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As filed with the Securities and Exchange Commission on April 22, 1999
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)
EFC BANCORP, INC.
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(NAME OF ISSUER)
EFC BANCORP, INC.
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(NAME OF PERSON(S) FILING STATEMENT)
Common Stock, $0.01 Par Value Per Share
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(TITLE OF CLASS OF SECURITIES)
268423 10 0
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(CUSIP NUMBER OF CLASS OF SECURITIES)
John J. Brittain
Chairman of the Board
EFC Bancorp, Inc.
1695 Larkin Avenue
Elgin, Illinois 60123
(847) 741-3900
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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:
Lori M. Beresford, Esq.
MULDOON, MURPHY & FAUCETTE LLP
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
(202) 362-0840
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(AGENT FOR SERVICE OF PROCESS)
April 22, 1999
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(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
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CALCULATION OF FILING FEE
Transaction Valuation 1 Amount of Filing Fee
$21,350,796 $5,936
1 Calculated solely for the purpose of determining the filing fee, based upon
the purchase of 1,779,233 shares at the maximum tender offer price of $12.00
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
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4 relates
is EFC Bancorp, Inc., a Delaware corporation (the "Company"), and the address
of its principal executive office, and its mailing address, is 1695 Larkin
Avenue, Elgin, Illinois 60123.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase
up to 1,779,233 shares (or such lesser number of shares as are properly
tendered) of its common stock, $0.01 par value per share (the "Shares"),
7,116,934 of which Shares were outstanding as of April 16, 1999, at prices not
in excess of $12.00 nor less than $10.00 per Share in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated April 22,
1999 (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 two of its directors intend to tender shares pursuant to the offer. The
Company also 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
information set forth in "Introduction," "Section 1, Number of Shares;
Proration" and "Section 11, Interest of Directors and Executive 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 7, 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 10, Source and Amount of Funds"
of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
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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 10,
Source and Amount of Funds," "Section 8, Purpose of the Offer; Certain Effects
of the Offer," "Section 11, Interest of Directors and Officers; Transactions
and Arrangements Concerning Shares" and "Section 12, 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 11, Interest of Directors and
Officers; Transactions and Arrangements Concerning Shares."
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in "Introduction" and "Section 10, Source and
Amount of Funds," "Section 8, Purpose of the Offer; Certain Effects of the
Offer," and "Section 11, 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 16, 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 9, 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 13, Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in "Section 12, 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 April 22, 1999.
(2) Form of Letter of Transmittal (including Certification of Taxpayer
Identification Number on Form W-9).
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(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees (including the
Instruction Form).
(6) Form of Letter to Stockholders of the Company, dated April 22,
1999, from John J. Brittain, Chairman of the Board of the Company.
(7) Form of Question and Answer Brochure.
(8) Text of Press Release issued by the Company, dated April 22, 1999.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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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.
Date: April 22, 1999 EFC BANCORP, INC.
By: /s/ John J. Brittain
-----------------------
John J. Brittain
Chairman of the Board
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EFC BANCORP, INC.
OFFER TO PURCHASE FOR CASH
UP TO 1,779,233 SHARES OF ITS
COMMON STOCK, PAR VALUE $0.01 PER SHARE
AT A PURCHASE PRICE NOT LESS THAN $10.00
NOR IN EXCESS OF $12.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M.,CENTRAL TIME, ON JUNE 1, 1999
UNLESS THE OFFER IS EXTENDED.
EFC Bancorp, Inc., a Delaware corporation ("Company"), invites its shareholders
to tender shares of its Common Stock, par value $0.01 per share ("Shares"), at
prices, net to the seller in cash, without interest thereon, not less than
$10.00 nor in excess of $12.00 per Share specified by such tendering
shareholders, 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 less than $10.00 nor in
excess of $12.00 per Share) that it will pay for the Shares validly tendered
pursuant to the Offer and not withdrawn ("Purchase Price"), taking into
consideration the number of Shares so tendered and the prices specified by the
tendering shareholders. The Company will select the Purchase Price that will
allow it to purchase 1,779,233 Shares (or such lesser number of Shares as are
validly tendered and not withdrawn at prices not less than $10.00 nor in excess
of $12.00 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 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 and
Shares not purchased because of proration will be returned. Shareholders 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.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE SECTION 6.
IMPORTANT
Any shareholder desiring to tender all or any portion of his or her
Shares should either (1) 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 LaSalle
National Bank ("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 (2) request his or her broker, dealer,
commercial bank, trust company or nominee to effect the transaction for him or
her. A shareholder 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. SHAREHOLDERS WHO DESIRE TO TENDER SHARES AND WHOSE CERTIFICATES FOR SUCH
SHARES ARE NOT IMMEDIATELY AVAILABLE OR WHO CANNOT COMPLY WITH THE PROCEDURE FOR
BOOK-ENTRY TRANSFER BY THE EXPIRATION OF THE OFFER MUST TENDER SUCH SHARES BY
FOLLOWING THE PROCEDURES FOR GUARANTEED DELIVERY SET FORTH UNDER "SECTION
3--PROCEDURE FOR TENDERING SHARES."
SHAREHOLDERS MUST PROPERLY COMPLETE THE LETTER OF TRANSMITTAL, INCLUDING THE
SECTION OF THE LETTER OF TRANSMITTAL RELATING TO THE PRICE AT WHICH THEY ARE
TENDERING SHARES, IN ORDER TO EFFECT A VALID TENDER OF THEIR SHARES.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
TO TENDER AND AT WHAT PRICE. EMPLOYEES, DIRECTORS AND EXECUTIVE OFFICERS MAY
PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE COMPANY'S OTHER SHAREHOLDERS.
THE COMPANY HAS BEEN ADVISED THAT TWO OF ITS DIRECTORS INTEND 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/Information Agent for the Offer is:
KEEFE, BRUYETTE & WOODS, INC.
The date of this Offer to Purchase is April 22, 1999
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As of April 16, 1999, the Company had issued and outstanding 7,116,934
Shares. There are no currently exercisable stock options and, therefore, no
shares have been reserved for issuance under the Company's 1998 Stock-Based
Incentive Plan. The 1,779,233 Shares that the Company is offering to purchase
pursuant to the Offer represents approximately 25% of the Shares then
outstanding. The Shares are traded on the American Stock Exchange ("AMEX").
The Shares trade under the symbol "EFC." On April 16, 1999, the closing price of
the Shares as reported on the AMEX was $10 1/16 per Share. Shareholders are
urged to obtain current market quotations for the Shares.
To tender Shares properly, shareholders must complete the section of
the Letter of Transmittal relating to the price at which they are tendering
Shares.
Questions or requests for assistance regarding this Offer to Purchase,
the Letter of Transmittal or other tender offer materials may be directed to the
Dealer Manager/Information Agent toll free at (877) 298-6520. Additional copies
of these materials will be furnished promptly at the Company's expense.
Shareholders 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 SHAREHOLDERS 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
Page
INTRODUCTION..................................................................1
1. NUMBER OF SHARES; PRORATION.................................2
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES.................3
3. PROCEDURE FOR TENDERING SHARES..............................4
4. WITHDRAWAL RIGHTS...........................................6
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT
FOR PURCHASE PRICE..........................................7
6. CERTAIN CONDITIONS OF THE OFFER.............................8
7. PRICE RANGE OF SHARES; DIVIDENDS............................9
8. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER..........9
9. CERTAIN INFORMATION CONCERNING THE COMPANY.................11
10. SOURCE AND AMOUNT OF FUNDS.................................17
11. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS
AND ARRANGEMENTS CONCERNING SHARES.........................17
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION
UNDER THE EXCHANGE ACT.....................................19
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS................19
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES....................20
15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS........23
16. FEES AND EXPENSES..........................................23
17. ADDITIONAL INFORMATION.....................................24
18. MISCELLANEOUS..............................................24
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To the Holders of Shares of Common Stock of EFC Bancorp, Inc.:
INTRODUCTION
EFC Bancorp, Inc., a Delaware corporation ("Company"), invites its
shareholders to tender shares of its Common Stock, par value $0.01 per share
("Shares"), at a price, net to the seller in cash, without interest thereon, not
less than $10.00 nor in excess of $12.00 per Share specified by such tendering
shareholders, 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 less than
$10.00 nor in excess of $12.00 per Share) that it will pay for the Shares
validly tendered pursuant to the Offer and not withdrawn ("Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the Purchase Price that will
allow it to purchase 1,779,233 shares (or such lesser number of Shares as is
validly tendered and not withdrawn at prices not less than $10.00 nor in excess
of $12.00 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 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 and Shares not purchased
because of proration 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 6.
If more than 1,779,233 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 shareholders who owned beneficially as
of the close of business on April 16, 1999, 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 shareholders who validly tender Shares at or below the
Purchase Price. See Sections 1 and 2. Tendering shareholders 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 Keefe, Bruyette &
Woods, Inc.("Dealer Manager/Information Agent") and LaSalle National Bank
("Depositary") incurred in connection with the Offer. See Section 16. ANY
TENDERING SHAREHOLDER 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 SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE
SECTIONS 3 AND 14.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. NEITHER THE
COMPANY NOR ITS BOARD OF DIRECTORS, HOWEVER, MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER 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. EMPLOYEES, OFFICERS AND DIRECTORS OF THE
COMPANY MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE COMPANY'S OTHER
SHAREHOLDERS. THE COMPANY HAS BEEN ADVISED THAT TWO OF ITS DIRECTORS INTEND TO
TENDER SHARES PURSUANT TO THE OFFER. THE COMPANY HAS BEEN ADVISED THAT THE
TRUSTEE OF THE COMPANY'S EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP") DOES NOT INTEND
TO TENDER ANY SHARES PURSUANT TO THE OFFER.
As of April 16, 1999, the Company had issued and outstanding 7,116,934
Shares. The 1,779,233 shares that the Company is offering to purchase pursuant
to the Offer represent approximately 25% of the Shares then outstanding.
1
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The Shares are traded on the AMEX. The Shares trade under the symbol
"EFC." On April 16, 1999 the closing price of the Shares on the AMEX was
$10 1/16 per Share. See Section 7. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES.
Questions and requests for assistance may be directed to the Dealer
Manager/Information Agent.
Keefe, Bruyette & Woods, Inc
211 Bradenton Avenue
Dublin, Ohio 43017-3541
Toll free. (877) 298-6520
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 1,779,233 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 less than $10.00 nor in excess of $12.00 per
Share. The later of 5:00 p.m., Central Time, on June 1, 1999, or the latest time
and date to which the Offer is extended pursuant to Section 15, 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
shareholders. The Company will select the Purchase Price that will allow it to
purchase 1,779,233 shares (or such lesser number of Shares as is validly
tendered and not withdrawn at prices not less than $10.00 nor in excess of
$12.00 per Share) pursuant to the Offer. Subject to Section 15, the Company
reserves the right to purchase more than 1,779,233 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 6.
In accordance with Instruction 5 of the Letter of Transmittal, each
shareholder who wishes to tender Shares must specify the price (not less than
$10.00 nor in excess of $12.00 per Share) at which such shareholder is willing
to have the Company purchase such Shares or, if such shareholder 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 less than $10.00 nor in excess of $12.00 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 shareholders. 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, will be returned to the tendering
shareholders 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 1,779,233
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 1,779,233 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
shareholder who owned beneficially, as of the close of business on April 16,
1999 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
tenders will not qualify for this preference) and completes the box captioned
"Odd Lots" on the Letter of Transmittal; and
2
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(b) then, after purchase of all of the foregoing Shares, 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, and (ii) as a
result of the "odd lot" procedure described in Section 2, the Company does not
expect that it would be able to announce the final proration factor or to
commence payment for any Shares purchased pursuant to the Offer until
approximately seven (7) 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 also may obtain such
preliminary information from the Dealer Manager/Information Agent.
As described under "Section 14--Certain Federal Income Tax
Consequences," the number of Shares that the Company will purchase from a
shareholder may affect the federal income tax consequences to the shareholder of
such purchase and therefore may be relevant to a shareholder's decision whether
to tender Shares. Each shareholder should consult his or her own tax advisor as
to the particular federal income tax consequences to that shareholder 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 15. 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, Central 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 shareholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES
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 shareholder
who owned beneficially, as of the close of business on April 16, 1999, 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 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 shareholder 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 April 16, 1999, there were approximately 3,460 holders of
record of Shares. Approximately 414 of these holders of record held
individually fewer than 100 Shares and held in the aggregate approximately
16,314 Shares. Because of the large number of Shares held in the names of
brokers and nominees, the Company is unable to determine the exact number of
beneficial owners of fewer than 100 Shares or the aggregate number of Shares
they own. Any shareholder 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
<PAGE> 7
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, (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), or (iii) the tendering shareholder must comply with the guaranteed
delivery procedure described below, 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 SHAREHOLDER MUST INDICATE IN THE
SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING
TENDERED" ON THE LETTER OF TRANSMITTAL: (1) THE PRICE (IN MULTIPLES OF FIFTY
CENTS) AT WHICH SUCH SHARES ARE BEING TENDERED; OR (2) THAT THE SHARES ARE BEING
TENDERED AT THE PURCHASE PRICE DETERMINED BY THE COMPANY IN ACCORDANCE WITH THE
TERMS OF THE OFFER.
Shareholders 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. FOR A
TENDER OF SHARES TO BE VALID, A PRICE BOX, BUT ONLY ONE PRICE BOX, OR THE BOX
INDICATING THAT THE SHARES ARE BEING TENDERED AT THE PURCHASE PRICE DETERMINED
BY THE COMPANY MUST BE CHECKED ON EACH LETTER OF TRANSMITTAL.
In addition, Odd Lot Holders who tender all such Shares must complete
the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on
the Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Holders as described in Section 2.
The Depositary will establish an account with respect to the Shares at
the Depository Trust Company (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 the 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 such
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 the
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 any
participant in the 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.
4
<PAGE> 8
If a shareholder desires to tender Shares pursuant to the Offer and
such shareholder's certificates are not immediately available (or the procedures
for book-entry transfer cannot be completed on a timely basis) or time will not
permit all required documents to reach the Depositary by the Expiration Date,
such Shares may nevertheless be tendered provided that all of the following
conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail, telegram or facsimile
transmission), on or prior to the Expiration Date, a properly completed and duly
executed Notice of Guaranteed Delivery substantially in the form the Company has
provided with this Offer to Purchase (indicating the price at which the Shares
are being tendered) and includes a guarantee by an Eligible Institution in the
form set forth in such Notice; and
(c) the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by the Letter of Transmittal, are
received by the Depositary within three AMEX trading days after the date the
Depositary receives such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED
IN ALL CASES. SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE 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 SHAREHOLDER MUST
PROVIDE THE DEPOSITARY WITH SUCH SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION
NUMBER AND CERTAIN OTHER INFORMATION BY PROPERLY COMPLETING THE SUBSTITUTE FORM
W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. FOREIGN SHAREHOLDERS (AS DEFINED IN
SECTION 14) 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 SHAREHOLDERS SUBJECT TO
30% (OR LOWER TREATY RATE) WITHHOLDING ON GROSS PAYMENTS RECEIVED PURSUANT TO
THE OFFER (AS DISCUSSED IN SECTION 14). FOR A DISCUSSION OF CERTAIN FEDERAL
INCOME TAX CONSEQUENCES TO TENDERING SHAREHOLDERS, SEE SECTION 14. EACH
SHAREHOLDER 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 shareholder's representation and
warranty that (i) such shareholder 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 Rule 14e-4. The Company's
acceptance for payment of Shares tendered pursuant to the Offer will constitute
a binding agreement between the tendering shareholder and the Company upon the
terms and subject to the conditions of the Offer.
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
5
<PAGE> 9
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/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
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, Central Time, June 1,
1999 unless previously 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.
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,
Central Time, June 1, 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 shareholder 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 (including
the number of Shares being withdrawn); (C) the certificate numbers shown on the
particular certificates evidencing such Shares; (D) the signature of such
shareholder 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.
A shareholder of Shares held with the Book-Entry Transfer Facility must
call such shareholder's broker and instruct such broker to withdraw such tender
of Shares and instruct such broker to provide a written, telegraphic or
facsimile transmission notice of withdrawal to the Depositary on or before the
Expiration Date. A purported notice of withdrawal, which lacks any of the
applicable required information noted above, will not be an effective withdrawal
of a tender previously made.
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/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.
6
<PAGE> 10
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 shareholders, announce the Purchase Price, and
(subject to the proration 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, Shares that are
validly tendered and not withdrawn as of 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 (7) 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
shareholders for the purpose of receiving payment from the Company and
transmitting payment to tendering shareholders. Under no circumstances will
interest be paid on amounts to be paid to tendering shareholders, 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 and Shares not purchased
because of proration, 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
such Shares) as promptly as practicable following the Expiration Date without
expense to the tendering shareholder.
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 6.
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 SHAREHOLDER 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 REQUIRED FEDERAL
INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAID TO SUCH SHAREHOLDER OR
OTHER PAYEE PURSUANT TO THE OFFER SEE SECTION 3.
7
<PAGE> 11
6. 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 after April 16, 1999 and at or 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 subsidiary, taken
as a whole, or otherwise materially impair in any way the contemplated future
conduct of the business of the Company or its subsidiary 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 its
subsidiary, 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 subsidiary, taken as a whole, or otherwise materially impair in
any way the contemplated future conduct of the business of the Company or its
subsidiary;
(c) 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 judgment, 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,
(d) 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);
(e) 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
subsidiary;
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 such condition, 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 any such right and each such right shall be deemed an ongoing right which may
be asserted at any
8
<PAGE> 12
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 shareholders of record and the Shares would remain listed for
quotation on the AMEX. 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.
7. 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 AMEX for the periods
indicated.
<TABLE>
<CAPTION>
DIVIDENDS
HIGH LOW DECLARED
------------ -------------- -----------
<S> <C> <C> <C>
Fiscal 1998
3rd Quarter................ $14 $10 --
4th Quarter................ $12 1/2 $9 1/8 --
Fiscal 1999
1st Quarter................ $11 7/8 $9 3/8 $0.10
March 31, 1999
</TABLE>
The stock began trading on April 6, 1998. Consequently, no trading
information is available prior to that date. On April 16, 1999, the closing
price of the Shares on the AMEX was $10 1/16 per Share. SHAREHOLDERS ARE URGED
TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
8. 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 shareholders
and is consistent with the Company's long-term goal of increasing shareholder
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 shareholder 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 objective of
increasing shareholder value.
Other actions previously employed, including an open market purchase of
Shares, and the declaration of a quarterly dividend, have enhanced shareholder
value, but capital remains at high levels. The Offer is designed to restructure
the Company's balance sheet in order to increase return on equity by reducing
the amount of equity 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 the Company and its wholly
owned subsidiary, Elgin Financial
9
<PAGE> 13
Savings Bank ("Bank"), will continue to maintain the highest regulatory ranking
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. Furthermore, the Company is aware of certain accounting
rules applicable to a business combination. The ability to enter into a
transaction that may be accounted for as a "pooling of interests" in the future
pursuant to applicable accounting rules and standards has also been considered
by the Company as they consider alternative shareholder enhancement vehicles.
The Offer will enable shareholders who are considering the sale of all
or a portion of their Shares the opportunity to determine the price or prices
(not less than $10.00 nor in excess of $12.00 per Share) at which they are
willing to sell their Shares, and, if any such Shares are purchased pursuant to
the Offer, to sell those Shares for cash without the usual transaction costs
associated with open-market sales. The Offer may also give shareholders the
opportunity to sell Shares at prices greater than market prices prevailing prior
to the announcement of the Offer. See Section 7. In addition, qualifying
shareholders 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.
Shareholders who do not tender their Shares pursuant to the Offer and
shareholders 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 shareholders will not be
subject to materially greater risk as a result of the reduction of the capital
base.
Shareholders 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. Finally, the Offer may prohibit the Company's
ability to qualify for pooling-of-interests accounting treatment for any merger
transaction for approximately the next two years.
If fewer than 1,779,233 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 shareholders 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 shareholder action (except as required by
applicable law or the rules of the AMEX 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 SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER
MUST MAKE HIS OR HER DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER AND AT WHAT PRICE. EMPLOYEES, OFFICERS AND DIRECTORS OF THE
COMPANY MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE COMPANY'S OTHER
SHAREHOLDERS. THE COMPANY HAS BEEN ADVISED THAT TWO OF ITS DIRECTORS INTEND TO
TENDER SHARES PURSUANT TO THE OFFER. THE COMPANY HAS BEEN ADVISED THAT THE
TRUSTEE OF THE COMPANY'S ESOP DOES NOT INTEND TO TENDER ANY SHARES PURSUANT TO
THE OFFER.
10
<PAGE> 14
9. CERTAIN INFORMATION CONCERNING THE COMPANY
General
EFC Bancorp, Inc, a Delaware corporation, was organized for the purpose
of becoming the holding company for the Bank upon the Bank's conversion from an
Illinois state-chartered mutual to an Illinois state-chartered stock savings
bank ("Conversion"). The Conversion was completed on April 3, 1998. At December
31, 1998, the Company had total assets of $420.9 million, total deposits of
$269.6 million and shareholders' equity of $88.8 million.
The Bank is an Illinois chartered savings bank regulated by the
Illinois State Banking Department and its deposits are insured up to applicable
limits under the Savings Association Insurance Fund ("SAIF") of the Federal
Deposit Insurance Corporation ("FDIC"). The Bank also is a member of the Federal
Home Loan Bank ("FHLB") System.
The Bank is a community-oriented savings bank whose principle business
consists of accepting retail deposits from the general public in its primary
market area, consisting of those areas surrounding its full-service branch
offices, and investing those deposits together with funds generated from
operations and borrowings primarily in mortgage loans, and to a much lesser
extent, on commercial property and multi-family loans, construction and land
loans, commercial business loans, home equity loans and automobile and passbook
savings loans.
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 Annual Report on Form 10-K for the year
ended December 31, 1998. A copy of this report may be obtained as described in
Section 17 of this Offer. The income statement data for the years ended December
31, 1998 and 1997 and the balance sheet data as of the same dates have been
derived from the audited consolidated financial statements of the Company.
The following summary unaudited pro forma consolidated financial data
has been derived from the historical consolidated financial statements of the
Company. Such information has not been adjusted for certain costs and expenses
to be incurred as a result of the purchase of Shares pursuant to the Offer. The
summary unaudited pro forma consolidated financial data should be read in
conjunction with 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.
11
<PAGE> 15
<TABLE>
<CAPTION>
EFC BANCORP, INC.
HISTORICAL CONSOLIDATED BALANCE SHEET
AT DECEMBER 31,
-----------------------------------
1998 1997
-------------- --------------
(IN THOUSANDS)
<S> <C> <C>
Assets:
Cash and cash equivalents:
On hand and in banks......................................................... $ 2,217 $ 1,965
Interest-bearing deposits with financial institutions........................ 21,063 8,134
Loans receivable, net........................................................... 308,990 246,695
Mortgage-backed securities available-for-sale, at fair value.................... 17,880 20,163
Investment securities available-for-sale at fair value.......................... 57,637 45,484
Foreclosed real estate.......................................................... 193 99
Stock in Federal Home Loan Bank of Chicago, at cost............................. 2,850 2,051
Accrued interest receivable..................................................... 1,972 1,101
Office properties and equipment................................................. 6,530 5,390
Other assets.................................................................... 1,544 781
----------- ------------
Total assets................................................................. $420,876 $331,863
=========== ============
Liabilities and stockholders' equity:
Liabilities:
Deposit liabilities............................................................. $269,582 $270,013
Borrowed money.................................................................. 57,000 24,000
Payments by borrowers for taxes and insurance................................... 643 424
Income taxes payable............................................................ 1,264 1,596
Accrued expenses and other liabilities.......................................... 3,632 3,600
----------- -----------
Total liabilities............................................................ 332,121 299,633
----------- -----------
Stockholders' equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized; none issued...... -- --
Common stock $0.01 par value, 25,000,0000 shares authorized,
issued 7,491,434 at December 31, 1998......................................... 75 --
Additional paid in capital 72,213 --
Retained earnings-- substantially restricted.................................... 31,758 31,494
Treasury stock, at cost, 374,500 shares at December 31, 1998.................... (4,355) --
Unearned ESOP shares, 559,360 at December 31, 1998.............................. (8,364) --
Unearned stock award plan, 289,668 shares at December 31, 1998.................. (3,223) --
Accumulated other comprehensive income.......................................... 651 736
------------ ------------
Total stockholders' equity................................................... 88,755 32,230
------------ ------------
Total liabilities and stockholders' equity................................... $420,876 $331,863
============ ============
</TABLE>
12
<PAGE> 16
<TABLE>
<CAPTION>
EFC BANCORP, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1998
1,779,233 SHARES PURCHASED AT
------------------------------
$10.00 $12.00
PER SHARE PER SHARE
-------------- --------------
(IN THOUSANDS)
<S> <C> <C>
Assets
Cash and cash equivalents:
On hand and in banks........................................................ $ 2,217 $ 1,929
Interest-bearing deposits with financial institutions....................... 3,270 --
Loans receivable, net........................................................... 308,990 308,990
Mortgage-backed securities available-for-sale, at fair value.................... 17,880 17,880
Investment securities available-for-sale at fair value.......................... 57,637 57,637
Foreclosed real estate.......................................................... 193 193
Stock in Federal Home Loan Bank of Chicago, at cost............................. 2,850 2,850
Accrued interest receivable..................................................... 1,972 1,972
Office properties and equipment................................................. 6,530 6,530
Other assets.................................................................... 1,545 1,545
----------- -----------
Total assets................................................................. $ 403,084 $ 399,526
=========== ===========
Liabilities and stockholders' equity:
Liabilities:
Deposit liabilities............................................................. 269,582 269,582
Borrowed money.................................................................. 57,000 57,000
Payments by borrowers for taxes and insurance................................... 643 643
Income taxes payable............................................................ 1,264 1,264
Accrued expenses and other liabilities.......................................... 3,632 3,632
---------- ----------
Total liabilities............................................................ 332,121 332,121
---------- ----------
Stockholders' equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized; none issued...... -- --
Common stock $0.01 par value, 25,000,0000 shares authorized,
issued 7,491,434 at December 31, 1998......................................... 75 75
Additional paid in capital 72,213 72,213
Retained earnings-- substantially restricted.................................... 31,758 31,758
Treasury stock, at cost, 2,153,733 shares at December 31, 1998.................. (22,147) (25,706)
Unearned ESOP shares, 559,360 at December 31, 1998.............................. (8,364) (8,364)
Unearned stock award plan, 289,668 shares at December 31, 1998.................. (3,222) (3,222)
Accumulated other comprehensive income.......................................... 651 651
---------- ----------
Total stockholders' equity................................................... 70,963 67,405
---------- ----------
Total liabilities and stockholders' equity................................... $403,084 $399,526
========== ==========
</TABLE>
13
<PAGE> 17
<TABLE>
<CAPTION>
EFC BANCORP, INC.
HISTORICAL CONSOLIDATED INCOME STATEMENT
YEAR ENDED DECEMBER 31,
-------------------------------
1998 1997
--------------- --------------
(IN THOUSANDS)
<S> <C> <C>
Interest Income:
Loans secured by real estate................................................... $20,806 $18,875
Other loans.................................................................... 1,256 905
Mortgage-backed securities available for sale.................................. 1,146 1,388
Investment securities and mutual funds available for sale...................... 5,108 3,309
--------- ---------
Total interest income..................................................... 28,316 24,477
--------- ---------
Interest expense:
Deposits........................................................................ 11,825 11,808
Borrowed money.................................................................. 2,273 1,441
--------- ---------
Total interest expense....................................................... 14,098 13,249
--------- ---------
Net interest income before provision for loan losses........................... 14,218 11,228
Provision for loan losses.......................................................... 293 354
--------- ---------
Net interest income after provision for loan losses............................ 13,925 10,874
--------- ---------
Noninterest income:
Service fees................................................................... 693 601
Real estate and insurance commissions.......................................... 92 158
Gain (loss) on sale of foreclosed real estate.................................. (12) 8
Gain on sale of securities..................................................... 12 --
Other.......................................................................... 121 34
---------- ---------
Total noninterest income................................................... 906 801
---------- ---------
Noninterest expense:
Compensation and benefits...................................................... 4,581 3,916
Office building, net........................................................... 313 304
Depreciation and repairs....................................................... 704 623
Data processing................................................................ 393 312
Federal insurance premiums..................................................... 177 163
NOW account operating expenses................................................. 260 236
Foundation contribution........................................................ 5,549 --
Other.......................................................................... 2,580 2,045
---------- ---------
Total noninterest expense.................................................. 14,557 7,599
---------- ---------
Income before income taxes................................................. 274 4,076
Income tax expense................................................................. 10 1,388
---------- ---------
Net income................................................................. $ 264 $ 2,688
========== =========
Loss per share:
Basic.......................................................................... $ (0.08) N/A
Diluted........................................................................ (0.08) N/A
</TABLE>
14
<PAGE> 18
<TABLE>
<CAPTION>
EFC BANCORP, INC.
PRO FORMA CONSOLIDATED INCOME STATEMENT
YEAR ENDED
DECEMBER 31, 1998
1,779,233 SHARES PURCHASED AT
---------------------------------
$10.00 $12.00
PER SHARE PER SHARE
----------------- --------------
(IN THOUSANDS)
<S> <C> <C>
Interest Income:
Loans secured by real estate.............................................. $20,806 $20,806
Other loans............................................................... 1,256 1,256
Mortgage-backed securities available for sale............................... 1,146 1,146
Investment securities and mutual funds available for sale................... 4,467 4,339
------ ------
Total interest income.................................................. 27,675 27,547
------ ------
Interest expense:
Deposits..................................................................... 11,825 11,825
Borrowed money............................................................... 2,273 2,273
------ ------
Total interest expense.................................................... 14,098 14,098
------ ------
Net interest income before provision for loan losses........................ 13,577 13,449
Provision for loan losses....................................................... 293 293
------ ------
Net interest income after provision for loan losses......................... 13,284 13,156
------ ------
Noninterest income:
Service fees................................................................ 693 693
Real estate and insurance commissions....................................... 92 92
Gain (loss) on sale of foreclosed real estate............................... (12) (12)
Gain on sale of securities.................................................. 12 12
Other....................................................................... 121 121
------ ------
Total noninterest income................................................ 906 906
------ ------
Noninterest expense:
Compensation and benefits................................................... 4,581 4,581
Office building, net........................................................ 313 313
Depreciation and repairs.................................................... 704 704
Data processing............................................................. 393 393
Federal insurance premiums.................................................. 177 177
NOW account operating expenses.............................................. 260 260
Foundation contribution..................................................... 5,549 5,549
Other....................................................................... 2,580 2,580
------ ------
Total noninterest expense............................................... 14,557 14,557
------ ------
Loss before income taxes................................................ (367) (495)
Income tax benefit.............................................................. (142) (192)
------- ------
Net loss................................................................ $ (225) $ (303)
======= ======
Loss per share:
Basic....................................................................... $ (0.04) $ (0.06)
Diluted..................................................................... (0.04) (0.06)
</TABLE>
15
<PAGE> 19
<TABLE>
<CAPTION>
EFC BANCORP, INC.
SELECTED HISTORICAL FINANCIAL RATIOS
YEAR ENDED DECEMBER 31,
------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
Selected Ratios:
Financial Performance:
Return on average assets........................................................ 0.06% 0.82%
Return on average equity........................................................ 0.34% 8.67%
Capital:
Dividend payout ratio........................................................... -- --
Shareholders' equity to total assets............................................ 16.78% 9.67%
Book value per share............................................................ $12.47 $ --
Asset quality:
Allowance for loan losses as a percent of loans................................. 0.44% 0.46%
Allowance for loan losses as a percent of nonperforming loans................... 136.47% 57.68%
Nonperforming loans to total loans before net items............................. 0.32% 0.79%
</TABLE>
<TABLE>
<CAPTION>
EFC BANCORP, INC.
UNAUDITED SELECTED PRO FORMA FINANCIAL RATIOS
YEAR ENDED DECEMBER 31, 1998
---------------------------------
SHARES PURCHASED AT
---------------------------------
$10.00 $12.00
PER SHARE PER SHARE
-------------- ---------------
<S> <C> <C>
Selected Ratios:
Financial Performance:
Return on average assets........................................................ (0.06%) (0.07%)
Return on average equity........................................................ (0.32%) (0.45%)
Capital:
Dividend payout ratio........................................................... -- --
Stockholders' equity to total assets............................................ 17.61% 16.87%
Book value per share............................................................ $13.29 $12.63
Asset quality:
Allowance for loan losses as a percent of loans................................. 0.44% 0.44%
Allowance for loan losses as a percent of nonperforming loans................... 136.47% 136.47%
Nonperforming loans to total loans.............................................. 0.32% 0.32%
</TABLE>
16
<PAGE> 20
EFC Bancorp, Inc.
Notes to Unaudited Pro Forma Financial Information
(1) The pro forma financial information reflects the repurchase of
1,779,233 Shares at $10.00 and $12.00 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 funds used to purchase Shares were considered to have been
provided by cash and overnight funds and interest-bearing deposits with
financial institutions. The pro forma data assumes a rate of interest of 3.6% on
interest-earning deposits and a statutory tax rate of 38.7% for the year ended
December 31, 1998.
(4) No effect has been given to the $215,000 in costs estimated to be
incurred in connection with the Purchase Offer. Such costs are not expected to
be material and will be capitalized as part of the cost of the stock purchased.
10. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 1,779,233 Shares pursuant to the
Offer at a price of $12.00 per Share, the total amount required by the Company
to purchase such Shares will be $21.4 million, exclusive of fees and other
expenses. The Company will fund such purchases with cash held by the Company.
11. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS;
TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES
As of March 31, 1999, the Company had issued and outstanding 7,116,934
shares of common stock. The 1,779,233 Shares that the Company is offering
to purchase represent approximately 25% of the outstanding Shares. As of April
16, 1999, the Company's directors and executive officers as a group (13 persons)
beneficially owned an aggregate of 582,526 Shares representing approximately
8.19% of the outstanding Shares. As of March 31, 1999, the ESOP held 599,314
shares, representing approximately 8.42% of the shares outstanding.
Neither the Company, nor any subsidiary of the Company nor, to the best
of the Company's knowledge, any of the Company's directors or executive
officers, nor any affiliates of any of the foregoing, had any transactions
involving the Shares during the 40 business days prior to the date hereof.
Executive officers and directors of the Company may participate in the
Offer on the same basis as the Company's other shareholders. The Company has
been advised that two of its directors intend to tender Shares pursuant to the
Offer. The table below identifies the directors of the Company that intend to
tender their Shares and sets forth the number of Shares each expects to tender.
The trustee of the ESOP has advised the Company that it does not intend to
tender any Shares pursuant to the Offer.
<TABLE>
<CAPTION>
Name Shares to be Tendered
- ---- ---------------------
<S> <C>
Vincent C. Norton
Director and Vice President 10,000
Ralph W. Helm, Jr.
Director 6,200
</TABLE>
The price at which such tenders will be made has not been determined.
17
<PAGE> 21
The table below identifies each executive officer and director of the
Company and sets forth the number of Shares owned (including Shares held under
the ESOP and excluding any shares that could in the future be acquired upon the
exercise of stock options because no stock options are currently exercisable)
and the percent of Shares owned to the total number of Shares outstanding as of
April 16, 1999. Subject to the terms of the Offer, all or a portion of such
Shares could be tendered.
<TABLE>
<CAPTION>
SHARES
NAME OWNED TOTAL
- ---- -------------- ------------
<S> <C> <C>
DIRECTORS
John J. Brittain
Chairman of the Board 69,351 69,351
Leo M. Flanagan
Vice Chairman of the Board 45,417 45,417
Barrett J. O'Connor
Director, President and CEO 61,797 61,797
James J. Kovac
Director, SVP and CFO 83,911 83,911
Peter A. Traeger
Director 34,000 34,000
James A. Alpeter
Director 500 500
Vincent C. Norton
Director and Vice President 53,231 53,231
Ralph W. Helm, Jr.
Director 60,200 60,200
Thomas I. Anderson
Director 44,000 44,000
EXECUTIVE OFFICERS
James R. Schneff
Vice President Lending 35,035 35,035
Joseph E. Stanczak
Vice President and Treasurer 33,170 33,170
Sandra L. Sommers
Vice President Savings 31,996 31,996
Jerry L. Gosse
Vice President Compliance
Officer 29,918 29,918
------- -------
Total shares owned......... 582,526 582,526
------- -------
Shares owned as a percent
of shares outstanding at
March 31, 1999................ 8.19% 8.19%
Shares owned as a percent of
shares outstanding assuming
tender and purchase of
1,779,233 shares............. 10.61% 10.61%
------- -------
</TABLE>
Except for outstanding options to purchase Shares granted to certain
employees (including executive officers) of the Company, 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
18
<PAGE> 22
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 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 its subsidiary; (c) a
sale or transfer of a material amount of assets of the Company or its
subsidiary; (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.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES;
REGISTRATION UNDER THE EXCHANGE ACT
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of shareholders. Nonetheless, the Company anticipates that there will be
a sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the AMEX, 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 AMEX.
The Shares are currently "margin securities" under the rules of the
Board of Governors of the Federal Reserve System ("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 shareholders
and the U.S. Securities and Exchange Commission ("Commission") and comply with
the Commission's proxy rules in connection with meetings of the Company's
shareholders.
13. 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 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 6.
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a discussion of the material United States federal
income tax consequences to shareholders 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"), U S Department of
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 shareholder
in light of such shareholder'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 shareholders 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
shareholders. The discussion assumes that the Shares are held as "capital
assets" within the meaning of Section 1221 of the Code.
19
<PAGE> 23
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 SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE
PARTICULAR UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THAT SHAREHOLDER 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.
CHARACTERIZATION OF THE SURRENDER OF SHARES PURSUANT TO THE OFFER
The surrender of Shares by a shareholder to the Company pursuant to the
Offer will be a taxable transaction for United States federal income tax
purposes. The United States federal income tax consequences to a shareholder may
vary depending upon the shareholder's particular facts and circumstances. Under
Section 302 of the Code, the surrender of Shares by a shareholder 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 shareholder) if the
receipt of cash upon such surrender (i) is "substantially disproportionate" with
respect to the shareholder, (ii) results in a "complete redemption" of the
shareholder's interest in the Company, or (iii) is "not essentially equivalent
to a dividend" with respect to the shareholder (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 shareholder will recognize
gain or loss equal to the difference between the amount of cash received by the
shareholder and the shareholder'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
shareholder will be treated as having received a distribution by the Company
with respect to such shareholder's Shares in an amount equal to the cash
received by the shareholder 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 shareholder's tax basis in the
Shares, and then as gain from the sale or exchange of such Shares. If a
shareholder is treated as having received a distribution by the Company with
respect to his or her Shares, the shareholder's tax basis in his or her
remaining Shares will generally be adjusted to take into account the
shareholder's return of basis in the Shares tendered.
CONSTRUCTIVE OWNERSHIP
In determining whether any of the three tests under Section 302 of the
Code is satisfied, shareholders must take into account not only the Shares that
are actually owned by the shareholder, but also Shares that are constructively
owned by the shareholder within the meaning of Section 318 of the Code. Under
Section 318 of the Code, a shareholder may constructively own Shares actually
owned, and in some cases constructively owned, by certain related individuals or
entities and Shares that the shareholder has the right to acquire by exercise of
an option or by conversion.
PRORATION
Contemporaneous dispositions or acquisitions of Shares by a shareholder
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
shareholder should be aware that because proration may occur in the Offer, even
if all the Shares actually and constructively owned by a shareholder are
tendered pursuant to the Offer, fewer than all of such Shares may be purchased
by the Company. Thus, proration may affect whether the surrender by a
shareholder pursuant to the Offer will meet any of the three tests under Section
302 of the Code.
SECTION 302 TESTS
The receipt of cash by a shareholder will be "substantially
disproportionate" if the percentage of the outstanding Shares in the Company
actually and constructively owned by the shareholder 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 such shareholder
immediately before the sale of Shares pursuant to the Offer. Shareholders should
consult their tax advisors with respect to the application of the "substantially
disproportionate" test to their particular situation.
20
<PAGE> 29
The receipt of cash by a shareholder will be a "complete redemption" if
either (i) the shareholder owns no Shares in the Company either actually or
constructively immediately after the Shares are surrendered pursuant to the
Offer, or (ii) the shareholder 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 shareholder immediately after the
Offer, the shareholder is eligible to waive (and effectively waives)
constructive ownership of all such Shares under procedures described in Section
302(c) of the Code. A director, officer or employee of the Company is not
eligible to waive constructive ownership under the procedures described in
Section 302(c) of the Code.
Even if the receipt of cash by a shareholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, a
shareholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test if the shareholder's surrender of Shares pursuant to the Offer
results in a "meaningful reduction" in the shareholder's interest in the
Company. Whether the receipt of cash by a shareholder will be "not essentially
equivalent to a dividend" will depend upon the individual shareholder's facts
and circumstances. The IRS has indicated in published rulings that even a small
reduction in the proportionate interest of a small minority shareholder in a
publicly held corporation who exercises no control over corporate affairs may
constitute such a "meaningful reduction". Shareholders 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 SHAREHOLDER DIVIDEND TREATMENT
If a sale of Shares by a corporate shareholder is treated as a
dividend, the corporate shareholder may be entitled to claim a deduction equal
to 70% of the dividend under Section 243 of the Code, subject to applicable
limitations. Corporate shareholders 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 shareholder 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 shareholder pursuant to
the Offer that are treated as a dividend may constitute an "extraordinary
dividend" under Section 1059 of the Code. The "extraordinary dividend" rules of
the Code are highly complicated. Accordingly, any corporate shareholder that
might have a dividend as a result of the sale of shares pursuant to the Offer
should review the "extraordinary dividend" rules to determine the applicability
and impact of such rules to it.
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. Tax rates on
long-term capital gain for individual shareholders vary depending on the
shareholder's income and holding period for the Shares. In particular, reduced
tax rates apply to gains recognized by an individual from the sale of capital
assets held for more than one year (currently 20 percent or less).
Shareholders 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 SHAREHOLDERS
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 shareholder 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 shareholder within the United
States. For this purpose, a foreign shareholder is any shareholder that is not
(i) a citizen or resident of the United States, (ii) a domestic corporation or
domestic partnership, (iii) an estate the income of which from sources without
the United States is effectively connected with the conduct of a trade or
business within the United States, or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust, and one or more United States persons have the authority to control all
substantial decisions of the trust. Without definite knowledge to the contrary,
the Company will determine whether a shareholder is a foreign shareholder by
reference to the shareholder's address. A foreign shareholder may be eligible to
file for a refund of such tax or a portion of such tax if such shareholder (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 shareholder within the
United States or that the foreign shareholder is entitled to the benefits of a
tax treaty, the foreign shareholder 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 shareholders
21
<PAGE> 30
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 SHAREHOLDER.
NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN TAX
CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. SHAREHOLDERS 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.
15. 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 6 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
issuing a notice of such extension by press release or other public
announcement, which notice shall be issued no later than 9:00 a.m., Eastern
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/Information
Agents soliciting fee, or (b) increase (except for an increase not exceeding 2%
of the outstanding shares) or decrease the number of Shares it seeks.
16. FEES AND EXPENSES
Keefe, Bruyette & Woods, Inc. will act as Dealer Manager/Information
Agent for the Company in connection with the Offer. For its services, the
Company has agreed to pay the Dealer Manager/Information Agent an advisory fee
of $25,000 and, upon acceptance for and payment of Shares pursuant to the Offer,
a total of $0.10 per Share purchased by the Company pursuant to the Offer, less
the $25,000 advisory fee.
The Dealer Manager/Information Agent may contact shareholders by mail,
telephone, facsimile, telex, telegraph, or other electronic means and personal
interviews, and may request brokers, dealers and other nominee shareholders to
forward materials relating to the Offer to beneficial owners. The Depositary and
the Dealer Manager/Information Agent will receive reasonable and customary
compensation for their services and will also be reimbursed for certain
out-of-pocket expenses. The Company has agreed
22
<PAGE> 31
to indemnify the Depositary and the Dealer Manager/Information Agent against
certain liabilities, including certain liabilities under the federal securities
laws, in connection with the Offer. Neither the Dealer Manager/Information Agent
nor the Depositary has been retained to make solicitations or recommendations in
connection with the Offer.
The Company has retained LaSalle National Bank as Depositary.
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/Information Agent). 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.
17. ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W. , Washington,
D C. 20549 and at the Commission's regional offices at 7 World Trade Center,
13th Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material may also be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Such information may also be accessed electronically by means of the
Commission's home page on the Internet (http://www.sec.gov).
18. MISCELLANEOUS
Pursuant to Rule 13e-4 under the Exchange Act, the Company has filed
with the Commission an Issuer Tender Offer Statement on Schedule 13e-4 which
contains additional information with respect to the Offer. Such Schedule 13e-4,
including the exhibits and any amendments thereto, may be examined, and copies
may be obtained, at the same places and in the same manner as is set forth in
Section 17 with respect to information concerning the Company.
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/Information Agent or one or more registered brokers or dealers licensed
under the laws of such jurisdictions.
EFC BANCORP, INC.
Date: April 22, 1999
23
<PAGE> 32
The Dealer Manager/Information Agent for the Offer is
KEEFE, BRUYETTE & WOODS, INC
211 Bradenton Avenue
Dublin, Ohio 43017-3541
Toll free: (877) 298-6520
Any questions concerning the terms of the Offer, 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/Information Agent.
The Depositary for the Offer is:
LASALLE NATIONAL BANK
By Mail or Overnight Delivery: By Hand:
135 South LaSalle Street IBJ Whitehall Bank and Trust Company
Room 1811 One State Street
Chicago, Illinois 60603 New York, New York 10004
ATTN: John Abraham ATTN: Custody Operations
Receive and Delivery
Investor Relations
Telephone Number: (800) 246-5761
Facsimile Number: (312) 904-2236
April 22, 1999
<PAGE> 1
EFC BANCORP, INC.
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK OF
EFC BANCORP, INC.
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED APRIL 22, 1999
BY MAIL & OVERNIGHT DELIVERY:
LaSalle National Bank BY HAND:
135 South LaSalle Street IBJ Whitehall Bank and
Room 1811 Trust Company
Chicago, Illinois 60603 One State Street
Attn: New York, New York 10004
--------------------- Attn: Custody Operations
Receive and Delivery
-------------------------------------------------------------------
EXCHANGE AGENT: LASALLE NATIONAL BANK
TELEPHONE NUMBER: (800) 246-5761) FACSIMILE NUMBER: (312) 904-2236
-------------------------------------------------------------------
DESCRIPTION OF SHARES SURRENDERED (SEE INSTRUCTION 3 AND 4)
-------------------------------------------------------------------
Name(s) and Address(s) of Registered Shares Tendered
owners(s) (Please Fill In Exactly as name(s) (Attach Additional
Appear(s) on Certificate(s)) List if Necessary)
- --------------------------------------------------------------------------------
Number Certificate(s)* Tendered**
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
Total Shares
- --------------------------------------------------------------------------------
* Need not be completed by shareholders 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., CENTRAL TIME, ON JUNE 1, 1999,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA 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.
Delivery of documents to EFC Bancorp, Inc. or to the Book-Entry Transfer
Facility does not constitute a valid delivery. PLEASE DO NOT MAIL OR DELIVER
ANY SHARES TO EFC BANCORP, INC. DELIVERIES TO EFC BANCORP, INC. WILL NOT BE
FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE A VALID DELIVERY.
(BOX BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
- --------------------------------------------------------------------------------
o CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution
---------------------------------------------------
Account No. Transaction Code No.
---------------------- --------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
o CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):
-------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------------
Name of Institution Which Guaranteed Delivery:
----------------------------------
Name of Tendering Institution:
--------------------------------
Account No. Transaction Code No.
------------------------ ----------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 April 16,
1999, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
o was the beneficial owner as of the close of business on April 16, 1999, 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
o 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 April 16, 1999, 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). / /
--
- --------------------------------------------------------------------------------
<PAGE> 2
NOTE: SIGNATURES MUST BE PROVIDED HEREON. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
The undersigned hereby tenders to EFC Bancorp, Inc., a Delaware corporation
("Company"), the above described shares of its Common Stock, par value $0.01 per
share ("Shares"), at a price per Share hereinafter set forth, pursuant to the
Company's offer to purchase up to 1,779,233 Shares, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated April 22, 1999
("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
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.
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 less than $10.00 nor in excess of $12.00 per Share) net to the
seller in cash, without interest thereon ("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 the
tendering shareholders. The undersigned understands that the Company will
select the Purchase Price that will allow it to purchase 1,779,233 shares (or
such lesser number of Shares as are validly tendered and not withdrawn at
prices not less than $10.00 nor in excess of $12.00 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
provisions, and that the Company will return all other Shares, including
Shares tendered and not withdrawn at prices greater than the Purchase Price
and Shares not purchased because of proration. The undersigned understands
that tenders of Shares pursuant to any 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 here-by 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.
|_| $10.00 |_| $10.50 |_| $11.00 |_| $11.50 |_| $12.00
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). |_|
- --------------------------------------------------------------------------------
IMPORTANT
(Please Complete Substitute Form W-9 Included in this Letter of Transmittal)
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF OWNER(S))
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT NAME(S))
Dated , 1999
----------------------------
Capacity (full title)
-----------------------------------------------------------
Address
-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.
-----------------------------------------------------
Tax Identification or
Social Security No.
-------------------------------------------------------------
(see Substitute Form W-9)
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificates(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.)
- --------------------------------------------------------------------------------
<PAGE> 3
- --------------------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S) (See Instructions 1 and 6)
Authorized Signature(s) Address
------------------- ------------------------
Name and Title
---------------------------- --------------------------------
(PLEASE PRINT)
Name of Firm
------------------------------ --------------------------------
(INCLUDE ZIP CODE)
Area Code and Area Code and
Telephone Number Telephone Number
-------------------------- ----------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
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.)
IF SPECIAL PAYMENT INSTRUCTIONS ARE BEING GIVEN, PLEASE REMEMBER TO HAVE YOUR
SIGNATURE GUARANTEED.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 o check and/or o
certificate(s) to:
Name
---------------------------------------------------------------------------
(PLEASE PRINT)
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
IF SPECIAL PAYMENT INSTRUCTIONS ARE BEING GIVEN, PLEASE REMEMBER TO HAVE YOUR
SIGNATURE GUARANTEED.
- --------------------------------------------------------------------------------
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 the
Book-Entry Transfer Facility 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 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
ITS ADDRESS AS 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 the Book-Entry Transfer Facility has received an
express acknowledgment from the participant in the Book-Entry Transfer Facility
tendering the Shares, that such participant has received and agrees to be bound
by the terms of the Offer to Purchase and 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
SHAREHOLDER, 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. DO NOT MAIL OR
DELIVER TO EFC BANCORP, INC.
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 shareholder 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 SHAREHOLDERS 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> 4
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. FOR SHARES TO
BE VALIDLY TENDERED, THE SHAREHOLDER MUST CHECK THE BOX INDICATING (1) THE PRICE
PER SHARE AT WHICH HE OR SHE IS TENDERING SHARES OR (2) THAT SUCH PERSON IS
TENDERING SHARES AT THE PURCHASE PRICE DETERMINED BY THE COMPANY PURSUANT TO THE
TERMS OF THE OFFER UNDER THE HEADING "PRICE (IN DOLLARS) PER SHARE AT WHICH
SHARES ARE BEING TENDERED" IN THIS LETTER OF TRANSMITTAL, except that any
shareholder who owned beneficially as of the close of business on April 16,
1999, 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 shareholder 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, THERE IS NO VALID TENDER OF SHARES. A
shareholder 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 tendered 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 OR 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). 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. Shareholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such shareholder at the Book-Entry Transfer Facility from which such transfer
was made.
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 shareholder who owned beneficially as
of the close of business on April 16, 1999, and continues to own beneficially
as of the Expiration Date, an aggregate of fewer than 100 Shares and who validly
tendered all such Shares at or below the Purchase Price (including by not
designating a Purchase Price as described above). Partial 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 SHAREHOLDER 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
SHAREHOLDER TO 31% FEDERAL INCOME TAX BACKUP WITHHOLDING ON THE PAYMENT OF THE
PURCHASE PRICE. The box in Part 3 of Substitute Form W-9 may be checked if the
tendering shareholder 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 3 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 Dealer Manager/Information Agent
at its telephone number and address 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 Dealer Manager/Information Agent and such
copies will be furnished promptly at the Company's expense. Shareholders 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 Dealer Manager/Information Agent, 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) OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
shareholder's correct TIN on Substitute Form W-9 below. If such shareholder 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-9,
the shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholder with respect to
Shares purchased pursuant to the Offer may be subject to backup withholding.
Certain shareholders (including, among others, all corporations and
certain foreign individuals and entities) are not subject to these backup
withholding and reporting requirements. In order for a noncorporate foreign
shareholder to qualify as an exempt recipient, that shareholder must complete
and sign a Form W-8, Certificate of Foreign Status, attesting to that
shareholder's exempt status. The Form W-8 can be obtained from the Depositary.
Exempt shareholders, other than noncorporate foreign shareholders, should
furnish their TIN in Part 1 and check the box in Part 4 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.
If federal income tax backup withholding applies, the Depositary is
required to withhold 31% on any payments made to the shareholder. 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 shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder 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 shareholder 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
shareholder that he or she is no longer subject to federal income tax backup
withholding. Foreign shareholders 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 shareholders subject to 30% (or
lower treaty rate) withholding on gross payments received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder 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.
(See Instruction 10)
<PAGE> 5
- --------------------------------------------------------------------------------
PAYER'S NAME:
- --------------------------------------------------------------------------------
SUBSTITUTE
FORM W-9
OR
(See Instruction 10)
Please fill in your name and address below.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address (number and street)
- --------------------------------------------------------------------------------
City, State and Zip Code
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
PART I - PLEASE PROVIDE YOUR
TIN IN THE BOX AT THE RIGHT AND
CERTIFY BY SIGNING AND DATING
BELOW.
- --------------------------------------------------------------------------------
PART 2 -- CERTIFICATION -- Under Penalties of Perjury, I certify that:
(1) The number shown on the form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding because (a) I am exempt
from backup withholding, or (b) I have not been notified by the
Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of failure to report all interest or
dividends or (c) the IRS has notified me that I am no longer
subject to backup withholding.
- --------------------------------------------------------------------------------
CERTIFICATE INSTRUCTIONS -- You must cross out Item (2) in Part 2 above if
you have been notified by the IRS that you are currently subject to
backup withholding because of under reporting interest or dividends on your
tax return. However, if after being notified by the IRS that you were subject
to backup withholding, you received another notification from the IRS stating
that you are no longer subject to backup withholding, do not cross out Item
(2). If you are exempt from backup withholding, check the box in Part 4 above.
SIGNATURE DATE 199
------------------------ --------------------- --
Social Security Numbers
OR
- --------------------------------------------------------------------------------
Employer Identification Number(s)
- --------------------------------------------------------------------------------
PART 3
Awaiting TIN / /
--
- --------------------------------------------------------------------------------
PART 4 -- For Payee
Exempt from Backup
Withholding
Exempt / /
--
- --------------------------------------------------------------------------------
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 3 OF
SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office, or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number to you within 60 days, you are required
to withhold 31% of all reportable payments thereafter made to me until I provide
a number.
SIGNATURE DATE 199
------------------------------- ------------------- --
- --------------------------------------------------------------------------------
The Dealer Manager/Information Agent:
KEEFE, BRUYETTE & WOODS, INC.
211 Bradenton Avenue o Dublin, Ohio 43017-3514 o Toll free: (877) 298-6520
<PAGE> 1
NOT VALID UNLESS SIGNED BY AN ELIGIBLE INSTITUTION.
EFC BANCORP, INC.
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
OFFER TO PURCHASE FOR CASH UP TO 1,779,233 SHARES
OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT LESS THAN
$10.00 NOR IN EXCESS OF $12.00 PER SHARE
This form or a facsimile copy of it must be used to accept the Offer (as
defined below) if:
(a) certificates for common stock, par value $0.01 per share (the "Shares"), of
EFC Bancorp, Inc., a Delaware corporation, are not immediately available;
or
(b) the procedure for book-entry transfer cannot be completed on a timely
basis; or
(c) time will not permit the Letter of Transmittal or other required documents
to reach the Depositary before the Expiration Date (as defined in Section 1
of the Offer to Purchase, as defined below).
This form or a facsimile of it, signed and properly completed, may be
delivered by hand, mail, telegram or facsimile transmission to the Depositary by
the Expiration Date. See "Section 3--Procedure for Tendering Shares" in the
Offer to Purchase.
DEPOSITARY:
To: LASALLE NATIONAL BANK
BY MAIL OR OVERNIGHT DELIVERY; BY HAND:
135 South LaSalle Street IBJ Whitehall Bank and Trust Company
Room 1811 One State Street
Chicago, Illinois 60603 New York, New York 10004
Attn: John Abraham Attn: Custody Operations
Receive and Delivery
Investor Relations Telephone Number: (800) 246-5761
Facsimile Number: (312) 904-2236
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OR INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THOSE LISTED
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to EFC Bancorp, Inc., at the price per Share
indicated below, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated April 22, 1999 (the "Offer
to Purchase"), and the related Letter of Transmittal (which together with the
Offer to Purchase constitute the "Offer"), receipt of which is hereby
acknowledged, 1,779,233 Shares of common stock, par value $0.01 per share (the
"Shares"), pursuant to the guaranteed delivery procedure set forth under
"Section 3-- Procedure for Tendering Shares" in the Offer to Purchase.
PLEASE CALL THE DEALER MANAGER/INFORMATION AGENT FOR ASSISTANCE IN COMPLETING
THIS FORM TOLL FREE AT (877) 298- 6520.
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED.
CHECK ONLY ONE BOX.
---
IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED (EXCEPT AS
OTHERWISE PROVIDED HEREIN), THERE IS NO VALID TENDER OF SHARES.
By checking one of the price boxes below, the undersigned hereby tenders Shares
at the price checked. 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 price
determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per Share below). / /
--
Price (in dollars) per Share at which Shares are being tendered:
/ / $10.00 / / $10.50 / / $11.00 / / $11.50 / / $12.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IF YOU OWN FEWER THAN 100 SHARES:
Complete ONLY if Shares are being tendered by or on behalf of a person
owning beneficially, as of the close of business on April 16, 1999 and who
continues to own beneficially as of the Expiration Date, an aggregate of fewer
than 100 Shares.
The undersigned either (check one):
/ / was the beneficial owner(s), as of the close of business on April 16,
-- 1999 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
-- which
(a) is tendering, for the beneficial owner(s) thereof, Shares with
respect to which it is the record owner, and
(b) believes, based upon representations made to it by such
beneficial owner(s), that each such person was the beneficial
owner, as of the close of business on April 16, 1999, of an
aggregate of fewer than 100 Shares and is tendering all of such
Shares.
- --------------------------------------------------------------------------------
<PAGE> 3
- --------------------------------------------------------------------------------
Certificate Nos. (if available):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
- --------------------------------------------------------------------------------
Address(es):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Zip Code
- --------------------------------------------------------------------------------
Area Code and
Telephone Number:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGN HERE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _______________________, 1999
If Shares will be tendered by book-entry transfer, check box below:
/ / The Depository Trust Company
- --
Account Number:
- --------------------------------------------------------------------------------
<PAGE> 4
- --------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank, trust company, savings association or credit union having an office or
correspondent in the United States (each, an "Eligible Institution"), hereby (i)
represents that the undersigned has a net long position in Shares in or
equivalent securities within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, at least equal to the shares
tendered, (ii) represents that such tender of Shares complies with Rule 14e-4,
and (iii) guarantees that either the certificates representing the Shares
tendered hereby in proper form for transfer, or timely confirmation of the
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (pursuant to the procedures set forth under "Section
3--Procedure for Tendering Shares" in the Offer to Purchase), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantee and any other documents required
by the Letter of Transmittal, will be received by the Depositary at one of its
addresses set forth above within three AMEX trading days after the date of
execution hereof.
Name of Firm:
------------------ ----------------------------------------
Authorized Signature
Address: Name:
------------------- ------------------------------------------
Title:
- --------------------------- ------------------------------------------
Zip Code:
Area Code and
Telephone Number: Dated: , 199__
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE
SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
KEEFE, BRUYETTE & WOODS, INC.
211 BRADENTON AVENUE
DUBLIN, OHIO 43017-3514
TOLL FREE: (877) 298-6520
EFC BANCORP, INC.
OFFER TO PURCHASE FOR CASH UP TO
1,779,233 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT LESS THAN $10.00
NOR IN EXCESS OF $12.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., CENTRAL TIME, ON JUNE 1, 1999,
UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
EFC Bancorp, Inc., a Delaware corporation ("Company"), has appointed us to
act as Dealer Manager/Information Agent in connection with its offer to purchase
for cash up to 1,779,233 shares of its Common Stock, $0.01 par value per share
("Shares"), at prices not less than $10.00 nor in excess of $12.00 per Share,
specified by shareholders tendering their Shares, upon the terms and subject to
the conditions set forth in the Company's Offer to Purchase, dated April 22,
1999, and in the related Letter of Transmittal (which together constitute the
"Offer").
The Company will determine the single per Share price, not less than
$10.00 nor in excess of $12.00 per Share, net to the seller in cash ("Purchase
Price"), that it will pay for Shares validly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the Purchase Price that will
allow it to buy 1,779,233 shares (or such lesser number of Shares as are
properly tendered at prices not less than $10.00 nor in excess of $12.00 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 provisions. See Section 1
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 1,779,233 shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i) from
shareholders who owned beneficially as of the close of business on April 16,
1999, 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 shareholders
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). See Sections 1 and 2
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 will be returned to the tendering
shareholders at the Company's expense as promptly as practicable following the
Expiration Date.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED
PURSUANT TO THE OFFER. SEE SECTION 6 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 fees paid to
the Dealer Manager/Information Agent 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
an agent of the Company, including Keefe, Bruyette & Woods, Inc. as "Dealer
Manager/Information Agent," and LaSalle National Bank as "Depositary," for
purposes of the Offer.
<PAGE> 2
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 April 22, 1999;
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. The Notice of Guaranteed Delivery to be used to accept the Offer
if shares and all other required documents cannot be delivered to the Depositary
by the Expiration Date.
4. Letter, dated April 22, 1999 from John J. Brittain, Chairman of the
Board of the Company, to shareholders of the Company;
5. Letter of Transmittal for your use and for the information of your
clients (together with substitute Form W-9); and
6. A return envelope addressed to LaSalle National Bank, as Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., CENTRAL TIME,
ON JUNE 1, 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 or the Dealer Manager/Information Agent at their respective
addresses and telephone numbers set forth on the back cover page of the Offer to
Purchase.
Additional copies of the enclosed material may be obtained from the Dealer
Manager/Information Agent by calling, toll free: (877) 298-6520.
Very truly yours,
KEEFE, BRUYETTE & WOODS, 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
DEALER MANAGER/INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED HEREIN.
<PAGE> 3
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.
- -- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
====================================================================================================================================
GIVE THE GIVE THE
SOCIAL SECURITY SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT NUMBER OF FOR THIS TYPE OF ACCOUNT NUMBER OF
====================================================================================================================================
<S> <C> <C> <C>
1. An individual's account The individual 8. Sole proprietorship account The owner4
2. Two or more individuals The actual owner of the 9. A valid trust, estate, or The legal entity (do not furnish
(joint account) account or, if combined funds pension trust the identifying number of the
any one of the individuals 1 personal representative or
trustee unless the legal entity
itself is not designated in the
account title.) 5
3. Husband and wife (joint The actual owner of the 10. Corporate account The corporation
account) account or, if joint funds,
either person 1
4. Custodian account of minor The minor2 11. Religious, charitable, The organization
(Uniform Gift to Minors educational organization
Act) account
5. Adult and minor (joint The adult or, if the minor 12. Partnership account The partnership
account only contributor, the minor 1 the name of the business
6. Account in the name of The ward, minor, or 13. Association, club or other The organization
guardian or committee for a incompetent person 3 tax-exempt organization
designated ward, minor, or
incompetent person
7. a. The usual revocable The grantor-trustee 1 14. A broker or registered The broker or nominee
savings trust account nominee
(grantor is also trustee)
b. So-called trust account The actual owner 1 15. Account with the The public entity
that is not a legal or Department of Agriculture
valid trust under State in the name of a public
law entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
====================================================================================================================================
</TABLE>
1 List first and circle the name of the person whose number you furnish.
2 Circle the minor's name and furnish the minor's social security number.
3 Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
4 Show the name of the owner.
5 List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 4
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
o An international organization or any agency, or instrumentality thereof.
o A registered dealer in securities or commodities registered
in the U.S. or a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(A).
o An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(l).
o An entity registered at all times under the Investment Company Act of
1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
o Payments to nonresident aliens subject to withholding
under section 1441.
o Payments to partnerships not engaged in a trade or business
in the U.S. and which have at least one nonresident partner.
o Payments of patronage dividends where the amount
received is not paid in money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payee.
o Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
o Payments described in section 6049(B)(5) to nonresident
aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER. WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Effective January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer.
Certain penalties may also apply.
PENALTIES
(1)PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2)FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS -- If you fail to
include any portion of an includable payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3)CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO
WITHHOLDING. -- If you make a false statement with no reasonable
basis which results in no imposition of backup withholding, you are
subject to a penalty of $500.
<PAGE> 1
EFC BANCORP, INC.
OFFER TO PURCHASE FOR CASH UP TO
1,779,233 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT LESS THAN $10.00
NOR IN EXCESS OF $12.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., CENTRAL TIME, ON JUNE 1, 1999
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated April 22,
1999, and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the Offer by EFC Bancorp, Inc. a Delaware
corporation ("Company"), to purchase up to 1,779,233 Shares of its Common Stock,
$0.01 par value per share ("Shares"), at prices not less than $10.00 nor in
excess of $12.00 per Share, as specified by tendering shareholders, upon the
terms and subject to the conditions set forth in the Offer
The Company will determine the single per Share price, not less than
$10.00 nor in excess of $12.00 per Share, net to the seller in cash ("Purchase
Price"), that it will pay for Shares validly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the Purchase Price that will
allow it to buy up to 1,779,233 Shares (or such lesser number of Shares as are
validly tendered at prices not less than $10.00 nor in excess of $12.00 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 provisions. See
Section 1 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 1,779,233 Shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i) from
shareholders who owned beneficially as of the close of business on April 16,
1999, 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
shareholders who properly tender at or below the Purchase Price (and do not
withdraw them prior to the expiration of the Offer). See Sections 1 and 2 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 will be returned to the tendering shareholders at
the Company's expense as promptly as practicable following the Expiration Date.
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 all or a portion of your Shares at prices not less than
$10.00 nor in excess of $12.00 per Share as indicated in the attached
Instruction Form, net to you in cash. If you do not wish to specify a Purchase
Price you may indicate that you have tendered your Shares at the Purchase Price
(not less than $10.00 nor in excess of $12.00 per Share) as determined by the
Company in accordance with the terms of the Offer.
2. The Offer is not conditioned on any minimum number of Shares being
tendered pursuant to the Offer.
3. The Offer, proration period and withdrawal rights will expire at 5:00
p.m., Central Time, on June 1, 1999, unless the Company extends the Offer.
4. The Offer is for 1,779,233 shares, constituting approximately 25% of
the Shares outstanding as of April 16, 1999.
<PAGE> 2
5. Tendering shareholders will not be obligated to pay any stock transfer
taxes on the Company's purchase of Shares pursuant to the Offer, subject to
Instruction 7 of the Letter of Transmittal.
6. If you beneficially held, as of the close of business on April 16,
1999, 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.
7. 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 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 5:00 P.M., CENTRAL
TIME, ON JUNE 1, 1999, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if more than 1,779,233
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 shareholder who owned
beneficially, as of the close of business on April 16, 1999 and
continues to own beneficially as of the Expiration Date, an aggregate
of fewer than 100 Shares who:
(1) validly tender all of such Shares at a price at or below the
Purchase Price (partial 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 foregoing Shares, then 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
(with appropriate adjustments to avoid purchases of fractional
Shares) as described in Section 1 of the Offer to Purchase.
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 Dealer Manager/Information
Agent or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
<PAGE> 3
INSTRUCTION FORM
FOR SHARES HELD BY BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES.
INSTRUCTIONS FOR TENDER OF SHARES
OF EFC BANCORP, INC.
Please tender to EFC Bancorp, Inc. ("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 April 22, 1999, and the related
Letter of Transmittal, the receipt of both of which is acknowledged.
The undersigned hereby instruct(s) you to tender to the Company the number of
Shares indicated below, at the price per Share indicated below, pursuant to the
terms and subject to the conditions of the Offer.
Aggregate number of Shares to be tendered by you for us: ___________ Shares.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5 ON THE LETTER OF TRANSMITTAL)
By checking one of the price boxes below, the undersigned understands that
none of my Shares will be purchased if the Purchase Price is less than the price
checked. 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 below. o
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED (SEE
INSTRUCTION 5 ON THE LETTER OF TRANSMITTAL):
/ / $10.00 / / $10.50 / / $11.00 / / $11.50 / / $12.00
-- -- -- -- --
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
- -- April 16, 1999, 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 box INSTEAD OF ONE OF THE PRICE PURCHASE 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 $10.00 or as high as
$12.00.
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE 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 SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES.
EACH SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY TO TENDER AND AT WHAT PRICE. EMPLOYEES, OFFICERS AND
DIRECTORS OF THE COMPANY MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE
COMPANY'S OTHER SHAREHOLDERS.
Signature(s):
------------------------------------------------------------------
------------------------------------------------------------------
Address: (Including Zip Code)
Name(s):
------------------------------------------------------------------
(Please Print) (Please Print)
------------------------------------------------------------------
Area Code and Telephone Number
Date: , 1999
-----------------------
- --------------------------------------------------------------------------------
(Employer Identification or Social Security Number)
IMPORTANT: SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-9 WITH
THEIR INSTRUCTION FORM.
<PAGE> 1
EFC BANCORP, INC. LOGO
April 22, 1999
Dear Shareholders:
Over time, the profitable operations of EFC Bancorp, Inc. ("Company") and
its subsidiary Elgin Financial Savings Bank ("Bank") have contributed to the
growth of a capital base that, when coupled with the substantial proceeds from
our conversion to a stock company in April 1998, exceeds all applicable
regulatory standards. This exceptionally strong capital base exceeds 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 shareholders, 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 1,779,233 shares of the
Company's common stock, or approximately 25% of our 7,116,934 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 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 less than $10.00 per share nor in excess of $12.00 per share. Upon
expiration of the offer, we will select the purchase price from those shares
tendered that will allow us to buy 1,779,233 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 1,779,233
shares are tendered.
We encourage each shareholder to read carefully the Offer to Purchase and
related materials. Neither EFC Bancorp, Inc. nor our Board of Directors makes
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 Keefe, Bruyette & Woods,
Inc. to serve as Dealer Manager/Information Agent. Representatives from this
firm 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 toll free the Dealer
Manager/Information Agent at (877) 298-6520 between 8:30 a m. and 5:30 p.m.,
Eastern Time.
Unless otherwise extended, the offer will expire at 5:00 p.m. Central
Time, on June 1, 1999. We again encourage you to read carefully the enclosed
material.
As always, we appreciate your interest in EFC Bancorp, Inc.
Sincerely,
John J. Brittain
Chairman of the Board
<PAGE> 2
INSTRUCTION SHEET
-----------------
SHAREHOLDERS WHO HOLD THEIR OWN STOCK CERTIFICATE(S) AND WISH TO TENDER SHARES
MUST:
o Completely fill out the Letter of Transmittal (blue document). If you want
to tender your shares at more than one price, then you must complete a
separate Letter of Transmittal for each price. You cannot, however, tender
the same stock at different prices. Please make additional copies of the
Letter of Transmittal if you need them.
o FOR THE TENDER TO BE VALID, A PRICE BOX OR THE BOX INDICATING THAT THE
SHARES ARE BEING TENDERED AT THE PURCHASE PRICE DETERMINED BY THE COMPANY
MUST BE CHECKED ON THE LETTER OF TRANSMITTAL (BLUE DOCUMENT).
o Send stock certificate(s) along with Letter of Transmittal to LaSalle
National Bank (the "Depositary") at the address on the back cover of the
Offer to Purchase (white booklet) and NOT to EFC Bancorp, Inc.
o Odd Lot Holders (holders of fewer than 100 shares) must complete the box
captioned "Odd Lots" on the Letter of Transmittal (blue
document).
o If a shareholder wishes to tender shares but will not have access to the
stock certificate(s) by the Expiration Date, the tender can still be made
by completely filling out the Letter of Transmittal (blue document), and
the Notice of Guaranteed Delivery (gray document).
o Complete the Substitute Form W-9 on the Letter of Transmittal (blue
document) to prevent the withholding of 31% of your gross payments.
o Signatures need not be guaranteed if being signed by the registered
holder(s) of the shares.
SHAREHOLDERS WHO DO NOT HOLD THEIR STOCK CERTIFICATE(S) (HELD BY BROKER) AND
WISH TO TENDER SHARES MUST:
o Contact your broker to coordinate the completion of the appropriate
documents.
INSTRUCTIONS FOR BROKERS:
o Completely fill out the Letter of Transmittal (blue document). If you want
to tender your shares at more than one price, then you must complete a
separate Letter of Transmittal for each price. Please make additional
copies of the Letter of Transmittal if you need them.
o FOR THE TENDER TO BE VALID, A PRICE BOX OR THE BOX INDICATING THAT THE
SHARES ARE BEING TENDERED AT THE PURCHASE PRICE DETERMINED BY THE COMPANY
MUST BE CHECKED ON THE LETTER OF TRANSMITTAL (BLUE DOCUMENT).
o Contact your broker and have the broker deliver your Shares pursuant to the
procedures for book-entry transfer, along with the Letter of Transmittal to
the Depositary at the address on the back cover of the Offer to Purchase
(white booklet) and NOT to EFC Bancorp, Inc.
o If a shareholder wishes to tender shares but will not have access to the
stock certificate(s) by the Expiration Date, the tender can still be made
by completely filling out the Letter of Transmittal (blue document), and
the Notice of Guaranteed Delivery (gray document).
o Complete the Substitute Form W-9 on the Letter of Transmittal (blue
document) to prevent the withholding of 31% of your gross payments.
o Signatures need not be guaranteed if being signed by the registered
holder(s) of the shares.
FOR MORE INFORMATION, A HELPFUL QUESTIONS & ANSWERS BROCHURE IS INCLUDED IN THIS
MATERIAL. IF YOU STILL HAVE QUESTIONS REGARDING THIS TENDER OFFER, INCLUDING
HOW TO COMPLETE THE NECESSARY FORMS, PLEASE CALL TOLL FREE AT (877) 298-6520.
<PAGE> 1
================================================================================
EFC BANCORP, INC.
QUESTIONS AND ANSWERS
ABOUT THE OFFER OF
EFC BANCORP, INC.
TO PURCHASE FOR CASH UP TO 1,779,233 SHARES
OF COMMON STOCK AT A PURCHASE PRICE OF
$10.00 TO $12.00 PER SHARE
APRIL 22, 1999
================================================================================
<PAGE> 2
QUESTIONS AND ANSWERS ABOUT THE OFFER OF
EFC BANCORP, INC.
TO PURCHASE ITS STOCK
The following information is designed to answer frequently asked questions
about the offer by EFC Bancorp, Inc. (the "Company") to purchase shares of its
common stock ("Shares"). Shareholders are referred to the Offer to Purchase and
Letter of Transmittal for a detailed description of the terms and conditions of
the offer.
Q. WHY IS THE COMPANY MAKING THIS OFFER?
A. The Company believes that it and its subsidiary, Elgin Financial Savings Bank
(the "Bank") has a strong and more than adequate capital base which will
allow them to continue to grow their business and using the additional
capital to buy back stock will allow them to increase shareholder value. The
repurchasing of stock is designed to increase the Company's return on equity
by reducing the amount of equity outstanding.
Q. WHAT IS THE OFFER TO PURCHASE?
A. The Company is inviting its shareholders to tender shares of its common stock
at prices not less than $10.00 nor in excess of $12.00 per Share in cash, as
specified by shareholders tendering their Shares. The Company will determine
the single per Share price, not less than $10.00 nor in excess of $12.00 per
Share, net to the seller in cash (the "Purchase Price"), that it will pay for
Shares validly tendered pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering shareholders. The
Company will select the Purchase Price that will allow it to buy 1,779,233
Shares (or such lesser number of Shares as are properly tendered at prices
not less than $10.00 nor in excess of $12.00 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. In a Modified Dutch Auction a company makes a direct tender offer to its own
shareholders to purchase a specified number of shares of its stock within a
specified price range per share, and pays the highest price at which it
accepts shares to all shareholders whose shares are accepted. In this case,
the Company is making a direct offer to all of its shareholders to purchase
in the aggregate 1,779,233 Shares of its common stock at a price not less
than $10.00 nor in excess of $12.00 per Share. This process allows each
shareholder to elect whether to sell stock, and the price the shareholder 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 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 Purchase Price that will allow it to buy up to
1,779,233 Shares. All shareholders tendering at or below the Purchase Price
will receive the same amount.
Q. WHAT WILL HAPPEN IF MORE THAN 1,779,233 SHARES ARE TENDERED AT OR BELOW THE
PURCHASE PRICE?
A. In the event more than 1,779,233 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 shareholder who owned beneficially, as of the
close of business on April 16, 1999 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 shareholders subject to proration.
Q. AT WHAT PRICE MAY I TENDER MY SHARES?
A. Shareholders may elect to tender their Shares in increments of fifty cents
($0.50) starting at $10.00 per Share up to and including $12.00 per Share.
The election as to the number of Shares and the price a shareholder is
willing to tender (or, if a
2
<PAGE> 3
shareholder does not wish to specify a price, he or she may elect to tender
Shares at the Purchase Price determined by the Company) 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 LaSalle National Bank (the "Depositary"), which
must be received by them by 5:00 p.m., Central Time, on June 1, 1999 (the
"Expiration Date"). PLEASE DO NOT ENDORSE YOUR CERTIFICATE(S).
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 RENDER THEM?
A. Call LaSalle National Bank at (800) 246-5761 for instructions for tendering
Shares in such circumstances. Calls should be made as soon as possible.
Q. I WANT TO TENDER BUT I CANNOT GET MY STOCK TO THE DEPOSITARY ON TIME. WHAT
CAN I DO?
A. If you cannot submit a valid tender by the Expiration Date but want to
tender, you may complete the guaranteed delivery instructions which gives you
three days to produce the certificates. Have an Eligible Institution (as
defined in Instruction 1 of the Letter of Transmittal) help you fill out the
form as instructed in Section 3 of the Offer to Purchase.
Q. DO I HAVE TO SELL MY STOCK TO THE COMPANY?
A. No. A shareholder 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 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 1,779,233 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. IF I DO TENDER MY SHARES, WHEN WILL I RECEIVE THE MONEY?
A. As soon as practicable after the Expiration Date. If you are a registered
shareholder, you will receive a check from the Depositary or if you hold your
stock with a bank or broker your account will be credited.
Q. WHAT IF THE TERMS OF THE OFFER CHANGE?
A. In the event the Expiration Date is extended or if the terms of the Offer are
materially changed, the Company will generally give notice of the change and,
under certain circumstances, shareholders will be able to change or withdraw
their tender for at least 10 business days from such notice.
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 one price, 500 Shares at another and keep the
remaining 500 Shares. However, you cannot tender the same stock at different
prices. In the prior example, the shareholder owning 1,500 Shares cannot
tender 1,500 at one price and 1,500 at another price. IF YOU TENDER SOME
SHARES AT ONE PRICE AND OTHER SHARES AT A DIFFERENT PRICE, YOU MUST USE A
3
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SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE.
You may make a copy of the Letter of Transmittal if you need additional
forms.
Q. IS THERE ANY BROKERAGE COMMISSION?
A. No. The Company will purchase stock directly from each shareholder at the
Purchase Price without the use of a broker.
Q. CAN I CANCEL OR CHANGE MY TENDER?
A. You may increase or decrease the number of Shares indicated in the Letter of
Transmittal or withdraw it entirely up until 5:00 p.m., Central Time, on
June 1, 1999. Generally, after June 1, 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 June 1, 1999 deadline.
Except as discussed in the Offer to Purchase, tenders are irrevocable after
the June 1, 1999 deadline.
Q. CAN YOU SUMMARIZE THE PROCESS BY WHICH SHARES ARE VALIDLY TENDERED?
A. Generally, if you hold the stock certificate, you must complete the Letter of
Transmittal (the blue form) as set forth below. PLEASE FOLLOW THESE
INSTRUCTIONS CAREFULLY TO ASSURE A VALID TENDER. o List the certificates and
the number of Shares that you are tendering in the box captioned "Description
of Shares Surrendered."
o 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 endered."
o If you want to give us special payment instructions, complete the box
captioned "Special Payment Instructions."
o If you want to give us special delivery instructions, complete the box
captioned "Special Delivery Instructions."
o If you are an Odd Lot Holder (I.E., you hold fewer than 100 Shares) who is
tendering all your shares, complete the box captioned "Odd Lots."
o Complete the substitute Form W-9 to certify your tax identification number.
o Sign the Letter of Transmittal in the box captioned "Important" (in certain
circumstances, signatures must be guaranteed in this Box; see Instructions
1 and 6 in the Letter of Transmittal).
o Contact your broker if your Shares are held in street name (held by broker)
for instructions.
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, LaSalle National Bank, no later than 5:00 p.m.,
Central Time, on June 1, 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 our Dealer Manager/Information Agent,
Keefe, Bruyette & Woods, Inc., toll free at (877) 298-6520 from 8:30 a.m. to
5:30 p.m., Eastern 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 EFC BANCORP, INC. OFFER TO PURCHASE DOCUMENT DATED APRIL 22, 1999 AND THE
ACCOMPANYING LETTER OF TRANSMITTAL.
4
<PAGE> 1
PRESS RELEASE
EFC BANCORP, INC.
ANNOUNCES OFFER TO BUY
UP TO 1,779,233 SHARES OF ITS COMMON STOCK
CONTACT: BARRETT J. O'CONNOR
PRESIDENT AND CHIEF EXECUTIVE OFFICER
EFC BANCORP, INC.
(847) 741-3900
Elgin, Illinois, April 22, 1999-- EFC Bancorp, Inc., (AMEX: EFC) the
holding company for Elgin Financial Savings Bank, Elgin, Illinois, has announced
that its Board of Directors has authorized the repurchase of up to 1,779,233
shares of its common stock, which represents approximately 25 percent of its
outstanding shares as of April 16, 1999.
The repurchase will be made through a "Modified Dutch Auction Tender."
Under this procedure, EFC Bancorp, Inc. shareholders will be given the
opportunity to sell part or all of their shares to the Corporation at a price of
not less than $10.00 per share and not more than $12.00 per share. The offer to
purchase shares will commence on April 22, 1999 and will expire at 5:00 p.m.
Central Time, June 1, 1999, unless extended by EFC Bancorp, Inc.
Under the procedures for a Modified Dutch Auction Tender, shareholders may
offer to sell all or a portion of the shares they own within a price range of
not less than the minimum price of $10.00 and not in excess of the maximum price
of $12.00 specified in the tender. Upon the expiration of the offer, EFC
Bancorp, Inc. will select the purchase price that will allow it to buy 1,779,233
shares. All shares purchased in the offer will receive the same price. If the
number of shares tendered is equal to or less than 1,779,233 shares, the
purchase price will be the highest price specified by tendering shareholders. 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. EFC Bancorp has retained Keefe, Bruyette & Woods, Inc. as dealer
manager/information agent and financial advisor for this transaction.
Barrett J. O'Connor, President and Chief Executive Officer of EFC Bancorp,
Inc., stated, "EFC Bancorp, Inc. is announcing this tender offer because the
Board of Directors believes that the purchase of shares pursuant to the offer
should have beneficial effects on shareholder value while maintaining a strong
capital base to support the needs of our business and our customers. After
studying a number of alternatives, we selected the Modified Dutch Auction Tender
because it is a positive action that has the potential for improving shareholder
returns in an expeditious manner. If the tender offer is successful, it is
expected to improve our return on equity, as well as our earnings per share."
At December 31, 1998, EFC Bancorp, Inc. had assets of $420.9 million and
stockholders' equity of $88.8 million. Elgin Financial Savings Bank is
headquartered in Elgin, Illinois, and operates through its executive/branch
office in Elgin and through four other full service branches
<PAGE> 2
located in Elgin and West Dundee, Illinois. The Bank's deposits are insured by
the Federal Deposit Insurance Corporation.
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell shares of EFC Bancorp, Inc. common stock. The offer may be made
solely by the Offer to Purchase, dated April 22, 1999 and the related Letter of
Transmittal, which documents are being sent to all shareholders.
