U.S. bank or U.S. savings association
controlled by such a qualifying U.S. BHC or U.S. SLHC; and
(iii) any U.S. BHC or U.S. SLHC whose U.S. depository
institution subsidiaries are the subject of an application
under Section 4(c)(8) of the Bank Holding Company Act;
except that QFI shall not mean any BHC, SLHC, bank or
savings association that is controlled by a foreign bank or
company. For purposes of this program, "U.S. bank", "U.S.
savings association", "U.S. BHC" and "U.S. SLHC" means a
bank, savings association, BHC or SLHC organized under the
laws of the United States or any State of the United States,
the District of Columbia, any territory or possession of the
United States, Puerto Rico, Northern Mariana Islands, Guam,
American Samoa, or the Virgin Islands. THE UNITED STATES
DEPARTMENT OF THE TREASURY WILL DETERMINE ELIGIBILITY AND
ALLOCATION FOR QFIS AFTER CONSULTATION WITH THE APPROPRIATE
FEDERAL BANKING AGENCY.
INITIAL HOLDER: United States Department of the Treasury (the "UST").
SIZE: QFIs may sell preferred to the UST subject to the limits and
terms described below.
Each QFI may issue an amount of Senior Preferred equal to
not less than 1% of its risk-weighted assets and not more
than the lesser of (i) $25 billion and (ii) 3% of its
risk-weighted assets.
SECURITY: Senior Preferred, liquidation preference $1,000 per share.
(Depending upon the QFI's available authorized preferred
shares, the UST may agree to purchase Senior Preferred with
a higher liquidation preference per share, in which case the
UST may require the QFI to appoint a depositary to hold the
Senior Preferred and issue depositary receipts.)
RANKING: Senior to common stock and pari passu with existing
preferred shares other than preferred shares which by their
terms rank junior to any existing preferred shares.
A-1
REGULATORY
CAPITAL
STATUS: Tier l.
TERM: Perpetual life.
DIVIDEND: The Senior Preferred will pay cumulative dividends at a rate
of 5% per annum until the fifth anniversary of the date of
this investment and thereafter at a rate of 9% per annum.
For Senior Preferred issued by banks which are not
subsidiaries of holding companies, the Senior Preferred will
pay non-cumulative dividends at a rate of 5% per annum until
the fifth anniversary of the date of this investment and
thereafter at a rate of 9% per annum. Dividends will be
payable quarterly in arrears on February 15, May 15, August
15 and November 15 of each year.
REDEMPTION: Senior Preferred may not be redeemed for a period of three
years from the date of this investment, except with the
proceeds from a Qualified Equity Offering (as defined below)
which results in aggregate gross proceeds to the QFI of not
less than 25% of the issue price of the Senior Preferred.
After the third anniversary of the date of this investment,
the Senior Preferred may be redeemed, in whole or in part,
at any time and from time to time, at the option of the QFI.
All redemptions of the Senior Preferred shall be at 100% of
its issue price, plus (i) in the case of cumulative Senior
Preferred, any accrued and unpaid dividends and (ii) in the
case of non-cumulative Senior Preferred, accrued and unpaid
dividends for the then current dividend period (regardless
of whether any dividends are actually declared for such
dividend period), and shall be subject to the approval of
the QFI's primary federal bank regulator.
"Qualified Equity Offering" shall mean the sale by the QFI
after the date of this investment of Tier 1 qualifying
perpetual preferred stock or common stock for cash.
Following the redemption in whole of the Senior Preferred
held by the UST, the QFI shall have the right to repurchase
any other equity security of the QFI held by the UST at fair
market value.
A-2
RESTRICTIONS
ON DIVIDENDS: For as long as any Senior Preferred is outstanding, no
dividends may be declared or paid on junior preferred
shares, preferred shares ranking pari passu with the Senior
Preferred, or common shares (other than in the case of pari
passu preferred shares, dividends on a pro rata basis with
the Senior Preferred), nor may the QFI repurchase or redeem
any junior preferred shares, preferred shares ranking pari
passu with the Senior Preferred or common shares, unless (i)
in the case of cumulative Senior Preferred all accrued and
unpaid dividends for all past dividend periods on the Senior
Preferred are fully paid or (ii) in the case of
non-cumulative Senior Preferred the full dividend for the
latest completed dividend period has been declared and paid
in full.
COMMON DIVIDENDS: The UST's consent shall be required for any increase in
common dividends per share until the third anniversary of
the date of this investment unless prior to such third
anniversary the Senior Preferred is redeemed in whole or the
UST has transferred all of the Senior Preferred to third
parties.
REPURCHASES: The UST's consent shall be required for any share
repurchases (other than (i) repurchases of the Senior
Preferred and (ii) repurchases of junior preferred shares or
common shares in connection with any benefit plan in the
ordinary course of business consistent with past practice)
until the third anniversary of the date of this investment
unless prior to such third anniversary the Senior Preferred
is redeemed in whole or the UST has transferred all of the
Senior Preferred to third parties. In addition, there shall
be no share repurchases of junior preferred shares,
preferred shares ranking pari passu with the Senior
Preferred, or common shares if prohibited as described above
under "Restrictions on Dividends".
VOTING RIGHTS: The Senior Preferred shall be non-voting, other than class
voting rights on (i) any authorization or issuance of shares
ranking senior to the Senior Preferred, (ii) any amendment
to the rights of Senior Preferred, or (iii) any merger,
exchange or similar transaction which would adversely affect
the rights of the Senior Preferred.
If dividends on the Senior Preferred are not paid in full
for six dividend periods, whether or not consecutive, the
Senior Preferred will have the right to elect 2 directors.
The right to elect directors will end when full dividends
have been paid for four consecutive dividend periods.
A-3
TRANSFERABILITY: The Senior Preferred will not be subject to any contractual
restrictions on transfer. The QFI will file a shelf
registration statement covering the Senior Preferred as
promptly as practicable after the date of this investment
and, if necessary, shall take all action required to cause
such shelf registration statement to be declared effective
as soon as possible. The QFI will also grant to the UST
piggyback registration rights for the Senior Preferred and
will take such other steps as may be reasonably requested to
facilitate the transfer of the Senior Preferred including,
if requested by the UST, using reasonable efforts to list
the Senior Preferred on a national securities exchange. If
requested by the UST, the QFI will appoint a depositary to
hold the Senior Preferred and issue depositary receipts.
EXECUTIVE
COMPENSATION: As a condition to the closing of this investment, the QFI
and its senior executive officers covered by the EESA shall
modify or terminate all benefit plans, arrangements and
agreements (including golden parachute agreements) to the
extent necessary to be in compliance with, and following the
closing and for so long as UST holds any equity or debt
securities of the QFI, the QFI shall agree to be bound by,
the executive compensation and corporate governance
requirements of Section 111 of the EESA and any guidance or
regulations issued by the Secretary of the Treasury on or
prior to the date of this investment to carry out the
provisions of such subsection. As an additional condition to
closing, the QFI and its senior executive officers covered
by the EESA shall grant to the UST a waiver releasing the
UST from any claims that the QFI and such senior executive
officers may otherwise have as a result of the issuance of
any regulations which modify the terms of benefits plans,
arrangements and agreements to eliminate any provisions that
would not be in compliance with the executive compensation
and corporate governance requirements of Section 111 of the
EESA and any guidance or regulations issued by the Secretary
of the Treasury on or prior to the date of this investment
to carry out the provisions of such subsection.
A-4
SUMMARY OF WARRANT TERMS
WARRANT: The UST will receive warrants to purchase a number of shares
of common stock of the QFI having an aggregate market price
equal to 15% of the Senior Preferred amount on the date of
investment, subject to reduction as set forth below under
"Reduction". The initial exercise price for the warrants,
and the market price for determining the number of shares of
common stock subject to the warrants, shall be the market
price for the common stock on the date of the Senior
Preferred investment (calculated on a 20-trading day
tiailing average), subject to customary anti-dilution
adjustments. The exercise price shall be reduced by 15% of
the original exercise price on each six-month anniversary of
the issue date of the warrants if the consent of the QFI
stockholders described below has not been received, subject
to a maximum reduction of 45% of the original exercise
price.
TERM: 10 years
EXERCISABILITY: Immediately exercisable, in whole or in part
TRANSFERABILITY: The warrants will not be subject to any contractual
restrictions on transfer; provided that the UST may only
transfer or exercise an aggregate of onehalf of the
warrants prior to the earlier of (i) the date on which the
QFI has received aggregate gross proceeds of not less than
100% of the issue price of the Senior Preferred from one or
more Qualified Equity Offerings and (ii) December 31, 2009.
The QFI will file a shelf registration statement covering
the warrants and the common stock underlying the warrants as
promptly as practicable after the date of this investment
and, if necessary, shall take all action required to cause
such shelf registration statement to be declared effective
as soon as possible. The QFI will also grant to the UST
piggyback registration rights for the warrants and the
common stock underlying the warrants and will take such
other steps as may be reasonably requested to facilitate the
transfer of the warrants and the common stock underlying the
warrants. The QFI will apply for the listing on the national
exchange on which the QFI's common stock is traded of the
common stock underlying the warrants and will take such
other steps as may be reasonably requested to facilitate the
transfer of the warrants or the common stock.
VOTING: The UST will agree not to exercise voting power with
respect to any shares of common stock of the QFI issued to
it upon exercise of the warrants.
A-5
REDUCTION: In the event that the QFI has received aggregate gross
proceeds of not less than 100% of the issue price of the
Senior Preferred from one or more Qualified Equity Offerings
on or prior to December 31, 2009, the number of shares of
common stock underlying the warrants then held by the UST
shall be reduced by a number of shares equal to the product
of (i) the number of shares originally underlying the
warrants (taking into account all adjustments) and (ii) 0.5.
CONSENT: In the event that the QFI does not have sufficient available
authorized shares of common stock to reserve for issuance
upon exercise of the warrants and/or stockholder approval is
required for such issuance under applicable stock exchange
rules, the QFI will call a meeting of its stockholders as
soon as practicable after the date of this investment to
increase the number of authorized shares of common stock
and/or comply with such exchange rules, and to take any
other measures deemed by the UST to be necessary to allow
the exercise of warrants into common stock.
SUBSTITUTION: In the event the QFI is no longer listed or traded on a
national securities exchange or securities association, or
the consent of the QFI stockholders described above has not
been received within 18 months after the issuance date of
the warrants, the warrants will be exchangeable, at the
option of the UST, for senior term debt or another economic
instrument or security of the QFI such that the UST is
appropriately compensated for the value of the warrant, as
determined by the UST.
A-6
APPENDIX B
PSB GROUP, INC.
AMENDMENT TO ARTICLES OF INCORPORATION
ARTICLE III
The total number of shares of all classes of the capital stock which the
Corporation has authority to issue is 7,200,000, which shall be divided into a
class of 7,000,000 shares of common stock and a class of 200,000 shares of
preferred stock.
PREFERRED STOCK
Subject to the limitations and restrictions set forth in this Article III,
the board of directors is authorized and empowered at any time, and from time to
time, to designate and issue any authorized and unissued preferred stock
(whether or not previously designated as shares of a particular series, and
including preferred stock of any series issued and thereafter acquired by the
Corporation) as shares of one or more series, hereby or hereafter to be
designated. Each different series of preferred stock may vary as to dividend
rate, redemption price, liquidation price, voting rights and conversion rights,
if any, all of which shall be fixed as hereinafter provided. Each series of
preferred stock issued hereunder shall be so designated as to distinguish the
shares thereof from the shares of the other series and classes. All preferred
stock of any one series shall be alike in every particular.
The rights, qualifications, limitations or restrictions or each series of
preferred stock shall be as stated and expressed in the resolution or
resolutions adopted by the board of directors which provides for the issuance of
such series, which resolutions may include, but shall not be limited to, the
following:
(i) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the
board of directors in creating such series) be increased or
decreased (but not below the number of shares then outstanding) from
time to time by action of the board of directors;
(ii) The rate of the dividends thereon and the relation which such
dividends shall bear to the dividends payable on any other class of
capital stock or any other series of preferred stock, the terms and
conditions upon which and the periods in respect of which dividends
shall be payable, whether and upon what conditions such dividends
shall be cumulative and if cumulative, the date or dates from which
dividends shall accumulate;
(iii) The amount per share, if any, which the holders of preferred stock
of such series shall be entitled to receive, in addition to any
dividends accrued and unpaid thereon, (a) upon the redemption
thereof, plus the premium payable upon redemption, if any; or (b)
upon the voluntary liquidation, dissolution or winding
B-1
up of the Corporation; or (c) upon the involuntary liquidation,
dissolution or winding up of the Corporation;
(iv) The conversion or exchange rights, if any, of such series, including
without limitation, the price or prices, rate or rates, provision
for the adjustment thereof (including provisions for protection
against the dilution or impairment of such rights), and all other
terms and conditions upon which preferred stock constituting such
series may be convertible into, or exchangeable for shares of any
other class or classes or series;
(v) Whether the shares of such series shall be redeemable, and, if
redeemable, whether redeemable for cash, property or rights,
including securities of any other corporation, at the option of
either the holder or the Corporation or upon the happening of a
specified event, the limitations and restrictions with respect to
such redemption, the time or times when, the price or prices or rate
or rates at which, the adjustments with which and the manner in
which such shares shall be redeemable, including the manner of
selecting shares of such series for redemption if less than all
shares are to be redeemed;
(vi) Whether the shares of such series shall be subject to the operation
of a purchase, retirement, or sinking fund, and, if so, whether and
upon what conditions such purchase, retirement or sinking fund shall
be cumulative or noncumulative, the extent to which and the manner
in which such fund shall be applied to the purchase or redemption of
the shares of such series for retirement or to other corporate
purposes and the terms and provisions relative to the operation
thereof;
(vii) The voting rights per share, if any, of each such series, and
whether and under what conditions the shares of such series (alone
or together with the shares of one or more other series) shall be
entitled to vote separately as a single class, upon any merger,
share exchange or other transaction of the Corporation, or upon any
other matter, including (without limitation) the elections of one or
more additional directors of the Corporation in case of dividend
arrearage or other specified events; and
(viii) Whether the issuance of any additional shares of such series, or of
any shares of any other series shall be subject to restrictions of
such series, as the board of directors may deem advisable and as
shall not be inconsistent with the provisions of these articles of
incorporation.
COMMON STOCK
No shares of common stock shall be entitled to any preferences, and each
share of common stock shall be equal to every other share of such class of stock
in every respect. At all meetings of shareholders of the Corporation, the
holders of the common stock shall be entitled to one vote for each share of
common stock held by them of record.
B-2
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE PSB GROUP, INC.
FOR AGAINST ABSTAIN
SPECIAL MEETING OF SHAREHOLDERS 1. To amend PSB Group, Inc.'s [ ] [ ] [ ]
DECEMBER _____, 2008 articles of incorporation to
9:00 A.M., EASTERN TIME increase the number of authorized
common shares and to authorize the
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS issuance of preferred stock by the
company.
The undersigned hereby appoints the official Proxy
Committee of PSB Group, Inc. (the "Company"), with full FOR AGAINST ABSTAIN
power of substitution, to act as proxy for the undersigned, 2. To consider and act upon a [ ] [ ] [ ]
and to vote all shares of Common Stock of the Company that proposal to adjourn or postpone
the undersigned is entitled to vote at the Special Meeting the meeting, if necessary, in the
of Shareholders, to be held on ________, December ___, 2008, event that an insufficient number
at 9:00 a.m., at the Ukranian Cultural Center, 26601 Ryan of shares is present in person or
Road, Warren, Michigan, and at any and all adjournments by proxy to approve and adopt the
thereof, as indicated on this proxy. proposal to amend the articles of
incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" EACH OF THE LISTED PROPOSALS.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT
IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED
"FOR" EACH OF THE PROPOSALS LISTED. IF ANY OTHER BUSINESS
IS PRESENTED AT THE SPECIAL MEETING, THIS PROXY WILL BE
VOTED BY THE PROXIES IN THEIR BEST JUDGMENT. AT THE PRESENT
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO
BE PRESENTED AT THE SPECIAL MEETING.
You can vote if you are a shareholder of record on _________, 2008.
A majority of shares of common stock must be represented at
the meeting. If there are insufficient shares, the meeting
may be adjourned.
Please be sure to date and sign Date
this proxy card in the box
below.
Sign above
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- DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. -
PSB GROUP, INC.
PLEASE ACT PROMPTLY
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
THE ABOVE-SIGNED ACKNOWLEDGES RECEIPT FROM THE COMPANY PRIOR TO THE
EXECUTION OF THIS PROXY, OF A NOTICE OF SPECIAL MEETING OF SHAREHOLDERS AND
PROXY STATEMENT DATED NOVEMBER ___, 2008.
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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