As filed with the Securities and Exchange Commission on December 23, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
PEEKSKILL FINANCIAL CORPORATION
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(Name of issuer)
PEEKSKILL FINANCIAL CORPORATION
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(Name of Person(s) Filing Statement)
Common Stock, $0.01 Par Value Per Share
(Title of Class of Securities)
705385 10 2
(CUSIP Number of Class of Securities)
William J. LaCalamito
Peekskill Financial Corporation
1019 Park Street
Peekskill, New York 10566
(914) 737-2777
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
Copies to:
Kip A. Weissman, P.C.
James M. Larkins, III
Silver, Freedman & Taff, L.L.P.
1100 New York Avenue, N.W.
Washington, D.C. 20005
(202) 414-6100
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(Agent for Service of Process)
December 23, 1998
(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
$13,400,000 $2,680
*Calculated solely for the purpose of determining the filing fee, based upon the
purchase of 800,000 shares at the maximum tender offer price of $16.75 per
share.
[ ] Check box if any 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: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
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Item 1. Security and Issuer.
(a) The issuer of the securities to which this Schedule 13E-4 relates
is Peekskill Financial Corporation, a Delaware corporation (the "Company"), and
the address of its principal executive office, and its mailing address, is 1019
Park Street Peekskill, New York 10566.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase
up to 800,000 shares (or such lesser number of shares as are properly tendered)
of its common stock, $0.01 par value per share (the "Shares"), 2,842,069 of
which Shares were outstanding as of December 16, 1998, at prices not in excess
of $16.75 nor less than $14.75 per Share in cash, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated December 23, 1998 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer"), copies of which are attached as Exhibits (a)(1) and
(a)(2), respectively, and incorporated herein by reference. Employees, officers
and directors of the Company may participate in the Offer on the same basis as
the Company's other stockholders. The Company has been advised that one of its
Executive Officers intends to tender Shares pursuant to the Offer. The Company
has also been advised that the Trustee of the Company's Employee Stock Ownership
Plan does not intend to tender Shares pursuant to the Offer. The information set
forth in "Introduction", "Section 1, Number of Shares; Proration" and "Section
12, Interest of Directors and Officers; Transactions and Arrangements Concerning
Shares" of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "Introduction" and "Section 8, Price
Range of Shares; Dividends" of the Offer to Purchase is incorporated herein by
reference.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
(a) The information set forth in "Section 11, Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
(a)-(j) The information set forth in "Introduction" and "Section 11,
Source and Amount of Funds," "Section 9, Purpose of the Offer; Certain Effects
of the Offer," "Section 12, Interest of Directors and Officers; Transactions and
Arrangements Concerning Shares" and "Section 13, Effects of the Offer on the
Market for Shares; Registration under the Exchange Act" of the Offer to Purchase
is incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
The information set forth in "Section 12, Interest of Directors and
Officers; Transactions and Arrangements Concerning Shares" is incorporated
herein by reference.
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Item 5. Contracts, Arrangements, Understandings or Relationships with Respect to
the Issuer's Securities.
The information set forth in "Introduction" and "Section 11, Source and
Amount of Funds," "Section 9, Purpose of the Offer; Certain Effects of the
Offer," and "Section 12, Interest of Directors and Officers; Transactions and
Arrangements Concerning Shares" of the Offer to Purchase is incorporated herein
by reference.
Item 6. Persons Retained, Employed, or to be Compensated.
The information set forth in "Introduction" and "Section 17, Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.
Item 7. Financial Condition.
(a)-(b) The information set forth in "Section 10, Certain Information
Concerning the Company" of the Offer to Purchase is incorporated herein by
reference.
Item 8. Additional Information.
(a) Not applicable.
(b) The information set forth in "Section 14, Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated
herein by reference.
(c) The information set forth in "Section 13, Effects of the Offer on
the Market for Shares; Registration under the Exchange Act" of
the Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and Letter of
Transmittal is incorporated herein by reference.
Item 9. Material to be Filed as Exhibits.
(a) (1) Form of Offer to Purchase, dated December 23, 1998
(2) Form of Letter of Transmittal (including Certification of
Taxpayer Identification Number on Form W-9).
(3) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(4) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(including the Instruction Form).
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(5) Form of Letter to Stockholders of the Company, dated
December 23, 1998, from William J. LaCalamito, President
and Chief Operating Officer of the Company.
(6) Form of Memorandum, dated December 23, 1998, to the
Company's employees.
(7) Form of Question and Answer Brochure.
(8) Text of Press Release issued by the Company, dated December
18, 1998.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule 13E-4 is true, complete and
correct.
December 23, 1998 PEEKSKILL FINANCIAL CORPORATION
By: /s/William J. LaCalamito
-----------------------------------------
William J. LaCalamito,
President, and Chief Operating Officer
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Exhibit (a)(1)
PEEKSKILL FINANCIAL CORPORATION
Offer to Purchase for Cash
Up to 800,000 Shares of its
Common Stock, Par Value $0.01 Per Share
At a Purchase Price Not Greater Than $16.75
Nor Less Than $14.75 Per Share
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THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 4:00 P.M., EASTERN STANDARD TIME, ON JANUARY 27, 1999,
UNLESS THE OFFER IS EXTENDED
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Peekskill Financial Corporation, a Delaware corporation (the "Company"),
invites its Stockholders to tender shares of its Common Stock, par value $0.01
per share (the "Shares"), at prices, net to the seller in cash, without interest
thereon, not greater than $16.75 nor less than $14.75 per Share specified by
such tendering Stockholders, 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 a single per Share price (not greater
than $16.75 nor less than $14.75 per Share) that it will pay for the Shares
validly tendered pursuant to the Offer and not withdrawn (the "Purchase Price"),
taking into consideration the number of Shares so tendered and the prices
specified by the tendering Stockholders. The Company will select the lowest
Purchase Price that will enable it to purchase 800,000 Shares (or such lesser
number of Shares as are validly tendered and not withdrawn at prices not greater
than $16.75 nor less than $14.75 per Share) pursuant to the Offer. The Company
will purchase all Shares validly tendered at prices at or below the Purchase
Price and not withdrawn on or prior to the Expiration Date (as defined in
Section 1), upon the terms and subject to the conditions of the Offer, including
the provisions thereof relating to proration and conditional tenders described
herein. The Purchase Price will be paid in cash, net to the seller, without
interest thereon, with respect to all Shares purchased. All Shares tendered at
prices in excess of the Purchase Price, Shares not purchased because of
proration and Shares that were conditionally tendered and not accepted for
purchase will be returned. Stockholders must complete the section of the Letter
of Transmittal relating to the price at which they are tendering Shares in order
to validly tender Shares.
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The Offer is not conditioned upon any minimum number of shares being
tendered. The offer is, however, subject to other conditions. See Section 7.
---------------------
IMPORTANT
Any Stockholder desiring to tender all or any portion of his or her Shares
should either (i) complete and sign the Letter of Transmittal or a facsimile
thereof in accordance with the instructions in the Letter of Transmittal, mail
or deliver it and any other required documents to Registrar and Transfer Company
(the "Depositary"), and either mail or deliver the certificates representing
Shares to be tendered to the Depositary along with the Letter of Transmittal or
deliver such Shares pursuant to the procedure for book-entry transfer set forth
in Section 3 or (ii) request his or her broker, dealer, commercial bank, trust
company or nominee to effect the transaction for him or her. A Stockholder whose
Shares are registered in the name of a broker, dealer, commercial bank, trust
company or nominee must contact such broker, dealer, commercial bank, trust
company or nominee if he or she desires to tender such Shares.
The Board of Directors of the Company has unanimously approved the offer.
Neither the Company nor its Board of Directors makes any recommendation to any
Stockholder as to whether to tender all or any Shares. Each Stockholder must
make his or her own decision as to whether to tender shares and, if so, how many
to tender and at what price. Directors, officers and employees of the Company
who own Shares may participate in the Offer on the same basis as the Company's
other Stockholders. The Company has been advised that one of its Executive
Officers intends to tender Shares pursuant to the Offer. The Company has been
advised that the Trustee of the Company's Employee Stock Ownership Plan does not
intend to tender any Shares pursuant to the Offer.
The Dealer Manager for the Offer is:
CAPITAL RESOURCES, INC.
The date of this Offer to Purchase is December 23, 1998
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As of December 16, 1998, the Company had 2,842,069 Shares issued and
outstanding and 389,476 Shares issuable upon exercise of outstanding stock
options (110,596 of which were exercisable and 278,880 of which were not yet
vested) under the Company's 1996 Stock Option and Incentive Plan. The 800,000
Shares that the Company is offering to purchase pursuant to the Offer represent
approximately 28% of the Shares then outstanding. The Shares are traded on the
Nasdaq National Market under the symbol "PEEK." On December 17, 1998, the
closing price of the Shares as reported on the Nasdaq National Market was $13.75
per Share. Stockholders are urged to obtain current market quotations for the
Shares.
To tender shares properly, Stockholders must complete the section of the
Letter of Transmittal relating to the price at which they are tendering shares.
Questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials may
be directed to the Information Agent or the Dealer Manager at the address and
telephone numbers set forth on the back cover of this Offer to Purchase, and
such copies will be furnished promptly at the Company's expense. Stockholders
may also contact their local broker, dealer, commercial bank or trust company
for assistance concerning the Offer.
No person has been authorized to make any recommendation on behalf of the
Company as to whether Stockholders should tender Shares pursuant to the Offer.
No person has been authorized to give any information or to make any
representations in connection with the Offer other than those contained herein
or in the related Letter of Transmittal. If given or made, such recommendation
and such other information and representations must not be relied upon as having
been authorized by the Company.
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TABLE OF CONTENTS
Section Page
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INTRODUCTION................................................................. 1
1. NUMBER OF SHARES; PRORATION.............................................. 2
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES.............................. 3
3. PROCEDURE FOR TENDERING SHARES........................................... 3
4. WITHDRAWAL RIGHTS........................................................ 5
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE........... 6
6. CONDITIONAL TENDER OF SHARES............................................. 7
7. CERTAIN CONDITIONS OF THE OFFER.......................................... 7
8. PRICE RANGE OF SHARES; DIVIDENDS......................................... 9
9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER....................... 9
10. CERTAIN INFORMATION CONCERNING THE COMPANY............................... 11
11. SOURCE AND AMOUNT OF FUNDS............................................... 17
12. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING SHARES......................................... 17
13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION
UNDER THE EXCHANGE ACT................................................. 19
14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.............................. 19
15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................. 20
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS...................... 22
17. FEES AND EXPENSES........................................................ 23
18. MISCELLANEOUS............................................................ 23
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To the Holders of Shares of Common Stock of
Peekskill Financial Corporation
INTRODUCTION
Peekskill Financial Corporation, a Delaware corporation (the
"Company"), invites its Stockholders to tender shares of its Common Stock, par
value $0.01 per share (the "Shares") at a price, net to the seller in cash,
without interest thereon, not greater than $16.75 nor less than $14.75 per Share
specified by such tendering Stockholders, 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 a single per Share price (not greater than
$16.75 nor less than $14.75 per Share) that it will pay for the Shares validly
tendered pursuant to the Offer and not withdrawn (the "Purchase Price"), taking
into account the number of Shares so tendered and the prices specified by
tendering Stockholders. The Company will select the lowest Purchase Price that
will enable it to purchase 800,000 Shares (or such lesser number of Shares as is
validly tendered and not withdrawn at prices not greater than $16.75 nor less
than $14.75 per Share) pursuant to the Offer. The Company will purchase all
Shares validly tendered at prices at or below the Purchase Price and not
withdrawn on or prior to the Expiration Date (as defined in Section 1), upon the
terms and subject to the conditions of the Offer, including the provisions
relating to proration and conditional tenders described below. The Purchase
Price will be paid in cash, net to the seller, without interest thereon, with
respect to all Shares purchased. Shares tendered at prices in excess of the
Purchase Price, Shares not purchased because of proration and Shares that were
conditionally tendered and not accepted for purchase will be returned.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions. See
Section 7.
If more than 800,000 Shares have been validly tendered at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date, the Company
will purchase Shares first from Stockholders who owned beneficially as of the
close of business on December 16, 1998, and continue to own beneficially as of
the Expiration Date, an aggregate of fewer than 100 Shares who properly tender
all their Shares at or below the Purchase Price, and then on a pro rata basis
from all other Stockholders who validly tender Shares at or below the Purchase
Price, other than Stockholders who tender conditionally, and for whom the
condition is not satisfied. See Sections 1, 2 and 6. Tendering Stockholders will
not be obligated to pay brokerage commissions, solicitation fees or, subject to
the Instructions to the Letter of Transmittal, stock transfer taxes on the
purchase of Shares by the Company. The Company will pay the expenses of Capital
Resources, Inc. (the "Dealer Manager"), Regan & Associates, Inc. (the
"Information Agent") and Registrar & Transfer Co. (the "Depositary") incurred in
connection with the Offer. See Section 17. Any tendering Stockholder or other
payee who fails to complete and sign the substitute Form W-9 that is included in
the Letter of Transmittal may be subject to United States federal income tax
backup withholding equal to 31% of the gross proceeds payable to such
Stockholder or other payee pursuant to the Offer. See Sections 3 and 15.
As of December 16, 1998, the Company's Employee Stock Ownership Plan
("ESOP") held 40,250 Shares in accounts for participants therein as well as
286,982 unallocated Shares. The Company has been advised that the Trustee of the
ESOP does not intend to tender any Shares pursuant to the Offer.
The Board of Directors has unanimously approved the Offer. Neither the
Company nor its Board of Directors, however, makes any recommendation to any
Stockholder as to whether to tender all or any Shares. Each Stockholder must
make his or her own decision as to whether to tender Shares and, if so , how
many Shares to tender and at what price. Directors, officers and employees of
the Company who own Shares may participate in the Offer on the same basis as the
Company's other Stockholders. The Company has been advised that one of its
Executive Officers intends to tender Shares pursuant to the Offer. The Company
has been advised that the Trustee of the ESOP does not intend to tender any
Shares pursuant to the Offer.
As of December 16, 1998, the Company had 2,842,069 Shares issued and
outstanding, and 389,476 Shares issuable upon exercise of outstanding stock
options (110,596 of which were exercisable and 278,880 of which were not vested)
under the Company's 1996 Stock Option and Incentive Plan. The 800,000 Shares
that the Company is offering to purchase pursuant to the Offer represent
approximately 28% of the Shares then outstanding.
The Shares are traded on the Nasdaq National Market ("NNM"). The Shares
trade under the symbol "PEEK." On December 17, 1998, the closing price of the
Shares on the NNM was $13.75 per Share. See Section 8.
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Stockholders are urged to obtain current market quotations for the Shares.
Questions and requests for assistance may be directed to the Dealer Manager or
Information Agent. The Company has been advised that one of its Executive
Officers intends to tender Shares pursuant to the Offer. The Company has been
advised that the Trustee of the Company's Employee Stock Ownership Plan does not
intend to tender any Shares pursuant to the Offer.
1. NUMBER OF SHARES; PRORATION
Upon the terms and subject to the conditions described herein and in
the Letter of Transmittal, the Company will purchase up to 800,000 Shares that
are validly tendered on or prior to the Expiration Date (as defined below) (and
not properly withdrawn in accordance with Section 4) at a price (determined in
the manner set forth below) not greater than $16.75 nor less than $14.75 per
Share. The later of 4:00 p.m., Eastern Standard Time, on January 27, 1999, or
the latest time and date to which the Offer is extended pursuant to Section 16,
is referred to herein as the "Expiration Date." If the Offer is oversubscribed
as described below, only Shares tendered at or below the Purchase Price on or
prior to the Expiration Date will be eligible for proration. The proration
period also expires on the Expiration Date.
The Company will determine the Purchase Price taking into consideration
the number of Shares so tendered and the prices specified by tendering
Stockholders. The Company will select the lowest Purchase Price that will enable
it to purchase 800,000 Shares (or such lesser number of Shares as is validly
tendered and not withdrawn at prices not greater than $16.75 nor less than
$14.75 per Share) pursuant to the Offer. Subject to Section 16, the Company
reserves the right to purchase more than 800,000 Shares pursuant to the Offer,
but does not currently plan to do so. The Offer is not conditioned on any
minimum number of Shares being tendered. The Offer is, however, subject to
certain other conditions. See Section 7.
In accordance with Instruction 5 of the Letter of Transmittal, each
Stockholder who wishes to tender Shares must specify the price (not greater than
$16.75 nor less than $14.75 per Share) at which the Stockholder is willing to
have the Company purchase such Shares or, if such Stockholder does not wish to
specify a Purchase Price, he or she may check the box on the Letter of
Transmittal indicating that the Shares are being tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer. As promptly
as practicable following the Expiration Date, the Company will determine the
Purchase Price (not greater than $16.75 nor less than $14.75 per Share) that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering Stockholders. All Shares purchased pursuant to the Offer will be
purchased at the Purchase Price. All Shares not purchased pursuant to the Offer,
including Shares tendered at prices greater than the Purchase Price and Shares
not purchased because of proration or because they were conditionally tendered
and not accepted for purchase, will be returned to the tendering Stockholders at
the Company's expense as promptly as practicable following the Expiration Date.
Upon the terms and subject to the conditions of the Offer, if 800,000
or fewer Shares have been validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date, the Company will purchase all
such Shares. Upon the terms and subject to the conditions of the Offer, if more
than 800,00 Shares have been validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date, the Company will purchase
Shares in the following order of priority:
(a) first, all Shares validly tendered at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date by
or on behalf of any Stockholder who owned beneficially, as of the close
of business on December 16, 1998 and continues to own beneficially as
of the Expiration Date, an aggregate of fewer than 100 Shares and who
validly tenders all of such Shares (partial and conditional tenders
will not qualify for this preference) and completes the box captioned
"Odd Lots" on the Letter of Transmittal; and
(b) then, after purchase of all of the foregoing Shares,
subject to the conditional tender provisions described in Section 6,
all other Shares validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date on a pro rata basis,
if necessary (with appropriate adjustments to avoid purchases of
fractional Shares).
If proration of tendered Shares is required, (i) because of the
difficulty in determining the number of Shares validly tendered, (ii) as a
result of the "odd lot" procedure described in Section 2,and (iii) as a result
of the conditional
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tender procedure described in Section 6, 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 NNM trading
days after the Expiration Date. Preliminary results of proration will be
announced by press release as promptly as practicable after the Expiration Date.
Holders of Shares may obtain such preliminary information from the Dealer
Manager or the Information Agent.
As described under "Section 15--Certain Federal Income Tax
Consequences," the number of Shares that the Company will purchase from a
Stockholder may affect the federal income tax consequences to the Stockholder of
such purchase and therefore may be relevant to a Stockholder's decision whether
to tender Shares. Each Stockholder should consult his or her own tax advisor as
to the particular federal income tax consequences to that Stockholder of
tendering Shares pursuant to the Offer and the applicability and effect of any
state, local or foreign tax laws and recent changes in applicable tax laws.
The Company expressly reserves the right, in its sole discretion, at
any time or from time to time, 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. See Section 16. There can
be no assurance, however, that the Company will exercise its right to extend the
Offer.
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, Eastern Standard time.
Copies of this Offer to Purchase and the related Letter of Transmittal
are being 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 Stockholder 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. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES
Except to the extent that the Company's purchase would result in the
delisting of the Shares on the NNM, all Shares validly tendered at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date by or on
behalf of any Stockholder who owned beneficially, as of the close of business on
December 16, 1998, and continues to own beneficially as of the Expiration Date,
an aggregate of fewer than 100 Shares, will be accepted for purchase before
proration, if any, of other tendered Shares. Partial or conditional tenders will
not qualify for this preference, and it is not available to beneficial holders
of 100 or more Shares, even if such holders have separate stock certificates for
fewer than 100 Shares. By accepting the Offer, a Stockholder owning beneficially
fewer than 100 Shares will avoid the payment of brokerage commissions and the
applicable odd lot discount payable in a sale of such Shares in a transaction
effected on a securities exchange.
As of December 16, 1998, there were approximately 161 beneficial owners
who held individually fewer than 100 Shares. Any Stockholder wishing to tender
all of his or her Shares pursuant to this Section should complete the box
captioned "Odd Lots" on the Letter of Transmittal.
3. PROCEDURE FOR TENDERING SHARES
To tender Shares validly pursuant to the Offer, a properly completed
and duly executed Letter of Transmittal or facsimile thereof, together with any
required signature guarantees and any other documents required by the Letter of
Transmittal, must be received by the Depositary at its address set forth on the
back cover of this Offer to Purchase and either (i) certificates for the Shares
to be tendered must be received by the Depositary at such address or (ii) such
Shares must be delivered pursuant to the procedures for book-entry transfer
described below (and a confirmation of such delivery received by the
Depositary), in each case on or prior to the Expiration Date.
In accordance with instruction 5 of the Letter of Transmittal, in order
to tender Shares pursuant to the Offer, a Stockholder must indicate in the
section captioned "Price (In Dollars) Per Share At Which Shares Are Being
Tendered" on the Letter of Transmittal (i) the price (in multiples of $0.25) at
which such Shares are being tendered, or (ii) that the Shares are being tendered
at the Purchase Price determined by the Company in accordance with the terms of
the Offer.
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Stockholders wishing to tender Shares at more than one price must
complete separate Letters of Transmittal for each price at which such Shares are
being tendered. The same Shares cannot be tendered at more than one price.
The Depositary will establish an account with respect to the Shares at
The Depository Trust Company ("DTC") (hereinafter referred to as the "Book-Entry
Transfer Facility") for purposes of the Offer within two business days after the
date of this Offer to Purchase, and any financial institution that is a
participant in the system of Book-Entry Transfer Facility may make delivery of
Shares by causing the Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account in accordance with the procedures of the Book-Entry
Transfer Facility. Although delivery of Shares may be effected through
book-entry transfer, a properly completed and duly executed Letter of
Transmittal or a manually signed copy thereof, or an Agent's Message (as defined
below), together with any required signature guarantees and any other required
documents, must, in any case, be transmitted to and received by the Depositary
at its address set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date. Delivery of required documents to the Book-Entry
Transfer Facility in accordance with its procedures does not constitute delivery
to the Depositary and will not constitute a valid tender.
The term "Agent's Message" means a message transmitted by the
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares, that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Company may enforce such agreement against the participant.
Except as set forth below, all signatures on a Letter of Transmittal
must be guaranteed by a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc., or
by a commercial bank, a trust company, a savings bank, a savings and loan
association or a credit union which has membership in an approved Signature
Guarantee Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"). Signatures on a Letter of Transmittal need not be
guaranteed if (a) the Letter of Transmittal is signed by the registered holder
of the Shares (which term, for the purposes of this Section, includes a
participant in any Book-Entry Transfer Facility whose name appears on a security
position listing as the holder of the Shares) tendered therewith and such holder
has not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or (b)
such Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 6 of the Letter of Transmittal.
The method of delivery of Shares and all other required documents is at
the option and risk of the tendering Stockholder. 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 timely delivery.
To prevent United States federal income tax backup withholding equal to
31% of the gross payments made pursuant to the Offer, each tendering Stockholder
must provide the Depositary with such Stockholder's correct taxpayer
identification number and certain other information by properly completing the
substitute Form W-9 included in the Letter of Transmittal. Foreign Stockholders
(as defined in Section 15) must submit a properly completed Form W-8 (which may
be obtained from the Depositary) in order to prevent backup withholding. In
general, backup withholding does not apply to corporations or to foreign
Stockholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer (as discussed in Section 15). For a discussion of
certain federal income tax consequences to tendering Stockholders, see Section
15. Each Stockholder is urged to consult with his or her own tax advisor
regarding his, her or its qualification for exemption from backup withholding
and the procedure for obtaining any applicable exemption.
It is a violation of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), for a person to tender
Shares for his or her own account unless 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 immediately convertible into, exercisable or exchangeable for
the amount of Shares tendered and will acquire such Shares for tender by
conversion, exercise or exchange of such other securities 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 on behalf of
another person. The tender of Shares pursuant to any one of the procedures
described above will constitute the tendering Stockholder's representation and
warranty that (i) such Stockholder has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Exchange Act,
and (ii) the tender of such Shares complies with
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Rule 14e-4. The Company's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the tendering Stockholder
and the Company upon the terms and subject to the conditions of the Offer.
All questions as to the Purchase Price, the form of documents, the
number of Shares to be accepted and the validity, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by the Company, in its sole discretion, which determination shall be final and
binding on all parties. The Company reserves the absolute right to reject any or
all tenders of Shares that it determines are not in proper form or the
acceptance for payment of or payment for Shares that may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any defect or irregularity in any tender of any particular Shares. None of
the Company, the Dealer Manager, the Information Agent, the Depositary or any
other person is or will be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice.
Certificates for Shares, together with a properly completed Letter of
Transmittal (or, in the case of a book-entry transfer, an Agent's Message) and
any other documents required by the Letter of Transmittal, must be delivered to
the Depositary and not to the Company. Any such documents delivered to the
Company will not be forwarded to the Depositary and therefore will not be deemed
to be properly tendered.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer may be withdrawn at any
time prior to the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after 12:00 midnight, Eastern Standard Time,
March 24, 1999 unless theretofore accepted for payment by the Company as
provided in this Offer to Purchase. If the Company extends the period of time
during which the Offer is open, is delayed in purchasing 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, on behalf of the
Company, retain all Shares tendered, and such Shares may not be withdrawn except
as otherwise provided in this Section 4, subject to Rule 13e-4(f)(5) under the
Exchange Act, which provides that the issuer making the tender offer shall
either pay the consideration offered, or return the tendered securities promptly
after the termination or withdrawal of the tender offer.
Withdrawal of Shares Held in Physical Form. Tenders of Shares made
pursuant to the Offer may not be withdrawn after the Expiration Date, except
that they may be withdrawn after 12:00 midnight, Eastern Standard Time, March
24, 1999 unless accepted for payment by the Company as provided in this Offer to
Purchase. For a withdrawal to be effective prior to that time, a Stockholder of
Shares held in physical form must provide a written, telegraphic or facsimile
transmission notice of withdrawal to the Depositary at its address set forth on
the back cover page of this Offer to Purchase before the Expiration Date, which
notice must contain: (A) the name of the person who tendered the Shares; (B) a
description of the Shares to be withdrawn; (C) the certificate numbers shown on
the particular certificates evidencing such Shares; (D) the signature of such
Stockholder executed in the same manner as the original signature on the Letter
of Transmittal (including any signature guarantee (if such original signature
was guaranteed)); and (E) if such Shares are held by a new beneficial owner,
evidence satisfactory to the Company that the person withdrawing the tender has
succeeded to the beneficial ownership of the Shares. A purported notice of
withdrawal which lacks any of the required information will not be an effective
withdrawal of a tender previously made.
Withdrawal of Shares Held with the Book-Entry Transfer Facility.
Tenders of Shares made pursuant to the Offer may not be withdrawn after the
Expiration Date, except that they may be withdrawn after midnight, Eastern
Standard Time, March 24, 1999 unless accepted for payment by the Company as
provided in this Offer to Purchase. For a withdrawal to be effective prior to
that time, a Stockholder of Shares held with the Book-Entry Transfer Facility
must (i) call his or her broker and instruct such broker to withdraw the tender
of Shares by debiting the Depositary's account at the Book-Entry Transfer
Facility for all Shares to be withdrawn; and (ii) instruct the broker to provide
a written, telegraphic or facsimile transmission notice of withdrawal to the
Depositary on or before the Expiration Date. Such notice of withdrawal shall
contain (A) the name of the person who tendered the Shares; (B) a description of
the Shares to be withdrawn; and (C) if such Shares are held by a new beneficial
owner, evidence satisfactory to the Company that the person withdrawing the
tender has succeeded to the beneficial ownership of the Shares. A purported
notice of withdrawal which lacks any of the required information will not be an
effective withdrawal of a tender previously made.
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Any permitted withdrawals of tenders of Shares may not be rescinded,
and any Shares so withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer; provided, however, that withdrawn Shares may be
re-tendered by following the procedures for tendering prior to the Expiration
Date.
All questions as to the form and validity (including time of receipt)
of any notice of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties. None
of the Company, the Dealer Manager, the Information Agent, the Depositary or any
other person is or will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer and as
promptly as practicable after the Expiration Date, the Company will determine
the Purchase Price, taking into consideration the number of Shares tendered and
the prices specified by tendering Stockholders, announce the Purchase Price, and
(subject to the proration and conditional tender provisions of the Offer) accept
for payment and pay the Purchase Price for Shares validly tendered and not
withdrawn at or below the Purchase Price. Thereafter, payment for all Shares
validly tendered on or prior to the Expiration Date and accepted for payment
pursuant to the Offer will be made by the Depositary by check as promptly as
practicable. In all cases, payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or of a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility), a properly completed and duly executed Letter of Transmittal or a
manually signed copy thereof, with any required signature guarantees, or in the
case of a book-entry delivery an Agent's Message, and any other required
documents.
For purposes of the Offer, the Company shall be deemed to have accepted
for payment (and thereby purchased), subject to proration and conditional
tenders, Shares that are validly tendered and not withdrawn as, if and when it
gives oral or written notice to the Depositary of the Company's acceptance for
payment of such Shares. 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 such proration until
approximately seven NNM trading days after the Expiration Date. The Company will
pay for Shares that it has purchased pursuant to the Offer by depositing the
aggregate Purchase Price therefor with the Depositary. The Depositary will act
as agent for tendering Stockholders for the purpose of receiving payment from
the Company and transmitting payment to tendering Stockholders. Under no
circumstances will interest be paid on amounts to be paid to tendering
Stockholders, regardless of any delay in making such payment.
Certificates for all Shares not purchased, including all Shares
tendered at prices greater than the Purchase Price, Shares not purchased because
of proration and Shares that were conditionally tendered and not accepted, will
be returned (or, in the case of Shares tendered by book-entry transfer, such
Shares will be credited to an account maintained with the Book-Entry Transfer
Facility by the participant therein who so delivered the Shares) as promptly as
practicable following the Expiration Date without expense to the tendering
Stockholder.
Payment for Shares may be delayed in the event of difficulty in determining
the number of Shares properly tendered or if proration is required. See Section
1. In addition, if certain events occur, the Company may not be obligated to
purchase Shares pursuant to the Offer. See Section 7.
The Company will pay or cause to be paid any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the Purchase Price is to be made to, or a
portion of the Shares delivered (whether in certificated form or by book entry)
but not tendered or not purchased are to be registered in the name of, any
person other than the registered holder, or if tendered Shares are registered in
the name of any person other than the person signing the Letter of Transmittal
(unless such person is signing in a representative or fiduciary capacity), 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 will be deducted from the Purchase Price unless satisfactory evidence of
the payment of such taxes, or exemption therefrom, is submitted. See Instruction
7 to the Letter of Transmittal.
Any tendering Stockholder or other payee who fails to complete fully
and sign the substitute Form W-9 included in the Letter of Transmittal (or, in
the case of a foreign individual, a Form W-8) may be subject to
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required federal income tax withholding of 31% of the gross proceeds paid to
such Stockholder or other payee pursuant to the Offer. See Section 3.
6. CONDITIONAL TENDER OF SHARES
Under certain circumstances and subject to the exceptions set forth in
Section 1, the Company may prorate the number of Shares purchased pursuant to
the Offer. As discussed in Section 15, the number of Shares to be purchased from
a particular Stockholder might affect the tax treatment of such purchase for the
Stockholder and the Stockholder's decision whether to tender. Each Stockholder
is urged to consult with his or her own tax advisor. Accordingly, a Stockholder
may tender Shares subject to the condition that a specified minimum number of
the Stockholder's Shares tendered pursuant to a Letter of Transmittal must be
purchased if any Shares so tendered are purchased. Any Stockholder desiring to
make such a conditional tender must so indicate in the box captioned
"Conditional Tender" in the Letter of Transmittal.
Any tendering Stockholders wishing to make a conditional tender must
calculate and appropriately indicate the minimum number of Shares to be
tendered. If the effect of accepting tenders on a pro rata basis would be to
reduce the number of Shares to be purchased from any Stockholder (tendered
pursuant to a Letter of Transmittal) below the minimum number so specified, the
tender will automatically be regarded as withdrawn (except as provided in the
next paragraph ) and all Shares tendered by the Stockholder pursuant to the
applicable Letter of Transmittal will be returned as promptly as practicable
thereafter.
If conditional tenders, that would otherwise be so regarded as
withdrawn, would cause the total number of Shares to be purchased to fall below
800,000, then, to the extent feasible, the Company will select enough of such
conditional tenders that would otherwise have been so withdrawn to permit the
Company to purchase 800,000 Shares. In selecting among these conditional
tenders, the Company will select by lot and will limit its purchase in each case
to the minimum number of Shares designated by the Stockholder in the applicable
Letter of Transmittal as a condition to his or her tender.
7. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company will not
be required to accept for payment or pay for any Shares tendered, and may
terminate or amend and may postpone (subject to the requirements of the Exchange
Act for prompt payment for or return of Shares tendered) the acceptance for
payment of Shares tendered, if at any time before the Expiration Date any of the
following shall have occurred:
(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, authority, agency or tribunal
that (i) challenges the acquisition of Shares pursuant to the Offer or
otherwise in any manner relates to or affects the Offer or (ii) in the
reasonable judgment of the Company, could materially and adversely
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;
(b) there shall have been any action threatened, pending or
taken, or approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Company or any of its subsidiaries, by
any legislative body, court, authority, agency or tribunal which, in
the Company's reasonable judgment, would 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
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 impair the contemplated
benefits of the Offer to the Company or (iv) 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;
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(c) it shall have been publicly disclosed or the Company shall
have learned that (i) any person or "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) has acquired or proposes to
acquire beneficial ownership of more than 5% of the outstanding Shares
whether through the acquisition of stock, the formation of a group, the
grant of any option or right, or otherwise (other than as disclosed in
a Schedule 13D or 13G on file with the Securities and Exchange
Commission (the "Commission") as of the date hereof) or (ii) any such
person or group that on or prior to January 27, 1999 had filed such a
Schedule with the Commission thereafter shall have acquired or shall
propose to acquire, whether through the acquisition of stock, the
formation of a group, the grant of any option or right, or otherwise,
beneficial ownership of additional Shares representing 2% or more of
the outstanding Shares;
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, (ii) any
significant decline in the market price of the Shares or in the general
level of market prices of equity securities in the United States or
abroad, (iii) any change in the general political, market, economic or
financial condition in the United States or abroad that, in the
Company's reasonable judgement could have a material adverse effect on
the Company's business, condition (financial or otherwise) , income,
operations, prospects or ability to obtain financing generally or the
trading in the Shares, (iv) the declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States or
any limitation on, or any event which, in the Company's reasonable
judgment, might affect the extension of credit by lending institutions
in the United States, (v) the commencement of a war, armed hostilities
or other international or national calamity directly or indirectly
involving the United States or (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, in the Company's
reasonable judgment, a material acceleration or worsening thereof;
(e) a tender or exchange offer with respect to some or all of
the Shares (other than the Offer), or a merger, acquisition or other
business combination proposal for the Company, shall have been
proposed, announced or made by another person or group (within the
meaning of Section 13(d) (3) of the Exchange Act);
(f ) there shall have occurred any event or events that has
resulted, or may in the reasonable judgment of the Company result,
directly or indirectly, in an actual or threatened change in the
business, condition (financial or other), income, operations, stock
ownership or prospects of the Company and its subsidiaries;
and, in the reasonable judgment of the Company, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance for
payment.
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 of these conditions, and
any such condition may be waived by the Company, in whole or in part, at any
time and from time to time in its reasonable discretion. The failure by the
Company at any time to exercise any of the foregoing rights shall not be deemed
a waiver of the right and each of these rights 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.
Acceptance of Shares validly tendered in the Offer is subject to the
condition that, as of the Expiration Date, and after giving pro forma effect to
the acceptance of Shares validly tendered, the Company would continue to have at
least 400 Stockholders and the Shares would remain listed for quotation on the
NNM. This condition may not be waived.
The Exchange Act requires that all conditions to the Offer must be
satisfied or waived before the Expiration Date.
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8. PRICE RANGE OF SHARES; DIVIDENDS
The following table sets forth the high and low sales prices, and
dividends declared, for the Shares as reported on the NNM for the periods
indicated. The Company's fiscal year-end is June 30.
Dividends
High Low Declared
------- ------- ---------
Fiscal 1997
1st Quarter ............... $14.00 $11.25 $0.09
2nd Quarter ............... 14.875 13.25 0.09
3rd Quarter ............... 15.50 13.50 0.09
4th Quarter ............... 15.25 13.375 0.09
Fiscal 1998
1st Quarter ............... $18.25 $15.125 $0.09
2nd Quarter ............... 18.25 16.50 0.09
3rd Quarter ............... 17.75 16.00 0.09
4th Quarter ............... 18.063 16.625 0.09
Fiscal 1999
1st Quarter ............... $18.125 $14.75 $0.09
2nd Quarter (through
December 17, 1998........ 14.50 12.00 0.09
On December 17, 1998, the closing price of the Shares on the NNM was
$13.75 per Share. Stockholders are urged to obtain current market quotations for
the Shares prior to making an investment decision.
9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
The Company believes that the purchase of Shares is an attractive use
of a portion of the Company's available capital on behalf of its Stockholders
and is consistent with the Company's long-term goal of increasing Stockholder
value. The Company believes it has adequate sources of capital to complete the
Share repurchase and pursue business opportunities.
Over time, the Company's profitable operations have contributed to the
growth of a capital base that exceeds all applicable regulatory standards and
the amount of capital needed to support the Company's banking business. After
evaluating a variety of alternatives to utilize more effectively its capital
base and to attempt to maximize Stockholder value, the Company's management and
its Board of Directors believe that the purchase of Shares pursuant to the Offer
is a positive action that is intended to accomplish the desired objectives.
Other actions previously employed, including periodic open market purchases of
Shares, have enhanced Stockholder value, but capital remains at high levels, and
this affects the Company's ability to produce desired returns for Stockholders.
The Offer is designed to restructure the Company's balance sheet in
order to increase return on equity and earnings per share by reducing the amount
of equity and Shares outstanding. Based upon the current market price of its
Shares, the Company believes that the purchase of Shares is an attractive use of
its funds. Following the purchase of the Shares, the Company believes funds
provided by earnings, combined with its other sources of liquidity, will be
fully adequate to meet its funding needs for the foreseeable future. Upon
completion of the Offer, the Company expects that it and its wholly owned
subsidiary bank, First Federal Savings Bank (the "Bank"), will continue to
maintain the highest regulatory standard for capital, which is designated as
"well capitalized" under the prompt corrective action scheme enacted by the
Federal Deposit Insurance Corporation Improvement Act of 1991.
The Offer will enable Stockholders who are considering the sale of all
or a portion of their Shares the opportunity to determine the price or prices
(not greater than $16.75 nor less than $14.75 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 may also give Stockholders the
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opportunity to sell Shares at prices greater than market prices prevailing prior
to the announcement of the Offer. See Section 8. In addition, qualifying
Stockholders owning beneficially fewer than 100 Shares, whose Shares are
purchased pursuant to the Offer, not only will avoid the payment of brokerage
commissions but will also avoid any applicable odd lot discounts to the market
price typically charged by brokers for executing odd lot trades.
Stockholders who do not tender their Shares pursuant to the Offer and
Stockholders who otherwise retain an equity interest in the Company as a result
of a partial tender of Shares or a proration pursuant to Section 1 of the Offer
will continue to be owners of the Company with the attendant risks and rewards
associated with owning the equity securities of the Company. As noted above, the
Company, following completion of the Offer, will maintain the highest regulatory
capital ranking. Consequently, the Company believes that Stockholders will not
be subject to materially greater risk as a result of the reduction of the
capital base.
Stockholders 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 earnings and assets, subject to any risks resulting from
the Company's purchase of Shares and the Company's ability to issue additional
equity securities in the future. In addition, to the extent the purchase of
Shares pursuant to the Offer results in a reduction of the number of
Stockholders of record, the Company's costs for services to Stockholders may be
reduced. Finally, the Offer may affect the Company's ability to qualify for
pooling-of-interests accounting treatment for any merger transaction for
approximately the next two years (which could limit acquisition by or of the
Company during this period).
If fewer than 800,000 Shares are purchased pursuant to the Offer, the
Company may repurchase the remainder of such Shares on the open market, in
privately negotiated transactions or otherwise. In the future, the Company may
determine to purchase additional Shares on the open market, in privately
negotiated transactions, through one or more tender offers or otherwise. Any
such purchases may be on the same terms as, or on terms which are more or less
favorable to Stockholders than, the terms of the Offer. However, Rule 13e-4
under the 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 future purchases of Shares by the Company would
depend on many factors, including the market price of the Shares, the Company's
business and financial position, and general economic and market conditions.
Shares the Company acquires pursuant to the Offer will be restored to
the status of authorized and unissued Shares, and will be available for the
Company to issue without further Stockholder action (except as required by
applicable law or the rules of the NNM or any other securities exchange on which
the Shares are listed) for purposes including, but not limited to, the
acquisition of other businesses, the raising of additional capital for use in
the Company's business and the satisfaction of obligations under existing or
future employee benefit plans. The Company has no current plans for reissuance
of the Shares repurchased pursuant to the Offer.
Neither the Company nor its Board of Directors makes any recommendation
to any Stockholder as to whether to tender all or any Shares. Each Stockholder
must make his or her own decision whether to tender Shares and, if so, how many
Shares to tender and at what price. Directors, officers and employees of the
Company who own Shares may participate in the Offer on the same basis as the
Company's other Stockholders. The Company has been advised that one of its
Executive Officers intends to tender shares pursuant to the Offer. The Company
has been advised that the Trustee of the ESOP does not intend to tender any
Shares pursuant to the Offer.
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10. CERTAIN INFORMATION CONCERNING THE COMPANY
General
The Company was formed at the direction of First Federal Savings Bank
(the "Bank"), formerly First Federal Savings and Loan Association of Peekskill,
for the purpose of becoming a unitary savings and loan holding company and
owning all of the outstanding stock of the Bank issued on December 29, 1995 in
connection with the Bank's conversion from the mutual to stock form of
organization (the "Conversion"). The Company is incorporated under the laws of
the State of Delaware and is authorized to do business in the State of New York,
and generally is authorized to engage in any activity that is permitted by the
Delaware General Corporation Law. At September 30, 1998, the Company had total
assets of $199.9 million, liabilities of $156.9 million and Stockholders' equity
of $43.0 million. The Company's Common Stock is quoted on the Nasdaq National
Market System under the symbol "PEEK." Unless the context otherwise requires,
all references herein to the Company include the Company and the Bank on a
consolidated basis.
The Bank was originally organized as a state chartered savings and loan
association in 1924. In 1954, it converted to a federally chartered savings and
loan association. In December 1995, the Bank became a federally chartered
savings bank. The Bank's business involves attracting deposits from customers in
its market area and investing such funds primarily in one-to-four family
residential mortgage loans and mortgage backed and investment securities. The
Bank serves the financial needs of its customers through its main office located
at 1019 Park Street, Peekskill, New York and branch offices located at 1961
Commerce Street in Yorktown Heights, New York and Cortlandt Town Center in
Mohegan Lake, New York.
The Bank has sought to enhance its net income through the adoption of a
strategy designed to maintain capital in excess of regulatory requirements,
limit loan delinquencies and enhance net interest spread while managing interest
rate risk. This strategy involves (i) maintaining a substantial portfolio of
mortgage-backed and other debt securities having terms to repricing of seven
years or less, (ii) controlling operating expenses, (iii) focusing loan
originations on one-to-four family residential loans, (iv) limiting other types
of loans which could increase credit risk or operating costs, and (v) using
customer service to build and maintain a substantial level of core depositor
accounts.
The Company and the Bank are regulated by the Office of Thrift
Supervision. The Bank is a member of the Federal Home Loan Bank System and is a
Stockholder in the Federal Home Loan Bank ("FHLB") of New York. The Bank is also
a member of the Savings Association Insurance Fund and its deposit accounts are
insured up to applicable limits by the Federal Deposit Insurance Corporation.
The Company's principal executive offices are located at 1019 Park
Street, Peekskill, New York 10566 and its telephone number is (914) 737-2777.
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Summary Historical Consolidated Financial Data and
Summary Unaudited Pro Forma Consolidated Financial Data
The following summary historical consolidated financial data has been
derived from the consolidated financial statements of the Company. The data
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998 and the Company's Annual Report on Form 10-K
for the year ended June 30, 1998. Copies of these reports may be obtained as
described in Section 18 of this Offer. The income statement data for the years
ended June 30, 1997 and 1998 and the balance sheet data as of the same dates
have been derived from the audited consolidated financial statements of the
Company. The income statement data for the three months ended September 30, 1997
and 1998 and the balance sheet data as of September 30, 1998 have been derived
from the unaudited condensed consolidated financial statements of the Company
which, in the opinion of management, include all adjustments (consisting of
normal recurring adjustments) necessary for a fair presentation of financial
position and results of operations for such periods. Operating results for the
three months ended September 30, 1998 are not necessarily indicative of the
results that may be expected for the entire year ending June 30, 1999.
The following summary unaudited pro forma consolidated financial data
has been prepared by applying certain pro forma adjustments to the historical
consolidated financial data of the Company. Such pro forma data reflects the
purchase of Shares in the Offer, but has not been adjusted for certain related
costs and expenses which are not expected to be material. The summary unaudited
pro forma consolidated financial data should be read in conjunction with the
notes thereto and the summary historical consolidated financial data included
herein. The pro forma income statement data and balance sheet data are not
necessarily indicative of the financial position or results of operations that
would have been obtained had the Offer been completed as of the dates indicated.
12
<PAGE>
<TABLE>
<CAPTION>
Pro Forma
-------------------------------------------
Historical June 30, 1998 September 30, 1998
----------------------------------- ------------------- --------------------
June 30, September 30, $14.75 $16.75 $14.75 $16.75
-------------------- ------------- per per per per
1997 1998 1998 Share Share Share Share
-------- -------- -------- -------- -------- -------- --------
Balance Sheet Data: (In thousands, except Share amounts)
- ------------------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents...................... $4,158 $4,626 $1,248 $4,626 $4,626 $1,248 $1,248
Securities available-for-sale.................. 2,983 8,498 15,606 8,498 8,498 15,606 15,606
Securities held-to-maturity.................... 126,450 135,446 126,997 135,446 135,446 126,997 126,997
Loans receivable, net.......................... 45,507 47,631 51,913 47,631 47,631 51,913 51,913
Other assets................................... 3,462 4,140 4,134 4,140 4,140 4,134 4,134
-------- -------- -------- -------- -------- -------- --------
Total assets............................... $182,560 $200,341 $199,898 $200,341 $200,341 $199,898 $199,898
======== ======== ======== ======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits....................................... $132,418 $139,858 $140,466 $139,858 $139,858 $140,466 $140,466
Securities sold under repurchase agreements.... --- 13,000 13,000 24,800 26,400 24,800 26,400
Other liabilities.............................. 3,176 4,277 3,435 4,277 4,277 3,435 3,435
-------- -------- -------- -------- -------- -------- --------
Total liabilities.......................... 135,594 157,135 156,901 168,935 170,535 168,701 170,301
-------- -------- -------- -------- -------- -------- --------
Stockholders' equity:
Common stock................................... 41 41 41 41 41 41 41
Additional paid-in capital..................... 40,032 40,181 40,221 40,181 40,181 40,221 40,221
Retained earnings.............................. 23,668 24,508 24,731 24,508 24,731 24,731 24,731
Treasury stock................................. (12,543) (17,730) (18,312) (29,530) (31,130) (30,112) (31,712)
Net unrealized (loss) gain on securities
available for sale........................... (10) (2) 63 (2) (2) 63 63
Common stock acquired by ESOP and RRP.......... (4,222) (3,792) (3,747) (3,792) (3,792) (3,747) (3,747)
-------- -------- -------- -------- -------- -------- --------
Total stockholders' equity ................ 46,966 43,206 42,997 31,406 29,806 31,197 29,597
-------- -------- -------- -------- -------- -------- --------
Total liabilities and stockholders' equity. $182,560 $200,341 $199,898 $200,341 $200,341 $199,898 $199,898
======== ======== ======== ======== ======== ======== ========
Shares outstanding............................. 3,193,121 2,895,569 2,860,069 2,095,569 2,095,569 2,060,069 2,060,069
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Pro Forma
---------------------------------------
Historical Year ended Year ended
--------------------------------------- June 30, 1997 September 30,1998
Year ended Three months ended ------------------ ------------------
June 30, September 30, $14.75 $16.75 $14.75 $16.75
------------------ ------------------ per per per per
1997 1998 1997 1998 Share Share Share Share
-------- -------- -------- -------- ------- ------- -------- -------
Income Statement Data: (In thousands, except Share and per Share amounts)
- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total interest income............ $12,309 $12,643 $3,095 $3,355 $12,643 $12,643 $3,355 $3,355
Total interest expense........... 5,431 6,034 1,446 1,695 6,582 6,656 1,832 1,850
------- ------- ------ ------ ------- ------- ------ ------
Net interest income.......... 6,878 6,609 1,649 1,660 6,061 5,987 1,523 1,505
Provision for loan losses........ 143 60 15 15 60 60 15 15
-------- ------- ------ ------ ------- ------- ------ ------
Net interest income after
provision for loan losses... 6,735 6,549 1,634 1,645 6,001 5,927 1,508 1,490
Total non-interest income........ 236 225 57 63 225 225 63 63
Total non-interest expense....... 4,202 3,474 826 885 3,474 3,474 885 885
------- ------- ------ ------ ------- ------- ------ ------
Income before income taxes... 2,769 3,300 865 823 2,752 2,678 686 668
Income taxes..................... 957 1,446 370 367 1,206 1,174 306 298
------- ------- ------ ------ ------- ------- ------ ------
Net income................... $ 1,812 $ 1,854 $ 495 $ 456 $ 1,546 $ 1,505 $ 380 $ 370
======= ======= ====== ====== ======= ======= ====== ======
Diluted earnings per share....... $ 0.58 $ 0.66 $ 0.17 $ 0.18 $ 0.76 $ 0.74 $ 0.21 $ 0.21
======= ======= ====== ====== ======= ======= ====== ======
Dividends declared per share..... $ 0.36 $ 0.36 $ 0.09 $ 0.09 $ 0.36 $ 0.36 $ 0.09 $ 0.09
Weighted average number of
shares (diluted).............. 3,149,000 2,825,000 2,886,000 2,602,000 2,025,000 2,025,000 1,802,000 1,802,000
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Pro Forma
---------------------------------------
Historical Year ended Year ended
--------------------------------------- June 30, 1997 September 30,1998
Year ended Three months ended ------------------ ------------------
June 30, September 30, $14.75 $16.75 $14.75 $16.75
------------------ ------------------ per per per per
1997 1998 1997 1998 Share Share Share Share
-------- -------- -------- -------- ------- ------- -------- -------
Selected Financial Ratios: (annualized)
- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Return on assets (ratio of net income to
average total assets).................... 0.98% 0.98% 1.09% 0.91% 0.82% 0.80% 0.76% 0.74%
Return on equity (ratio of net income
to average equity)....................... 3.57% 4.02% 4.20% 4.23% 4.51% 4.60% 4.87% 5.00%
Dividend payout ratio....................... 62.25% 54.69% 57.98% 51.10% 46.95% 48.25% 42.35% 43.53%
Equity to total assets at end of period..... 25.73% 21.57% 26.10% 21.51% 15.68% 14.88% 15.61% 14.81%
Book value per share........................ $14.71 $14.92 $14.81 $15.03 $14.99 $14.22 $15.14 $14.37
Non-performing assets to total assets
at end of period.......................... 1.22% 0.79% 1.24% 0.75% 0.79% 0.79% 0.75% 0.75%
Allowance for loan losses to total
non-performing assets..................... 27.97% 43.03% 28.36% 46.50% 43.03% 43.03% 46.50% 46.50%
</TABLE>
15
<PAGE>
Peekskill Financial Corporation
Notes to Unaudited Pro Forma Consolidated Financial Data
(1) The unaudited pro forma consolidated financial data reflects the
repurchase of 800,000 Shares at $14.75 and $16.75 per share, as
appropriate.
(2) The balance sheet data gives effect to the purchase of Shares as of the
balance sheet date. The income statement data gives effect to the
purchase of Shares as of the beginning of each period presented.
(3) The purchase of Shares in the Offer is assumed to have been funded from
the proceeds from secured borrowings from the FHLB of New York with an
average term to maturity (as calculated without regard to call
provisions) of approximately ten years and an interest rate of 4.64%.
(4) No effect has been given to the costs which will be incurred in
connection with the Offer. Such costs are not expected to be material
and will be capitalized as part of the cost of the Shares purchased.
16
<PAGE>
11. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 800,000 Shares pursuant to the
Offer at a price of $16.75 per Share, the total amount required by the Company
to purchase such Shares will be $13.4 million, exclusive of fees and other
expenses. The Company will fund such purchase primarily through the dividends by
the Bank. Such dividends will be funded primarily through secured borrowings
from the FHLB of New York. In November 1998, the Bank obtained $10.0 million
through securities repurchase agreements for this transaction.
12. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING
SHARES
As of December 16, 1998, the Company had 2,842,069 Shares issued and
outstanding, and had reserved 409,975 Shares for issuance upon exercise of
outstanding stock options. The 800,000 Shares that the Company is offering to
purchase represents approximately 28% of the outstanding Shares. As of December
16, 1998, the Company's directors and executive officers as a group (eight
persons) beneficially owned an aggregate of 254,003 Shares representing
approximately 8.60% of the outstanding Shares, assuming the exercise by such
persons of their currently exercisable options. The Company has been advised
that one of the Executive Officers intends to tender shares pursuant to the
Offer. In addition, 286,982 Shares, or approximately 10.1% of the outstanding
Shares, are held in the ESOP. The Company has been advised that the Trustee of
the ESOP does not intend to tender any Shares pursuant to the Offer.
Directors, officers and employees of the Company who own Shares may
participate in the Offer on the same basis as the Company's other Stockholders.
The Company has been advised that William J. LaCalamito, President intends to
tender 10,250 shares pursuant to the Offer. The price at which such tender will
be made has not been determined.
17
<PAGE>
The following table sets forth information regarding share ownership of
(i) each member of the Company's board of directors, (ii) the executive officers
of the Company and the Bank who are not also directors; (iii) all directors and
executive officers of the Company and the Bank as a group, (iv) all employees
and directors of the Company and the Bank, and (v) the Peekskill Financial
Corporation Employee Stock Ownership Plan ("ESOP").
<TABLE>
<CAPTION>
Unvested Unvested
Percent of Shares Stock
Class under the options
Shares Assuming 1996 under the
Beneficially Purchase of Recognition 1996 Stock
Owned at 800,000(2) and Option and
December16, Percent Shares in the Retention Incentive
1998(1) of Class Offer Plan Plan
------------ ---------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Eldorus Maynard, Chairman of the Board and 71,995 2.50% 3.46% 30,747 61,496
Chief Executive Officer
William J. LaCalamito, President, 72,140 2.50 2.97 30,747 61,496
Chief Operating Officer and Director
Dominick Bertoline, Director 22,816 0.80 1.11 4,919 12,299
Edward H. Dwyer, Director 38,726 1.36 1.89 4,919 12,299
Robert E. Flower, Director 33,980 1.19 1.66 4,919 12,299
John A. McGurty, Jr., M.D., Director 5,000 0.18 0.24 --- ---
Executive officers who are not also directors of the 9,346 0.33 0.45 4,000 16,000
Company and the Bank as a group (2 persons)
Directors and executive officers of the Company 254,003 8.60 11.33 80,251 175,889
and the Bank, as a group (8 persons)
Directors and employees of the Company and the 317,779 10.76 14.69 124,449 278,880
Bank as a group (25 persons)
Peekskill Financial Corporation Employee Stock 286,982 10.10 14.05 N/A N/A
Ownership Plan(3)
</TABLE>
- ----------
(1) Amount includes shares held directly, as well as shares allocated to such
individuals under the ESOP, shares held jointly with family members, shares
held in retirement accounts, shares held in a fiduciary capacity or by
certain family members, with respect to which shares the group members may
be deemed to have sole voting and/or investment power. The amounts do not
include restricted stock awards which have been granted but not yet vested
under the Company's 1996 Recognition and Retention Plan ("RRP") and stock
options which have been awarded but not yet vested under the Company's 1996
Stock Option and Incentive Plan ("SOP").
(2) Gives effect to the sale of 10,250 Shares in the Offering by an Executive
Officer.
(3) The amount reported represents shares held by the ESOP, 40,250 of which have
been allocated to accounts of participants and are therefore excluded from
the total. First Bankers Trust, Quincy, Illinois, the trustee of the ESOP,
may be deemed to beneficially own the shares held by the ESOP which have not
been allocated to accounts of participants. Participants in the ESOP are
entitled to instruct the trustee as to the voting of shares allocated to
their accounts under the ESOP. Unallocated shares held in the ESOP's
suspense account or allocated shares for which no voting instructions are
received are voted by the trustee in the same proportion as allocated shares
voted by participants.
Assuming (i) the granting of all unallocated awards in such plans to
the Company's employees and directors, (ii) the vesting of all awards under the
Stock Option Plan and the RRP and (iii) the tender and purchase of 800,000
18
<PAGE>
shares pursuant to the Offer, the amount of Shares beneficially owned by the
directors, employees and the ESOP would be 997,840, representing 40.3% of the
then outstanding shares (including stock options).
Neither the Company, nor any subsidiary of the Company nor, to the best
of the Company's knowledge, any of the Company's directors and executive
officers, nor any affiliate of any of the foregoing, had any transactions
involving the Shares during the 40 business days prior to the date hereof.
Except for outstanding options to purchase Shares granted from to time
to time over recent years to certain directors, officers and employees of the
Company pursuant to the Company's 1996 Stock Option and Incentive Plan and the
Company's 1996 Recognition and Retention Plan, and except as otherwise described
herein, neither the Company nor, to the best of the Company's knowledge, any of
its affiliates, directors or executive officers, or any of the directors or
executive officers of any of its affiliates, is a party to any contract,
arrangement, understanding or relationship with any other person relating,
directly or indirectly, to the Offer with respect to any securities of the
Company 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.
Except as disclosed in this Offer, the Company has no current plans or
proposals which relate to or would result in: (a) the acquisition by any person
of additional securities of the Company or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (d) any change in the present Board of Directors or management
of the Company; (e) any material change in the present dividend rate or policy,
or indebtedness or capitalization of the Company; (f) any other material change
in the Company's corporate structure or business; (g) any change in the
Company's Certificate of Incorporation or Bylaws or any actions which may impede
the acquisition of control of the Company by any person; (h) a class of equity
security of the Company being delisted from a national securities exchange; (i)
a class of equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the
suspension of the Company's obligation to file reports pursuant to Section 15(d)
of the Exchange Act.
13. 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 Stockholders. 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 NNM, the Company believes that following
its purchase of Shares pursuant to the Offer, the Company's remaining Shares
will continue to qualify to be quoted on the NNM.
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 Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its Stockholders
and the U.S. Securities and Exchange Commission (the "Commission") and comply
with the Commission's proxy rules in connection with meetings of the Company's
Stockholders.
14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
The Company is not aware of any license or regulatory permit that
appears to be material to the Company's business that might be adversely
affected by the Company's acquisition of Shares as contemplated herein or of any
approval or other action by, or any filing with, any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the acquisition or ownership of Shares by the Company as
contemplated herein. Should any such approval or other action be required, the
Company presently contemplates that such approval or other action will be
sought. The Company is unable to predict whether it may determine that it is
required to delay the acceptance for payment of or payment for Shares tendered
pursuant to the Offer pending the
19
<PAGE>
outcome of any such matter. There can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without
substantial conditions or that the failure to obtain any such approval or other
action might not result in adverse consequences to the Company's business. The
Company's obligations under the Offer to accept for payment and pay for Shares
is subject to certain conditions. See Section 7.
15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General. The following is a discussion of the material United States
federal income tax consequences to Stockholders with respect to a sale of Shares
pursuant to the Offer. The discussion is based upon the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations,
Internal Revenue Service ("IRS") rulings and judicial decisions, all in effect
as of the date hereof and all of which are subject to change (possibly with
retroactive effect) by subsequent legislative, judicial or administrative
action. The discussion does not address all aspects of United States federal
income taxation that may be relevant to a particular Stockholder in light of the
Stockholder's particular circumstances or to certain types of holders subject to
special treatment under the United States federal income tax laws (such as
certain financial institutions, tax-exempt organizations, life insurance
companies, dealers in securities or currencies, employee benefit plans or
Stockholders holding the Shares as part of a conversion transaction, as part of
a hedge or hedging transaction, or as a position in a straddle for tax
purposes). In addition, the discussion below does not consider the effect of any
foreign, state, local or other tax laws that may be applicable to particular
Stockholders. The discussion assumes that the Shares are held as "capital
assets" within the meaning of Section 1221 of the Code. The Company has neither
requested nor obtained a written opinion of counsel or a ruling from the IRS
with respect to the tax matters discussed below.
Each Stockholder should consult his or her own tax advisor as to the
particular United States federal income tax consequences to that Stockholder
tendering Shares pursuant to the Offer and the applicability and effect of any
state, local or foreign tax laws and recent changes in applicable tax laws.
Characterization of the Surrender of Shares Pursuant to the Offer. The
surrender of Shares by a Stockholder to the Company pursuant to the Offer will
be a taxable transaction for United States federal income tax purposes and may
also be a taxable transaction under applicable state, local and foreign tax
laws. The United States federal income tax consequences to a Stockholder may
vary depending upon the Stockholder's particular facts and circumstances. Under
Section 302 of the Code, the surrender of Shares by a Stockholder to the Company
pursuant to the Offer will be treated as a "sale or exchange" of such Shares for
United States federal income tax purposes (rather than as a distribution by the
Company with respect to the Shares held by the tendering Stockholder) if the
receipt of cash upon surrender (i) is "substantially disproportionate" with
respect to the Stockholder, (ii) results in a "complete redemption" of the
Stockholder's interest in the Company, or (iii) is "not essentially equivalent
to a dividend" with respect to the Stockholder (each as described below).
If any of the above three tests is satisfied, and the surrender of the
Shares is therefore treated as a "sale or exchange" of such Shares for United
States federal income tax purposes, the tendering Stockholder will recognize
gain or loss equal to the difference between the amount of cash received by the
Stockholder and the Stockholder's tax basis in the Shares surrendered pursuant
to the Offer. Any such gain or loss will be capital gain or loss, and will be
long term capital gain or loss if the Shares have been held for more than one
year.
If none of the above three tests is satisfied, the tendering
Stockholder will be treated as having received a distribution by the Company
with respect to the Stockholder's Shares in an amount equal to the cash received
by the Stockholder pursuant to the Offer. The distribution will be treated as a
dividend taxable as ordinary income to the extent of the Company's current or
accumulated earnings and profits for tax purposes. The amount of the
distribution in excess of the Company's current or accumulated earnings and
profits will be treated as a return of the Stockholder's tax basis in the
Shares, and then as gain from the sale or exchange of the Shares. The tendering
Stockholder's basis in the Shares surrendered pursuant to the Offer generally
will be added to the Stockholder's basis in his or her remaining Shares, if any.
Constructive Ownership. In determining whether any of the three tests
under Section 302 of the Code is satisfied, Stockholders must take into account
not only the Shares that are actually owned by the Stockholder, but also Shares
that are constructively owned by the Stockholder within the meaning of Section
318 of the Code. Under Section 318 of the Code, a Stockholder may constructively
own Shares actually owned, and in some cases constructively owned,
20
<PAGE>
by certain related individuals or entities and Shares that the Stockholder has
the right to acquire by exercise of an option or by conversion.
Proration. Contemporaneous dispositions or acquisitions of Shares by a
Stockholder or related individuals or entities may be deemed to be part of a
single integrated transaction and may be taken into account in determining
whether any of the three tests under Section 302 of the Code has been satisfied.
Each Stockholder should be aware that because proration may occur in the Offer,
even if all the Shares actually and constructively owned by a Stockholder are
tendered pursuant to the Offer, fewer than all of these Shares may be purchased
by the Company. Thus, proration may affect whether the surrender by a
Stockholder pursuant to the Offer will meet any of the three tests under Section
302 of the Code. See Section 6 for information regarding each Stockholder's
option to make a conditional tender of a minimum number of Shares. A Stockholder
should consult his or her own tax advisor regarding whether to make a
conditional tender of a minimum number of Shares, and the appropriate
calculation thereof.
Section 302 Tests. The receipt of cash by a Stockholder will be
"substantially disproportionate" if the percentage of the outstanding Shares in
the Company actually and constructively owned by the Stockholder immediately
following the surrender of Shares pursuant to the Offer is less than 80% of the
percentage of the outstanding Shares actually and constructively owned by the
Stockholder immediately before the sale of Shares pursuant to the Offer.
Stockholders should consult their tax advisors with respect to the application
of the "substantially disproportionate" test to their particular situation.
The receipt of cash by a Stockholder will be a "complete redemption" if
either (i) the Stockholder owns no Shares in the Company either actually or
constructively immediately after the Shares are surrendered pursuant to the
Offer, or (ii) the Stockholder actually owns no Shares in the Company
immediately after the surrender of Shares pursuant to the Offer and, with
respect to Shares constructively owned by the Stockholder immediately after the
Offer, the Stockholder is eligible to waive (and effectively waives)
constructive ownership of all such Shares under procedures described in Section
302(c) of the Code.
Even if the receipt of cash by a Stockholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, a
Stockholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test if the Stockholder's surrender of Shares pursuant to the Offer
results in a "meaningful reduction" in the Stockholder's interest in the
Company. Whether the receipt of cash by a Stockholder will be "not essentially
equivalent to a dividend" will depend upon the individual Stockholder's facts
and circumstances. The IRS has indicated in published rulings that even a small
reduction in the proportionate interest of a small minority Stockholder in a
publicly held corporation who exercises no control over corporate affairs may
constitute such a "meaningful reduction." Stockholders expecting to rely upon
the "not essentially equivalent to a dividend" test should consult their own tax
advisors as to its application in their particular situation.
Corporate Stockholder Dividend Treatment. If a sale of Shares by a
corporate Stockholder is treated as a dividend, the corporate Stockholder may be
entitled to claim a deduction equal to 70% of the dividend under Section 243 of
the Code, subject to applicable limitations. Corporate Stockholders should,
however, consider the effect of Section 246(c) of the Code, which disallows the
70% dividends-received deduction with respect to stock that is held for 45 days
or less. For this purpose, the length of time a taxpayer is deemed to have held
stock may be reduced by periods during which the taxpayer's risk of loss with
respect to the stock is diminished by reason of the existence of certain options
or other transactions. Moreover, under Section 246A of the Code, if a corporate
Stockholder has incurred indebtedness directly attributable to an investment in
Shares, the 70% dividends-received deduction may be reduced.
In addition, amounts received by a corporate Stockholder pursuant to
the Offer that are treated as a dividend may constitute an "extraordinary
dividend" under Section 1059 of the Code. Generally, an "extraordinary dividend"
is a dividend that (i) equals or exceeds 10% of the Stockholder's basis in the
Shares (treating all dividends having ex-dividend dates within an 85-day period
as a single dividend) or (ii) exceeds 20% of the Stockholder's adjusted basis in
the Shares (treating all dividends having ex-dividend dates within a 365-day
period as a single dividend). Accordingly, if applicable, a corporate
Stockholder would be required under Section 1059(a) of the Code to reduce its
basis (but not below zero) in its Shares by the non-taxed portion of the
dividend (i.e., the portion of the dividend for which a deduction is allowed),
and if such portion exceeds the Stockholder's tax basis for its Shares, to treat
the excess as gain from the sale of such Shares in the year in which a sale or
disposition of the Shares occurs (which, in certain circumstances, may be the
year in which Shares are sold pursuant to the Offer).
21
<PAGE>
Additional Tax Considerations. The distinction between long-term
capital gains and ordinary income is relevant because, in general, individuals
currently are subject to taxation at a reduced rate on their "net capital gain"
(i.e., the excess of net long-term capital gains over net short-term capital
losses) for the year.
Stockholders are urged to consult their own tax advisors regarding any
possible impact on their obligation to make estimated tax payments as a result
of the recognition of any capital gain (or the receipt of any ordinary income)
caused by the surrender of any Shares to the Company pursuant to the Offer.
Foreign Stockholders. The Company will withhold United States federal
income tax at a rate of 30% from gross proceeds paid pursuant to the Offer to a
foreign Stockholder or his agent, unless the Company determines that a reduced
rate of withholding is applicable pursuant to a tax treaty or that an exemption
from withholding is applicable because such gross proceeds are effectively
connected with the conduct of a trade or business by the foreign Stockholder
within the United States. For this purpose, a foreign Stockholder is any
Stockholder 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 (iii) an estate or trust the income of which is
subject to United States federal income taxation regardless of its source.
Without definite knowledge to the contrary, the Company will determine whether a
Stockholder is a foreign Stockholder by reference to the Stockholder's address.
A foreign Stockholder may be eligible to file for a refund of such tax or a
portion of such tax if such Stockholder (i) meets the "complete redemption,"
"substantially disproportionate" or "not essentially equivalent to a dividend"
tests described above, (ii) is entitled to a reduced rate of withholding
pursuant to a treaty and the Company withheld at a higher rate, or (iii) is
otherwise able to establish that no tax or a reduced amount of tax was due. In
order to claim an exemption from withholding on the ground that gross proceeds
paid pursuant to the Offer are effectively connected with the conduct of a trade
or business by a foreign Stockholder within the United States or that the
foreign Stockholder is entitled to the benefits of a tax treaty, the foreign
Stockholder must deliver to the Depositary (or other person who is otherwise
required to withhold United States tax) a properly executed statement claiming
such exemption or benefits. Such statements may be obtained from the Depositary.
Foreign Stockholders are urged to consult their own tax advisors regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and the refund
procedures.
Backup Withholding. See Section 3 with respect to the application of the
United States federal income tax backup withholding.
The tax discussion set forth above is included for general information
only and may not apply to Shares acquired in connection with the exercise of
stock options or pursuant to other compensation arrangements with the Company.
The tax consequences of a sale pursuant to the Offer may vary depending upon,
among other things, the particular circumstances of the tendering Stockholder.
No information is provided herein to the state, local or foreign tax
consequences of the transaction contemplated by the Offer. Stockholders are
urged to consult their own tax advisors to determine the particular federal,
state, local and foreign tax consequences to them of tendering Shares pursuant
to the Offer and the effect of the stock ownership attribution rules described
above.
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion and at
any time or from time to time, 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. There can be no assurance,
however, that the Company will exercise its right to extend the Offer. During
any such extension, all Shares previously tendered will remain subject to the
Offer, except to the extent that such Shares may be withdrawn as set forth in
Section 4. The Company also expressly reserves the right, in its sole
discretion, (i) to terminate the Offer and not accept for payment any Shares not
previously accepted for payment or, subject to Rule 13e-4(f)(5) under the
Exchange Act, which requires the Company either to pay the consideration offered
or to return the Shares tendered promptly after the termination or withdrawal of
the Offer, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 7 hereof, by giving oral or written notice of
such termination to the Depositary and making a public announcement thereof and
(ii) at any time, or from time to time, to amend the Offer in any respect.
Amendments to the Offer may be effected by public announcement. Without limiting
the manner in which the Company may choose to make public announcement of any
extension, termination or amendment, the Company shall have no obligation
(except as otherwise required by applicable law) to publish, advertise or
otherwise communicate any such public announcement, other than by making a
release to the Dow Jones News Service, except in the case of an announcement of
an extension of the Offer, in which case the Company shall have no obligation to
publish, advertise or otherwise communicate such announcement other than by
22
<PAGE>
issuing a notice of such extension by press release or other public
announcement, which notice shall be issued no later than 4:00 p.m., Eastern
Standard Time, on the next business day after the previously scheduled
Expiration Date. Material changes to information previously provided to holders
of the Shares in this Offer or in documents furnished subsequent thereto will be
disseminated to holders of Shares in compliance with Rule 13e-4(e)(2)
promulgated by the Commission under the Exchange Act.
If the Company materially changes the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) under the Exchange Act. Those rules require that the
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer (other than a
change in price, change in dealer's soliciting fee or change in percentage of
securities sought) will depend on the facts and circumstances, including the
relative materiality of such terms or information. In a published release, the
Commission has stated that in its view, an offer should remain open for a
minimum of five business days from the date that notice of such a material
change is first published, sent or given. The Offer will continue or be extended
for at least ten business days from the time the Company publishes, sends or
gives to holders of Shares a notice that it will (a) increase or decrease the
price it will pay for Shares or the amount of the Dealer Manager's soliciting
fee or (b) increase (except for an increase not exceeding 2% of the outstanding
Shares) or decrease the number of Shares it seeks.
17. FEES AND EXPENSES
Capital Resources, Inc. will act as the Dealer Manager for the Company in
connection with the Offer. The Company has agreed to pay Capital Resources,
Inc., upon acceptance for and payment of Shares pursuant to the Offer, a total
of $.07 per Share purchased by the Company pursuant to the Offer. In addition,
the Company has agreed to pay Capital Resources, Inc. a $5,000 consulting and
valuation fee in connection with the Offer and to reimburse it for certain
out-of-pocket expenses. Capital Resources, Inc. will also be indemnified against
certain liabilities, including liabilities under the federal securities laws, in
connection with the Offer.
Capital Resources, Inc. has rendered, is currently rendering and may
continue to render various investment banking and other advisory services to the
Company. It has received, and may continue to receive, customary compensation
from the Company for such services.
The Company has retained Regan and Associates, Inc. as the Information
Agent in connection with the Offer. The Information Agent may contact
Stockholders by mail, telephone, facsimile, telex, telegraph, other electronic
means and personal interviews, and may request brokers, dealers and other
nominee Stockholders to forward materials relating to the Offer to beneficial
owners.
The Information Agent will receive reasonable and customary compensation
for its services and will also be reimbursed for certain out-of-pocket expenses.
The Company has agreed to indemnify the Information Agent against certain
liabilities, including certain liabilities under the federal securities laws, in
connection with the Offer.
The Company has retained Registrar & Transfer Co. as Depositary in
connection with the Offer. The Depositary will receive reasonable and customary
compensation for its services and will also be reimbursed for certain
out-of-pocket expenses. The Company has agreed to indemnify the Depositary
against certain liabilities, including certain liabilities under the federal
securities laws, in connection with the Offer.
The Depositary will not make solicitations or recommendations in
connection with the Offer.
The Company will not pay any fees or commissions to any broker, dealer
or other person for soliciting tenders of Shares pursuant to the Offer (other
than the fee of the Dealer Manager). The Company will, upon request, reimburse
brokers, dealers, commercial banks and trust companies for reasonable and
customary handling and mailing expenses incurred by them in forwarding materials
relating to the Offer to their customers.
18. MISCELLANEOUS
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 relating to its business, financial
condition and other matters. Certain information as of particular dates
concerning the Company's directors and officers, their
23
<PAGE>
remuneration, options granted to them, the principal holders of the Company's
securities and any material interest of such persons in transactions with the
Company is filed with the Commission. The Company has also filed an Issuer
Tender Offer Statement on Schedule 13E-4 with the Commission, which includes
certain additional information relating to the Offer. Such reports, as well as
such other material, may be inspected and copies may be obtained at the
Commission's public reference facilities at 450 Fifth Street, N.W., Washington,
D.C., and should also be available for inspection and copying at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, New York,
New York 10048, and Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material may be obtained by
mail, upon payment of the Commission's customary fees, from the Commission's
Public Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Company's Schedule 13E-4 may not be available at the Commission's regional
offices. Such information may also be accessed electronically by means of the
Commission's home page on the Internet (http:.//www.sec.gov)
The Offer is being made to all holders of Shares. The Company is not
aware of any state where the making of the Offer is prohibited by administrative
or judicial action pursuant to a valid state statute. If the Company becomes
aware of any valid state statute prohibiting the making of the Offer, the
Company will make a good faith effort to comply with such statute. If, after
such good faith effort, the Company cannot comply with such statute, the Offer
will not be made to, nor will tenders be accepted from or on behalf of, holders
of Shares in such state. In those jurisdictions whose securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of the Company by the Dealer Manager
or one or more registered brokers or dealers licensed under the laws of such
jurisdictions.
24
<PAGE>
PEEKSKILL FINANCIAL CORPORATION
December 23, 1998
The Dealer Manager the Offer is:
CAPITAL RESOURCES, INC.
1211 Connecticut Avenue, N.W.
Suite 200
Washington, DC 20036
(800) 220-2744
The Information Agent for the Offer is:
REGAN & ASSOCIATES, INC.
15 Park Row
New York, New York 10038
(800) 737-3426
Any questions concerning tender procedures or requests for additional
copies of this Offer to Purchase, the Letter of Transmittal or other tender
offer materials may be directed to the Dealer Manager or the Information Agent.
The Depositary for the Offer is:
<TABLE>
<CAPTION>
Registrar and Transfer Company
<S> <C> <C>
By Mail or By Overnight Courier: By Facsimile: By Hand:
(212) 587-3006 c/o The Depository Trust Co.
10 Commerce Drive (For Eligible Institutions Transfer Agent Drop
Cranford, New Jersey 07016 Only) 55 Water Street, 1st Floor
Attention: Reorganization Department New York, New York 10041-0099
For Assistance:
(800) 368-5948
</TABLE>
Any questions concerning tender procedures may be directed to the
Information Agent at (800) 737-3426.
December 23, 1998
25
<PAGE>
Exhibit (a)(2)
PEEKSKILL FINANCIAL CORPORATION
LETTER OF TRANSMITTAL
To Accompany Shares of Common Stock of Peekskill Financial Corporation
Tendered Pursuant to the Offer to Purchase Dated December 23, 1998
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 4:00 P.M., EASTERN STANDARD
TIME ON JANUARY 27, 1999, UNLESS THE OFFER IS EXTENDED.
To: Registrar and Transfer Company, Depositary
By Mail or By Overnight Courier:
10 Commerce Drive
Cranford, New Jersey 07016
Attention: Reorganization Department
By Facsimile:
(212) 587-3006
(For Eligible Institutions Only)
For Assistance:
(800) 368-5948
By Hand:
c/o The Depository Trust Co.
Transfer Agent Drop
55 Water Street, 1st Floor
New York, New York 10041-0099
DESCRIPTION OF SHARES TENDERED
(See Instructions 3 and 4)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Shares Tendered
(Please Fill in Exactly as Name(s) Appear(s) on Certificate(s) (Attach Additional List if Necessary)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Number Total
of Shares Number of
Certificate Represented by Shares
Number(s)* Certificate(s)* Tendered**
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN ONE LISTED ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE>
This Letter of Transmittal is to be used if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") (hereinafter referred to as the "Book-Entry Transfer Facility") pursuant
to the procedures set forth in Section 3 of the Offer to Purchase (as defined
below).
Delivery of documents to the Company or to a Book-Entry Transfer Facility
does not constitute a valid delivery.
(BOX BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
- --------------------------------------------------------------------------------
|_| CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution __________________________________________________
Account No. ____________________________________________________________________
Transaction Code No. ___________________________________________________________
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Peekskill Financial Corporation, a
Delaware corporation (the "Company"), the above-described shares of its Common
Stock, par value $0.01 per share (the "Shares"), at a price per Share
hereinafter set forth, pursuant to the Company's offer to purchase up to 800,000
Shares, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated December 23, 1998 (the "Offer to Purchase"), receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and 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 the Shares that are being 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
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to (a) deliver certificates for such Shares, or
transfer ownership of such Shares on the account books maintained by the
Book-Entry Transfer Facility, together, in any 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 books of the Company and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by the Company, the Company will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges,
encumbrances, conditional sales agreements or other obligations relating to the
sale or transfer thereof, and the same will not be subject to any adverse
claims. The undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Shares tendered hereby.
The undersigned hereby represents and warrants that the undersigned has
read and agrees to all of the terms of the Offer. All authority herein conferred
or agreed to be conferred shall not be affected by, and shall survive the death
or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
<PAGE>
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 or 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 the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (ii) the tender of such Shares complies
with Rule 14e-4. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Offer.
The undersigned understands that the Company will determine a single per
Share price (not greater than $16.75 nor less than $14.75 per Share) net to the
seller in cash, without interest thereon, (the "Purchase Price") that it will
pay for Shares validly tendered and not withdrawn pursuant to the Offer taking
into account the number of Shares so tendered and the prices specified by
tendering stockholders. The undersigned understands that the Company will select
the lowest Purchase Price that will enable it to purchase 800,000 Shares (or
such lesser number of Shares as are validly tendered and not withdrawn at prices
not greater than $16.75 nor less than $14.75 per Share) pursuant to the Offer.
The undersigned understands that all Shares properly 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, without interest thereon, upon the terms and
subject to the conditions of the Offer, including its proration and conditional
tender provisions, and that the Company will return all other Shares, including
Shares tendered and not withdrawn at prices greater than the Purchase Price,
Shares not purchased because of proration and Shares that were conditionally
tendered and not accepted. The undersigned understands that tenders of Shares
pursuant to any one of the procedures described in Section 2 or 3 of the Offer
to Purchase and in the instructions hereto will constitute an agreement between
the undersigned and the Company upon the terms and subject to the conditions of
the Offer.
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 accept
for payment fewer than all of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at the Book-Entry Transfer Facility). Similarly, unless otherwise
indicated under "Special Delivery Instructions," please mail the check for the
purchase price of any Shares purchased and/or any certificates for Shares not
tendered or not purchased (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature(s). In the
event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price of
any Shares purchased and/or return any Shares not tendered or not purchased in
the name(s) of, and mail said check and/or any certificates to, the person(s) so
indicated. The undersigned recognizes that the Company has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from the
name of the registered holder(s) thereof if the Company does not accept for
payment any of the Shares so tendered.
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5)
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS
CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW), THERE
IS NO VALID TENDER OF SHARES.
|_| $14.75 |_| $15.00 |_| $15.25
|_| $15.50 |_| $15.75 |_| $16.00
|_| $16.25 |_| $16.50 |_| $16.75
OR
IF YOU DO NOT WISH TO SPECIFY A PURCHASE PRICE, CHECK THE FOLLOWING BOX, IN
WHICH CASE YOU WILL BE DEEMED TO HAVE TENDERED AT THE PURCHASE PRICE DETERMINED
BY THE COMPANY IN ACCORDANCE WITH THE TERMS OF THE OFFER (PERSONS CHECKING THIS
BOX NEED NOT INDICATE THE PRICE PER SHARE ABOVE). |_|
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
ODD LOTS
(SEE INSTRUCTION 9)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person owning beneficially, as of the close of business on
December 16, 1998, and who continues to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares.
The undersigned either (check one box):
|_| was the beneficial owner as of the close of business on December 16, 1998,
and continues to be the beneficial owner as of the Expiration Date, of an
aggregate of fewer than 100 Shares, all of which are being tendered, or
|_| is a broker, dealer, commercial bank, trust company or other nominee that
(i) is tendering, for the beneficial owners thereof, Shares with respect to
which it is the record owner, and (ii) believes, based upon representations
made to it by each such beneficial owner, that such beneficial owner owned
beneficially as of the close of business on December 16, 1998, and
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares, and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price determined
by the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per Share in the box entitled "Price (In
Dollars) Per Share At Which Shares Are Being Tendered" in this Letter of
Transmittal). |_|
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 6, 7 AND 8)
To be completed ONLY if the check for the purchase price of Shares purchased
and/or certificates for Shares not tendered or not purchased are to be issued in
the name of someone other than the undersigned.
Issue |_| check and/or |_| certificate(s) to:
Name____________________________________________________________________________
________________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
________________________________________________________________________________
(Taxpayer Identification or Social Security No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 6, 7 AND 8)
To be completed ONLY if the check for the purchase price of Shares purchased
and/or certificates for Shares not tendered or not purchased are to be mailed to
someone other than the undersigned or to the undersigned at an address other
than that shown below the undersigned's signature(s).
Mail |_| check and/or |_| certificate(s) to:
Name____________________________________________________________________________
________________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
- --------------------------------------------------------------------------------
<PAGE>
CONDITIONAL TENDER
A tendering stockholder may condition his or her tender of Shares upon the
purchase by the Company of a specified minimum number of the Shares tendered
hereby, all as described in the Offer to Purchase, particularly in Section 6
thereof. Unless at least such minimum number of Shares is purchased by the
Company pursuant to the terms of the Offer, none of the Shares tendered hereby
will be purchased. It is the tendering stockholder's responsibility to calculate
such minimum number of Shares, and each stockholder is urged to consult his or
her own tax advisor. Unless this box has been completed and a minimum specified,
the tender will be deemed unconditional. Minimum number of Shares that must be
purchased, if any are purchased: ________________________________ Shares
- --------------------------------------------------------------------------------
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL)
- --------------------------------------------------------------------------------
________________________________________________________________________________
(Signature(s) of Owner(s))
Dated: ___________________________________
Name(s)_________________________________________________________________________
Capacity (full title)___________________________________________________________
Address_________________________________________________________________________
(Include Zip Code)
Area Code and Telephone No._____________________________________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm ___________________________________________________________________
Authorized Signature ___________________________________________________________
Dated: ___________________________________
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all signatures
on this Letter of Transmittal must be guaranteed by a firm that is a member of a
registered national securities exchange or the National Association of
Securities Dealers, Inc., or by a commercial bank, a trust company, a savings
bank, a savings and loan association or a credit union which has membership in
an approved Signature Guarantee Medallion Program (an "Eligible Institution").
Signatures on this Letter of Transmittal need not be guaranteed (a) if this
Letter of Transmittal is signed by the registered holder(s) of the Shares (which
term, for purposes of this document, shall include any participant in one of the
Book-Entry Transfer Facilities whose name appears on a security position listing
as the owner of Shares) tendered herewith and such holder(s) have not completed
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on this Letter of Transmittal or (b) if such Shares are
tendered for the account of an Eligible Institution. See Instruction 6.
2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal or,
in the case of a book-entry transfer, an Agent's Message (as defined below), is
to be used either if certificates are to be forwarded herewith or if delivery of
Shares is to be made by book-entry transfer pursuant to the procedures set forth
in Section 3 of the Offer to Purchase. Certificates for all physically delivered
Shares, or a confirmation of a book-entry transfer into the Depositary's account
at the Book-Entry Transfer Facility of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or
manually signed copy thereof) and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the front page of this Letter of Transmittal on or prior to the
Expiration Date (as defined in the Offer to Purchase). The term "Agent's
Message" means a message transmitted by the Book-Entry Transfer Facility to, and
received by, the Depositary and forming a part of a Book-Entry confirmation,
which states that such Book-Entry Transfer Facility has received an express
acknowledgment from the participant in such Book-Entry Transfer Facility
tendering the Shares, that such participant has received and agrees to be bound
by the terms of the Letter of Transmittal and that the Company may enforce such
agreement against the participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Except as specifically permitted by Section 6 of the Offer to Purchase, no
alternative or contingent tenders will be accepted. See Section 1 of the Offer
to Purchase. By executing this Letter of Transmittal (or facsimile thereof), the
tendering stockholder waives any right to receive any notice of the acceptance
for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the certificate
numbers and/or the number of Shares should be listed on a separate signed
schedule attached hereto.
4. Partial Tenders (Not Applicable to Stockholders Who Tender By Book-Entry
Transfer). If fewer than all the Shares represented by any certificate delivered
to the Depositary are to be tendered, fill in the number of Shares that are to
be tendered in the box entitled "Number of Shares Tendered." In such case, a new
certificate for the remainder of the Shares represented by the old certificate
will be sent to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the "Special Payment Instructions" or "Special Delivery
Instructions" boxes on this Letter of Transmittal, as promptly as practicable
following the expiration or termination of the Offer. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
<PAGE>
5. Indication of Price at Which Shares Are Being Tendered. For Shares to be
validly tendered, the stockholder must check the box indicating (1) the price
per Share at which he or she is tendering Shares under "Price (In Dollars) Per
Share at Which Shares Are Being Tendered" in this Letter of Transmittal, or (2)
that such person is tendering Shares at the Purchase Price determined by the
Company pursuant to the terms of the Offer under this heading, except that any
stockholder who owned beneficially as of the close of business on December 16,
1998, and continues to own beneficially as of the Expiration Date, an aggregate
of fewer than 100 Shares, may check the box above in the section entitled "Odd
Lots" indicating that such stockholder is tendering all Shares at the Purchase
Price determined by the Company. Only one box may be checked. If more than one
box is checked or if no box is checked (except as provided in the Odd Lots box
and this Instruction 5), there is no valid tender of Shares. A stockholder
wishing to tender portions of his or her Share holdings at different prices must
complete a separate Letter of Transmittal for each price at which he or she
wishes to tender each such portion of his or her 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. If this
Letter of Transmittal is signed by the registered holder(s) of the Shares
hereby, the signature(s) must correspond with the name(s) as written on the face
of the certificates without alteration, enlargement or any change whatsoever.
If any of the Shares hereby are held of record by two or more persons, all such
persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s). Signatures on any such certificates or
stock powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the registered
holder(s) of the Shares tendered hereby, certificates evidencing the Shares
tendered hereby 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 certificates for such Shares. Signature(s) on any such certificates or
stock powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
7. Stock Transfer Taxes. The Company will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or its
order pursuant to the Offer. If, however, payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be registered in the
name of, any person other than the registered holder(s), or if tendered Shares
are registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder(s), such other person or otherwise) payable on account
of the transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted. See Section 5 of the Offer to Purchase. EXCEPT AS PROVIDED IN THIS
INSTRUCTION 7, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE
CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
8. Special Payment and Delivery Instructions. If the check for the purchase
price of any Shares purchased is to be issued in the name of, and/or any Shares
not tendered or not purchased are to be returned to, a person other than the
person(s) signing this Letter of Transmittal or if the check and/or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such stockholder at the Book-Entry Transfer Facility from which such transfer
was made.
<PAGE>
9. Odd Lots. As described in the Offer to Purchase, if fewer than all Shares
validly tendered at or below the Purchase Price and not withdrawn on or prior to
the Expiration Date are to be purchased, the Shares purchased first will consist
of all Shares tendered by any stockholder who owned beneficially as of the close
of business on December 16, 1998, and continues to own beneficially as of the
Expiration Date, an aggregate of fewer than 100 Shares and who validly and
unconditionally tendered all such Shares at or below the Purchase Price
(including by not designating a Purchase Price as described above). Partial or
conditional tenders of Shares will not qualify for this preference, This
preference will not be available unless the box captioned "Odd Lots" in this
Letter of transmittal is completed.
10. Substitute Form W-9 and Form W-8. The tendering stockholder is required to
provide the Depositary with either a correct Taxpayer Identification Number
("TIN") on Substitute Form W-9, which is provided under "Important Tax
Information" below, or a properly completed Form W-8. Failure to provide the
information on either Substitute Form W-9 or Form W-8 may subject the tendering
stockholder to 31% federal income tax backup withholding on the payment of the
purchase price. The box in Part 2 of Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a number or
intends to apply for a number in the near future. If the box in Part 2 is
checked and the Depositary is not provided with a TIN by the time of payment,
the Depositary will withhold 31% on all payments of the purchase price
thereafter until a TIN is provided to the Depositary.
11. Requests for Assistance or Additional Copies. Any questions or requests for
assistance may be directed to the Information Agent or the Dealer Manager at
their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase, this Letter of Transmittal or other
tender offer materials may be directed to the Information Agent or the Dealer
Manager and such copies will be furnished promptly at the Company's expense.
Stockholders may also contact their local broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
12. Irregularities. All questions as to the Purchase Price, the form of
documents, and the validity, 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. The Company
reserves the absolute right to reject any or all tenders of Shares that it
determines are not in proper form or the acceptance for payment of or payment
for Shares that may, in the opinion of the Company's counsel, be unlawful.
Except as otherwise provided in the Offer to Purchase, the Company also reserves
the absolute right to waive any of the conditions to the Offer or any defect or
irregularity in any tender of Shares and the Company's interpretation of the
terms and conditions of the Offer (including these instructions) shall be final
and binding. 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 Information Agent, Dealer Manager, the Depositary, or any other
person shall be under any duty to give notice of any defect or irregularity in
tenders, nor shall any of them incur any liability for failure to give any such
notice. Tenders will not be deemed to have been made until all defects and
irregularities have been cured or waived.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED COPY THEREOF)
TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are accepted
for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is his or her social security number. For businesses and
other entities, the number is the employer identification number. If the
Depositary is not provided with the correct TIN or properly completed Form W-8,
the stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such stockholder with respect to
Shares purchased pursuant to the Offer may be subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to these backup withholding
and reporting requirements. In order for a noncorporate foreign stockholder to
qualify as an exempt recipient, that stockholder must complete and sign a Form
W-8, Certificate of Foreign Status, attesting to that stockholder's exempt
status. The Form W-8 can be obtained from the Depositary. Exempt stockholders,
other than noncorporate foreign stockholders, should furnish their TIN, write
"Exempt" on the face of the Substitute Form W-9 below and sign, date and return
the Substitute Form W-9 to the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
<PAGE>
If federal income tax backup withholding applies, the Depositary is required to
withhold 31% of any payments made to the stockholder. Backup withholding is not
an additional tax. Rather, the federal income tax liability of persons subject
to backup withholding will be reduced by the amount of the tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a stockholder with
respect to Shares purchased pursuant to the Offer, the stockholder is required
to notify the Depositary of his or her correct TIN by completing the Substitute
Form W-9 included in this Letter of Transmittal certifying that the TIN provided
on Substitute Form W-9 is correct and that (1) the stockholder has not been
notified by the Internal Revenue Service that he or she is subject to federal
income tax backup withholding as a result of failure to report all interest or
dividends or (2) the Internal Revenue Service has notified the stockholder that
he or she is no longer subject to federal income tax backup withholding. Foreign
stockholders must submit a properly completed Form W-8 in order to avoid the
applicable backup withholding; provided, however, that backup withholding will
not apply to foreign stockholders subject to 30% (or lower treaty rate)
withholding on gross payments received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security number or
employer identification number of the registered owner 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.
PAYER'S NAME: REGISTRAR AND TRANSFER COMPANY
- --------------------------------------------------------------------------------
SUBSTITUTE
Form W-9
Department of the Treasury
Internal Revenue Service
Payer's Request for
Taxpayer
Identification Number (TIN)
and Certification
- --------------------------------------------------------------------------------
PART 1 - PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND
DATING BELOW.
- --------------------------------------------------------------------------------
NAME (Please Print)
- --------------------------------------------------------------------------------
ADDRESS
- --------------------------------------------------------------------------------
CITY STATE ZIP CODE
- --------------------------------------------------------------------------------
TIN _________________________________________
Social Security Number or
Employer Identification Number:
PART 2: For Payees exempt from backup withholding, see the Important Tax
Information above and Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 enclosed herewith and complete as instructed
herein.
Awaiting TIN |_|
- --------------------------------------------------------------------------------
<PAGE>
PART 3 -- CERTIFICATION-UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT (1) the
number shown on this form is my correct taxpayer identification number (or a TIN
has not been issued to me but I have mailed or delivered an application to
receive a TIN or intend to do so in the near future), (2) I am not subject to
backup withholding either because I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a result
of a failure to report all interest or dividends or the IRS has notified me that
I am no longer subject to backup withholding, and (3) all other information
provided on this form is true, correct and complete.
- --------------------------------------------------------------------------------
SIGNATURE___________________________________________ DATE_______________________
You must cross out item (2) above if you have been notified by the IRS that you
are currently subject to backup withholding because of underreporting interest
or dividends on your tax return.
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN 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 DETAILS. YOU MUST COMPLETE THE FOLLOWING
CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF THE 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 (1) 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 (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
payments of the Purchase Price made to me thereafter will be withheld until I
provide a number.
SIGNATURE_________________________________________________DATE _________________
- --------------------------------------------------------------------------------
Dealer Manager:
Capital Resources, Inc.
1211 Connecticut Avenue, N.W.
Washington, DC 20036
(800) 220-2744
Information Agent:
Regan & Associates
15 Park Row
New York, NY 10038
(800) 737-3426
<PAGE>
Exhibit (a)(3)
CAPITAL RESOURCES, INC.
1211 Connecticut Avenue, N.W.
Suite 200
Washington, D.C. 20036
Telephone: (800) 220-2744
PEEKSKILL FINANCIAL CORPORATION
Offer To Purchase For Cash Up To
800,000 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $16.75
Nor Less Than $14.75 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
4:00 P.M., EASTERN STANDARD TIME, ON JANUARY 27, 1999,
UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Peekskill Financial Corporation, a Delaware corporation (the
"Company"), has appointed us to act as Dealer Manager in connection with its
offer to purchase for cash up to 800,000 shares of its Common Stock, $0.01 par
value per share (the "Shares"), at prices not in excess of $16.75 nor less than
$14.75 per Share, specified by stockholders tendering their Shares, upon the
terms and subject to the conditions set forth in the Company's Offer to
Purchase, dated December 23, 1998, 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
$16.75 nor less than $14.75 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 stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 800,000 Shares (or such lesser number of Shares as are
properly tendered at prices not in excess of $16.75 nor less than $14.75 per
Share). All Shares validly tendered at prices at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) will be purchased at the Purchase Price, subject to the terms
and conditions of the Offer, including the proration and conditional tender
provisions. See Sections 1 and 16 of the Offer to Purchase.
Upon the terms and subject to the conditions of the Offer, if, at the
expiration of the Offer, more than 800,000 Shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i) from
stockholders who owned beneficially as of the close of business on December 16,
1998 and continue to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares who properly tender all their Shares at or below the
Purchase Price, and (ii) then, on a pro rata basis, from all other stockholders
who properly tender their Shares at prices at or below the Purchase Price (and
do not withdraw them prior to the expiration of the Offer), other than
stockholders who tender conditionally, and for whom the condition is not
satisfied. See Sections 1, 2 and 6 of the Offer to Purchase. All Shares not
purchased pursuant to the Offer, including Shares tendered at prices greater
than the Purchase Price and Shares not purchased because of proration or because
they were conditionally tendered and not accepted for purchases will be returned
to the tendering stockholders at the Company's expense as promptly as
practicable following the Expiration Date.
1
<PAGE>
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED PURSUANT TO THE OFFER. SEE SECTION 7 OF THE OFFER TO PURCHASE.
No fees or commissions will be payable to brokers, dealers or any
person for soliciting tenders of Shares pursuant to the Offer other than the
fees paid to the Dealer Manager, the Information Agent and the Depositary, as
described in the Offer to Purchase. The Company will, upon request, reimburse
brokers and banks for reasonable and customary handling and mailing expenses
incurred by them in forwarding materials relating to the Offer to their
customers. The Company will pay all stock transfer taxes applicable to its
purchase of Shares pursuant to the Offer, subject to Instruction 7 of the Letter
of Transmittal.
No broker, dealer, bank, trust company or fiduciary shall be deemed to
be the agent of the Company, Registrar and Transfer Company as the "Depositary,"
Capital Resources, Inc. as the "Dealer Manager" or Regan & Associates as the
"Information Agent," for purposes of the Offer.
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 December 23, 1998;
2. Letter to Clients which 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 December 23, 1998, from William J. LaCalamito,
President and Chief Operating Officer of the Company, to
stockholders of the Company;
4. Letter of Transmittal for your use and for the information of
your clients (together with accompanying Form W-9 and
guidelines);
5. A return envelope addressed to Registrar & Transfer Company, as
Depositary; and
6. Questions and Answers About the Offer of Peekskill Financial
Corporation.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 4:00 P.M., EASTERN
STANDARD TIME, ON JANUARY 27, 1999, UNLESS THE OFFER IS EXTENDED.
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 certificate(s) 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.
Any inquiries you may have with respect to the Offer should be
addressed to the Depositary, the Information Agent or the Dealer Manager at
their respective addresses and telephone numbers set forth on the back cover
page of the Offer to Purchase.
2
<PAGE>
Additional copies of the enclosed material may be obtained from the
Dealer Manager at (800) 220- 2744 or the Information Agent at (800) 737-3426.
Very truly yours,
-----------------------------------------
Capital Resources, 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 DEALER MANAGER 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.
3
<PAGE>
Exhibit (a)(4)
PEEKSKILL FINANCIAL CORPORATION
Offer To Purchase For Cash Up To
800,000 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $16.75
Nor Less Than $14.75 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
4:00 P.M., EASTERN STANDARD TIME, ON JANUARY 27, 1999,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated
December 23, 1998, and the related Letter of Transmittal (which together
constitute the "Offer") in connection with the Offer by Peekskill Financial
Corporation, a Delaware corporation (the "Company"), to purchase up to 800,000
shares of its Common Stock, $0.01 par value per share (the "Shares"), at prices
not in excess of $16.75 nor less than $14.75 per Share, as specified by
tendering stockholders, upon the terms and subject to the conditions set forth
in the Offer.
The Company will determine the single per Share price, not in excess of
$16.75 nor less than $14.75 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 stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 800,000 Shares (or such lesser number of Shares as are
validly tendered at prices not in excess of $16.75 nor less than $14.75 per
Share). All Shares properly tendered at prices at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase) will be purchased at the Purchase Price, subject to the
terms and conditions of the Offer, including the proration and conditional
tender provisions. See Sections 1 and 16 of the Offer to Purchase.
Upon the terms and subject to the conditions of the Offer, if, at the
expiration of the Offer, more than 800,000 Shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i) from
stockholders who owned beneficially as of the close of business on December 16,
1998, and continue to own beneficially as of the Expiration Date an aggregate of
fewer than 100 Shares who properly tender all their Shares at prices at or below
the Purchase Price, and (ii) then, on a pro rata basis, from all other
stockholders who properly tender at or below the Purchase Price (and do not
withdraw them prior to the expiration of the Offer), other than stockholders who
tender conditionally and for whom the condition is not satisfied. See Sections
1, 2 and 6 of the Offer to Purchase. All Shares not purchased pursuant to the
Offer, including Shares tendered at prices greater than the Purchase Price and
Shares not purchased because of proration or because they were conditionally
tendered and not accepted for purchase will be returned to the tendering
stockholders at the Company's expense as promptly as practicable following the
Expiration Date.
1
<PAGE>
We are the owner 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 not in excess of $16.75 nor less
than $14.75 per Share as indicated in the attached Instruction
Form, net to you in cash.
2. You may tender your Shares conditioned upon the Company's
purchasing all or a minimum number of your Shares.
3. The Offer is not conditioned on any minimum number of Shares
being tendered pursuant to the Offer.
4. The Offer, proration period and withdrawal rights will expire at
4:00 p.m., Eastern Standard Time, on January 27, 1999, unless the
Company extends the Offer.
5. The Offer is for 800,000 Shares, constituting approximately 28%
of the Shares outstanding as of December 16, 1998.
6. Tendering stockholders 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 beneficially held, as of the close of business on December
16, 1998, an aggregate of fewer than 100 Shares and you continue
to beneficially own as of the Expiration Date an aggregate of
fewer than 100 Shares, and you instruct us to tender on your
behalf all such Shares at or below the Purchase Price before the
Expiration Date (as defined in the Offer to Purchase) and
complete the box captioned "Odd Lots" in the attached Instruction
Form, the Company, upon the terms and subject to the conditions
of the Offer, will accept all such Shares for purchase before
proration, if any, of the purchase of other Shares validly
tendered at or below the Purchase Price.
8. If you wish to tender portions of your Shares at different
prices, you must complete a separate Instruction Form 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.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your
2
<PAGE>
Instruction Form 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 DATE OF THE
OFFER. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 4:00 P.M.,
EASTERN STANDARD TIME, ON JANUARY 27, 1999, UNLESS THE COMPANY EXTENDS THE
OFFER.
As described in Section 1 of the Offer to Purchase, if more than
800,000 Shares have been validly tendered at prices at or below the Purchase
Price and not withdrawn on or prior to the Expiration Date (as defined in the
Offer to Purchase), the Company will purchase properly tendered Shares on the
basis set forth below:
(a) first, all Shares validly tendered and not withdrawn on or prior to
the Expiration Date by or on behalf of any stockholder who owned beneficially,
as of the close of business on December 16, 1998 and continues to own
beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares
who:
(1) validly tenders all of such Shares at a price at or below
the Purchase Price (partial and conditional tenders will not
qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal; and
(b) second, after purchase of all of the forgoing Shares, all other
Shares validly and conditionally tendered at prices at or below the Purchase
Price in accordance with Section 6 of the Offer to Purchase for which the
condition was satisfied, and all other Shares validly and unconditionally
tendered at or below the Purchase Price and not withdrawn on or prior to the
Expiration Date on a pro rata basis (with appropriate adjustments to avoid
purchases of fractional Shares) as described in Section 1 of the Offer to
Purchase; and
(c) third, if necessary, Shares validly and conditionally tendered at
or below the Purchase Price and not withdrawn on or prior to the Expiration
Date, selected by lot in accordance with Section 6 of the Offer to Purchase.
You may condition your tender on the Company purchasing a minimum
number of your tendered Shares. In such case, if as a result of the proration
provisions in the Offer to Purchase the Company would purchase less than such
minimum number of your Shares, then the Company will not purchase any of your
Shares, except as provided in the next sentence. If so many conditional tenders
would be deemed withdrawn that the total number of such Shares to be purchased
falls below 800,000 Shares, then to the extent feasible, the Company will select
enough of such conditional tenders that would otherwise have been so withdrawn
to permit the Company to purchase 800,000 Shares. In selecting among such
conditional tenders, the Company will select by lot and will limit its purchase
in each case to the minimum number of Shares designated. See Sections 1 and 6 of
the Offer to Purchase.
3
<PAGE>
The Offer is being made to all holders of Shares. 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, holders of Shares
residing in such jurisdiction. In any jurisdiction the securities or blue sky
laws of which require the Offer to be made by a licensed broker or dealer, the
Offer is being made on the Company's behalf by the Information Agent, Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
4
<PAGE>
INSTRUCTION FORM
for Shares Held by Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
INSTRUCTIONS FOR TENDER OF SHARES OF
PEEKSKILL FINANCIAL CORPORATION
Please tender to Peekskill Financial Corporation (the "Company"), on (our) (my)
behalf, the number of Shares indicated below, which are beneficially owned by
(us) (me) and registered in your name, upon terms and subject to the conditions
contained in the Offer to Purchase of the Company dated December 23, 1998, and
the related Letter of Transmittal, the receipt of both of which is acknowledged.
Number of Shares to be tendered: ________ Shares
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE
BEING TENDERED (See Instruction on the Letter
of Transmittal.)
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
I hereby tender Shares at the price checked below. This action could result in
none of my Shares being purchased if the Purchase Price for the Shares is less
than the price checked.
Price (In Dollars) Per Share At Which Shares Are Being Tendered (See Instruction
5 on the Letter of Transmittal):
[ ] $14.75 [ ] $15.00 [ ] $15.25
-------------- -------------- --------------
[ ] $15.50 [ ] $15.75 [ ] $16.00
-------------- -------------- --------------
[ ] $16.25 [ ] $16.50 [ ] $16.75
-------------- -------------- --------------
OR
[ ] By checking this one box INSTEAD OF ONE OF THE PRICE BOXES
ABOVE, I hereby tender Shares and I am willing to accept the
Purchase Price determined by the Company in accordance with the
terms of the Offer. This action will result in my receiving a
price per Share of as low as $14.75 or as high as $16.75.
ODD LOTS
(See Instruction 9 on the Letter of Transmittal)
[ ] Check here ONLY if I was the beneficial owner as of the close
of business on December 16, 1998, and continue to be the
beneficial owner as of the Expiration Date, of an aggregate of
fewer than 100 Shares, all of which are being tendered.
[ ] The Odd Lot Shares are being tendered at the price per Share
indicated above in the box entitled "Price (In Dollars) Per Share
At Which Shares Are Being Tendered."
OR
[ ] By checking this one box INSTEAD OF ONE OF THE PRICE BOXES
ABOVE, I hereby tender Shares and I am willing to accept the
Purchase Price determined by the Company in accordance with the
terms of the Offer. This action will result in my receiving a
price per Share of as low as $14.75 or as high as $16.75.
CONDITIONAL TENDER
(See the box captioned "Conditional Tender" on the Letter of Transmittal)
[ ] Check here ONLY if my tender of Shares is conditional on the
Company purchasing all or a minimum number of the tendered
Shares, and as set forth below:
<PAGE>
Minimum number of Shares that must be purchased, if any are purchased:
____________ Shares
The Shares I conditionally tendered are being tendered at the price per Share
indicated above in the box captioned "Price (In Dollars) Per Share At Which
Shares Are Being Tendered."
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING STOCKHOLDER. 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 BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS, HOWEVER, MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES.
EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY TO TENDER AND AT WHAT PRICE. DIRECTORS, OFFICERS AND
EMPLOYEES OF THE COMPANY WHO OWN SHARES MAY PARTICIPATE IN THE OFFER ON THE SAME
BASIS AS THE COMPANY'S OTHER STOCKHOLDERS. THE COMPANY HAS BEEN ADVISED THAT ONE
OF ITS EXECUTIVE OFFICERS INTENDS TO TENDER SHARES PURSUANT TO THE OFFER. THE
COMPANY HAS ALSO BEEN ADVISED THAT THE TRUSTEE OF THE COMPANY'S EMPLOYEE STOCK
OWNERSHIP PLAN DOES NOT INTEND TO TENDER ANY SHARES PURSUANT TO THE OFFER.
Signature(s):_____________________ Address: _______________________________
- ---------------------------------- ----------------------------------------
(Including Zip Code)
Name(s): _________________________ Area Code and Telephone Number:_________
(Please Print)
__________________________________ Date: _________________, 199__
(Please Print)
- ---------------------------------------------------
(Employer Identification or Social Security Number)
IMPORTANT: STOCKHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-9 WITH THEIR
INSTRUCTION FORM.
<PAGE>
Exhibit (a)(5)
PEEKSKILL FINANCIAL CORPORATION
December 23, 1998
Dear Stockholders of Peekskill Financial Corporation:
Over time, Peekskill Financial Corporation's profitable operations have
contributed to the growth of a capital base that exceeds all applicable
regulatory standards and the amount of capital needed to support the Company's
banking business. After evaluating a variety of alternatives to utilize this
strong capital base more effectively and to maximize value to our stockholders,
we have determined that a repurchase of our own shares is currently the best
alternative to accomplish those objectives. The Board of Directors has approved
a repurchase of 800,000 shares of the Company's common stock, or approximately
28% percent of our 2,842,069 outstanding shares. A copy of the Offer to Purchase
is enclosed.
The Company is conducting the offer through a procedure referred to as
a "Modified Dutch Tender Auction." This procedure allows you to select the price
at which you are willing to sell, or tender, all or part of your shares within a
price range of not more than $16.75 per share and not less than $14.75 per
share. Upon expiration of the offer, we will select the lowest purchase price
from those shares tendered that will allow us to buy 800,000 shares. All shares
purchased in the offer will receive the same purchase price, even those shares
that are tendered below the purchase price. In addition, if you own less than
100 shares and tender all of your shares at or below the purchase price, you
will receive priority and have all of your shares purchased even if more than
800,000 shares are tendered. No brokerage fees or commissions will be charged to
you if you tender your shares.
We encourage each stockholder to read carefully the Offer to Purchase
and related materials. Neither Peekskill Financial Corporation nor our Board of
Directors make any recommendation whether to tender shares to the Company. You
should make your decision independently after consulting with your advisors.
To assist us with this offer, we have engaged Capital Resources, Inc.
to serve as the Dealer Manager and Regan & Associates to serve as the
Information Agent. Representatives from these firms may contact you by phone to
make sure you have received the Offer to Purchase and related materials and to
answer any questions you may have. If you need information or additional forms,
please call either the Information Agent at (800) 737-3426 or the Dealer Manager
at (800) 220-2744.
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<PAGE>
Unless otherwise extended, the offer will expire at 4:00 p.m. Eastern
Standard Time on January 27, 1999. Please read carefully the enclosed material
before making any decisions regarding the Offer.
As always, we appreciate your interest in Peekskill Financial
Corporation.
Sincerely,
/s/
-----------------------------------------
William J. LaCalamito
President and Chief Operating Officer
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<PAGE>
Exhibit (a)(6)
MEMO PLEASE CIRCULATE
DATE: December 23, 1998
TO: All Staff
FROM: Eldorus Maynard, Chairman and Chief Executive Officer
RE: Tender Offer for Peekskill Financial Corporation's Common Stock
- --------------------------------------------------------------------------------
The Board has recently approved the purchase of 800,000 shares of our
common stock by means of a "Modified Dutch Auction Tender." It is more fully
described in the attached news release. We have made every effort to communicate
this action to our stockholders and financial media as quickly as possible.
Below you will find the answers to some questions that are likely to arise from
our public announcement. However, you are instructed to direct all questions to
the Information Agent described below or, if a customer insists on speaking with
Bank personnel, to William J. LaCalamito.
Question: Who is the Information Agent?
Answer: Peekskill Financial Corporation has hired a special Information Agent
to handle all questions. The Information Agent is Regan & Associates
and their toll-free telephone number is (800) 737-3426. Because
Peekskill Financial Corporation is the purchaser of the shares, and
because securities laws are involved, it is highly important that all
questions be referred to the Information Agent. No member of Peekskill
Financial Corporation's staff is allowed or authorized to answer any
questions or give any advice regarding the tender offer. We are aware
that many stockholders are customers of the bank and have ties or
relationships with staff members. You should handle these situations
as diplomatically as possible, but in any event, all questions must be
referred either to the Information Agent or the holder's broker or
investment advisor.
Question: Why is Peekskill Financial Corporation offering to repurchase its
stock?
Answer: Over time, Peekskill Financial Corporation's profitable operations
have contributed to the growth of a capital base that exceeds all
applicable regulatory standards and the amount of capital needed to
support our banking business. After evaluating a variety of
alternatives to utilize more effectively our capital base and to
attempt to maximize stockholder value, Peekskill Financial
Corporation's management and its Board of Directors believe that the
purchase of its stock pursuant to the tender offer is a positive
action that is intended to improve returns to our stockholders. Our
financial projections indicate that the purchase of shares will
increase earnings per share and return on stockholders' equity.
1
<PAGE>
Question: Who's idea was this?
Answer: The Board with the assistance of its financial advisers, has conducted
a detailed analysis of Peekskill Financial Corporation's capital
structure to determine how to maximize stockholder value by improving
return on stockholders' equity while maintaining a high level of
financial security and preserving future strategic options. Based upon
an internal review a purchase of shares appeared to be the best means
to accomplish the desired objectives. The Modified Dutch Auction
Tender method was determined to be the best way to acquire shares in
the shortest period of time.
Question: What do I say if a stockholder asks, "Should I sell (tender) my
stock?"
Answer: Members of the Peekskill Financial Corporation staff must not give any
investment advice to stockholders. The stockholder must make his or
her own investment decision. You should not express an opinion as to
whether you think the tender offer is a "good deal" or a "bad deal."
While the stockholder may call Regan & Associates, the Information
Agent or Capital Resources, Inc., the Dealer Manager, they will not
receive investment advice from them. They should be directed to
contact their broker or investment advisor.
Question: What do I do if someone brings a Letter of Transmittal to me or my
office?
Answer: Because tenders must be received by the Depositary, Registrar and
Transfer Company within a limited amount of time, we cannot take the
responsibility for having any stockholder's tender delivered.
Stockholders must send tenders directly to Registrar and Transfer
Company at the address provided in the tender offer documents. That
address is:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
Question: May employees of Peekskill Financial Corporation tender shares in the
offer?
Answer: Yes. Employees who own shares of Peekskill Financial Corporation
common stock are eligible to tender their shares. You will receive a
complete copy of the same documents that are being provided to other
stockholders.
2
<PAGE>
Exhibit (a)(7)
PEEKSKILL FINANCIAL CORPORATION
QUESTIONS AND ANSWERS
ABOUT THE OFFER OF
PEEKSKILL FINANCIAL CORPORATION
TO PURCHASE FOR CASH UP TO 800,000 SHARES
OF COMMON STOCK AT A PURCHASE PRICE OF
$14.75 TO $16.75 PER SHARE
December 23, 1998
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE OFFER OF
PEEKSKILL FINANCIAL CORPORATION
TO PURCHASE ITS STOCK
The following information is designed to answer frequently asked questions about
the offer by Peekskill Financial Corporation to purchase shares of its common
stock. Stockholders 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. Peekskill Financial Corporation is inviting its stockholders to tender
shares of its common stock, $0.01 par value per share (the "Shares"), at
prices not in excess of $16.75 nor less than $14.75 per Share in cash, as
specified by stockholders tendering their Shares, upon the terms and
subject to the conditions set forth in its Offer to Purchase, dated
December 23, 1998, and in the enclosed Letter of Transmittal (which
together constitute the "Offer"). The Company will determine the single per
Share price, not in excess of $16.75 nor less than $14.75 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 stockholders. The
Company will select the lowest Purchase Price that will allow it to buy
800,000 Shares (or such lesser number of Shares as are number tendered at
prices not in excess of $16.75 nor less than $14.75 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 purchase a specified number of shares of stock within a
specified price range per share, and pays the highest price at which it
accepts shares to all stockholders whose shares are accepted. In this case,
Peekskill Financial Corporation is making a direct offer to all of its
stockholders to purchase in the aggregate 800,000 Shares of its common
stock at a price not in excess of $16.75 nor less than $14.75 per Share.
This process allows each stockholder to elect whether to sell stock, and
the price the stockholder is willing to sell at within the given price
range. After receiving tenders of Shares, at the termination of the Offer,
the Company will choose the lowest price within the specified range that
will permit it to purchase the amount of securities sought and this price
will become the Purchase Price.
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 800,000 Shares. All stockholders tendering at or below the Purchase
Price will receive the price per share. For example, if 300,000 Shares are
tendered at $15.00 per Share, 500,000 Shares are tendered at $15.50 per
Share and 200,000 are tendered at $16.00 per Share, 800,000 Shares will be
purchased at $15.50 per Share from the persons who tendered at $15.00 and
$15.50, and the 200,000 Shares tendered at $16.00 per Share will be
returned and not purchased.
1
<PAGE>
Q. What Will Happen If More Than 800,000 Shares Are Tendered At Or Below The
Purchase Price?
A. In the event more than 800,000 Shares are tendered at or below the Purchase
Price, Shares tendered at or below the Purchase Price will be acquired by
the Company (i) first from any stockholder who owned beneficially, as of
the close of business on December 16, 1998 and continues to own
beneficially as of the termination of the Offer, an aggregate of fewer than
100 Shares and who validly tenders all of such Shares, and (ii) then from
all other tendering stockholder subject to proration.
Q. At What Price May I Tender My Shares?
A. Stockholders may elect to tender their Shares in increments of 1/4th of a
dollar ($.25) starting at $14.75 per Share up to and including $16.75 per
Share or may elect to tender their Shares at the Purchase Price determined
by the Company in accordance with the Terms of the Offer. The election as
to the number of Shares and the price a stockholder is willing to tender
are to be indicated on the Letter of Transmittal.
Q. How Do I Tender My Shares?
A. If you hold your Shares in certificate form, you must return a properly
completed Letter of Transmittal (the blue form) and any other documents
required by the Letter of Transmittal, together with the certificates for
the Shares being tendered, to the Depositary, Registrar and Transfer
Company, which must be received by it by 4:00 p.m. Eastern Standard Time on
January 27, 1999.
Q. How Do I Tender My Shares If My Shares Are Held By My Broker? A. If your
Shares are registered in street name with a broker, dealer, commercial
bank, trust company or other nominee, you will need to contact your broker,
bank or other nominee and instruct the nominee to make the tender of your
Shares for you. You cannot tender such Shares using the Letter of
Transmittal even though you may have received one for your information. If
you are a broker and are tendering Shares in book-entry form for your
customers, you must comply with the Book-Entry Delivery procedure described
in Section 3 of the Offer to Purchase. Q. What Do I Do If I Have Lost My
Certificates, Or If They Have Been Mutilated, Destroyed Or Stolen, But I
Still Want To Tender Them? A. Call the Depositary at (800) 368-5948 in New
Jersey for instructions for tendering Shares in such circumstances. Q. Do I
Have To Sell My Stock To The Company?
A. No. A stockholder is not required to tender any stock.
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
2
<PAGE>
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 800,000 of its outstanding Shares, the percentage of
the outstanding stock which you own will increase since the number of
outstanding Shares will be reduced.
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 for a period of at least 5 business days, and under certain
circumstances at least 10 business days, from such notice stockholders will
be able to change or withdraw their tender.
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 $15.00, 500 Shares at $16.00 and
keep the remaining 500 Shares. However, you cannot tender the same stock at
different prices. In the prior example, the stockholder owning 1,500 Shares
cannot tender 1,500 at $15.00 and 1,500 at $16.00. If you tender some
Shares at one price and other Shares at a different price, you must use a
separate Letter of Transmittal for each price.
Q. Is There Any Brokerage Commission?
A. No. The Company will purchase stock directly from each stockholder 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 indicated in the Letter
of Transmittal or withdraw it entirely up until 4:00 p.m. Eastern Standard
Time on January 27, 1999. Generally after January 27, 1999, you cannot
withdraw your tender. If you desire to change or withdraw your tender, you
are responsible to make certain that a valid withdrawal is received by the
January 27, 1999 deadline. Except as discussed in the Offer to Purchase,
tenders are irrevocable after the January 27, 1999 deadline.
Q. Can You Summarize The Process By Which Shares Are Validly Tendered?
A. Generally, for certificated Shares you must complete the Letter of
Transmittal (the blue form) as follows:
- List the certificates and the number of Shares that you are
tendering in the box captioned "Description of Shares Tendered".
- Check the box specifying the price at which you are tendering in
the box captioned "Price (in Dollars) Per Share at Which Shares
are Being Tendered".
- If you want to give us special payment instructions, complete the
box captioned "Special Payment Instructions".
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<PAGE>
- If you want to give us special delivery instructions, complete the
box captioned "Special Delivery Instructions".
- If you are an Odd Lot Holder who is tendering all your shares,
complete the box captioned "Odd Lots".
- If you want to make a conditional tender of Shares, complete the
box captioned "Conditional Tenders".
- If your Shares are being delivered by book-entry, complete the box
captioned "Box Below for Use By Eligible Institutions Only".
- Complete substitute Form W-9 to certify your tax identification
number.
- Sign the Letter of Transmittal in the box captioned "Sign Here"
(in certain circumstances, signatures must be guaranteed in this
Box).
You must deliver your Share certificates or comply with the book-entry
delivery requirements. See Section 3 of the Offer to Purchase. These
documents must be received by the Depositary, Registrar and Transfer
Company, no later than 4:00 p.m. Eastern Standard Time on January 27, 1999.
If you are tendering Shares held by a broker, commercial bank, trust
company or other nominee, your instructions must be given to your nominee
who will, on the basis of your instructions, tender Shares for you. Please
see Section 3 and the Letter of Transmittal for more details about how to
tender Shares.
Q. How Can I Get More Information?
A. If you have a question, please call the Information Agent, Regan &
Associates, Inc. at (800) 737-3426 or the Dealer Manager, Capital
Resources, Inc. at (800) 220-2744, from 9:00 a.m. - 5:30 p.m., Eastern
Standard Time, 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 Peekskill Financial Corporation Offer to Purchase document dated December
23, 1998 and the accompanying Letter of Transmittal.
4
<PAGE>
Exhibit (a)(8)
[PEEKSKILL FINANCIAL CORPORATION LETTERHEAD]
For Immediate Release
December 18, 1998
CONTACT: William J. LaCalamito,
President and Chief Operating Officer
Peekskill Financial Corporation
(914) 737-2777
PEEKSKILL FINANCIAL CORPORATION ANNOUNCES TENDER OFFER
TO BUY UP TO 800,000 SHARES OF ITS COMMON STOCK
Peekskill, New York . . . . . Peekskill Financial Corporation (NASDAQ NMS: PEEK)
announced today that its Board of Directors has authorized the repurchase,
commencing on December 23, 1998, of up to 800,000 shares of its common stock,
which represents 28 percent of its 2,842,069 outstanding shares. The repurchase
will be made through a "Modified Dutch Auction Tender." Under this procedure,
Peekskill Financial Corporation stockholders will be given the opportunity to
sell part or all of their shares to the Corporation at a price of not less than
$14.75 per share and not more than $16.75 per share. This price range represents
a 7 percent to a 22 percent premium to the December 17, 1998 closing price of
$13.75 per share. Based upon the minimum and maximum offering prices specified
in the offer, the aggregate purchase price, if 800,000 shares are purchased,
would range from $11.8 million to $13.4 million. The offer to purchase shares
will begin at 9:30 a.m. Eastern Standard Time on December 23, 1998 and will
expire at 4:00 p.m. Eastern Standard Time on January 27, 1999 unless extended by
the Corporation. The offer to purchase represents the first Modified Dutch
Auction Tender by a thrift institution located in New York State.
Under the procedures for a Modified Dutch Auction Tender, stockholders
may offer to sell all or a portion of the shares they own at a price not more
than the maximum price ($16.75) nor less than the minimum price ($14.75)
specified in the tender. Upon the expiration of the offer, Peekskill Financial
Corporation will select the lowest purchase price that will allow it to buy
800,000 shares. All shares purchased in the offer will receive the same price.
If the number of shares tendered is equal to or less than 800,000 shares, the
purchase price will be the highest price specified by tendering stockholders. If
the number of shares tendered is greater than the number sought, the Corporation
will select the lowest price that will allow it to buy the number of shares it
seeks.
According to Eldorus Maynard, the Corporation's Chairman and Chief
Executive Officer, "the Board of Directors believes that the repurchase of
shares should enhance the long term value of the Corporation's shares without
reducing its strong capital base below the level needed to support its customer
oriented business. After studying a number of alternatives, we believe that the
Modified Dutch Auction Tender is the most effective way to repurchase the amount
of shares desired. Based upon our pro forma financial analysis, the purchase of
shares should have the effect of increasing earnings per share and raising the
return on stockholders' equity."
Peekskill Financial Corporation is a savings and loan holding company
based in Peekskill, New York. Its principal subsidiary, Peekskill Federal
Savings Bank serves its customers through these offices located in Northern
Westchester County, New York. At September 30, 1998, the Corporation had $199.9
million in assets, $156.9 million in liabilities and $43 million in
stockholders' equity.
1
<PAGE>
Capital Resources, Inc. will act as the dealer manager for the offer,
Regan & Associate, Inc. will act as information agent for the offer, and
Registrar and Transfer Company will be the depositary for the shares tendered.
Silver, Freedman & Taff, LLP will act as counsel on the transaction. Questions
or to requests for assistance may be directed to either Capital Resources, Inc.
at (202) 466-4585 or Regan & Associates at (800) 737-3426.
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell shares of Peekskill Financial Corporation common stock. The
offer is made solely by the Offer to Purchase
2
