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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-4
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
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PATRIOT BANK CORP.
(Name of Issuer)
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PATRIOT BANK CORP.
(Name of Person(s) Filing Statement)
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COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
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703356-10-5
(CUSIP Number of Class of Securities)
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JOSEPH W. MAJOR
PRESIDENT AND CHIEF OPERATING OFFICER
PATRIOT BANK CORP.
HIGH AND HANOVER STREETS
POTTSTOWN, PENNSYLVANIA 19464
(610) 323-1500
With Copies to:
JEFFREY P. WALDRON, ESQUIRE
STEVENS & LEE
ONE GLENHARDIE CORPORATE CENTER
SUITE 202
1275 DRUMMERS LANE
P.O. BOX 236
WAYNE, PENNSYLVANIA 19087-0236
(610) 293-4961
(Name, Address and Telephone Number of Persons Authorized to Receive
Notices and Communications on Behalf of Person(s) filing Statement)
June 27, 1997
(Date tender offer first published, sent or given to security holders)
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CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$13,500,000 $2,700
* For purposes of calculating fee only. Based on the Offer for 750,000 shares at
the maximum tender offer price per share of $18.00.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: Not applicable. DATE FILED: Not applicable
FORM OR REGISTRATION NO.: Not applicable. DATE FILED: Not applicable
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<PAGE>
This Issuer Tender Offer Statement (the "Statement") relates to the tender
offer by Patriot Bank Corp., a Delaware corporation (the "Company"), to purchase
up to 750,000 shares of common stock, par value $.01 per Share (the "Shares"),
at a price not greater than $18.00 nor less than $16.50 per Share upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated June 27,
1997 (the "Offer to Purchase") and the related Letter of Transmittal (which are
herein collectively referred to as the "Offer"). The Offer is being made to all
holders of Shares, including officers, directors and affiliates of the Company.
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Patriot Bank Corp., a Delaware corporation.
The address of its principal executive offices is High and Hanover Streets,
Pottstown, Pennsylvania 19464.
(b) The classes of securities to which this Statement relates are the
Shares. The information set forth in "INTRODUCTION" in the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in "INTRODUCTION" and "Price Range of Shares;
Dividends" in the Offer to Purchase is incorporated herein by reference.
(d) This statement is being filed by the Issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Source and Amount of Funds" in the
Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER.
(a)-(j) The information set forth in "INTRODUCTION", "Number of Shares;
Proration", "Background and Purpose of the Offer" and "Effects of the Offer on
the Market for Shares; Registration under the Exchange Act" in the Offer to
Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning Shares" in the Offer to Purchase is
incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in "INTRODUCTION", "Number of Shares; Proration",
"Background and Purpose of the Offer", "Effects of the Offer on the Market for
Shares; Registration under the Exchange Act" and "Interest of Directors and
Executive Officers; Transactions and Arrangements Concerning Shares" in the
Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Fees and Expenses" in the Offer to Purchase
is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
The information set forth in "Certain Information Concerning the Company --
Selected Consolidated Financial Information" and " -- Unaudited Pro Forma
Financial Information" in the Offer to Purchase is incorporated herein by
reference.
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<PAGE>
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in "Miscellaneous" in the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in "Effects of the Offer on the Market for
Shares; Registration Under the Exchange Act" in the Offer to Purchase is
incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, is incorporated herein by reference in their entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Form of Offer to Purchase dated June 27, 1997.
(2) Form of Letter of Transmittal.
(3) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees dated June 27, 1997.
(4) Form of Letter to Clients from Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees dated June 27, 1997.
(5) Form of Notice of Guaranteed Delivery.
(6) Form of Letter to Stockholders from the Chief Operating Officer of
the Company dated June 27, 1997.
(7) Form of press release issued by the Company dated June 27, 1997.
(8) Form of question and answer brochure.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
PATRIOT BANK CORP.
By: /s/ Richard A. Elko
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Name: Richard A. Elko
Title: Executive Vice President and
Chief Financial Officer
Dated: June 27, 1997
4
<PAGE>
INDEX OF EXHIBITS
(a)(1) Form of Offer to Purchase dated June 27, 1997.
(2) Form of Letter of Transmittal.
(3) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees dated June 27, 1997.
(4) Form of Letter to Clients from Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees dated June 27, 1997.
(5) Form of Notice of Guaranteed Delivery.
(6) Form of Letter to Stockholders from the Chief Operating Officer of
the Company dated June 27, 1997.
(7) Form of press release issued by the Company dated June 27, 1997.
(8) Form of question and answer brochure.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
5
PATRIOT BANK CORP.
Offer To Purchase For Cash Up to 750,000 Shares of its
Common Stock at a Purchase Price not in excess of
$18.00 nor less than $16.50 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN
TIME, ON MONDAY, JULY 28, 1997, UNLESS THE OFFER IS EXTENDED.
Patriot Bank Corp., a Delaware corporation (the "Company"), invites its
shareholders to tender shares of its common stock, $.01 par value per share (the
"Shares"), at prices not in excess of $18.00 nor less than $16.50 per share in
cash, as specified by shareholders tendering their Shares, upon the terms and
subject to the conditions set forth herein and in the related Letter of
Transmittal (which together constitute the "Offer"). The Company will determine
the single per Share price, not in excess of $18.00 nor less than $16.50 per
Share, net to the seller in cash (the "Purchase Price"), that it will pay for
Shares validly tendered pursuant to the Offer, taking into account the number of
Shares so tendered and the prices specified by tendering shareholders. The
Company will select the lowest Purchase Price that will allow it to buy 750,000
Shares (or such lesser number of Shares as are validly tendered at prices not in
excess of $18.00 nor less than $16.50 per Share). All Shares validly tendered at
prices at or below the Purchase Price and not withdrawn will be purchased at the
Purchase Price, upon the terms and subject to the conditions of the Offer,
including the proration provisions. All Shares acquired in the Offer will be
acquired at the Purchase Price.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED, BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
The Shares are quoted on the Nasdaq National Market ("Nasdaq/NMS"). On June
26, 1997, the last full trading day on the Nasdaq/NMS prior to the day of the
announcement of the offer, the closing per Share sales price was $16 5/8.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
Any shareholder wishing to tender all or any part of his or her Shares
should either (a) complete and sign a Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
either mail or deliver it with any required signature guarantee and any other
required documents to Registrar & Transfer Company (the "Depositary"), and
either mail or deliver the stock certificates for such Shares to the Depositary
(with all such other documents) or tender such Shares pursuant to the procedure
for book-entry delivery set forth in Section 3, or (b) request a broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such shareholder. Holders of Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact that broker,
dealer, commercial bank, trust company or other nominee if such shareholder
desires to tender such Shares. Any shareholder who desires to tender Shares and
whose certificates for such Shares cannot be delivered to the Depositary or who
cannot comply with the procedure for book-entry delivery or whose other required
documents cannot be delivered to the Depositary, in any case, by the expiration
of the offer must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3. SHAREHOLDERS MUST PROPERLY COMPLETE THE LETTER
OF TRANSMITTAL INCLUDING THE SECTION OF THE LETTER OF TRANSMITTAL RELATING TO
THE PRICE AT WHICH THEY ARE TENDERING SHARES IN ORDER TO EFFECT A VALID TENDER
OF THEIR SHARES.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES TO TENDER AND AT WHICH PRICE OR PRICES.
<PAGE>
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to Kissel-Blake Inc. (the "Information Agent"), at its
address and telephone number set forth on the back cover of this Offer to
Purchase. Requests for additional copies of this Offer to Purchase, Letter of
Transmittal, or Notice of Guaranteed Delivery may also be directed to brokers,
dealers, commercial banks or trust companies.
The Date of this Offer to Purchase is June 27, 1997
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR
MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<C> <S> <C>
INTRODUCTION.......................................................................................... 1
THE OFFER............................................................................................. 2
1. Number of Shares; Proration................................................................ 2
2. Background and Purpose of the Offer........................................................ 3
3. Procedures for Tendering Shares............................................................ 4
4. Withdrawal Rights.......................................................................... 6
5. Purchase of Shares and Payment of Purchase Price........................................... 7
6. Certain Conditions of the Offer............................................................ 8
7. Extension of the Offer; Termination; Amendment............................................. 9
8. Price Range of Shares; Dividends........................................................... 9
9. Source and Amount of Funds................................................................. 10
10. Certain Information Concerning the Company................................................. 10
Selected Consolidated Financial Information................................................ 11
Unaudited Pro Forma Financial Information.................................................. 13
11. Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning Shares.......................................... 17
12. Effects of the Offer on the Market for Shares; Registration under the Exchange Act......... 17
13. Certain Federal Income Tax Consequences.................................................... 18
14. Fees and Expenses.......................................................................... 20
15. Additional Information..................................................................... 21
16. Miscellaneous.............................................................................. 21
SCHEDULE I............................................................................................ I-1
</TABLE>
<PAGE>
To the Holders of Common Stock of
Patriot Bank Corp.:
INTRODUCTION
Patriot Bank Corp., a Delaware corporation (the "Company"), invites its
shareholders to tender shares of its common stock, $.01 par value per share (the
"Shares"), at prices, net to the seller in cash, not in excess of $18.00 nor
less than $16.50 per Share, as specified by shareholders tendering their Shares,
upon the terms and subject to the conditions set forth herein and in the related
Letter of Transmittal (which together constitute the "Offer"). The Company will
determine the single per Share price, not in excess of $18.00 nor less than
$16.50 per share (the "Purchase Price"), that it will pay for Shares validly
tendered pursuant to the Offer, taking into account the number of Shares so
tendered and the prices specified by tendering shareholders. The Company will
select the lowest Purchase Price that will allow it to buy 750,000 shares (or
such lesser number of Shares as are validly tendered). All Shares acquired in
the offer will be acquired at the Purchase Price. All Shares validly tendered at
prices at or below the Purchase Price and not withdrawn will be purchased at the
Purchase Price, net to the seller in cash, upon the terms and conditions of the
Offer, including the proration provisions.
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 750,000 Shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy shares on a pro
rata basis from all shareholders who validly tender at prices at or below the
Purchase Price (and did not withdraw them prior to the expiration of the Offer).
See Section 1. All Shares not purchased pursuant to the Offer, including Shares
tendered at prices greater than the Purchase Price and not withdrawn and Shares
not purchased because of proration, will be returned at the Company's expense to
the shareholders who tendered such Shares.
The Purchase Price will be paid net to the tendering shareholder in cash
for all Shares purchased. Tendering shareholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Company.
HOWEVER, ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE
SIGN AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN
THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX
WITHHOLDING. SEE SECTION 3 OF THIS OFFER TO PURCHASE AND INSTRUCTION 12 OF THE
LETTER OF TRANSMITTAL. The Company will pay all fees and expenses of Registrar &
Transfer Company (the "Depositary") and Kissel-Blake Inc. (the "Information
Agent") incurred in connection with the Offer. See Section 14.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY SHAREHOLDER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES. EACH
SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES AND AT WHICH PRICE OR PRICES.
As of June 26, 1997, there were 4,076,502 Shares outstanding and 425,061
Shares issuable upon exercise of stock options under the Company's stock option
plans. The 750,000 Shares that the Company is offering to purchase pursuant to
the Offer represent approximately 18% of the outstanding Shares. The Shares are
quoted on the Nasdaq National Market ("Nasdaq/NMS"), under the symbol "PBIX." On
June 26, 1997, the last full trading day on the Nasdaq/NMS prior to the day of
the announcement of the Offer, the closing per Share sale price was $16 5/8.
Shareholders are urged to obtain current market quotations for the Shares. See
Section 8.
<PAGE>
THE OFFER
1. Number of Shares; Proration.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase up to 750,000 Shares or such lesser number of Shares as are validly
tendered (and not withdrawn in accordance with Section 4) prior to the
Expiration Date (as defined below) at prices not in excess of $18.00 nor less
than $16.50 net per Share in cash. The term "Expiration Date" means 5:00 p.m.,
Eastern time, on Monday, July 28, 1997, unless and until the Company, in its
sole discretion, shall have extended the period of time during which the Offer
will remain open, in which event the term "Expiration Date" shall refer to the
latest time and date at which the Offer, as so extended by the Company, shall
expire. In the event of an oversubscription of the Offer as described below,
Shares tendered at or below the Purchase Price prior to the Expiration Date will
be subject to proration. The proration period also expires on the Expiration
Date.
The Company will, upon the terms and subject to the conditions of the
Offer, determine the Purchase Price (not greater than $18.00 nor less than
$16.50 per share) that it will pay for Shares validly tendered pursuant to the
Offer taking into account the number of Shares so tendered and the prices
specified by tendering shareholders. The Company will select a single per Share
Purchase Price that will allow it to buy 750,000 Shares (or such lesser number
as are validly tendered at prices not greater than $18.00 nor less than $16.50
per Share) pursuant to the Offer. The Company reserves the right, in its sole
discretion, to purchase more than 750,000 Shares pursuant to the Offer.
If (i) the Company increases or decreases the price to be paid for Shares,
increases the number of Shares being sought and any such increase in the number
of Shares being sought exceeds 2% of the outstanding Shares, or decreases the
number of Shares being sought, and (ii) the Offer is scheduled to expire less
than ten business days from and including the date that notice of such increase
or decrease is first published, sent or given in the manner specified in Section
7, the Offer will be extended for at least ten business days from and including
the date of such notice. For purposes of the Offer, a "business day" means any
day other than Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, Eastern time.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED
BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
In accordance with Instruction 5 of the Letter of Transmittal, shareholders
desiring to tender Shares must specify the price, not in excess of $18.00 nor
less than $16.50 per Share, at which they are willing to sell their Shares to
the Company. Shares validly tendered pursuant to the Offer at or below the
Purchase Price and not withdrawn will be purchased at the Purchase Price,
subject to the terms and conditions of the Offer, including the proration
provisions. All Shares tendered and not purchased pursuant to the Offer,
including Shares tendered at prices in excess of the Purchase Price and Shares
not purchased because of proration will be returned to the tendering
shareholders at the Company's expense as promptly as practicable following the
Expiration Date.
In the event that proration of tendered Shares is required, the Company
will determine the proration factor as soon as practicable following the
Expiration Date. Proration for each shareholder tendering Shares shall be based
on the ratio of the number of Shares tendered by such shareholder to the total
number of Shares tendered by all shareholders at or below the Purchase Price.
Because of the difficulty in determining the number of Shares validly tendered
(including Shares tendered by guaranteed delivery procedures, as described in
Section 3) and not withdrawn, the Company does not expect that it will be able
to announce the final proration factor or to commence payment for any Shares
purchased pursuant to the Offer until approximately seven over-the-counter
("OTC") trading days after the Expiration Date. The preliminary results of any
proration will be announced by press release as promptly as practicable after
the Expiration Date. Shareholders may obtain such preliminary information from
the Information Agent and may be able to obtain such information from their
brokers.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares and will be furnished to brokers, banks and similar
persons whose names, or the names of whose nominees, appear on the Company's
shareholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
2
<PAGE>
2. Background and Purpose of the Offer.
The Offer is designed to increase return on equity and earnings per share
by redeploying a portion of the Company's equity capital. The Offer is
consistent with the Company's ongoing growth strategy, which has included growth
of its retail and commercial banking activities, as well as the purchase of
investment and mortgage-backed securities funded primarily by Federal Home Loan
Bank borrowings and open market purchases of Shares. Following completion of the
Offer, the Company and its wholly owned subsidiary, Patriot Bank (the "Bank"),
will continue to have strong capital positions and will continue to qualify as
"well capitalized" institutions under the prompt corrective action scheme
enacted by the Federal Deposit Insurance Corporation Improvement Act of 1991. On
a pro forma basis as of March 31, 1997, giving effect to the Offer at the
maximum Purchase Price of $18.00 per Share and assuming acceptance of the
maximum number of Shares in the Offer, the Company would have had an equity to
assets ratio of 5.95%. On June 5, 1997, Patriot Capital Trust I issued $19.0
million of 10.30% Capital Securities (the "Capital Securities") and used the
proceeds to purchase from the Company $19.0 million of 10.30% Junior Deferrable
Interest Debentures. A portion of the Capital Securities qualify as Tier I
capital of the Company. After giving pro forma effect to the issuance of the
Capital Securities and the repurchase of 750,000 Shares at $18.00 per share, the
Company's leverage ratio would be 7.52%.
The Offer will enable shareholders to sell a portion of their Shares while
retaining a continuing equity interest in the Company if they so desire. The
Offer will increase the Company's leverage, with an attendant increase in the
risks and rewards for persons who retain a continuing equity interest in the
Company. In addition, persons who determine not to accept the Offer will realize
a proportionate increase in their relative equity interest in the Company, and
thus in the Company's future earnings and assets, subject to increased risks
resulting from higher leverage and to the Company's ability to issue additional
Shares or other equity securities in the future.
The Offer may provide shareholders who are considering a sale of all or a
portion of their Shares the opportunity to determine the price or prices (not
greater than $18.00 nor less than $16.50 per Share) at which they are willing to
sell their Shares and, if any such Shares are purchased pursuant to the Offer,
to sell those Shares for cash without the usual transaction costs associated
with open-market sales. The Offer also gives shareholders the opportunity to
sell Shares at prices greater than market prices prevailing prior to
announcement of the Offer. To the extent the purchase of Shares in the Offer
results in a reduction in the number of shareholders of record, the costs to the
Company for services to shareholders may be reduced. For shareholders who do not
tender, there is no assurance that the Company's growth strategy will be
successful or that the price of the stock will not trade below the price
currently being offered by the Company pursuant to the Offer. For shareholders
who do tender, the trading price of the Shares may increase as a result of the
Offer and the Company's growth strategy. Finally, the Offer may affect the
Company's ability to qualify for pooling-of-interests accounting treatment for
any acquisition transaction for approximately the next two years.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, NEITHER
THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH SHAREHOLDER'S
SHARES AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION.
SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER,
CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN DECISIONS
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR
PRICES AT WHICH SHARES SHOULD BE TENDERED.
Following completion of the Offer, the Company may repurchase additional
Shares in the open market, in privately negotiated transactions or otherwise.
Any such purchases may be on the same terms or on terms which are more or less
favorable to shareholders than the terms of the Offer. Rule 13e-4 under the
Securities Exchange Act of 1934, as amended ("Exchange Act") prohibits the
Company and its affiliates from purchasing any Shares, other than pursuant to
the Offer, until at least ten business days after the Expiration Date. Any
possible future purchases by the Company will depend on many factors, including
the market price of the Shares, the results of the Offer, the Company's business
and financial position and general economic and market conditions.
Shares the Company acquires pursuant to the Offer will be held in the
Company's treasury and will be available for the Company to issue without
further shareholder action (except as required by applicable law or the
3
<PAGE>
rules of the Nasdaq/NMS). Such Shares could be issued without shareholder
approval for such purposes as, among others, the acquisition of other
businesses, or the raising of additional capital for use in the Company's
business.
3. Procedures for Tendering Shares.
Proper Tender of Shares. For Shares to be validly tendered pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry delivery set forth below),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) including any required signature guarantees
and any other documents required by the Letter of Transmittal, must be received
prior to 5:00 p.m., Eastern time, on the Expiration Date by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase, or
(b) the tendering shareholder must comply with the guaranteed delivery procedure
set forth below.
IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, SHAREHOLDERS
DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE
SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING
TENDERED" ON THE LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF $.0625) AT
WHICH THEIR SHARES ARE BEING TENDERED. SHAREHOLDERS WHO DESIRE TO TENDER SHARES
AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE LETTER OF TRANSMITTAL FOR EACH
PRICE AT WHICH SHARES ARE TENDERED, PROVIDED THAT THE SAME SHARES CANNOT BE
TENDERED (UNLESS PROPERLY WITHDRAWN PREVIOUSLY IN ACCORDANCE WITH THE TERMS OF
THE OFFER) AT MORE THAN ONE PRICE. IN ORDER TO VALIDLY TENDER SHARES, ONE AND
ONLY ONE PRICE BOX MUST BE CHECKED IN THE APPROPRIATE SECTION ON EACH LETTER OF
TRANSMITTAL.
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal (i) if the Letter of Transmittal is signed
by the registered holder of the Shares (which term, for purposes of this Section
3, shall include any participant in The Depository Trust Company or The
Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities") whose name appears on a security position listing as the owner of
the Shares) tendered therewith and such holder has not completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal; or (ii) if Shares are tendered for
the account of a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office, branch or agency in the United States.
In all other cases, all signatures on the Letter of Transmittal must be
guaranteed by an eligible guarantor institution (bank, stockbroker, savings and
loan association or credit union with membership in an approved signature
guarantee medallion program) pursuant to Rule 17Ad-15 promulgated under the
Exchange Act (an "Eligible Institution"). See Instruction 1 of the Letter of
Transmittal. If a certificate for Shares is registered in the name of a person
other than the person executing a Letter of Transmittal, or if payment is to be
made, or Shares not purchased or tendered are to be issued, to a person other
than the registered holder, the certificate must be endorsed or accompanied by
an appropriate stock power, in either case, signed exactly as the name of the
registered holder appears on the certificate, with the signature on the
certificate or stock power guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal. The method of delivery of all documents,
including certificates for Shares, the Letter of Transmittal and any other
required documents, is at the election and risk of the tendering shareholder. If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares for purposes of the Offer at each Book-Entry Transfer Facility
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry delivery of the Shares by causing such facility to
transfer Shares into the Depositary's account in accordance with
4
<PAGE>
the Book-Entry Transfer Facility's procedures for transfer. Although delivery of
Shares may be effected through a book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility, either (i) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof)
with any required signature guarantees and any other required documents must, in
any case, be transmitted to and received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or (ii) the guaranteed delivery procedure described below must
be followed. Delivery of the Letter of Transmittal and any other required
documents to a Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
Backup Federal Income Tax Withholding. To prevent backup federal income
tax withholding on payments made to shareholders for Shares purchased pursuant
to the Offer, each shareholder who does not otherwise establish an exemption
from such withholding must provide the Depositary with the shareholder's correct
taxpayer identification number and provide certain other information by
completing the substitute Form W-9 included in the Letter of Transmittal.
Foreign shareholders may be required to submit Form W-8, certifying non-United
States status, to avoid backup withholding. See Instructions 12 and 13 of the
Letter of Transmittal. For a discussion of certain federal income tax
consequences to tendering shareholders, see Section 13.
Withholding For Foreign Shareholders. The Depositary will withhold federal
income taxes equal to 30% of the gross payments payable to a foreign shareholder
or his agent unless the Depositary determines that an exemption from or a
reduced rate of withholding is available pursuant to a tax treaty or an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business in the United
States. In order to obtain an exemption from or a reduced rate of withholding
pursuant to a tax treaty, a foreign shareholder must deliver to the Depositary a
properly completed Form 1001 (or any related successor form). For this purpose,
a foreign shareholder is a shareholder that is not (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States, any State or any political
subdivision thereof, (iii) an estate the income of which is subject to United
States federal income taxation regardless of the source of such income, or (iv)
any trust if a court within the United States is able to exercise primary
supervision over the administration of the trust, and one or more United States
trustees have authority to control all substantial decisions relating to the
trust. In order to obtain an exemption from withholding on the grounds that the
gross proceeds paid pursuant to the Offer are effectively connected with the
conduct of a trade or business within the United States, a foreign shareholder
must deliver to the Depositary a properly completed Form 4224 (or any related
successor form). The Depositary will determine a shareholder's status as a
foreign shareholder and eligibility for a reduced rate of, or an exemption from,
withholding by reference to any outstanding certificates or statements
concerning eligibility for a reduced rate of, or exemption from, withholding
(e.g., Form 1001 or Form 4224) unless facts and circumstances indicate that such
reliance is not warranted. A foreign shareholder who has not previously
submitted the appropriate certificates or statements with respect to a reduced
rate of, or exemption from, withholding for which such shareholder may be
eligible should consider doing so in order to avoid excess withholding. A
foreign shareholder may be eligible to obtain a refund of tax withheld if such
shareholder meets one of the three tests for sale treatment described in Section
13 or is otherwise able to establish that no tax or a reduced amount of tax is
due. Backup withholding generally will not apply to amounts subject to the 30%
or treaty-reduced rate of withholding.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share certificates are not immediately
available (or the procedures for book-entry delivery cannot be completed on a
timely basis) or if time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such Shares may nevertheless be
tendered, provided that all of the following conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, telegram or facsimile
transmission, on or prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the form the
Company has provided with this Offer to Purchase (specifying the price at
which the Shares are being tendered), including (where required) a
signature guarantee by an Eligible Institution; and
(c) the certificates for all tendered Shares, in proper form for
transfer (or confirmation of book-entry delivery of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof)
5
<PAGE>
and any required signature guarantees or other documents required by the
Letter of Transmittal, are received by the Depositary within three (3) OTC
trading days after the date of receipt by the Depositary of such Notice of
Guaranteed Delivery.
If any tendered Shares are not purchased, or if less than all shares
evidenced by a shareholder's certificates are tendered, certificates for
unpurchased Shares will be returned as promptly as practicable after the
expiration or termination of the Offer or, in the case of Shares tendered by
book-entry delivery at a Book-Entry Transfer Facility, such Shares will be
credited to the appropriate account maintained by the tendering shareholder at
the appropriate Book-Entry Transfer Facility, in each case without expense to
such shareholder.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid therefor and the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Company, in its sole discretion, and its determination
shall be final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders of any Shares that it determines are not in
appropriate form or the acceptance for payment of or payment for which may be
unlawful. The Company also reserves the absolute right to waive any of the
conditions of the Offer or any defect or irregularity in any tender with respect
to any particular Shares. No tender of Shares will be deemed to have been
validly made until all defects or irregularities have been cured by the
tendering shareholder or waived by the Company. None of the Company, the
Depositary, the Information Agent or any other person shall be obligated to give
notice of any defects or irregularities in tenders, nor shall any of them incur
any liability for failure to give any such notice.
Tendering Shareholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the Offer, as well as the tendering shareholder's
representation and warranty to the Company that (a) such shareholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated by the Commission under the Exchange Act, and (b) the tender of such
Shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a person,
directly or indirectly, to tender Shares for such person's own account unless,
at the time of tender and at the end of the proration period, the person so
tendering (i) has a net long position equal to or greater than the amount of (x)
Shares tendered or (y) other securities convertible into or exchangeable or
exercisable for the Shares tendered and will acquire such Shares for tender by
conversion, exchange or exercise, and (ii) will cause such Shares to be
delivered in accordance with the terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on behalf
of another person. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
shareholder and the Company upon the terms and subject to the conditions of the
Offer.
4. Withdrawal Rights.
Except as otherwise provided in this Section 4, the tender of Shares
pursuant to the Offer is irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Company pursuant to the Offer, may also be withdrawn
at any time after 12:00 midnight, Eastern time, on Monday, August 25, 1997.
For a withdrawal to be effective, a notice of withdrawal must be in
written, telegraphic or facsimile transmission form and must be received in a
timely manner by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase. Any such notice of withdrawal must specify the
name of the tendering shareholder, the name of the registered holder, if
different, the number of Shares tendered and the number of Shares to be
withdrawn. If the certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the release of such
certificates, the tendering shareholder must also submit the serial numbers
shown on the particular certificates evidencing the Shares to be withdrawn and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution).
If Shares have been tendered pursuant to the procedure for book-entry delivery
set forth in Section 3, the notice of withdrawal also must specify the name and
the number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with the procedures of
such Book-Entry Transfer Facility. None of the Company, the Depositary, the
Information Agent or any other person shall be obligated to give notice of any
defects or irregularities in any notice of withdrawal nor shall any of them
incur liability for failure to give any such notice. All questions as to the
form and validity (including time
6
<PAGE>
of receipt) of notices of withdrawal will be determined by the Company, in its
sole discretion, which determination shall be final and binding on all parties.
Withdrawals may not be rescinded and any Shares withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered prior to the Expiration Date by again following one of
the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain tendered Shares on behalf of the Company, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in this Section 4.
5. Purchase of Shares and Payment of Purchase Price.
Upon the terms and subject to the conditions of the Offer, the Company will
determine the Purchase Price it will pay for the Shares validly tendered and not
withdrawn prior to the Expiration Date, taking into account the number of Shares
so tendered and the prices specified by tendering shareholders, and will accept
for payment and pay for (and thereby purchase) Shares validly tendered at prices
at or below the Purchase Price as promptly as practicable following the
Expiration Date. For purposes of the Offer, the Company will be deemed to have
accepted (and therefor purchased) Shares which are tendered at or below the
Purchase Price and not withdrawn (subject to the proration provisions of the
Offer) when, as and if it gives oral or written notice to the Depositary of its
acceptance of such Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date the Company will accept for payment and pay a
single per Share Purchase Price for 750,000 Shares (subject to increase or
decrease as provided in Section 7) or such lesser number of Shares as are
validly tendered at prices not in excess of $18.00 or less than $16.50 per Share
and not withdrawn as permitted in Section 4.
The Company will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering shareholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any proration and commence payment for Shares
purchased until approximately seven OTC trading days after the Expiration Date.
Certificates for all Shares tendered and not purchased, including all Shares
tendered at prices in excess of the Purchase Price and Shares not purchased due
to proration, will be returned (or, in the case of Shares tendered by book-entry
delivery, such Shares will be credited to the account maintained with the
Book-Entry Transfer Facility by the participant therein who so delivered such
Shares) to the tendering shareholder as promptly as practicable after the
Expiration Date without expense to the tendering shareholders. Under no
circumstances will interest on the Purchase Price be paid by the Company by
reason of any delay in making payment.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or such other person), payable on account of the transfer to
such person will be deducted from the Purchase Price unless evidence
satisfactory to the Company of the payment of the stock transfer taxes, or
exemption therefrom, is submitted. See Instruction 7 of the Letter of
Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING.
SEE SECTION 3 OF THIS OFFER TO PURCHASE AND INSTRUCTION 12 OF THE LETTER OF
TRANSMITTAL. ALSO SEE SECTION 3 REGARDING FEDERAL INCOME TAX CONSEQUENCES FOR
FOREIGN SHAREHOLDERS.
7
<PAGE>
6. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
under the Exchange Act (see Section 7), if at any time on or after June 27, 1997
and prior to the time of payment for any such shares any of the following events
shall have occurred (or shall have been determined by the Company to have
occurred) which, in the Company's sole judgment in any such case and regardless
of the circumstances giving rise thereto (including any action or omission to
act by the Company), makes it inadvisable to proceed with the Offer or with such
acceptance for payment:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, or before any court or governmental, regulatory or
administrative authority or agency or tribunal, domestic or foreign, which:
(1) challenges the making of the Offer, the acquisition of Shares pursuant
to the Offer or otherwise relates in any manner to the Offer or (2) in the
Company's sole judgment, could materially affect the business, condition
(financial or other), income, operations or prospects of the Company and
its subsidiaries taken as a whole, or otherwise materially impair in any
way the contemplated future conduct of the business of the Company or any
of its subsidiaries or materially impair the Offer's contemplated benefits
to the Company; or
(b) there shall have been any claim, action or proceeding threatened,
pending or taken, or any consent, license, authorization, permit or
approval withheld, or any law, statute, rule, regulation, judgment, order
or injunction threatened, proposed, sought, promulgated, enacted, entered,
enforced or deemed to be applicable to the Offer or the Company, by or
before any court or any government or governmental, regulatory or
administrative agency or authority (federal, state, local or foreign) or
tribunal, domestic or foreign, which, in the sole judgment of the Company,
could or might directly or indirectly (i) make the acceptance for payment
of, or payment for, some or all of the Shares illegal or otherwise restrict
or prohibit the consummation of the Offer, (ii) delay or restrict the
ability of the Company, or render the Company unable, to accept for payment
or pay for some or all of the Shares, (iii) materially affect the business,
condition (financial or other) income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the business of the
Company or any of its subsidiaries, or (iv) materially impair the
contemplated benefits of the Offer to the Company; or
(c) there shall have occurred any of the following events: (i) the
commencement of any state of war, international crisis or national
emergency; (ii) the declaration of any banking moratorium or suspension of
payments by banks in the United States or any limitation on the extension
of credit by lending institutions in the United States; (iii) any general
suspension of trading or limitation of prices for securities on any
securities exchange or in the over-the-counter market in the United States;
(iv) any significant adverse change in the market price of the Shares or
any change in the general political, market, economic or financial
conditions in the United States or abroad that could have a material
adverse effect upon the trading of the Shares; or (v) in the case of any of
the foregoing existing at the time of the commencement of the Offer, in the
sole judgment of the Company, a material acceleration or worsening effect
thereof; or
(d) a tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or a merger or acquisition proposal for the
Company, shall have been proposed, announced or made by another person or
shall have been publicly disclosed, or the Company shall have learned that
any person or "group" (within the meaning of Section 13(d)(3) of the
Exchange Act), shall have acquired or proposed to acquire beneficial
ownership of more than five percent of the outstanding Shares, or any new
group shall have been formed that beneficially owns more than 5% of the
outstanding Shares (other than any such person, entity or group who have
filed a Schedule 13D or Schedule 13G with the Commission on or before March
31, 1997); or
(e) there shall have occurred any event which, in the sole judgement
of the Company, has resulted in an actual or threatened material adverse
change in the business, financial condition, assets, income, operations,
prospects or stock ownership of the Company or which may adversely affect
the value of the Shares; and, in the sole judgment of the Company, such
event makes it inadvisable to proceed with the Offer or with acceptance for
payment of or payment for any Shares; or
8
<PAGE>
(f) the purchase of Shares pursuant to the offer would result in there
being less than 300 shareholders of record of the Shares or would result in
the Shares being delisted from the Nasdaq/NMS.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and may be waived by
the Company, in whole or in part, at any time and from time to time in its sole
discretion. The Company's failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by the Company concerning the events described above
will be final and binding on all parties.
7. Extension of the Offer; Termination; Amendment.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or been determined by the Company to
have occurred, (a) to extend the period of time during which the Offer is open
by giving oral or written notice of such extension to the Depositary and making
a public announcement thereof no later than 9:00 a.m., Eastern time, on the next
business day after the previously scheduled Expiration Date, and (b) to amend
the Offer in any respect (including, without limitation, by increasing or
decreasing the range of prices it may pay for Shares or the number of Shares
being sought in the Offer) by giving oral or written notice of such amendment to
the Depositary and, as promptly as practicable thereafter, making a public
announcement thereof. If (i) the Company increases or decreases the price to be
paid for Shares, the number of Shares being sought in the Offer or incurs dealer
manager soliciting fees and, in the event of an increase in the number of Shares
being sought, such increase exceeds two percent of the outstanding Shares and
(ii) the Offer is scheduled to expire at any time earlier than the expiration of
a period ending on the tenth business day from, and including, the date that
such notice of an increase or decrease is first published, sent or given in the
manner specified in this Section 7, the Offer will, at least, be extended until
the expiration of such period of ten business days. The Company also expressly
reserves the right, in its sole and absolute discretion, to terminate the Offer
and not to accept for payment or pay for Shares upon the occurrence of any of
the conditions specified in Section 6 by giving oral or written notice of such
termination to the Depositary and, as promptly as practicable thereafter, making
a public announcement thereof. Without limiting the manner in which the Company
may choose to make a public announcement, except as required by applicable law
(including Rule 13e-4(e)(2) under the Exchange Act), the Company shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service. The
rights reserved by the Company in this paragraph are in addition to the
Company's rights under Section 6. Payment for Shares accepted for payment
pursuant to the Offer may be delayed in the event of proration due to the
difficulty of determining the number of validly tendered Shares. See Sections 1
and 5.
8. Price Range of Shares; Dividends.
The Shares are traded over-the-counter and quoted on the Nasdaq/NMS. The
following table sets forth, for the periods indicated, the high and low sales
prices per Share as published by the Nasdaq statistical report and the cash
dividends paid per Share in each such fiscal quarter.
DIVIDENDS
PAID
FISCAL YEAR HIGH LOW PER SHARE
- ----------- --------- --------- -----------
1995:
4th Quarter................................. $ 10.94 $ 8.33 --
1996:
1st Quarter................................. 10.83 10.20 .0160
2nd Quarter................................. 10.94 10.42 .0500
3rd Quarter................................. 12.70 10.52 .0670
4th Quarter................................. 13.86 12.08 .0800
1997:
1st Quarter................................. 16.88 12.88 .0825
2nd Quarter (through June 26, 1997)......... 16.75 14.25 .0875
9
<PAGE>
On June 26, 1997, the last full trading day prior to the day of the
announcement of the Offer, the closing per Share sales price as reported on the
Nasdaq/NMS was $16 5/8. Shareholders are urged to obtain current market
quotations for the Shares.
9. Source and Amount of Funds.
Assuming that the Company purchases 750,000 Shares pursuant to the Offer at
a price of $18.00 per Share, the cost to the Company (including all fees and
expenses relating to the Offer), is estimated to be approximately $13.55
million. The Company plans to obtain the funds needed for the Offer from cash on
hand and the sale of investment and mortgage-backed securities.
10. Certain Information Concerning the Company.
General
The Company is a Delaware corporation and bank holding company which was
organized in August 1995 to acquire all of the capital stock of the Bank issued
in connection with the Bank's conversion from mutual to stock form of ownership
in December 1995. The Company is headquartered in Pottstown, Pennsylvania and is
the holding company for the Bank and Patriot Investment Company ("PIC"). The
Company reported net income of $810,000 or $.20 per share for the three-month
period ended March 31, 1997 and net income of $2.8 million or $.66 per share for
the year ended December 31, 1996 (excluding a special after-tax charge of
$836,000 representing the special deposit insurance assessment levied by the
FDIC on all SAIF member institutions). At March 31, 1997, the Company had total
assets of $594.1 million and total stockholders' equity of $48.1 million.
The Bank is a Pennsylvania state chartered commercial bank which conducts
business from its executive offices in Pottstown, Pennsylvania and its 12
community banking offices located in Montgomery, Berks, Lehigh, Northampton and
Chester Counties, Pennsylvania. The Bank is a community-oriented financial
services provider whose business primarily consists of attracting retail
deposits from the general public and small businesses and originating mortgage,
consumer and commercial loans in the Bank's market area. The Bank also invests
in investment and mortgage-backed securities and uses advances from the Federal
Home Loan Bank of Pittsburgh and repurchase agreements as sources of funds. At
March 31, 1997, the Bank had total assets of $571.3 million and total
stockholder's equity of $32.1 million.
Prior to May 23, 1997, the Bank was a federally-chartered savings bank. The
Bank converted to a Pennsylvania-chartered commercial bank in order to provide
expanded commercial products and services.
PIC is a Delaware investment corporation whose primary business consists of
maintaining an investment portfolio. At March 31, 1997, PIC had total assets of
$26.0 million and total stockholder's equity of $14.2 million.
10
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial data should be read in
conjunction with the historical Consolidated Financial Statements of the Company
included in the Company's 1996 Annual Report on Form 10-K and the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997. Interim
unaudited data for the three months ended March 31, 1997 and 1996 reflect, in
the opinion of management of the Company, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of such data.
Results for the three months ended March 31, 1997 are not necessarily indicative
of results that may be expected for any other interim period or for the year as
a whole. The selected information below is qualified in its entirety by
reference to such Reports (which may be inspected or obtained at the offices of
the Commission in the manner set forth below) and the financial information and
related notes contained therein.
<TABLE>
<CAPTION>
AT
MARCH 31, AT DECEMBER 31,
----------- -----------------------------------------------------
1997 1996 1995 1994 1993 1992
----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Selected Financial Condition Data:
(in thousands)
Total Assets...................................... $ 594,055 $ 529,165 $ 268,869 $ 221,035 $ 221,895 $ 244,171
Investments and mortgage-backed securities
available for sale(1)........................... 211,675 159,148 47,646 33,025 -- --
Investments and mortgage-backed securities held to
maturity(1)..................................... 71,009 72,710 3,917 8,669 34,436 38,148
Loans receivable.................................. 294,799 280,184 194,250 168,974 161,529 195,837
Allowance for possible loan losses................ (1,927) (1,830) (1,702) (1,720) (1,665) (1,450)
Deposits.......................................... 266,280 239,514 201,618 189,938 198,876 207,944
Borrowings........................................ 275,244 231,595 10,000 10,000 2,000 16,100
Stockholders' equity.............................. 48,094 53,117 54,110 17,868 17,517 15,200
</TABLE>
<TABLE>
<CAPTION>
THREE
MONTHS, ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Selected Operating Data:
(in thousands except per share data)
Interest income................................. $ 10,320 $ 5,206 $ 29,594 $ 17,168 $ 15,498 $ 17,361 $ 20,298
Interest expense................................ 6,796 2,587 17,502 9,549 8,125 9,628 12,141
--------- --------- --------- --------- --------- --------- ---------
Net interest income before provision for
possible loan losses.......................... 3,524 2,619 12,092 7,619 7,373 7,733 8,157
Provision for possible loan losses.............. 105 35 305 60 56 1 1,115
--------- --------- --------- --------- --------- --------- ---------
Net interest income after provision for possible
loan losses................................... 3,419 2,584 11,787 7,559 7,317 7,732 7,042
Non-interest income............................. 225 121 637 518 674 1,496 641
Non-interest expense............................ 2,373 1,743 9,198 6,151 6,090 5,541 5,132
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes and cumulative effect
of change in method of accounting for income
taxes......................................... 1,271 962 3,226 1,926 1,901 3,777 2,551
Income taxes.................................... 461 379 1,251 734 717 1,460 593
--------- --------- --------- --------- --------- --------- ---------
Income before cumulative effect of change in
method of accounting for income taxes......... 810 583 1,975 1,192 1,184 2,317 1,958
Cumulative effect of change in method of
accounting for income taxes................... -- -- -- -- -- -- 586
--------- --------- --------- --------- --------- --------- ---------
Net income...................................... $ 810 $ 583 $ 1,975 $ 1,192 $ 1,184 $ 2,317 $ 2,544
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Earnings per share(2)........................... $ 0.20 $ 0.14 $ 0.46 N/A N/A N/A N/A
Net income before special charge(3)............. N/A N/A $ 2,811 N/A N/A N/A N/A
Earnings per share before special
charge(2)(3).................................. N/A N/A $ 0.66 N/A N/A N/A N/A
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
THREE
MONTHS, ENDED
MARCH 31 YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Performance Ratios(4):
Return on average assets........................ 0.59% 0.77% 0.48% 0.50% 0.54% 0.99% 0.81%
Return on average assets before special
charge(3)..................................... -- -- 0.68 -- -- -- --
Return on average equity........................ 6.60 4.30 3.71 5.40 6.59 13.61 13.90
Return on average equity before special
charge(3)..................................... -- -- 5.28 -- -- -- --
Average interest rate spread(5)................. 2.39 3.54 2.95 3.29 3.33 3.31 3.38
Net interest margin(6).......................... 2.43 3.58 3.01 3.39 3.45 3.43 3.50
Average interest-earning assets to average
interest-bearing liabilities.................. 107.53 122.96 113.69 109.20 107.16 106.90 105.84
Total non-interest expense to average
assets(7)..................................... 1.65 2.49 1.93 2.65 2.75 2.34 2.13
Dividend payout ratio(8)........................ 41.04 11.86 45.91 -- -- -- --
<CAPTION>
AT MARCH 31, AT DECEMBER 31,
-------------------- -----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Regulatory Capital Ratios(9):
Tangible capital to tangible assets............. 8.06% 17.21% 9.97% 20.14% 8.46% 7.89% 6.23%
Leverage ratio.................................. 8.06 17.21 9.97 20.14 8.46 7.89 6.23
Leverage capital to risk-adjusted
assets........................................ 16.47 33.33 20.28 34.27 13.98 13.61 10.61
Risk based capital to risk-adjusted assets...... 17.13 34.40 20.98 35.35 15.33 14.90 11.62
<CAPTION>
AT MARCH 31, AT DECEMBER 31,
-------------------- -----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset Quality Ratios(8):
Non-performing assets as a percent of total
assets........................................ 0.13% 0.23% 0.12% 0.29% 0.45% 0.64% 0.86%
Non-performing loans as a percent of loans
receivable.................................... 0.25 0.26 0.20 0.30 0.43 0.53 0.72
Allowance for possible loan losses as a percent
of loans receivable........................... 0.65 0.88 0.65 0.88 1.01 1.02 0.73
Allowance for possible loan losses as a percent
of non-performing loans....................... 266.73 331.82 321.94 292.94 235.94 190.94 102.04
</TABLE>
- ------------------
(1) Patriot has classified its investment and mortgage-backed securities as
"held to maturity" or "available for sale" since fiscal 1994 when it adopted
Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for
Certain Investments in Debt and Equity Securities."
(2) Patriot completed its initial public offering on December 1, 1995.
Therefore, earnings per share and dividend payout ratio are not applicable
for years prior to 1996.
(3) Special charge representing the special deposit insurance assessment levied
against all SAIF member financial institutions by the FDIC to recapitalize
its SAIF fund.
(4) All ratios are based on average monthly balances during the indicated
periods. Return on average assets and return on average equity are
calculated before the cumulative effect of change in method of accounting
for income taxes.
(5) The average interest rate spread represents the difference between the
weighted average yield on interest-earning assets and the weighted average
cost of interest-bearing liabilities and equity.
(6) The net interest margin represents net interest income as a percent of
average interest-earning assets.
(7) Calculated prior to special charge.
(8) Non-performing assets consist of non-performing loans and real estate owned
(REO). Non-performing loans consist of non-accrual and accruing loans 90
days or more overdue, while REO consists of real estate acquired through
foreclosure and real estate acquired by acceptance of a deed in lieu of
foreclosure.
(9) On June 5, 1997, Patriot Capital Trust I issued $19.0 million of 10.30%
Capital Securities and used the proceeds to purchase from the Company $19.0
million of 10.30% Junior Deferrable Interest Debentures. A portion of the
Capital Securities qualify as Tier I capital of the Company. Such amounts
are not reflected herein.
12
<PAGE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information of the Company for
the fiscal year ended December 31, 1996 and the three months ended March 31,
1997 shows the effects of the purchase of 750,000 Shares pursuant to the Offer.
The income statement data give effect to the purchase of Shares pursuant to See
Notes to Unaudited Pro Forma Financial Information on page 17 the Offer as if it
had occurred at the beginning of each period presented. The balance sheet data
give effect to the purchase of Shares pursuant to the Offer as if it had
occurred as of the date of the respective balance sheets. The pro forma
financial information should be read in conjunction with the audited financial
statements and related notes contained in the Company's Annual Report on Form
10-K for the year ended December 31, 1996 and the unaudited financial statements
contained in the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997. The pro forma financial information does not purport to be
indicative of the results that would actually have been attained had the
purchases of the Shares been completed at the dates indicated or that may be
attained in the future.
PATRIOT BANK CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
SHARES PURCHASED AT
$16.50 $18.00
PER SHARE PER SHARE
---------- ----------
<S> <C> <C>
Interest income......................................................... $ 10,103 $ 10,084
Interest expense........................................................ 6,796 6,796
---------- ----------
Net interest income................................................ 3,307 3,288
Provision for loan losses............................................... 105 105
---------- ----------
Net interest income after provision
for loan losses.................................................. 3,202 3,183
Non-interest income..................................................... 225 225
Non-interest expenses................................................... 2,373 2,373
---------- ----------
Income before income taxes.............................................. 1,054 1,035
Federal and state income taxes.......................................... 383 376
---------- ----------
Net income......................................................... $ 671 $ 659
---------- ----------
---------- ----------
Net income per share............................................... $ 0.205 $ 0.201
---------- ----------
---------- ----------
Weighted average shares outstanding..................................... 3,281,000 3,281,000
</TABLE>
See Notes to Unaudited Pro Forma Financial Information on page 17
13
<PAGE>
PATRIOT BANK CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
SHARES PURCHASED AT
$16.50 $18.00
PER SHARE PER SHARE
---------- ----------
<S> <C> <C>
Interest income............................................................. $ 28,278 $ 28,649
Interest expense............................................................ 17,502 17,502
---------- ----------
Net interest income.................................................... 11,226 11,147
Provision for loan losses................................................... 305 305
---------- ----------
Net interest income after provision for loan losses.................... 10,921 10,842
Non-interest income......................................................... 637 637
Non-interest expenses....................................................... 9,198 9,198
---------- ----------
Income before income taxes.................................................. 2,360 2,281
Income taxes................................................................ 939 911
---------- ----------
Net income............................................................. $ 1,421 $ 1,370
---------- ----------
---------- ----------
Net income per share................................................... $ 0.405 $ 0.391
---------- ----------
---------- ----------
Weighted average shares outstanding......................................... 3,505,000 3,505,000
</TABLE>
See Notes to Unaudited Pro Forma Financial Information on page 17
14
<PAGE>
PATRIOT BANK CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SHARES PURCHASED AT
$16.50 $18.00
PER SHARE PER SHARE
---------- ----------
<S> <C> <C>
ASSETS
Cash and cash equivalents............................................................. $ 2,799 $ 2,799
Investment and mortgage-backed securities............................................. 270,310 269,185
Loans receivable...................................................................... 294,799 294,799
Allowance for possible loan losses.................................................... (1,927) (1,927)
Other assets.......................................................................... 15,669 15,669
---------- ----------
Total assets....................................................................... $ 581,680 $ 581,680
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits.............................................................................. $ 266,280 $ 266,280
Borrowings............................................................................ 275,244 275,244
Other liabilities..................................................................... 4,437 4,437
---------- ----------
Total liabilities.................................................................. 545,961 545,961
---------- ----------
Stockholders' equity
Preferred stock, $.01 par value, 2,000,000 shares authorized at
December 31, 1995, none issued..................................................... -- --
Common stock, $.01 par value, 10,000,000 shares authorized 4,683,594 issued........... 47 47
Additional paid in capital............................................................ 49,014 49,014
Common stock acquired by ESOP, 308,513 shares at cost................................. (2,571) (2,571)
Common stock acquired by MRP, 160,644 shares at $10.78................................ (1,451) (1,451)
Retained earnings..................................................................... 10,803 10,803
Treasury stock acquired, 1,328,092 shares at cost..................................... (19,897) (21,022)
Net unrealized gain (loss) on investment and mortgage-backed securities available for
sale, net of taxes................................................................. (226) (226)
Total stockholders' equity......................................................... 35,719 34,594
---------- ----------
Total liabilities and stockholders' equity......................................... $ 581,680 $ 580,555
---------- ----------
---------- ----------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information on page 17
15
<PAGE>
PATRIOT BANK CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
SHARES PURCHASED AT
$16.50 $18.00
PER SHARE PER SHARE
---------- ----------
<S> <C> <C>
ASSETS
Cash and cash equivalents............................................................. $ 6,853 $ 6,853
Investment and mortgage-backed securities............................................. 219,983 218,358
Loans receivable...................................................................... 280,184 280,184
Allowance for possible loan losses.................................................... (1,830) (1,830)
Other assets.......................................................................... 12,100 12,100
---------- ----------
Total assets....................................................................... $ 516,790 $ 515,665
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits.............................................................................. $ 239,514 $ 239,514
Borrowings............................................................................ 231,595 231,595
Other liabilities..................................................................... 4,939 4,939
---------- ----------
Total liabilities.................................................................. 476,048 476,048
---------- ----------
Stockholders' equity
Preferred stock, $.01 par value, 2,000,000 shares authorized at
December 31, 1995, none issued..................................................... -- --
Common stock, $.01 par value, 10,000,000 shares authorized 4,683,594 issued........... 47 47
Additional paid in capital............................................................ 49,014 49,014
Common stock acquired by ESOP, 308,513 shares at cost................................. (2,571) (2,571)
Common stock acquired by MRP, 160,644 shares at $10.78................................ (1,538) (1,538)
Retained earnings..................................................................... 10,357 10,357
Treasury stock acquired, 976,147 shares at cost....................................... (14,892) (16,017)
Net unrealized gain (loss) on investment and mortgage-backed securities available for
sale, net of taxes................................................................. 325 325
Total stockholders' equity......................................................... 40,742 39,617
---------- ----------
Total liabilities and stockholders' equity......................................... $ 516,790 $ 515,665
---------- ----------
---------- ----------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information on page 17
16
<PAGE>
PATRIOT BANK CORP.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(1) The pro forma financial information reflects the repurchase of 750,000
shares of stock at $16.50 and $18.00 per share, respectively.
(2) The balance sheet data give effect to the purchase of shares as of the
balance sheet date. The income statement data give effect to the purchase of
shares as of the beginning of each period presented.
(3) The funds used to purchase shares were considered to have been obtained from
the sale of investment and mortgage-backed securities primarily invested at
7.00%. The pro forma data assume an income tax rate of 36%. The income
statement data reflect the decrease in interest income on investment and
mortgage-backed securities as if such investment and mortgage-backed
securities were sold at the beginning of each period presented.
(4) No effect has been given to costs incurred in connection with the Offer.
Such costs are not expected to be material and will be capitalized as part
of the costs of the shares purchased.
(5) On June 5, 1997, Patriot Capital Trust I issued $19.0 million of 10.30%
Capital Securities and used the proceeds to purchase from the Company $19.0
million of 10.30% Junior Deferrable Interest Debentures. A portion of the
Capital Securities qualify as Tier I capital of the Company. After giving
pro forma effect to the issuance of the Capital Securities and the
repurchase of 750,000 Shares at $18.00 per share, the Company's leverage
ratio would be 7.52%.
11. Interest of Directors and Executive Officers; Transactions and Arrangements
Concerning Shares.
As of June 26, 1997, the Company's directors and executive officers as a
group beneficially owned (including pursuant to vested stock awards and
presently exercisable stock options) an aggregate of 500,738 Shares
(approximately 12.2% of the outstanding Shares including Shares issuable upon
the exercise of options). Such ownership includes 82,612 Shares granted pursuant
to vested stock awards and 152,006 Shares subject to exercisable stock options
which are held by directors and executive officers.
Except as set forth in Schedule I, neither the Company, nor any subsidiary
of the Company nor, to the best of the Company's knowledge, any of the Company's
directors or executive officers, nor any affiliates of any of the foregoing, had
any transactions involving the Shares during the 40 business days prior to the
date hereof.
Except for outstanding stock awards and options to purchase Shares granted
from time to time to certain employees (including executive officers) and
directors of the Company pursuant to the Company's stock compensation plans and
except as otherwise described herein, neither the Company nor, to the best of
the Company's knowledge, any of its directors or executive officers, is a party
to any contract, arrangement, understanding or relationship with any other
person relating, directly or indirectly, to the Offer including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies, consents or authorizations.
Certain officers and directors may tender Shares into the Offer. Such
Shares will be purchased pursuant to the terms and subject to the conditions of
the Offer and will be treated in the same manner as Shares tendered by other
shareholders. The number of Shares, if any, that will be tendered by executive
officers and directors and the prices at which such Shares will be tendered is
uncertain. To the extent executive officers and directors do not tender Shares,
the percentage of Shares outstanding held by executive officers and directors
will increase as a result of the purchase of Shares pursuant to the Offer.
12. Effects of the Offer on the Market for Shares; Registration under the
Exchange Act.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of shareholders. Nonetheless, the Company anticipates that there will be
a sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the Nasdaq/NMS,
17
<PAGE>
the Company does not believe that its purchase of Shares pursuant to the offer
will cause the Company's remaining Shares to be delisted from the Nasdaq/NMS.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using such Shares as collateral. The Company
believes that, following the purchase of Shares pursuant to the Offer, the
Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
The Bank Holding Company Act and the Change in Bank Control Act each set
forth thresholds with respect to the ownership of voting shares of a bank
holding company of 5% to 10%, respectively, over which the owner of such voting
shares may be determined to control such bank holding company. If, as a result
of the Offer, the ownership interest of any shareholder in the Company is
increased over these thresholds, such shareholder may be required to reduce its
ownership interest in the Company or file a notice with regulators. Each
shareholder whose ownership interest may be so increased is urged to consult the
shareholder's own legal counsel with respect to the consequences to the
shareholder of the Offer.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's shareholders. The Company believes that its
purchase of Shares pursuant to the Offer will not result in the Shares becoming
eligible for deregistration under the Exchange Act.
13. Certain Federal Income Tax Consequences.
General. The federal income tax discussion set forth below summarizes the
principal federal income tax consequences to domestic shareholders of sales of
stock pursuant to the Offer and is included for general information only. The
discussion does not address all aspects of federal income taxation that may be
relevant to a particular shareholder nor any relevant foreign, state, local or
other tax laws. Certain shareholders (including, but not limited to, insurance
companies, tax-exempt entities, foreign persons, financial institutions, broker
dealers, employee benefit plans, personal holding companies and persons who
acquired their Shares upon the exercise of employee stock options or as
compensation) may be subject to special rules not discussed below. The
discussion is based on laws, regulations, rulings and court decisions currently
in effect as of the date of this Offer to Purchase, all of which are subject to
change. The Company intends that, under the terms of the Offer, sales of Shares
will be completed in 1997 and shareholders will receive payment for purchased
Shares this year. In that event, shareholders will report the sale of Shares
pursuant to the Offer this year for tax purposes. In the event that sales are
not completed this year and/or shareholders receive payments for Shares next
year, shareholders may be required to report the sale of Shares pursuant to the
Offer next year for tax purposes. The Company has neither requested nor obtained
a written opinion of counsel or a ruling from the Internal Revenue Service (the
"Service") with respect to the tax matters discussed herein. Prior to tendering
any Shares pursuant to the Offer, each shareholder is strongly advised to
consult with his own tax advisor as to the particular tax consequences of the
offer to such shareholder, including the application of foreign, state, local,
or other tax laws.
In general, a sale of Shares pursuant to the Offer will be a taxable
transaction for federal income tax purposes. Such sale will constitute a
"redemption" within the meaning of Section 317 of the Internal Revenue Code of
1986, as amended (the "Code"). Each tendering shareholder will recognize either
gain or loss from a sale of Shares or dividend income, depending upon the
application of Section 302 of the Code to the shareholder's particular facts and
circumstances. If the redemption qualifies as a sale of Shares under Section
302, the cash received pursuant to the offer will be treated as a distribution
from the Company in part or full payment in exchange for the Shares surrendered
("Sale Treatment"). Sale Treatment will result in the shareholder's recognizing
gain or loss equal to the difference between (i) the cash received pursuant to
the Offer and (ii) the shareholder's tax basis in the Shares surrendered. If the
redemption does not qualify as a sale of Shares under Section 302, the
shareholder will not be treated as having sold Shares but will be treated as
having received a dividend, to the extent of the shareholder's proportionate
share of the Company's earnings and profits, taxable as ordinary income in an
amount equal to the cash received pursuant to the Offer ("Dividend Treatment").
18
<PAGE>
Sale Treatment. Under Section 302 of the Code, a sale of Shares pursuant
to the Offer will be treated as a sale of such Shares for federal income tax
purposes if such sale of Shares (i) results in a "complete redemption" of all of
the shareholder's stock in the Company, (ii) is a "substantially
disproportionate redemption" with respect to the shareholder, or (iii) is "not
essentially equivalent to a dividend" with respect to the shareholder. In
determining whether any of these three tests under Section 302 is satisfied,
shareholders must take into account not only Shares that they actually own, but
also any Shares that they are treated as owning pursuant to the constructive
ownership rules of Section 318 of the Code. Pursuant to these constructive
ownership rules, shareholders will be treated as owning a certain amount of (i)
Shares held by certain family members, including the shareholder's spouse,
children, grandchildren, and parents, (ii) Shares owned by certain trusts of
which the shareholder is a beneficiary, (iii) Shares owned by an estate of which
the shareholder is a beneficiary, (iv) Shares owned by any partnership or "S
corporation" in which the shareholder is a partner or shareholder, (v) Shares
owned by any non-S corporation of which the shareholder owns at least 50% in
value of the stock and
(vi) Shares that the shareholder can acquire by exercise of an option or similar
right. A shareholder that is a partnership or S corporation, estate, trust, or
non-S corporation is treated as owning stock owned (as the case may be) by
partners or S corporation shareholders, by estate beneficiaries, by certain
trust beneficiaries, and by 50% shareholders of a non-S corporation. Stock
constructively owned by a person generally is treated as being owned by that
person for the purpose of attributing ownership to another person.
A tendering shareholder's sale of Shares pursuant to the Offer will
generally result in a "complete redemption" of all the shareholder's stock in
the Company if, pursuant to the Offer, the Company purchases all of the Shares
actually owned by the shareholder and subsequently the shareholder does not
constructively own any Shares. If the shareholder's sale of Shares pursuant to
the Offer would satisfy the complete redemption requirement but for the
shareholder's constructive ownership of Shares held by certain family members,
such shareholder may, under certain circumstances, be entitled to waive such
constructive ownership, provided the shareholder complies with the provisions of
Section 302(c) of the Code. If the shareholder actually owns no Shares after
selling their Shares pursuant to the Offer, constructively owns only Shares
owned by certain family members, and the shareholder qualifies to and does waive
constructive ownership of Shares owned by certain family members, that
redemption of Shares should qualify as a "complete redemption."
A tendering shareholder's sale of Shares pursuant to the Offer will be a
"substantially disproportionate redemption" with respect to the shareholder if
the percentage of Shares actually and constructively owned by the shareholder
compared to all the outstanding Shares of the Company immediately following the
sale of Shares pursuant to the Offer (treating as not outstanding all Shares
sold by all the shareholders pursuant to the Offer) is less than 80% of the
percentage of Shares actually and constructively owned by the shareholder
compared to all the outstanding Shares of the Company immediately before the
sale of Shares pursuant to the Offer (treating as outstanding all Shares sold by
the shareholders pursuant to the Offer). This test will be applied to each
shareholder individually, regardless of the effect of the redemption on the
other shareholders.
A tendering shareholder's sale of Shares pursuant to the Offer will "not be
essentially equivalent to a dividend" if, as a result of the sale of Shares
pursuant to the Offer, the shareholder experiences a "meaningful reduction" in
his proportionate interest in the Company, including the shareholder's voting
rights, participation in earnings, and liquidation rights and taking into
account the constructive ownership rules. The Service has indicated in a
published ruling that even a small reduction in the proportionate interest of a
small minority shareholder who does not exercise any control over company
affairs may constitute a "meaningful reduction" in the shareholder's interest in
the company. The fact that the redemption fails to qualify as a sale pursuant to
the other two tests is not taken into account in determining whether the
redemption is "not essentially equivalent to a dividend."
Shareholders should be aware that their ability to satisfy any of the
foregoing tests may be affected by proration pursuant to the Offer. Therefore, a
shareholder can be given no assurance, even if he tenders all of his Shares,
that the Company will purchase a sufficient number of such Shares to permit him
to satisfy any of the foregoing tests. Shareholders also should be aware that it
is possible that, depending on the facts and circumstances, an acquisition or
disposition of Shares in the market or to other parties as part of an integrated
plan may be taken into account in determining whether any of the foregoing tests
is satisfied. Shareholders are strongly advised to consult with their own tax
advisors with regard to whether acquisitions from, or sales to, third
19
<PAGE>
parties, including market sales, may be so integrated. Subsequent open market
purchases by the Company also may be taken into account in determining whether
any of the foregoing tests is satisfied.
If any of the above three tests is satisfied, the tendering shareholder
will recognize gain or loss equal to the difference between the amount of cash
received by the shareholder pursuant to the Offer and the shareholder's tax
basis in the Shares sold. Such gain or loss must be determined separately for
each block of Shares sold (i.e., Shares acquired at the same time in a single
transaction), and will be capital gain or loss, assuming the Shares were held by
the shareholder as a capital asset. Capital gain or loss will be long-term
capital gain or loss if, at the time the Company accepts the Shares for payment,
the Shares were held by the shareholder for more than one year.
Dividend Treatment. If none of the three foregoing tests are satisfied,
the tendering shareholder generally will be treated as having received a
dividend taxable as ordinary income in an amount equal to the total cash
received by the shareholder pursuant to the Offer, provided the Company has
sufficient accumulated or current earnings and profits. To the extent that the
purchase of Shares from any shareholder pursuant to the Offer is treated as a
dividend, such shareholder's tax basis in any Shares which the shareholder
actually or constructively retains after consummation of the Offer will be
increased by the shareholder's tax basis in the Shares surrendered pursuant to
the Offer.
Treatment of Dividend Income for Corporate Shareholders. In the case of a
corporate shareholder, if the cash received for Shares pursuant to the Offer is
treated as a dividend, the dividend income may be eligible for the 70%
dividends-received deduction under Section 243 of the Code. The
dividends-received deduction is subject to certain limitations and may not be
available if the corporate shareholder does not satisfy certain holding period
requirements with respect to the Shares or if the Shares are treated as
"debt-financed portfolio stock." The Company believes that the Offer will not
result in a pro rata distribution to all shareholders. Consequently, dividends
received by corporate shareholders pursuant to the Offer will probably be
treated as "extraordinary dividends" as defined by Section 1059 of the Code.
Corporate shareholders should consult their tax advisors as to the availability
of the dividends-received deduction and the application of Section 1059 of the
Code.
Pending Tax Legislation. Shareholders should be aware that pending tax
legislation, if enacted in proposed or revised form, may affect the foregoing
discussion. In particular, corporate shareholders should note that such
legislation could materially affect the treatment of the dividends-received
deduction and the extraordinary dividend rules of the Code.
SEE SECTION 3 WITH RESPECT TO THE APPLICATION OF BACKUP FEDERAL INCOME TAX
WITHHOLDING.
14. Fees and Expenses.
The Company has retained Kissel-Blake Inc. to act as Information Agent and
Registrar and Transfer Company to act as Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telegraph and personal interviews and may request brokers, dealers and other
nominee shareholders to forward materials relating to the offer to beneficial
owners. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their respective services, will be reimbursed by
the Company for certain reasonable out-of-pocket expenses, including attorneys'
fees, and will be indemnified against certain liabilities and expenses in
connection therewith, including certain liabilities and expenses under the
federal securities laws.
No fees or commissions will be payable to brokers, dealers or other persons
(other than fees to the Information Agent and the Depositary as described above)
for soliciting tenders of Shares pursuant to the Offer. The Company will,
however, upon request, reimburse brokers, dealers and commercial banks for
customary mailing and handling expenses incurred by such persons in forwarding
the Offer to Purchase and related materials to the beneficial owners of Shares
held by any such person as a nominee or in a fiduciary capacity. No broker,
dealer, commercial bank or trust company has been authorized to act as the agent
of the Company, the Information Agent or the Depositary for purposes of the
Offer. The Company will pay or cause to be paid all
20
<PAGE>
stock transfer taxes, if any, on its purchase of Shares except as otherwise
provided in Instruction 7 in the Letter of Transmittal.
15. Additional Information.
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's regional offices at 7 World Trade Center,
13th Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material may also be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Such information may also be accessed electronically by means of the
Commission's home page on the Internet (http://www.sec.gov). The Company's
common stock is traded on the Nasdaq National Market. Such reports, proxy
statements and other information concerning the Company may also be inspected at
the offices of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington D.C. 20006.
16. Miscellaneous.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such law,
the offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares residing in such jurisdiction.
Pursuant to Rule 13e-4 under the Exchange Act, the Company has filed with
the Commission an Issuer Tender Offer Statement on Schedule 13e-4 which contains
additional information with respect to the Offer. Such Schedule 13e-4, including
the exhibits and any amendments thereto, may be examined, and copies may be
obtained, at the same places and in the same manner as is set forth in Section
15 with respect to information concerning the Company.
PATRIOT BANK CORP.
June 27, 1997
21
<PAGE>
SCHEDULE I
CERTAIN TRANSACTIONS INVOLVING SHARES
During the 40 business days prior to June 27, 1997, the following executive
officers and directors effected transactions in the Shares as follows:
PERSON WHO
EFFECTED NUMBER OF
DATE TRANSACTION SHARES NATURE OF TRANSACTION
---- ------------- ----------- -----------------------
None.
I-1
<PAGE>
Manually signed photocopies of the Letter of Transmittal will be accepted
from Eligible Institutions. The Letter of Transmittal and certificates for
Shares and any other required documents should be sent or delivered by each
shareholder or his or her broker, dealer, commercial bank, trust company or
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
REGISTRAR & TRANSFER COMPANY
By Mail or Overnight Delivery: By Hand:
10 Commerce Drive c/o Depository Trust Company
Cranford, New Jersey 07016 Transfer Agent Drop
55 Water Street, 1st Floor
New York, New York 10041-0099
(Attn: Reorganization Department) (Attn: Reorganization Department)
By Facsimile Transmission:
(Eligible Institutions Only)
(908) 497-2312
Confirm by Telephone:
(800) 368-5948
Any questions or requests for assistance or additional copies of this offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent at the telephone numbers and locations
listed below. Shareholders may also contact their local broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
KISSEL-BLAKE INC.
110 Wall Street
New York, New York 10005
Call Toll Free
(800) 554-7733
Banks and Brokerage Firms, please call:
(212) 344-6733
LETTER OF TRANSMITTAL
To Accompany Shares of Common Stock
of
PATRIOT BANK CORP.
Tendered Pursuant to the Offer to Purchase
Dated June 27, 1997
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., EASTERN TIME, ON MONDAY, JULY 28, 1997,
UNLESS THE OFFER IS EXTENDED.
TO: REGISTRAR AND TRANSFER COMPANY, DEPOSITARY
By Mail or Overnight Courier: Facsimile Transmission:
10 Commerce Drive (908) 497-2312
Cranford, New Jersey 07016 (for Eligible Institutions Only)
Confirm by Telephone:
(800) 368-5948
By Hand:
c/o Depository Trust Company
Transfer Agent Drop
55 Water Street, 1st Floor
New York, New York 10041-0099
For information call the Information Agent:
KISSEL-BLAKE INC.
110 WALL STREET, 11TH FLOOR
NEW YORK, NEW YORK 10005
CALL TOLL FREE
(800) 554-7733
BANKS AND BROKERAGE FIRMS, PLEASE CALL:
(212) 344-6733
<PAGE>
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
- ------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE(S) TENDERED
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S) (ATTACH SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S) TENDERED**
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
TOTAL SHARES
TENDERED
- ------------------------------------------------------------------------------------------------------------------------------
Indicate in this box the order (by certificate number) in which Shares are to be purchased in the event of proration.***
(Attach additional signed list if necessary.) See Instruction 9.
- ------------------------------------------------------------------------------------------------------------------------------
1ST: 2ND: 3RD: 4TH: 5TH:
- ------------------------------------------------------------------------------------------------------------------------------
* Need not be completed if Shares are delivered by book-entry transfer.
** If you desire to tender fewer than all Shares evidenced by any certificates listed above, please indicate in this column
the number of Shares you wish to tender. Otherwise, all Shares evidenced by such certificates will be deemed to have been
tendered. See Instruction 4.
*** If you do not designate an order, then in the event less than all Shares tendered are purchased due to proration, Shares
will be selected for purchase by the Depositary.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Delivery of this instrument to an address other than those shown above or
transmission of instructions via a facsimile number other than one of those
listed above does not constitute a valid delivery.
This Letter of Transmittal is to be used only (a) if certificates for Shares
(as defined below) are to be forwarded with it (or such certificates will be
delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or (b) if a tender of Shares is to be made by book-entry transfer to
the account maintained by the Depositary at The Depository Trust Company ("DTC")
or Philadelphia Depository Trust Company ("PDTC") (collectively, the "Book-Entry
Transfer Facilities") pursuant to Section 3 of the Offer to Purchase.
Shareholders whose certificates are not immediately available or who cannot
deliver their certificates for Shares and all other required documents to the
Depositary before the Expiration Date (as defined in the Offer to Purchase) or
whose Shares cannot be delivered on a timely basis pursuant to the procedure for
book-entry transfer must tender their Shares according to the guaranteed
delivery procedure set forth in Section 3 of the offer to Purchase. See
Instruction 2. Delivery of the Letter of Transmittal and any other required
documents to one of the Book-Entry Transfer Facilities does not constitute
delivery to the Depositary.
<PAGE>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE BOOK-ENTRY
TRANSFER FACILITIES, AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Check Box of Applicable Book-Entry Transfer Facility:
/ / DTC / / PDTC
Account Number: _____________________ Transaction Code Number: ______________
/ / CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution Which Guaranteed Delivery: _____________________________
Check Box of Applicable Book-Entry Transfer Facility and Give Account Number
if Delivered by Book-Entry Transfer:
/ / DTC / / PDTC
Ladies and Gentlemen:
The undersigned hereby tenders to Patriot Bank Corp., a Delaware corporation
(the "Company"), the above described shares of the Company's common stock, par
value $.01 per share (the "Shares") at the price per Share indicated in this
Letter of Transmittal, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Company's Offer to Purchase dated June 27, 1997,
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which together constitute the "Offer").
Subject to, and effective on acceptance for payment of the Shares tendered
hereby in accordance with, the terms of the Offer (including, if the Offer is
extended or amended, the terms or conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Company all right, title and interest in and to all Shares tendered
hereby or orders the registration of such Shares tendered by book-entry transfer
that are purchased pursuant to the Offer to or upon the order of the Company and
hereby irrevocably constitutes and appoints the Depositary as attorney-in-fact
of the undersigned with respect to such Shares, with full power of substitution
(such power of attorney being an irrevocable power coupled with interest), to:
(a) deliver certificates for such Shares, or transfer ownership of such
Shares on the account books maintained by a Book-Entry Transfer Facility,
together in either such case with all accompanying evidences of transfer and
authenticity, to or upon the order of the Company, upon receipt by the
Depositary, as the undersigned's agent, of the Purchase Price (as defined
below) with respect to such Shares;
(b) present certificates for such Shares for cancellation and transfer
on the Company's books; and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, subject to the next paragraph, all in accordance
with the terms of the Offer.
The undersigned hereby represents and warrants that:
(a) the undersigned understands that tenders of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in
the Instructions hereto will constitute the undersigned's acceptance of the
terms and conditions of the Offer, including the undersigned's
representation and warranty that (i) the undersigned has a "net long
position" in Shares or "equivalent securities" at least equal to the Shares
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (ii) such tender of Shares complies
with Rule 14e-4;
(b) when and to the extent the Company accepts the Shares for purchase,
the Company will acquire good, marketable and unencumbered title to them,
free and clear of all security interests, liens, charges, encumbrances,
conditional sales agreements or other obligations relating to their sale or
transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any additional
documents the Depositary or the Company deems necessary or desirable to
complete the assignment, transfer and purchase of the Shares tendered
hereby; and
(d) the undersigned has read and agrees to all of the terms of the
offer.
The names and addresses of the registered holders should be printed, if they
are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates, the number of Shares that the
undersigned wishes to tender and the purchase price at which such Shares are
being tendered should be indicated in the appropriate boxes on this Letter of
Transmittal.
<PAGE>
The undersigned understands that the Company will, upon the terms and
subject to the conditions of the Offer, determine a single per Share price (not
greater than $18.00 nor less than $16.50 per Share) that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The undersigned understands that the Company will select
the lowest Purchase Price which will allow it to buy 750,000 Shares (or such
lesser number of Shares as are validly tendered and not withdrawn at prices not
greater than $18.00 nor less than $16.50 per Share) pursuant to the offer, or
such greater number of Shares as the Company may elect to purchase. The
undersigned understands that all Shares validly tendered and not withdrawn at
prices at or below the Purchase Price will be purchased at the Purchase Price,
net to the seller in cash, upon the terms and subject to the conditions of the
Offer, including the proration provisions, and that the Company will return all
other Shares, including Shares tendered at prices greater than the Purchase
Price and Shares not purchased because of proration.
The undersigned recognizes that under certain circumstances set forth in the
Offer to Purchase, the Company may terminate or amend the Offer or may postpone
the acceptance for payment of, or the payment for, Shares tendered or may not be
required to purchase any of the Shares tendered hereby or may for payment fewer
than all of the Shares tendered hereby. In either event, undersigned understands
that certificate(s) for any Shares not tendered or not purchased will be
returned to the undersigned at the address indicated above, unless otherwise
indicated under the "Special Payment Instructions" or "Special Delivery
Instructions" below. The undersigned recognizes that the Company has no
obligation, pursuant to the Special Payment Instructions, to transfer any
certificate for Shares from the name of their registered holder, or to order the
registration or transfer of such Shares tendered by book-entry transfer, if the
Company purchases none of the Shares represented by such certificate or tendered
by such book-entry transfer.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the Purchase Price for such of the tendered Shares as are
purchased will be issued to the order of the undersigned and mailed to the
address indicated above unless otherwise indicated under "Special Payment
Instructions" or "Special Delivery Instructions" below.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligations of the undersigned under this Letter of Transmittal shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as stated in the offer to Purchase, this tender is
irrevocable.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
PRICE (IN DOLLARS) PER SHARE AT
WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE
THAN ONE PRICE, USE A SEPARATE
LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED.
(SEE INSTRUCTION 5)
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED (EXCEPT AS OTHERWISE PROVIDED HEREIN),
THERE IS NO VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
/ / $16.5000 / / 16.9375 / / 17.3125 / / 17.6875
/ / 16.5625 / / 17.0000 / / 17.3750 / / 17.7500
/ / 16.6250 / / 17.0625 / / 17.4375 / / 17.8125
/ / 16.6875 / / 17.1250 / / 17.5000 / / 17.8750
/ / 16.7500 / / 17.1875 / / 17.5625 / / 17.9375
/ / 16.8125 / / 17.2500 / / 17.6250 / / 18.0000
/ / 16.8750
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 8)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or any check for the Purchase Price of Shares purchased are to be
issued in the name of and sent to someone other than the undersigned.
Issue / / Check / / Certificates to:
Name: __________________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6 AND 8)
To be completed ONLY if certificates for Shares not tendered or not
purchased issued in the name of the undersigned and/or any check for the
Purchase Price of Shares purchased issued in the name of undersigned are to be
sent to someone other than the undersigned or to the undersigned at an address
other than that shown above.
Deliver / / Check / / Certificates to:
Name: __________________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 1 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Must be signed by the registered holder(s) exactly as name(s) appear(s) on
certificate(s) or on a security position listing or by persons(s) authorized to
become registered holder(s) by certificate(s) and documents transmitted with
this Letter of Transmittal. If signature is by attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary or representative capacity, please set forth the full title. See
Instruction 6.
________________________________________________________________________________
(Signature(s))
Dated: _________________________________________________________________________
Name(s): _______________________________________________________________________
(Please Print)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Area Code and Telephone Number: ________________________________________________
Taxpayer Identification or Social Security Number: _____________________________
Dated: _________________________________________________________________________
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 6)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
(Please Print)
Title: _________________________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: ________________________________________________
Dated: _________________________________________________________________________
Taxpayer Identification or Social Security Number: _____________________________
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of the
Shares (which term, for purposes of this document, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) exactly as the name of the
registered holder appears on the certificate tendered with this Letter of
Transmittal unless such holder has completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions"; or
(b) such Shares are tendered for the account of a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office, branch or agency in the United States. See
Instruction 6.
In all other cases the signature(s) must be guaranteed by an eligible
guarantor institution (bank, stockbroker, savings and loan association or credit
union with membership in an approved signature guarantee medallion program),
pursuant to Rule 17Ad-15 promulgated under the Exchange Act (an "Eligible
Institution"). See Instruction 6.
2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be used only if certificates are
delivered with it to the Depositary (or such certificates will be delivered
pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary)
or if tenders are to be made pursuant to the procedure for tender by book-entry
transfer set forth in Section 3 of the Offer to Purchase. Certificates for all
physically tendered Shares, or confirmation of a book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility of Shares tendered
electronically, together in each case with a properly completed and duly
executed Letter of Transmittal or duly executed facsimile of it, and any other
documents required by this Letter of Transmittal, should be mailed or delivered
to the Depositary at the appropriate address set forth herein and must be
delivered to the Depositary on or before the Expiration Date (as defined in the
offer to Purchase).
Shareholders whose certificates are not immediately available or who cannot
deliver Shares and all other required documents to the Depositary before the
Expiration Date, or whose Shares cannot be delivered on a timely basis pursuant
to the procedure for book-entry transfer, may tender their Shares by or through
any Eligible Institution by properly completing (including the price at which
the Shares are being tendered) and duly executing and delivering a Notice of
Guaranteed Delivery (or a facsimile of it) and by otherwise complying with the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Pursuant to such procedure, the certificates for all physically tendered Shares
or book-entry confirmation, as the case may be, as well as a properly completed
Letter of Transmittal and all other documents required by this Letter of
Transmittal, must be received by the Depositary within three over-the-counter
trading days after receipt by the Depositary of such Notice of Guaranteed
Delivery, all as provided in Section 3 of the Offer to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice. For
Shares to be validly tendered pursuant to the guaranteed delivery procedure, the
Depositary must receive the Notice of Guaranteed Delivery before the Expiration
Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
The Company will not accept any alternative, conditional or contingent
tenders, nor will it purchase any fractional Shares. All tendering shareholders,
by execution of this Letter of Transmittal (or a facsimile of it), waive any
right to receive any notice of the acceptance of their tender.
3. Inadequate Space. If the space provided in the box captioned
"Description of Shares Tendered" is inadequate, the certificate numbers and/or
the number of Shares should be listed on a separate signed schedule and attached
to this Letter of Transmittal.
4. Partial Tenders and Unpurchased Shares. (Not applicable to shareholders
who tender by book-entry transfer.) If fewer than all of the Shares evidenced by
any certificate are to be tendered, fill in the number of Shares which are to be
tendered in the column entitled "Number of Shares Tendered." In such case, if
any tendered Shares are purchased, a new certificate for the remainder of the
Shares evidenced by the old certificate(s) will be issued and sent to the
registered holder(s), unless otherwise specified in the "Special Payment
Instructions" or "Special Delivery Instructions" box on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by the certificate(s) listed and delivered to the Depositary are
deemed to have been tendered unless otherwise indicated.
5. Indication of Price at Which Shares Are Being Tendered. For Shares to be
validly tendered, the shareholder must check the box indicating the price per
Share at which he is tendering Shares under "Price (In Dollars) Per Share at
Which Shares Are Being Tendered" on this Letter of Transmittal. Only one box may
be checked. If more than one box is checked, or if no box is checked (except as
otherwise provided herein), there is no valid tender of Shares. A shareholder
wishing to tender portions of his Share holdings at different prices must
complete a separate Letter of Transmittal for each price at which he wishes to
tender each such portion of his Shares. The same Shares cannot be tendered
(unless previously validly withdrawn as provided in Section 4 of the Offer to
Purchase) at more than one price.
6. Signatures on Letter of Transmittal, Stock Powers, and Endorsements.
(a) If this Letter of Transmittal is signed by the registered holder(s)
of the Shares tendered hereby, the signature(s) must correspond exactly with
the name(s) as written on the face of the certificate without any change
whatsoever.
(b) If the Shares are registered in the names of two or more joint
holders, each such holder must sign this Letter of Transmittal.
(c) If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles of it) as there are different
registrations of certificates.
<PAGE>
(d) When this Letter of Transmittal is signed by the registered
holder(s) of the Shares listed and transmitted hereby, no endorsements of
certificate(s) representing such Shares or separate stock powers are
required unless payment is to be made, or the certificate(s) for Shares not
tendered or not purchased are to be issued, to a person other than the
registered holder(s). If this Letter of Transmittal is signed by a person
other than the registered holder(s) of the certificate(s) listed, or if
payment is to be made or certificate(s) must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of
the registered holder(s) appear(s) on the certificate(s), and any
signature(s) on such certificate(s) or stock power(s) must be guaranteed by
an Eligible Institution. See Instruction 1.
(e) If this Letter of Transmittal or any certificates or stock powers
are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity for the registered holder(s) of the certificates
listed, such persons should so indicate when signing and must submit proper
evidence satisfactory to the Company of their authority so to act.
7. Stock Transfer Taxes. Except as provided in this Instruction, no stock
transfer tax stamps or funds to cover such stamps need accompany this Letter of
Transmittal. The Company will pay or cause to be paid any stock transfer taxes
payable on the transfer to it of Shares purchased pursuant to the Offer. If,
however:
(a) payment of the Purchase Price is to be made to any person other than
the registered holder(s);
(b) Shares not tendered or not accepted for purchase are to be
registered in the name of any person other than the registered holder(s); or
(c) tendered certificates are registered in the name of any person other
than the person(s) signing this Letter of Transmittal;
then the Depositary will deduct from the Purchase Price the amount of any stock
transfer taxes (whether imposed on the registered holder, such other person or
otherwise) payable on account of the transfer to such person unless satisfactory
evidence of the payment of such taxes, or an exemption from them, is submitted.
8. Special Payment and Delivery Instructions. If certificate(s) for Shares
not tendered or not purchased and/or check(s) are to be issued in the name of a
person other than the signer of the Letter of Transmittal or if such
certificate(s) and/or check(s) are to be sent to someone other than the signer
of the Letter of Transmittal or to the signer at a different address, the boxes
captioned "Special Payment Instructions" and/or "Special Delivery Instructions"
on this Letter of Transmittal should be completed and signatures must be
guaranteed as described in Instructions 1 and 6.
9. Order of Purchase in Event of Proration. As described in Section 1 of
the Offer to Purchase, shareholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase may
have an effect on the federal income tax classification of any gain or loss on
the Shares purchased. See Section 1 of the Offer to Purchase.
10. Irregularities. The Company will determine, in its sole discretion, all
questions as to the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares, and its determination shall be
final and binding on all parties. The Company reserves the absolute right to
reject any or all tenders determined by it not to be in proper form or the
acceptance of which or payment for which may, in the opinion of the Company's
counsel, be unlawful. The Company also reserves the absolute right to waive any
of the conditions of the Offer or any defects or irregularities in the tender of
any particular Shares, and the Company's interpretation of the terms of the
offer (including these instructions) will be final and binding on all parties.
No tender of Shares will be deemed to be validly made until all defects and
irregularities have been cured or waived. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as the
Company shall determine. None of the Company, the Depositary nor any other
person is or will be obligated to give notice of any defects or irregularities
in tenders, nor shall any of them incur any liability for failure to give any
such notice.
11. Questions and Requests for Assistance and Additional Copies. Questions
and requests for assistance may be directed to, or additional copies of the
offer to Purchase, the Notice of Guaranteed Delivery, and this Letter of
Transmittal may be obtained from the Information Agent at its address and
telephone number set forth at the end of this Letter of Transmittal or from your
broker, dealer, commercial bank or trust company.
12. Substitute Form W-9 and Form W-8. Shareholders other than corporations
and certain foreign individuals may be subject to backup federal income tax
withholding. Each such tendering shareholder or other payee who does not
otherwise establish to the satisfaction of the Depositary an exemption from
backup federal income tax withholding is required to provide the Depositary with
a correct taxpayer identification number ("TIN") on Substitute Form W-9 which is
provided as a part of this Letter of Transmittal, and to indicate that the
shareholder or other payee is not subject to backup withholding by checking the
box in Part 2 of the form. For an individual, his TIN will generally be his
social security number. Failure to provide the information on the form or to
check the box in Part 2 of the form may subject the tendering shareholder or
other payee to 31% backup federal income tax withholding on the payments made to
the shareholder or other payee with respect to Shares purchased pursuant to the
Offer and to a $50 penalty imposed by the Internal Revenue Service. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained. The
box in Part 3 of the form may be checked if the tendering shareholder or other
payee has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 3 is checked and the Depositary
is not provided with a TIN within sixty (60) days, the Depository will withhold
31% on all such payments thereafter until a TIN is provided to the Depositary.
Shareholders who are foreign individuals should submit Form W-8 to certify that
they are exempt from backup withholding, unless Instruction 13 applies. Form W-8
may be obtained from the Depositary. For additional information concerning
Substitute Form W-9, see the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9."
<PAGE>
13. Withholding on Foreign Shareholders. The Depositary will withhold
federal income taxes equal to 30% of the gross payments payable to a foreign
shareholder or his agent unless the Depositary determines that a reduced rate of
withholding or an exemption from withholding is applicable. (Exemption from
backup withholding does not exempt a foreign shareholder from the 30%
withholding.) For this purpose, a foreign shareholder is any shareholder that is
not (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, (iii) an estate the income
of which is subject to United States federal income taxation regardless of the
source of such income, or (iv) any trust if a court within the United States is
able to exercise primary supervision over the administration of the trust, and
one or more United States trustees have authority to control all substantial
decisions relating to the trust. The Depositary will determine a shareholder's
status as a foreign shareholder and eligibility for a reduced rate of, or an
exemption from, withholding by reference to the shareholder's address and to any
outstanding certificates or statements concerning eligibility for a reduced rate
of, or exemption from, withholding on the grounds that the gross proceeds paid
pursuant to the Offer are effectively connected with the conduct of a trade or
business within the United States, a foreign shareholder must deliver to the
Depositary a properly executed Form 4224. Such form can be obtained from the
Depositary. A foreign shareholder who has not previously submitted the
appropriate certificates or statements with respect to a reduced rate of, or
exemption from, withholding for which such shareholder may be eligible should
consider doing so in order to avoid excess withholding. A foreign shareholder
may be eligible to obtain a refund of tax withheld if such shareholder meets one
of the three tests for capital gain or loss treatment described in Section 13 of
the Offer to Purchase or is otherwise able to establish that no tax or reduced
amount of tax was due. Foreign shareholders are advised to consult their tax
advisors regarding the application of federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and the refund
procedures.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE OF IT
(TOGETHER WITH CERTIFICATES) FOR SHARES OR CONFIRMATION OF BOOK-ENTRY TRANSFER
AND ALL OTHER REQUIRED DOCUMENTS) OR, IF APPLICABLE, THE NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY BEFORE THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under the United States federal income tax law, a shareholder whose tendered
Shares are accepted for payment generally is required by law to provide the
Depositary with such shareholder's correct TIN on Substitute Form W-9 below. If
the Depositary is not provided with the correct TIN, the Internal Revenue
Service may subject the shareholder or other payee to a $50 penalty. In
addition, payments that are made to such shareholder or other payee with respect
to Shares purchased pursuant to the Offer may be subject to backup withholding.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the shareholder must submit a Form W-8, signed under penalties of
perjury, attesting to the individual's exempt status. A Form W-8 can be obtained
from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the shareholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payment made to a shareholder or other
payee with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of the shareholder's correct TIN by completing
the form below, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such shareholder is awaiting a TIN) and that:
(a) the shareholder has not been notified by the Internal Revenue
Service that the shareholder is subject to backup withholding as a result of
failure to report all interest or dividends; or
(b) the Internal Revenue Service has notified the shareholder that the
shareholder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the registered holder of
the Shares. If the Shares are in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
<PAGE>
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------
PAYER'S NAME:
- -----------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN Social Security Number
FORM W-9 THE BOX AT RIGHT AND CERTIFY BY OR ______________________________
SIGNING AND DATING BELOW. Employer Identification Number
----------------------------------------------------------------------------
PART 2 -- Check the box if you are NOT subject to
DEPARTMENT OF THE backup withholding under the provisions of Section
TREASURY 3406(a)(1)(C) of the Internal Revenue Code because
INTERNAL REVENUE (1) you are exempt from backup withholding, or (2)
SERVICE you have not been notified by the Internal Revenue
Service that you are subject to backup withholding
as a result of failure to report all interest or
dividends, or (3) the Internal Revenue Service has
notified you that you are no longer subject to
backup withholding.
- ------------------------------------------------------------------------------------------------------
CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I
Payer's Request for CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM
Taxpayer Identification IS TRUE, CORRECT, AND COMPLETE.
Number (TIN) SIGNATURE __________________________________________________________________
DATE _______________________________________________________________________
PART 3 -- Awaiting TIN / /
- ------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECK THE BOX IN PART 3
OF SUBSTITUTE FORM W-9.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (a) I have mailed or delivered
an application to receive a Taxpayer Identification Number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a Taxpayer
Identification Number within sixty (60) days, 31% of all reportable payments
made to me thereafter will be withheld until I provide a number.
Signature ______________________________________________ Date __________________
- --------------------------------------------------------------------------------
Facsimile copies of the Letter of Transmittal will be accepted from Eligible
Institutions. The Letter of Transmittal and certificates for Shares and any
other required documents should be sent or delivered by each tendering
shareholder or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
<PAGE>
THE DEPOSITARY
REGISTRAR AND TRANSFER COMPANY
By Mail or Overnight Courier: Facsimile Transmission:
10 Commerce Drive (908) 497-2312
Cranford, New Jersey 07016
(for Eligible Institutions Only)
Confirm by Telephone:
(800) 368-5948
By Hand:
c/o Depository Trust Company
Transfer Agent Drop
55 Water Street, 1st Floor
New York, New York 10041-0099
Any questions or requests for assistance or for additional copies of the
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone number and
address set forth below. A tendering shareholder may also contact his broker,
dealer, commercial bank or trust company for assistance concerning the Offer. In
order to confirm the delivery of his Shares, a tendering shareholder should
contact the Depositary.
The Information Agent:
KISSEL-BLAKE INC.
110 WALL STREET, 11TH FLOOR
NEW YORK, NEW YORK 10005
CALL TOLL FREE:
(800) 554-7733
BANKS AND BROKERAGE FIRMS, PLEASE CALL:
(212) 344-6733
June 27, 1997
PATRIOT BANK CORP.
Offer To Purchase For Cash
Up to 750,000 Shares of its Common Stock
at a Purchase Price Not Greater
than $18.00 Nor Less than $16.50 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN
TIME, ON MONDAY, JULY 28, 1997, UNLESS THE OFFER IS EXTENDED.
June 27, 1997
To: Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
Patriot Bank Corp. a Delaware corporation (the "Company"), has appointed us
to act as Information Agent in connection with its offer to purchase up to
750,000 shares of its Common Stock, par value $.01 per share (the "Shares") at
prices, net to the seller in cash, not greater than $18.00 nor less than $16.50
per share, specified by tendering shareholders, upon the terms and subject to
the conditions set forth in its Offer to Purchase, dated June 27, 1997, and the
related Letter of Transmittal (which together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per share price (not greater than $18.00 nor less than $16.50
per share) that it will pay for Shares validly tendered and not withdrawn
pursuant to the Offer (the "Purchase Price"), taking into account the number of
Shares so tendered and the prices specified by tendering shareholders. The
Company will select the lowest Purchase Price that will allow it to purchase
750,000 Shares (or such lesser number of Shares as are validly tendered and not
withdrawn at prices not greater than $18.00 nor less than $16.50 per Share)
pursuant to the Offer, or such greater number as the Company may elect to
purchase. All Shares validly tendered and not withdrawn at prices at or below
the Purchase Price will be purchased at the Purchase Price, net to the seller in
cash, upon the terms and subject to the conditions of the Offer, including the
proration terms thereof. See Section 1 of the Offer to Purchase.
If, prior to the Expiration Date (as defined in the Offer to Purchase), more
than 750,000 Shares are validly tendered and not withdrawn at or below the
Purchase Price, the Company will, upon the terms and subject to the conditions
of the Offer, buy Shares on a pro rata basis from all shareholders whose Shares
are validly tendered and not withdrawn at or below the Purchase Price.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6 OF THE
OFFER TO PURCHASE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase, dated June 27, 1997;
2. Letter to Clients that may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
3. Letter dated June 27, 1997, from Joseph W. Major, President and Chief
Operating Officer of the Company, to shareholders of the Company;
4. Letter of Transmittal for your use and for the information of your
clients (together with accompanying Substitute Form W-9 and guidelines); and
5. Notice of Guaranteed Delivery to be used to accept the Offer if the
Share certificates and all other required documents cannot be delivered to
the Depositary by the Expiration Date or if the procedure for book-entry
transfer cannot be completed on a timely basis.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME,
ON MONDAY, JULY 28, 1997, UNLESS THE OFFER IS EXTENDED.
No fees or commissions will be payable to brokers, dealers or any person for
soliciting tenders of Shares pursuant to the Offer other than fees paid to the
Information Agent or the Depositary as described in the Offer to Purchase. The
Company will, however, upon request, reimburse you for customary mailing and
handling expenses incurred by you in forwarding any of the enclosed materials to
the beneficial owners of Shares held by you as a nominee or in a fiduciary
capacity. The Company will pay or cause to be paid any stock transfer taxes
applicable to its purchase of Shares, except as otherwise provided in
Instruction 7 of the Letter of Transmittal.
<PAGE>
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either certificates representing the tendered Shares or
confirmation of their book-entry transfer all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3, "Procedure for Tendering Shares," of the Offer to
Purchase, tenders may be made without the concurrent deposit of stock
certificates or concurrent compliance with the procedure for book-entry
transfer, if such tenders are made by or through a broker or dealer which is a
member firm of a registered national securities exchange, or a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office, branch or agency in the United States. Certificates
for Shares so tendered (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities described in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal and any other documents
required by the Letter of Transmittal, must be received by the Depositary within
three over-the-counter trading days after timely receipt by the Depositary of a
properly completed and duly executed Notice of Guaranteed Delivery.
Additional copies of the enclosed material may be obtained from, and any
inquiries you may have with respect to the Offer should be addressed to, the
undersigned, telephone: (800) 554-7733.
Very truly yours,
Kissel-Blake Inc.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION
WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
PATRIOT BANK CORP.
Offer To Purchase For Cash
Up to 750,000 Shares of its Common Stock
at a Purchase Price Not Greater
than $18.00 Nor Less than $16.50 Per Share
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated June 27,
1997 and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the Offer by Patriot Bank Corp., a Delaware
corporation (the "Company"), to purchase up to 750,000 shares of its common
stock, par value $.01 per share (the "Shares") at prices net to the seller in
cash, not greater than $18.00 nor less than $16.50 per Share, specified by
tendering shareholders, on the terms and subject to the conditions of the Offer.
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share price (not greater than $18.00 nor less than $16.50
per Share) that it will pay for Shares validly tendered and not withdrawn
pursuant to the Offer (the "Purchase Price"), taking into account the number of
Shares so tendered and the prices specified by tendering shareholders. The
Company will select the lowest Purchase Price that will allow it to purchase
750,000 Shares (or such lesser number of Shares as are validly tendered and not
withdrawn at prices not greater than $18.00 nor less than $16.50 per Share)
pursuant to the Offer, or such greater number as the Company may elect to
purchase. All Shares validly tendered and not withdrawn at prices at or below
the Purchase Price will be purchased at the Purchase Price, net to the seller in
cash, upon the terms and subject to the conditions of the Offer, including the
proration terms thereof. The Company will return all other Shares, including
Shares tendered at prices greater than the Purchase Price and Shares not
purchased because of proration. See Section 1 of the Offer to Purchase.
If, prior to the Expiration Date (as defined in the offer to Purchase), more
than 750,000 Shares are validly tendered and not withdrawn at or below the
Purchase Price, the Company will, upon the terms and subject to the conditions
of the Offer, accept Shares for purchase on a pro rata basis from all
shareholders whose Shares are validly tendered and not withdrawn at or below the
Purchase Price.
We are the holder of record of Shares held for your account. As such, we are
the only ones who can tender your Shares, and then only pursuant to your
instructions. We are sending you the Letter of Transmittal for your information
only; you cannot use it to tender Shares we hold for your account.
Please instruct us as to whether you wish us to tender any or all of the
Shares we hold for your account on the terms and subject to the conditions of
the Offer.
We call your attention to the following:
1. You may tender Shares at prices, net to you in cash, not greater than
$18.00 nor less than $16.50 per Share, as indicated in the attached
instruction form.
2. You may designate the priority in which your Shares will be purchased
in the event of proration.
3. The Offer is not conditioned upon any minimum number of Shares being
tendered.
4. The Offer, proration period and withdrawal rights will expire at 5:00
p.m., Eastern time, on Monday, July 28, 1997, unless the Company extends the
Offer.
5. The Offer is for 750,000 Shares (depending on the Purchase Price),
constituting approximately 18% of the Shares outstanding as of March 31,
1997.
6. Tendering shareholders will not be obligated to pay any brokerage
commissions, solicitation fees or, subject to Instruction 7 of the Letter of
Transmittal, stock transfer taxes on the Company's purchase of Shares
pursuant to the Offer.
7. If you wish to tender portions of your Share holdings at different
prices, you must complete separate instructions for each price at which you
wish to tender each such portion of your Shares. We must submit separate
Letters of Transmittal on your behalf for each price you will accept. The
same Shares cannot be tendered at different prices unless such tendered
Shares are withdrawn and retendered.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the attached instruction form.
An envelope to return your instructions to us is enclosed. If you authorize us
to tender your Shares, we will tender all such Shares unless you specify
otherwise on the attached instruction form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE OFFER. THE
OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN TIME,
ON MONDAY, JULY 28, 1997 UNLESS THE COMPANY EXTENDS THE OFFER.
The Company is not making the Offer to, nor will it accept tenders from or
on behalf of, owners of Shares in any jurisdiction in which the Offer or its
acceptance would violate the securities, blue sky or other laws of such
jurisdiction.
<PAGE>
Instruction Form
With Respect to the
PATRIOT BANK CORP.
Offer To Purchase For Cash
Up to 750,000 Shares of Its Common Stock
at a Purchase Price Per Share Not Greater
than $18.00 Nor Less than $16.50 Per Share
The undersigned acknowledges receipt of your letter and the enclosed Offer
to Purchase, dated June 27, 1997 and related Letter of Transmittal (which
together constitute the "Offer"), in connection with the Offer by Patriot Bank
Corp., a Delaware corporation (the "Company"), to purchase up to 750,000 shares
of its common stock, par value $.01 per share (the "Shares") at prices, net to
the Seller in cash, not greater than $18.00 nor less than $16.50 per Share,
specified by tendering shareholders, upon the terms and subject to the
conditions of the Offer.
The undersigned acknowledges that the Company will, upon the terms and
subject to the conditions of the Offer, determine a single per Share price (not
greater than $18.00 nor less than $16.50 per Share) that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the lowest Purchase Price which
will allow it to purchase 750,000 Shares (or such lesser number of Shares as are
validly tendered and not withdrawn at prices not greater than $18.00 nor less
than $16.50 per Share) pursuant to the Offer, or such greater number as the
Company may elect to purchase. All Shares validly tendered and not withdrawn at
prices at or below the Purchase Price will be purchased at the Purchase Price,
net to the seller in cash, upon the terms and subject to the conditions of the
Offer, including the proration terms thereof. The Company will return all other
Shares. See Section 1 of the Offer to Purchase.
The undersigned hereby instructs you to tender to the Company the number of
Shares indicated below or, if no number is indicated, all Shares you hold for
the account of the undersigned, at the price per Share indicated below, pursuant
to the terms and subject to the conditions of the Offer. The Company will return
Shares tendered at prices greater than the Purchase Price and Shares not
purchased because of proration.
Aggregate number of Shares to be tendered by you
for the account of the undersigned:
________________ Shares
* Unless otherwise indicated, all of the Shares held for the account of the
undersigned will be tendered.
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT
WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE
THAN ONE PRICE, USE A SEPARATE
INSTRUCTION FORM FOR EACH PRICE SPECIFIED.
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED (EXCEPT AS OTHERWISE PROVIDED HEREIN),
THERE IS NO VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
/ / $16.5000 / / 16.9375 / / 17.3125 / / 17.6875
/ / 16.5625 / / 17.0000 / / 17.3750 / / 17.7500
/ / 16.6250 / / 17.0625 / / 17.4375 / / 17.8125
/ / 16.6875 / / 17.1250 / / 17.5000 / / 17.8750
/ / 16.7500 / / 17.1875 / / 17.5625 / / 17.9375
/ / 16.8125 / / 17.2500 / / 17.6250 / / 18.0000
/ / 16.8750
- --------------------------------------------------------------------------------
SIGNATURE BOX
Signature(s) _________________________________________________________________
Dated __________________________________________________________________, 1997
Name(s) and Address(es) ______________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please Print)
Area Code and Telephone Number _______________________________________________
Taxpayer Identification or Social Security Number: ___________________________
NOTICE OF GUARANTEED DELIVERY
of
Shares of Common Stock
of
PATRIOT BANK CORP.
This form or a facsimile of it must be used to accept the Offer, as defined
below, if:
(a) certificates for common stock, par value $.01 per share (the
"Shares"), of Patriot Bank Corp., a Delaware corporation, are not
immediately available or certificates for Shares and all other required
documents cannot be delivered to the Depositary before the Expiration Date
(as defined in Section 1 of the Offer to Purchase, as defined below); or
(b) Shares cannot be delivered on a timely basis pursuant to the
procedure for book-entry transfer.
This form or a facsimile of it, signed and properly completed, may be
delivered by hand, mail, telegram or facsimile transmission to the Depositary.
See Section 3 of the Offer to Purchase.
TO: REGISTRAR AND TRANSFER COMPANY, DEPOSITARY
By Mail or Overnight Courier: Facsimile Transmission:
10 Commerce Drive (908) 497-2312
Cranford, New Jersey 07016 (for Eligible Institutions Only)
Confirm by Telephone:
(800) 368-5948
By Hand:
c/o Depository Trust Company
Transfer Agent Drop
55 Water Street, 1st Floor
New York, New York 10041-0099
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THAT LISTED ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY
Ladies and Gentlemen:
The undersigned hereby tenders to Patriot Bank Corp., at the price per Share
indicated below, net to the seller in cash, upon the terms and conditions set
forth in the Offer to Purchase, dated June 27, 1997 (the "Offer to Purchase")
and the related Letter of Transmittal (which together constitute the "Offer"),
receipt of which is hereby acknowledged, ____________ Shares pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT
WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE
THAN ONE PRICE, USE A SEPARATE
LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED.
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED (EXCEPT AS OTHERWISE PROVIDED HEREIN),
THERE IS NO VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
/ / $16.5000 / / 16.9375 / / 17.3125 / / 17.6875
/ / 16.5625 / / 17.0000 / / 17.3750 / / 17.7500
/ / 16.6250 / / 17.0625 / / 17.4375 / / 17.8125
/ / 16.6875 / / 17.1250 / / 17.5000 / / 17.8750
/ / 16.7500 / / 17.1875 / / 17.5625 / / 17.9375
/ / 16.8125 / / 17.2500 / / 17.6250 / / 18.0000
/ / 16.8750
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CERTIFICATE NOS. (IF AVAILABLE):
______________________________________________________________________________
______________________________________________________________________________
Name(s): _____________________________________________________________________
______________________________________________________________________________
(Please type or print)
Address(es): _________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Zip Code)
Area Code and Telephone Number: ______________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Sign Here)
Dated: _________________________________________________________________, 1997
If Shares will be tendered by book-entry transfer, check box of applicable
Book-Entry Depository Facility:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number: ______________________________________________________________
- --------------------------------------------------------------------------------
GUARANTEE
The undersigned is (1) a member firm of a registered securities exchange;
(2) a member of the National Association of Securities Dealers, Inc.; or (3) a
commercial bank or trust company having an office, branch or agency in the
United States, and represents that:
(a) the above-named person(s) has a "net long position" in Shares or
"equivalent securities" at least equal to the Shares tendered within the
meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934,
as amended; and
(b) such tender of Shares complies with such Rule 14e-4;
and guarantees that the Depositary will receive certificates for the Shares
tendered hereby in proper form for transfer, or Shares will be tendered pursuant
to the procedure for book-entry transfer at The Depository Trust Company or
Philadelphia Depository Trust Company, in any case, together with a properly
completed and duly executed Letter of Transmittal and any other documents
required by the Letter of Transmittal (or a manually signed facsimile of them),
all within three over-the-counter trading days after the day the Depositary
receives this Notice.
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Name of Firm: ________________________________________________________________
Address: _____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Area Code and Telephone Number: ______________________________________________
______________________________________________________________________________
Authorized Signature
Name: ________________________________________________________________________
(Please Print)
Title: _______________________________________________________________________
Dated: _________________________________________________________________, 1997
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[LETTERHEAD OF PATRIOT BANK CORP.]
President
and Chief Operating Officer
June 27, 1997
To Our Shareholders:
Patriot Bank Corp. (the "Company") is offering to purchase 750,000 shares
(approximately 18% of its currently outstanding shares) of its common stock from
its shareholders at a cash price not greater than $18.00 nor less than $16.50
per share. The Company is conducting the Offer through a procedure commonly
referred to as a "Modified Dutch Auction." This procedure allows you to select
the price within that price range at which you are willing to sell your shares
to the Company. Based upon the number of shares tendered and the prices
specified by the tendering shareholders, the Company will determine a single per
share purchase price within that price range which will allow it to buy 750,000
shares (or such lesser number of shares as are validly tendered and not
withdrawn at prices not greater than $18.00 nor less than $16.50 per share) (the
"Purchase Price"). Subject to possible proration in the event more than 750,000
shares are tendered at or below the Purchase Price, all of the shares that are
validly tendered at prices at or below that Purchase Price (and are not
withdrawn) will be purchased at that same Purchase Price, net to the selling
shareholder in cash. Because the Company is purchasing stock directly from its
shareholders, there are no brokerage commissions. All other shares that have
been tendered and not purchased will be returned to the shareholder.
The Offer proration period and withdrawal rights expire at 5:00 p.m.,
Eastern time, on Monday, July 28, 1997, unless the Offer is extended.
Neither the Company nor its Board of Directors makes any recommendation to
any shareholder as to whether to tender or refrain from tendering shares. You
must make your own decision whether to tender shares and, if so, how many shares
to tender and at which price or prices.
This Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you want to tender your shares, the instructions on
how to tender shares are also explained in detail in the enclosed materials. I
encourage you to carefully read these materials, along with a Question and
Answer Brochure that answers some of the frequently asked questions for this
type of transaction, before making any decision with respect to the Offer.
Very truly yours,
/s/ Joseph W. Major
[LETTERHEAD OF PATRIOT BANK CORP.]
NEWS RELEASE
For further information on this release call
Joseph W. Major
President and Chief Operating Officer
(610) 970-4650
or
Richard A. Elko
Executive Vice President and
Chief Financial Officer
(610) 970-4627
PATRIOT BANK CORP. ANNOUNCES
SHARE REPURCHASE OF UP TO 750,000 SHARES
Pottstown, Pa -- June 27, 1997 -- Patriot Bank Corp. (Nasdaq "PBIX"), the
parent holding company of Patriot Bank (the "Bank") will commence a "Modified
Dutch Auction" self-tender offer on June 27, 1997 for up to 750,000 common
shares, or approximately 18 percent of its 4,076,502 common shares currently
outstanding.
The offer will allow common shareholders to specify prices at which they
are willing to tender their shares at a price not greater than $18.00 and not
less than $16.50 per share. After receiving tenders, the Company will select a
single per share price that will allow it to buy up to 750,000 shares. All
shares purchased will be purchased at the company-selected price for cash, even
if tendered at a lower price. If more than the maximum number of shares sought
is tendered at or below the company-selected price, shares will be purchased pro
rata. The offer will not be conditioned on a minimum number of shares being
tendered, but will be subject to certain conditions set forth in the offering
documents.
The tender offer, proration period and withdrawal rights will expire at
5:00 p.m. on July 28, 1997 unless extended by the Company. On June 26, 1997 the
closing price of the Company's common stock was $16 5/8 on the Nasdaq National
Market.
Kissel-Blake Inc. will act as information agent for the offer.
Shareholders, in general, will be able to tender their shares free of all
brokerage commissions and stock transfer taxes, if any, which will be paid by
the Company. Each shareholder is urged to consult his tax advisor as to the
particular tax consequences of the tender offer to such shareholder. The full
details of the offer, including complete instructions on the tender procedure
along with the transmittal forms and other data will be mailed to shareholders
on June 30, 1997.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATIONS TO
ANY SHAREHOLDER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES IN THE OFFER AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY
SUCH RECOMMENDATION.
Shareholders are invited to contact:
Kissel-Blake Inc.
110 Wall Street
New York, New York 10005
Telephone: (800) 554-7733
for further information on the procedures to be followed for tendering their
shares, as well as for copies of the documents concerning the share repurchase,
which will be mailed to them free of charge upon request.
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell shares of Patriot Bank Corp. common stock. The offer is made
solely by the Offer to Purchase, dated June 27, 1997, and the related Letter of
Transmittal.
QUESTIONS AND ANSWERS
ABOUT THE OFFER OF
PATRIOT BANK CORP.
TO PURCHASE FOR CASH UP TO 750,000 SHARES
OF COMMON STOCK AT A PURCHASE PRICE OF
$16.50 TO $18.00 PER SHARE
<PAGE>
QUESTIONS AND ANSWERS
ABOUT THE OFFER TO PURCHASE ITS STOCK BY
PATRIOT BANK CORP.
THE HOLDING COMPANY FOR
PATRIOT BANK
The following information is designed to answer frequently asked questions
about the offer by Patriot Bank Corp. to purchase shares of its common stock.
Shareholders are referred to the Offer to Purchase and Letter of Transmittal for
a detailed description of the terms and conditions of the offer.
Q. WHAT IS THIS OFFER TO PURCHASE?
A. Patriot Bank Corp. ("Patriot" or the "Company") is inviting its shareholders
to tender shares of its common stock, $.01 par value per share (the
"Shares"), at prices not in excess of $18.00 nor less than $16.50 per share
in cash, as specified by shareholders tendering their Shares, in the enclosed
Letter of Transmittal (the "Offer"). The Company will determine the single
per Share price, not in excess of $18.00 nor less than $16.50 per share, net
to the seller in cash (the "Purchase Price"), that it will pay for Shares,
taking into account the number of Shares tendered and the prices specified by
tendering shareholders. The Company will select the lowest Purchase Price
that will allow it to buy 750,000 Shares (or such lesser number of Shares as
are validly tendered at prices not in excess of $18.00 nor less than $16.50
per share). This type of issuer tender offer is commonly referred to as a
"Modified Dutch Auction."
Q. WHAT IS A "MODIFIED DUTCH AUCTION?"
A. A Modified Dutch Auction is a process whereby a company makes a direct tender
offer to its own shareholders to purchase a specified number of shares of its
stock within a specified price range per share. In this case, Patriot is
making a direct offer to all of its shareholders to purchase, in the
aggregate, 750,000 Shares of its common stock at a price not in excess of
$18.00 nor less than $16.50 per share. This process allows each shareholder
to elect whether he wishes to sell his stock, and the price he is willing to
sell at within the given price range. After receiving all tendered securities
at the termination of the offer, the company may choose the lowest price
within the specified range that will permit it to purchase the amount of
securities sought.
Q. WHAT WILL BE THE FINAL PURCHASE PRICE?
A. All Shares acquired in the Offer will be acquired at the Purchase Price. The
Company will select the lowest Purchase Price that will allow it to buy up to
750,000 Shares. All shareholders tendering at or below the Purchase Price
will receive the same amount. For example, if 500,000 Shares are tendered at
$16.00 per share, 250,000 shares are tendered at $16.50 per share and 500,000
are tendered at $17.00 per share, 750,000 Shares will be purchased at $16.50
per share from the persons who tendered at $16.00 through $16.50, and the
500,000 Shares tendered at $17.00 per share will be returned and not
purchased.
Q. WHAT WILL HAPPEN IF MORE THAN 750,000 SHARES ARE TENDERED AT OR BELOW THE
PURCHASE PRICE?
A. In the event more than 750,000 Shares are tendered at or below the Purchase
Price, Shares tendered at or below the Purchase Price will be subject to
proration. For example, if the Offer is oversubscribed at 110% (i.e. 825,000
are tendered at or below the Purchase Price), approximately 90% of each
tender will be fulfilled.
Q. AT WHAT PRICE MAY I TENDER MY SHARES?
A. Shareholders may elect to tender their Shares in increments of .0625 of a
dollar starting at $16.50 per share up to and including $18.00 per share. The
election as to the number of Shares and the price a shareholder is willing to
tender are to be indicated on the Letter of Transmittal.
<PAGE>
Q. DO I HAVE TO SELL MY STOCK TO THE COMPANY?
A. No. No shareholder is required to tender any of his stock for sale to the
Company. Each shareholder may individually elect to sell part or all of his
stock at the price he specifies between no less than $16.50 nor more than
$18.00 per share.
Q. HOW MUCH STOCK IS THE COMPANY ATTEMPTING TO PURCHASE?
A. The Company is offering to purchase up to 750,000 Shares of its 4,105,502
Shares outstanding or 18% of the outstanding stock.
Q. WHAT IF THE TERMS OF THE OFFER CHANGE?
A. In the event the expiration date is extended or if the terms of the Offer are
materially changed, the Company will generally give notice of the change and,
under certain circumstances, at least 10 business days from such notice,
shareholders will be able to change or withdraw their tender.
Q. WHAT HAPPENS IF I DO NOT TENDER MY STOCK TO THE COMPANY TO PURCHASE?
A. Nothing will happen if you do not tender any or all of your Shares. Your
Shares will remain outstanding without a change in the terms or ownership
rights. You will continue to own the same number of Shares without any
adjustment, and you will continue to receive the same dividend and voting
rights. However, since the Company will purchase up to 750,000 of its
outstanding Shares, the percentage of the outstanding stock that you own will
increase because the number of outstanding Shares will be reduced.
Q. CAN I TENDER PART OF MY STOCK AT DIFFERENT PRICES?
A. Yes, you can elect to tender part of your stock at one price and an
additional amount at a second price. For example, if you owned 1,500 Shares,
you could tender 500 Shares at $16.00, 500 at $16.50 and keep the remaining
500 Shares. However, you can not tender the same stock at different prices.
In the prior example, the shareholder owning 1,500 Shares can not tender
1,500 at $16.00 and 1,500 at $16.50. If you tender part of your stock at more
than one price, you should use a separate Letter of Transmittal for each
price.
Q. IS THERE A BROKERAGE FEE?
A. No. The Company will purchase stock directly from each shareholder at the
Purchase Price without the use of a broker.
Q. CAN I CHANGE OR CANCEL MY TENDER?
A. You may increase or decrease the number of Shares and/or price indicated in
the Letter of Transmittal or withdraw it entirely up until July 28, 1997.
Generally after July 28, 1997, you cannot. If you desire to change or
withdraw your tender, you are responsible to make certain that a valid
withdrawal is received by the July 28, 1997 deadline. Except as discussed in
the Offer to Purchase, tenders are irrevocable after the July 28, 1997
deadline.
Q. HOW CAN I GET MORE INFORMATION?
A. If you have a question, please call our Information Agent at (800) 554-7733
from 9:00 a.m. - 5:00 p.m., Monday through Friday.
This brochure is neither an offer to purchase nor a solicitation of an
offer to sell securities. The offer to purchase the stock of the Company is made
only by the Patriot Bank Corp. Offer to Purchase document dated June 27, 1997,
and the accompanying Letter of Transmittal.
