Exhibit 99.2
[RP Financial, LC. Letterhead]
March 23, 2004
Mr. Thomas A. Borner, Chairman
PSB Holdings, Inc.
Putnam Savings Bank
40 Main Street
Putnam, Connecticut 06260
Dear Mr. Borner:
This letter sets forth the agreement between PSB Holdings, Inc. and
Putnam Savings Bank, Putnam, Connecticut (collectively, Putnam"), and RP(R)
Financial, LC. ("RP Financial"), whereby Putnam has engaged RP Financial to
prepare the regulatory business plan and financial projections to be adopted by
Putnam's Board of Directors in conjunction with a minority stock offering. These
services are described in greater detail below.
DESCRIPTION OF PROPOSED SERVICES
RP Financial's business planning services will include the following
areas: (1) evaluating Putnam's current financial and operating condition,
business strategies and anticipated strategies in the future; (2) analyzing and
quantifying the impact of business strategies, incorporating the use of net
offering proceeds both in the short and long term; (3) preparing detailed
financial projections on a quarterly basis for a period of at least three fiscal
years to reflect the impact of Board approved business strategies and use of
proceeds; (4) preparing the written business plan document which conforms with
applicable regulatory guidelines including a description of the use of proceeds
and how the convenience and needs of the community will be addressed; and (5)
preparing the detailed schedules of the capitalization of Putnam and mutual
holding company and related cash flows.
Contents of the business plan will include: Executive Summary;
Description of Business; Marketing Plan; Management Plan; Records, Systems and
Controls; Financial Management Plan; Monitoring and Revising the Plan; and
Alternative Business Strategy.
RP Financial agrees to prepare the business plan and accompanying
financial projections in writing such that the business plan can be filed with
the appropriate regulatory agencies prior to filing the appropriate
applications.
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WASHINGTON HEADQUARTERS
Rosslyn Center Telephone: (703) 528-1700
1700 North Moore Street, Suite 2210 Fax No.: (703) 528-1788
Arlington, VA 22209 Toll-Free No.: (866) 723-0594
www.rpfinancial.com E-Mail: wpommerening@rpfinancial.com
MR. THOMAS A. BORNER
MARCH 23, 2004
PAGE 2
FEE STRUCTURE AND PAYMENT SCHEDULE
Putnam agrees to compensate RP Financial for preparation of the
business plan on a fixed fee basis of $10,000. Payment of the professional fees
shall be made upon delivery of the completed business plan. Putnam also agrees
to reimburse RP Financial for those direct out-of-pocket expenses necessary and
incidental to providing the business planning services. Reimbursable expenses
will likely include shipping, telephone/facsimile printing, computer and data
services, and shall be paid to RP Financial as incurred and billed Reimbursable
expenses are limited as described in the accompanying letter to engage RP
Financial to provide appraisal services.
In the event Putnam shall, for any reason, discontinue this planning
engagement prior to delivery of the completed business plan and payment of the
progress payment fee, Putnam agrees to compensate RP Financial according to RP
Financial's standard billing rates for consulting services based on accumulated
and verifiable time expenses, not to exceed the fixed fee described above, plus
reimbursable expenses incurred.
If during the course of the planning engagement, unforeseen events
occur so as to materially change the nature or the work content of the business
planning services described in this contract, the terms of said contract shall
be subject to renegotiation by Putnam and RP Financial. Such unforeseen events
may include changes in regulatory requirements as it specifically relates to
Putnam or potential transactions that will dramatically impact Putnam such as a
pending acquisition or branch transaction.
* * * * * * * * * * *
Please acknowledge your agreement to the foregoing by signing as
indicated below and returning to RP Financial a signed copy of this letter.
Very truly yours,
/s/ William E. Pommerening
William E. Pommerening
Chief Executive Officer and
Managing Director
Agreed To and Accepted By: Thomas A. Borner /s/ Thomas A. Borner
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Chairman, PSB Holdings, Inc.
Thomas A. Borner /s/ Thomas A. Borner
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Chairman, Putnam Savings Bank
Date Executed: 3/30/2004
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