<PAGE>
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)
FIRST OTTAWA BANCSHARES, INC.
(Name of Issuer)
FIRST OTTAWA BANCSHARES, INC.
(Name of Person(s) Filing Statement)
Common Stock, par value $1.00 per share
(Title of Class of Securities)
335876108
(CUSIP Number of Class of Securities)
Joachim J. Brown
Chief Executive Officer
First Ottawa Bancshares, Inc.
701 LaSalle Street, P.O. Box 657
Ottawa, Illinois 61350
(815) 434-0044
(Name, Address and Telephone Number of Person Authorized to Receive Notice
and Communications on Behalf of Person(s) Filing Statement)
COPIES TO:
Steven J. Gavin, Esq.
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
December 6, 1999
(Date Tender Offer First Published, Sent or Given to
Security Holders)
<TABLE>
<CAPTION>
CALCULATION OF FILING FEE
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Transaction Value:* Amount of Filing Fee:*
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<S> <C>
$4,999,983 $1,000
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
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* Calculated solely for the purpose of determining the filing fee, based
upon the purchase of 87,719 shares at the tender offer price of $57.00
per share.
/ / Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
Amount Previously Paid: N/A
Filing Party: N/A
Form or Registration No.: N/A
Date Filed: N/A
<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4
relates is First Ottawa Bancshares, Inc., a Delaware corporation (the
"Company"), and the address of its principal executive office, and its mailing
address, is 701 LaSalle Street, P.O. Box 657, Ottawa, Illinois 61350.
(b) This Schedule 13E-4 relates to the offer by the Company to
purchase up to 87,719 shares (or such lesser number of shares as are properly
tendered) of its common stock, par value $1.00 per share (the "Shares"), 750,000
of which Shares were outstanding as of December 3, 1999, at a price, net to the
seller in cash, without interest thereon, of $57.00 per share, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated December
6, 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.
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
certain of its directors and executive officers intend to tender up to an
aggregate of 1,500 Shares pursuant to the Offer. The information set forth in
"Introduction," "Section 1. Number of Shares; Proration" and "Section 12.
Interest of Directors and Officers; Transactions and Arrangements Concerning
Shares" of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "Introduction" and "Section 8.
Price of Shares; Valuation Opinion" of the Offer to Purchase is incorporated
herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in "Section 11. Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER
OR AFFILIATE.
(a)-(j) The information set forth in "Introduction" and "Section
11. Source and Amount of Funds," "Section 9. Background; Purpose of the Offer;
Certain Effects of the Offer," "Section 12. Interest of Directors and Officers;
Transactions and Arrangements Concerning Shares" and "Section 13. Effects of the
Offer on the Market for Shares" of the Offer to Purchase is incorporated herein
by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Section 12. Interest of Directors
and Officers; Transactions and Arrangements Concerning Shares" of the Offer to
Purchase is incorporated herein by reference.
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<PAGE>
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE ISSUER'S SECURITIES.
The information set forth in "Introduction" and "Section 11.
Source and Amount of Funds," "Section 9. Background; Purpose of the Offer;
Certain Effects of the Offer," and "Section 12. Interest of Directors and
Officers; Transactions and Arrangements Concerning Shares" of the Offer to
Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED, OR TO BE COMPENSATED.
The information set forth in "Introduction" and "Section 17. Fees
and Expenses" of the Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL CONDITION.
(a)-(b) The information set forth in "Section 10. Certain
Information Concerning the Company," Schedule A and Schedule B of the Offer to
Purchase is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in "Section 14. Certain Legal
Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein
by reference.
(c) The information set forth in "Section 13. Effects of the Offer
on the Market for Shares" 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.
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<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase, dated December 6, 1999.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(4) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(including the Instruction Form).
(a)(5) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(6) Form of Letter to Stockholders of the Company, dated
December 6, 1999, from Joachim J. Brown, Chief Executive
Officer of the Company.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this Statement is true,
complete and correct.
FIRST OTTAWA BANCSHARES, INC.
By: /s/ Joachim J. Brown
----------------------------
Joachim J. Brown,
Chief Executive Officer
Dated: December 6, 1999
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<PAGE>
EXHIBIT INDEX
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
(a)(1) Form of Offer to Purchase, dated December 6, 1999.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(4) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(including the Instruction Form).
(a)(5) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(6) Form of Letter to Stockholders of the Company, dated December
6, 1999, from Joachim J. Brown, Chief Executive Officer of the
Company.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
<PAGE>
FIRST OTTAWA BANCSHARES, INC.
OFFER TO PURCHASE FOR CASH
UP TO 87,719 SHARES OF ITS
COMMON STOCK, PAR VALUE $1.00 PER SHARE
AT $57.00 NET PER SHARE IN CASH
--------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON MONDAY,
JANUARY 10, 2000, UNLESS THE OFFER IS EXTENDED.
--------------------------------------
First Ottawa Bancshares, Inc., a Delaware corporation (the "Company"),
invites its stockholders to tender up to 87,719 shares of its Common Stock, par
value $1.00 per share (the "Shares"), at a price, net to the seller in cash,
without interest thereon, of $57.00 per Share (the "Purchase Price"), upon the
terms and subject to the conditions set forth herein and in the related Letter
of Transmittal (which together constitute the "Offer"). Record holders of Shares
as of December 1, 1999 who sell Shares pursuant to the Offer will be entitled to
receive the regular semi-annual dividend of $1.00 per Share and the special
dividend of $1.00 per Share which are payable on January 1, 2000. See Section 8.
The Company will purchase all Shares validly tendered and not withdrawn
on or prior to the Expiration Date (as defined in Section 1), upon the terms and
subject to the conditions of the Offer, including the provisions relating to
proration and conditional tenders described herein. The Purchase Price will be
paid in cash, net to the seller, without interest thereon, with respect to all
Shares purchased. Shares not purchased because of proration and Shares that were
conditionally tendered and not accepted for purchase will be returned.
--------------------------------------
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE SECTION 7.
--------------------------------------
THE BOARD OF DIRECTORS HAS APPROVED THE OFFER. NEITHER THE COMPANY NOR
ITS BOARD OF DIRECTORS, HOWEVER, MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS
TO WHETHER TO TENDER ALL OR ANY SHARES. THE COMPANY HAS BEEN ADVISED THAT
CERTAIN OF ITS DIRECTORS AND EXECUTIVE OFFICERS INTEND TO TENDER UP TO AN
AGGREGATE 1,500 SHARES PURSUANT TO THE OFFER. EACH STOCKHOLDER MUST MAKE HIS OR
HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO
TENDER.
The date of this Offer to Purchase is December 6, 1999
<PAGE>
IMPORTANT
Any stockholder desiring to tender all or any portion of his or her
Shares should either (1) complete and sign the Letter of Transmittal or
facsimile thereof in accordance with the Instructions to the Letter of
Transmittal, mail or deliver it and any other required documents to The First
National Bank of Ottawa (the "Depositary"), and either mail or deliver the
certificates representing Shares to be tendered to the Depositary along with the
Letter of Transmittal or deliver such Shares pursuant to the procedure for
book-entry transfer set forth in Section 3 or (2) request his or her broker,
dealer, commercial bank, trust company or nominee to effect the transaction for
him or her. A stockholder whose Shares are registered in the name of a broker,
dealer, commercial bank, trust company or nominee must contact such broker,
dealer, commercial bank, trust company or nominee if he or she desires to tender
such Shares.
Questions and requests for assistance or for additional copies of this
Offer to Purchase or the Letter of Transmittal may be directed to the Company at
its address and telephone number indicated on the last page of this Offer to
Purchase.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER SHARES PURSUANT TO THE
OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION
AND SUCH OTHER INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
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<S> <C>
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 OF
PURCHASE PRICE..........................................................................7
6. CONDITIONAL TENDER OF SHARES..............................................................9
7. CERTAIN CONDITIONS OF THE OFFER...........................................................9
8. PRICE OF SHARES; VALUATION OPINION.......................................................11
9. BACKGROUND; PURPOSE OF THE OFFER; CERTAIN EFFECTS OF
THE OFFER..............................................................................12
10. CERTAIN INFORMATION CONCERNING THE COMPANY...............................................13
11. SOURCE AND AMOUNT OF FUNDS...............................................................15
12. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES......15
13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES............................................16
14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS..............................................16
15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................................................16
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS......................................20
17. FEES AND EXPENSES........................................................................21
18. MISCELLANEOUS............................................................................22
SCHEDULE A HISTORICAL FINANCIAL INFORMATION...........................................A-1
SCHEDULE B PRO FORMA FINANCIAL INFORMATION............................................B-1
SCHEDULE C OPINIOIN OF ALEX SHESHUNOFF & CO. INVESTMENT BANKING.......................C-1
</TABLE>
<PAGE>
SUMMARY
This general summary is provided solely for the convenience of holders
of Shares and is qualified in its entirety by reference to the full text of and
the more specific details contained in this Offer to Purchase and the related
Letter of Transmittal and any amendments hereto and thereto. Capitalized terms
used in this summary without definition shall have the meaning ascribed to such
terms in this Offer to Purchase.
The Company.................... First Ottawa Bancshares, Inc., a Delaware
corporation with principal executive offices
at 701-705 LaSalle Street, P.O. Box 657,
Ottawa, Illinois 61350.
The Shares..................... Shares of the Company's Common Stock, par
value $1.00 per share.
Number of Shares Sought........ 87,719 of the 750,000 Shares outstanding as
of December 3, 1999.
Purchase Price................. $57.00 net per Share.
Expiration Date of Offer....... Monday, January 10, 2000, at 12:00 midnight
Eastern time, unless extended by the
Company.
How to Tender Shares........... See Section 3. For further information, call
the Company or consult your broker for
assistance.
Proration...................... In the event more than 87,719 Shares have
been validly tendered and not withdrawn on
or prior to the Expiration Date, the
purchase of Shares will be subject to
proration. After the purchase of "Odd Lot"
Shares as described below, Shares will be
purchased on a pro rata basis.
Odd Lot Owners................. There will be no proration of Shares
tendered by any stockholder beneficially
owning less than 100 Shares as of the close
of business on December 3, 1999, and as of
the Expiration Date, who tenders all such
Shares and completes the box captioned "Odd
Lots" on the Letter of Transmittal.
Withdrawal Rights.............. Tendered Shares may be withdrawn at any time
until the Expiration Date of the Offer and,
unless previously purchased, after February
2, 2000.
Purpose of the Offer........... The Company believes that the purchase of
Shares is an attractive use of a portion of
the Company's available capital and will
afford those stockholders who desire
liquidity an opportunity to sell all or a
portion of their Shares.
Brokerage Commission........... Not payable by stockholders. In addition,
stockholders tendering Odd Lots will avoid
the applicable odd lot discount payable in a
sale of Shares in a transaction effected on
a securities exchange.
Stock Transfer Tax............. None, except as provided in Instruction 5 to
the Letter of Transmittal.
Payment Date................... As promptly as practicable after the
Expiration Date of the Offer.
Further Information............ Any questions, requests for assistance or
requests for additional copies of this Offer
to Purchase, the Letter of Transmittal or
other tender offer materials may be directed
to the Company, 701-705 LaSalle Street, P.O.
Box 657, Ottawa, Illinois 61350, Telephone:
(815) 434-0044.
Dividend....................... Record holders of Shares as of December 1,
1999 who sell Shares pursuant to the Offer
will be entitled to receive the regular
semi-annual dividend of $1.00 per Share and
the special dividend of $1.00 per Share
which are payable on January 1, 2000. See
Section 8.
i
<PAGE>
To the Holders of Shares of Common Stock of
First Ottawa Bancshares, Inc.:
INTRODUCTION
First Ottawa Bancshares, Inc., a Delaware corporation (the "Company"),
invites its stockholders to tender up to 87,719 shares of its Common Stock, par
value $1.00 per share (the "Shares"), at a price, net to the seller in cash,
without interest thereon, of $57.00 per Share, 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 has determined a per Share price of $57.00 (the "Purchase
Price") that it will pay for the Shares validly tendered pursuant to the Offer
and not withdrawn. The Company will purchase all Shares up to a maximum of
87,719 Shares validly tendered and not withdrawn on or prior to the Expiration
Date (as defined in Section 1), upon the terms and subject to the conditions of
the Offer, including the provisions relating to proration and conditional
tenders described below. The Purchase Price will be paid in cash, net to the
seller, without interest thereon, with respect to all Shares purchased. Record
holders of Shares as of December 1, 1999, who sell Shares pursuant to the Offer
will be entitled to receive the regular semi-annual dividend of $1.00 per Share
and the special dividend of $1.00 per Share which are payable on January 1,
2000. See Section 8. Shares not purchased because of proration and Shares that
were conditionally tendered and not accepted for purchase will be returned.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE COMPANY RESERVES THE RIGHT, HOWEVER, TO SO CONDITION THE OFFER.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7.
If more than 87,719 Shares have been validly tendered and not withdrawn
on or prior to the Expiration Date, the Company will purchase Shares first from
stockholders who owned beneficially as of the close of business on December 3,
1999, and continue to own beneficially as of the Expiration Date, an aggregate
of fewer than 100 Shares who properly tender all their Shares, and then on a pro
rata basis from all other Stockholders who validly tender Shares. See Sections
1, 2 and 6. Tendering stockholders will not be obligated to pay brokerage
commissions, solicitation fees or, subject to the Instructions to the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Company. The
Company will pay the expenses incurred in connection with the Offer, including
the fees of The First National Bank of Ottawa (the "Depositary"). See Section
17. ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND SIGN THE
SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE SUBJECT
TO UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS
PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE
SECTIONS 3 AND 15.
THE BOARD OF DIRECTORS HAS APPROVED THE OFFER. NEITHER THE COMPANY NOR
ITS BOARD OF DIRECTORS, HOWEVER, MAKES ANY
<PAGE>
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. THE
COMPANY HAS BEEN ADVISED THAT CERTAIN OF ITS DIRECTORS AND EXECUTIVE OFFICERS
INTEND TO TENDER UP TO AN AGGREGATE 1,500 SHARES PURSUANT TO THE OFFER. SEE
SECTION 12. EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
As of December 3, 1999, the Company had issued and outstanding a total
of 750,000 Shares.
Questions and requests for assistance may be directed to:
First Ottawa Bancshares, Inc.
701 LaSalle Street, P.O. Box 657
Ottawa, Illinois 61350
(815) 434-0044
Attention: Joachim J. Brown
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 87,719 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 of $57.00 per
Share. The later of 12:00 midnight, Eastern time, on Monday, January 10, 2000,
or the latest time and date to which the Offer is extended pursuant to Section
16, is referred to herein as the "Expiration Date." The proration period also
expires on the Expiration Date.
The offer price of $57.00 per share has been set by the Board in light
of past trades in the marketplace and current market conditions. The Board has
received a fairness opinion from Alex Sheshunoff & Co. Investment Banking that
$57.00 per share is a fair price from a financial perspective. Subject to
Section 16, the Company reserves the right to purchase more than 87,719 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 Company reserves
the right, however, to so condition the offer. The Offer is, however, subject to
certain other conditions. See Section 7.
All Shares purchased pursuant to the Offer will be purchased at the
Purchase Price. All Shares not purchased pursuant to the Offer, including Shares
not purchased because of proration, will be returned to the tendering
stockholders at the Company's expense as promptly as practicable following the
Expiration Date.
Upon the terms and subject to the conditions of the Offer, if 87,719 or
fewer Shares have been validly tendered 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
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<PAGE>
87,719 Shares have been validly tendered 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 and not withdrawn
on or prior to the Expiration Date by or on behalf of any stockholder
who owned beneficially, as of the close of business on December 3,
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 and condition tenders will not qualify for this
preference) and completes the box captioned "Odd Lots" on the Letter of
Transmittal; and
(b) then, after purchase of all of the foregoing Shares,
subject to the conditional tender provisions described in Section 6,
all other Shares validly tendered and not withdrawn on or prior to the
Expiration Date on a pro rata basis, if necessary (with appropriate
adjustments to avoid purchases of fractional Shares).
If proration of tendered Shares is required, (i) because of the
difficulty in determining the number of Shares validly tendered, (ii) as a
result of the "odd lot" procedure described in Section 2, and (iii) as a result
of the conditional tender procedure described in Section 6, 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 business days after the Expiration Date. Preliminary results
of proration will be announced as promptly as practicable after the Expiration
Date. Holders of Shares may obtain such preliminary information from the
Company.
The Company expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Depositary and making a public announcement thereof. See Section 16. There can
be no assurance, however, that the Company will exercise its right to extend the
Offer.
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, Eastern time.
Copies of this Offer to Purchase and the related Letter of Transmittal
are being mailed to record holders of Shares and will be furnished to brokers,
banks and similar persons whose names, or the names of whose nominees, appear on
the Company's stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES.
Except to the extent that the Company's purchase would result in a
"going private" transaction, all Shares validly tendered and not withdrawn at or
prior to the Expiration Date by or on behalf of any stockholder who owned
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
-3-
<PAGE>
Shares. Partial or conditional tenders will not qualify for this preference, and
it is not available to beneficial holders of 100 or more Shares, even if such
holders have separate stock certificates for fewer than 100 Shares. By accepting
this Offer, a stockholder owning beneficially fewer than 100 Shares will avoid
the payment of brokerage commissions and the applicable odd lot discount payable
in a sale of such Shares in a transaction effected on a securities exchange.
As of December 3, 1999, there were approximately 632 holders of record
of Shares. Approximately 144 of these holders of record held individually fewer
than 100 Shares and held in the aggregate approximately 5,746 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 stockholder
wishing to tender all of his or her Shares pursuant to this Section should
complete the box captioned "Odd Lots" on the Letter of Transmittal.
3. PROCEDURE FOR TENDERING SHARES.
To tender Shares validly pursuant to the Offer, a properly completed
and duly executed Letter of Transmittal or facsimile thereof, together with any
required signature guarantees and any other documents required by the Letter of
Transmittal, must be received by the Depositary at its address set forth on the
last page of this Offer to Purchase and either (i) certificates for the Shares
to be tendered must be received by the Depositary at such address or (ii) such
Shares must be delivered pursuant to the procedures for book-entry transfer
described below (and a confirmation of such delivery received by the
Depositary), in each case on or prior to the Expiration Date.
The Depositary will establish an account for its benefit 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 the
Book-Entry Transfer Facility. Although delivery of Shares may be effected
through book-entry transfer, a properly completed and duly executed Letter of
Transmittal and or 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 last page 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.
-4-
<PAGE>
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 (i) 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 (ii)
such Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 6 to the Letter of Transmittal.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
TO PREVENT UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO
31% OF THE GROSS PAYMENTS MADE PURSUANT TO THE OFFER, EACH TENDERING STOCKHOLDER
MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER AND CERTAIN OTHER INFORMATION BY PROPERLY COMPLETING THE
SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. FOREIGN STOCKHOLDERS
(AS DEFINED IN SECTION 15) MUST SUBMIT A PROPERLY COMPLETED FORM W-8 (WHICH MAY
BE OBTAINED FROM THE DEPOSITARY) IN ORDER TO PREVENT BACKUP WITHHOLDING. IN
GENERAL, BACKUP WITHHOLDING DOES NOT APPLY TO CORPORATIONS OR TO FOREIGN
STOCKHOLDERS SUBJECT TO 30% (OR LOWER TREATY RATE) WITHHOLDING ON GROSS PAYMENTS
RECEIVED PURSUANT TO THE OFFER (AS DISCUSSED IN SECTION 15). FOR A DISCUSSION OF
CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO TENDERING STOCKHOLDERS, SEE SECTION
15. EACH STOCKHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR
REGARDING HIS, HER OR ITS QUALIFICATION FOR EXEMPTION FROM BACKUP WITHHOLDING
AND THE PROCEDURE FOR OBTAINING ANY APPLICABLE EXEMPTION.
It is a violation of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), for a person to tender
Shares for his or her own account unless the person so tendering (i) has a net
long position equal to or greater than the amount of (x) Shares tendered or (y)
other securities immediately convertible into, exercisable or exchangeable for
the amount of Shares tendered and will acquire such Shares for tender by
conversion, exercise or exchange of such other securities and (ii) will cause
such Shares to be delivered in accordance with the terms of the Offer. Rule
14e-4 provides a similar restriction applicable to
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the tender on behalf of another person. The tender of Shares pursuant to any one
of the procedures described above will constitute the tendering stockholder's
representation and warranty that (i) such stockholder has a net long position in
the Shares being tendered within the meaning of Rule 14e-4 promulgated under the
Exchange Act, and (ii) the tender of such Shares complies with Rule 14e-4. The
Company's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering stockholder and the Company
upon the terms and subject to the conditions of the Offer.
All questions as to the Purchase Price, the form of documents, the
number of Shares to be accepted and the validity, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by the Company, in its sole discretion, which determination shall be final and
binding on all parties. The Company reserves the absolute right to reject any or
all tenders of Shares that it determines are not in proper form or the
acceptance for payment of or payment for Shares that may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any defect or irregularity in any tender of any particular Shares. Neither
the Company, the Depositary nor 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, Eastern time, February
2, 2000 unless theretofore accepted for payment by the Company as provided in
this Offer to Purchase. If the Company extends the period of time during which
the Offer is open, is delayed in purchasing Shares or is unable to purchase
Shares pursuant to the Offer, the Depositary may, on behalf of the Company,
retain all Shares tendered, and such Shares may not be withdrawn except as
otherwise provided in this Section 4, subject to Rule 13e-4(f)(5) under the
Exchange Act, which provides that the issuer making the tender offer shall
either pay the consideration offered or return the tendered securities promptly
after the termination or withdrawal of the tender offer.
WITHDRAWAL OF SHARES HELD IN PHYSICAL FORM.
Tenders of Shares made pursuant to the Offer may not be withdrawn after
the Expiration Date, except that they may be withdrawn after 12:00 midnight,
Eastern time, February 2, 2000 unless accepted for payment by the Company as
provided in this Offer to Purchase. For a withdrawal to be effective prior to
that time, a stockholder of Shares held in physical form must
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<PAGE>
provide a written, telegraphic or facsimile transmission notice (followed
immediately by original copy) of withdrawal to the Depositary at its address set
forth on the last page of this Offer to Purchase before the Expiration Date,
which notice must contain: (i) the name of the person who tendered the Shares;
(ii) a description of the Shares to be withdrawn (including the number of Shares
being withdrawn); (iii) the certificate numbers shown on the particular
certificates evidencing such Shares; (iv) the signature of such stockholder
executed in the same manner as the original signatures on the Letter of
Transmittal (including any signature guarantee (if such original signatures were
guaranteed)); and (v) if such Shares are held by a new beneficial owner,
evidence satisfactory to the Company that the person withdrawing the tender has
succeeded to the beneficial ownership of the Shares. A purported notice of
withdrawal which lacks any of the required information will not be an effective
withdrawal of a tender previously made.
WITHDRAWAL OF SHARES HELD WITH THE BOOK-ENTRY TRANSFER FACILITY.
Tenders of Shares made pursuant to the Offer may not be withdrawn after
the Expiration Date, except that they may be withdrawn after 12:00 midnight,
Eastern time, February 2, 2000 unless accepted for payment by the Company as
provided in this Offer to Purchase. For a withdrawal to be effective prior to
that time, a stockholder of Shares held with any of the Book-Entry Transfer
Facilities must call such stockholder'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 (followed immediately by original
copy) 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 withdrawal of a tender 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.
Neither the Company, the Depositary nor any other person is or will be under any
duty to give notification of any defect or irregularity in any notice of
withdrawal or incur any liability for failure to give any such notification.
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer and as
promptly as practicable after the Expiration Date, the Company will (subject to
the proration and conditional tender provisions of the Offer) accept for payment
and pay the Purchase Price for Shares validly tendered and not withdrawn.
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
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<PAGE>
certificates for such Shares (or of a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities), a properly completed and duly executed Letter of
Transmittal or manually signed copy thereof, with any required signature
guarantees, or, in the case of a book-entry delivery an Agent's Message, and any
other required documents.
For purposes of the Offer, the Company shall be deemed to have accepted
for payment (and thereby purchased), subject to proration and conditional
tenders, shares that are validly tendered and not withdrawn as, if and when it
gives oral or written notice to the Depositary of the Company's acceptance for
payment of such Shares. In the event of proration, the Company will determine
the proration factor and pay for those tendered Shares accepted for payment as
soon as practicable after the Expiration Date. However, the Company does not
expect to be able to announce the final results of any such proration until
approximately seven business days after the Expiration Date. The Company will
pay for Shares that it has purchased pursuant to the Offer by depositing the
aggregate Purchase Price therefor with the Depositary. The Depositary will act
as agent for tendering stockholders for the purpose of receiving payment from
the Company and transmitting payment to tendering stockholders. Under no
circumstances will interest be paid on amounts to be paid to tendering
stockholders, regardless of any delay in making such payment.
Certificates for all Shares not purchased, including Shares not
purchased because of proration and Shares that were conditionally tendered and
not accepted, will be returned (or, in the case of Shares tendered by book-entry
transfer, such Shares will be credited to an account maintained with one of the
Book-Entry Transfer Facilities by the participant therein who so delivered such
Shares) as promptly as practicable following the Expiration Date without expense
to the tendering stockholder.
Payment for Shares may be delayed in the event of difficulty in
determining the number of Shares properly tendered or if proration is required.
See Section 1. In addition, if certain events occur, the Company may not be
obligated to purchase Shares pursuant to the Offer. See Section 7.
The Company will pay or cause to be paid any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the Purchase Price is to be made to, or a
portion of the Shares delivered (whether in certificated form or by book-entry)
but not tendered or not purchased are to be registered in the name of, any
person other than the registered holder, or if tendered Shares are registered in
the name of any person other than the person signing the Letter of Transmittal
(unless such person is signing in a representative or fiduciary capacity), the
amount of any stock transfer taxes (whether imposed on the registered holder,
such other person or otherwise) payable on account of the transfer to such
person will be deducted from the Purchase Price unless satisfactory evidence of
the payment of such taxes, or exemption therefrom, is submitted. See Instruction
5 to the Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY
AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN
THE CASE OF A FOREIGN INDIVIDUAL, A FORM
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<PAGE>
W-8) MAY BE SUBJECT TO REQUIRED FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE
GROSS PROCEEDS PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER.
SEE SECTION 3.
6. CONDITIONAL TENDER OF SHARES.
Under certain circumstances and subject to the exceptions set forth in
Section 1, the Company may prorate the number of Shares purchased pursuant to
the Offer. As discussed in Section 15, the number of Shares to be purchased from
a particular stockholder might affect the tax treatment of such purchase to such
stockholder and such stockholder's decision whether to tender. EACH STOCKHOLDER
IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR. Accordingly, a stockholder
may tender Shares subject to the condition that a specified minimum number of
such holder's Shares tendered pursuant to a Letter of Transmittal must be
purchased if any such Shares so tendered are purchased, and any stockholder
desiring to make such a conditional tender must so indicate in the box captioned
"Conditional Tender" in such Letter of Transmittal.
Any tendering stockholders wishing to make a conditional tender must
calculate and appropriately indicate such minimum number of Shares. If the
effect of accepting tenders on a pro rata basis would be to reduce the number of
Shares (tendered pursuant to a Letter of Transmittal) to be purchased from any
stockholder below the minimum number so specified, such tender will
automatically be regarded as withdrawn (except as provided in the next
paragraph) and all Shares tendered by such stockholder pursuant to such Letter
of Transmittal will be returned as promptly as practicable thereafter.
If conditional tenders, that would otherwise be so regarded as
withdrawn, would cause the total number of Shares to be purchased to fall below
87,719 then, to the extent feasible, the Company will select enough of such
conditional tenders that would otherwise have been so withdrawn to permit the
Company to purchase 87,719 Shares. In selecting among such conditional tenders,
the Company will select by lot and will limit its purchase in each case to the
minimum number of Shares designated by the stockholder in the applicable Letter
of Transmittal as a condition to his or her tender.
7. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company will not
be required to accept for payment or pay for any Shares tendered, and may
terminate or amend and may postpone (subject to the requirements of the Exchange
Act for prompt payment for or return of Shares tendered) the acceptance for
payment of Shares tendered, if at any time after December 6, 1999, and at or
before acceptance for payment of any Shares 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
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<PAGE>
Offer or otherwise in any manner relates to or affects the Offer or
(ii) in the sole judgment of the Company, could materially and
adversely affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiaries, taken as a
whole, or otherwise materially impair in any way the contemplated
future conduct of the business of the Company or any of its
subsidiaries or materially impair the Offer's contemplated benefits to
the Company;
(b) there shall have been any action threatened, pending or
taken, or approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Company or any of its subsidiaries, by
any legislative body, court, authority, agency or tribunal which, in
the Company's sole judgment, would or might directly or indirectly (i)
make the acceptance for payment of, or payment for, some or all of the
Shares illegal or otherwise restrict or prohibit consummation of the
Offer, (ii) delay or restrict the ability of the Company, or render the
Company unable, to accept for payment or pay for some or all of the
Shares, (iii) materially impair the contemplated benefits of the Offer
to the Company or (iv) materially affect the business, condition,
(financial or other), income, operations or prospects of the Company
and its subsidiaries, taken as a whole, or otherwise materially impair
in any way the contemplated future conduct of the business of the
Company or any of its subsidiaries;
(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 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 sole 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 sole 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); or
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<PAGE>
(e) there shall have occurred any event or events that has
resulted, or may in the sole judgment of the Company result, directly
or indirectly, in an actual or threatened change in the business,
condition (financial or other), income, operations, stock ownership or
prospects of the Company and its subsidiaries; and, in the sole
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 sole 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 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 300 stockholders. 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.
8. PRICE OF SHARES; DIVIDENDS; VALUATION OPINION.
The Shares are not traded on any national or regional securities
exchange and there is no established public trading market for the Shares.
Transactions in the Shares have been infrequent. As of December 3, 1999, the
Company had approximately 632 stockholders of record. To the knowledge of the
Company's management, since January 1, 1994, an aggregate of approximately
390,760 Shares were transferred in approximately 513 separate transactions.
These Share transfers represent both transfers for consideration (i.e., sales)
and transfers for no consideration (e.g., gifts, estate transfers, etc.). The
Company's management is unable to differentiate such transfers and has limited
knowledge of the sale prices for transfers involving consideration.
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The following table sets forth dividends paid per Share on the dates
indicated:
<TABLE>
<CAPTION>
DATE DIVIDENDS
<S> <C>
January 1, 1996 $1.50
July 1, 1996 $0.50
January 1, 1997 $2.00
July 1, 1997 $1.00
January 1, 1998 $2.00
July 1, 1998 $1.00
January 1, 1999 $2.00
July 1, 1999 $1.00
January 1, 2000* $2.00
</TABLE>
* The Board has declared a regular semi-annual
dividend of $1.00 per Share and a special
dividend of $1.00 per Share which are
payable to record holders as of December 1,
1999 on January 1, 2000.
Record holders of Share as of December 1, 1999 who sell Shares pursuant to the
Offer will be entitled to receive the regular semi-annual dividend of $1.00 per
Share and the special dividend of $1.00 per Share which are payable on January
1, 2000.
The offer price of $57.00 per share has been set by the Board in light
of past trades in the marketplace and current market conditions. The Board
retained Alex Sheshunoff & Co. Investment Banking ("Alex Sheshunoff") to provide
a fairness opinion that the $57.00 per share Purchase Price was fair from a
financial perspective to the Company's stockholders. On July 14, 1999, Alex
Sheshunoff provided an opinion letter stating that the Purchase Price was fair
from a financial perspective to the Company's stockholders. This opinion was
subsequently updated as of November 29, 1999.
9. BACKGROUND; PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The Company believes that the purchase of Shares is an attractive use
of a portion of the Company's available capital on behalf of its stockholders
and is consistent with the Company's long-term goal of increasing stockholder
value. The Company's Board of Directors has determined that, taking into account
the availability of funds for the Company's current and strategic needs, the
Company has funds available for the purchase of Shares, which some stockholders
may wish to sell and for which no ready market is available. The Offer is also
responsive to requests that have been made from time to time by stockholders to
obtain liquidity for their Shares. Because the Company does not have any current
intent to provide liquidity to stockholders pursuant to a sale of the Company or
public offering of the Shares, the Offer affords those stockholders who desire
liquidity an opportunity to sell all or a portion of their Shares.
In order to assist the Company in valuing the Shares for the purposes
of the Offer, the Company retained Alex Sheshunoff as appraiser to express an
opinion as to the fair market value of the Shares. The opinion of Alex
Sheshunoff, dated July 14, 1999 and updated as of November
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29, 1999, concluded that in current market conditions a price of $57.00 per
share is fair from a financial perspective.
Stockholders who do not tender their Shares pursuant to the Offer and
stockholders who otherwise retain an equity interest in the Company as a result
of a partial tender of Shares or a proration pursuant to Section 1 of the Offer
will continue to be owners of the Company with the attendant risks and rewards
associated with owning the equity securities of the Company.
Stockholders who determine not to accept the Offer will realize a
proportionate increase in their relative equity interest in the Company and,
thus, in the Company's earnings and assets, subject to any risks resulting from
the Company's purchase of Shares and the Company's ability to issue additional
equity securities in the future. In addition, to the extent the purchase of
Shares pursuant to the Offer results in a reduction of the number of
stockholders of record, the Company's costs for services to stockholders may be
reduced. Finally, the Offer may affect the Company's ability to qualify for
pooling-of-interests accounting treatment.
If fewer than 87,719 Shares are purchased pursuant to the Offer, the
Company may repurchase the remainder of such Shares on the open market, in
privately negotiated transactions or otherwise. In the future, the Company may
determine to purchase additional Shares on the open market, in privately
negotiated transactions, through one or more tender offers or otherwise. Any
such purchases may be on the same terms as, or on terms which are more or less
favorable to stockholders than, the terms of the Offer. 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, or placed in the Company's
treasury, and will be available for the Company to issue without further
stockholder action for purposes including, but not limited to, the acquisition
of other businesses, the raising of additional capital for use in the Company's
business and the satisfaction of obligations under existing or future employee
benefit plans. The Company has no current plans for reissuance of the Shares
repurchased pursuant to the Offer.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. THE COMPANY HAS
BEEN ADVISED THAT CERTAIN OF ITS DIRECTORS AND EXECUTIVE OFFICERS INTEND TO
TENDER UP TO AN AGGREGATE 1,500 SHARES PURSUANT TO THE OFFER. SEE SECTION 12.
EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
10. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL.
The Company, which was incorporated in the State of Delaware in August,
1999, is the holding company for The First National Bank of Ottawa (the "Bank").
The Bank is a national
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banking association located in Ottawa, Illinois. The Bank conducts a general
banking business embracing most of the services, both commercial and consumer,
which banks may lawfully provide, including the following principal services:
the acceptance of deposits for demand, savings and time accounts and the
servicing of such accounts; commercial, agricultural, consumer and real estate
lending, including installment loans, personal lines of credit and overdraft
protection; trust operations; farm management; safe deposit operations; and an
extensive variety of additional services tailored to the needs of individual
customers, including the sales of travelers' checks, cashiers' checks and
foreign currency and other special services. Loans, both commercial and
consumer, are provided on either a secured or unsecured basis to corporations,
partnerships and individuals. Commercial lending covers such areas as business,
industry, capital, agriculture, inventory and real estate, with the latter
including residential properties. Consumer loans are made for a variety of
purposes including automobile purchases, recreational vehicle purchases,
consumer goods, installment loans and other types of loans.
The Bank is subject to examination and supervision by the Office of the
Comptroller of the Currency and the Federal Deposit Insurance Corporation. The
Company, as a bank holding company, is subject to examination and supervision by
the Board of Governors of the Federal Reserve System.
The Company's principal executive offices are located at 701-705
LaSalle Street, Ottawa, Illinois 61350 and its telephone number is (815)
434-0044.
SUMMARY HISTORICAL FINANCIAL DATA AND SUMMARY UNAUDITED PRO FORMA
FINANCIAL DATA.
The historical financial data set forth in Schedule A has been derived
from the financial statements of the Company. The data should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report for the year ended December 31, 1998 and the Company's
Quarterly Report for the quarter ended September 30, 1999. Copies of the Annual
Report and Quarterly Report may be obtained from the Company. The statement of
income 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 financial
statements of the Company. The statement of income data for the nine months
ended September 30, 1999 and 1998 and the balance sheet data as of September 30,
1999 and 1998 have been derived from the unaudited financial statements of the
Company which, in the opinion of management, include all adjustments (consisting
of normal recurring adjustments) necessary for a fair presentation of financial
position and results of operations for such periods. Operating results for the
nine months ended September 30, 1999 are not necessarily indicative of the
results that may be expected for the entire year ending December 31, 1999.
The summary unaudited pro forma financial data set forth in Schedule B
has been derived from the historical financial statements of the Company
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
financial data should be read in conjunction with the summary historical
financial data included herein. The pro forma balance sheet data are not
necessarily indicative of
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the financial position or results of operations that would have been obtained
had the Offer been completed as of the dates indicated.
11. SOURCE AND AMOUNT OF FUNDS.
Assuming that the Company purchases 87,719 Shares pursuant to the Offer
at a price of $57.00 per Share, the total amount required by the Company to
purchase such Shares will be $4,999,983 exclusive of fees and other expenses.
The Company will fund such purchase with the proceeds of sales of investment
securities.
12. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING SHARES.
As of December 3, 1999, the Company had issued and outstanding 750,000
Shares. The 87,719 Shares that the Company is offering to purchase represent
approximately 11.7% of the outstanding Shares. As of December 3, 1999, the
Company's directors and executive officers as a group 19 persons) beneficially
owned an aggregate of 145,725 Shares representing approximately 19.4% of the
outstanding Shares.
Executive 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 certain of its directors and executive officers intend to
tender up to an aggregate 1,500 Shares pursuant to the Offer.
If the Company purchases 87,719 Shares (including all of the Shares
that the Company's directors and executive officers intend to tender) pursuant
to the Offer, then after the purchase of Shares pursuant to the Offer, the
Company's directors and executive officers as a group would beneficially own
approximately 21.8% of the outstanding Shares.
Neither the Company, nor any subsidiary of the company nor, to the best
of the Company's knowledge, any of the Company's directors and executive
officers, nor any affiliate of any of the foregoing, had any transactions
involving the Shares during the 40 business days prior to the date hereof.
Neither the Company nor, to the best of the Company's knowledge, any of
its affiliates, directors or executive officers, or any of the directors or
executive officers of any of its affiliates, is a party to any contract,
arrangement, understanding or relationship with any other person relating,
directly or indirectly, to the Offer with respect to any securities of the
Company including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or the voting of any such securities,
joint ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies, consents or
authorizations.
Except as disclosed in this Offer, the Company has no 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
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merger, reorganization or liquidation, involving the Company or any of its
subsidiaries; (c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries; (d) any change in the present Board 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; or (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.
13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares and may reduce the number of stockholders. Prior to the Offer,
there was no liquid trading market for the Shares and the Company believes that
no liquid market will result from the Offer.
14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit that
appears to be material to the Company's business that might be adversely
affected by the Company's acquisition of Shares as contemplated herein or of any
approval or other action by, or any filing with, any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the acquisition or ownership of Shares by the Company as
contemplated herein. Should any such approval or other action be required, the
Company presently contemplates that such approval or other action will be
sought. The Company is unable to predict whether it may determine that it is
required to delay the acceptance for payment of or payment for Shares tendered
pursuant to the Offer pending the outcome of any such matter. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that the failure to
obtain any such approval or other action might not result in adverse
consequences to the Company's business. The Company's obligations under the
Offer to accept for payment and pay for Shares is subject to certain conditions.
See Section 7.
15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
IN GENERAL.
The following is a discussion of the material United States federal
income tax consequences to stockholders with respect to a sale of Shares
pursuant to the Offer. The discussion is based upon the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), 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 stockholder
in light of such stockholder's particular circumstances or to certain types of
holders subject to special treatment under the United States federal income tax
laws (such as certain financial institutions, tax-exempt organizations, life
insurance companies,
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dealers in securities or currencies, employee benefit plans or stockholders
holding the Shares as part of a conversion transaction, as part of a hedge or
hedging transaction, or as a position in a straddle for tax purposes). In
addition, the discussion below does not consider the effect of any foreign,
state, local or other tax laws that may be applicable to particular
stockholders. The discussion assumes that the Shares are held as "capital
assets" within the meaning of Section 1221 of the Code. The Company has neither
requested nor obtained a written opinion of counsel or a ruling from the IRS
with respect to the tax matters discussed below.
THE TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION
ONLY. THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING
UPON, AMONG OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE TENDERING
STOCKHOLDER. NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN
TAX CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. EACH STOCKHOLDER
SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE PARTICULAR UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES TO THAT STOCKHOLDER TENDERING SHARES PURSUANT TO
THE OFFER AND THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX
LAWS AND RECENT CHANGES IN APPLICABLE TAX LAWS.
CHARACTERIZATION OF THE SURRENDER OF SHARES PURSUANT TO THE OFFER.
The surrender of Shares by a stockholder to the Company pursuant to the
Offer will be a taxable transaction for United States federal income tax
purposes and may also be a taxable transaction under applicable state, local and
foreign tax laws.
The United States federal income tax consequences to a stockholder may
vary depending upon the stockholder's particular facts and circumstances. Under
Section 302 of the Code, the surrender of Shares by a stockholder to the Company
pursuant to the Offer will be treated as a "sale or exchange" of such Shares
(rather than as a distribution by the Company with respect to the Shares held by
the tendering stockholder) if the receipt of cash upon such surrender (i) is
"substantially disproportionate" with respect to the stockholder, (ii) results
in a "complete redemption" of the stockholder's interest in the Company, or
(iii) is "not essentially equivalent to a dividend" with respect to the
stockholder (each as described below).
If any of the above three tests is satisfied, and the surrender of the
Shares is treated as a "sale or exchange" of such Shares, the tendering
stockholder will recognize gain or loss equal to the difference between the
amount of cash received by the stockholder and the stockholder's tax basis in
the Shares surrendered pursuant to the Offer. Any such gain or loss will be
capital gain or loss, and will be long term capital gain or loss if the Shares
have been held for more than one year. An individual's net capital gain (I.E.,
the excess of net long term capital gains over net short-term capital losses) is
taxed for United States federal income tax purposes at preferential rates in
comparison to the rates imposed on ordinary income (for federal income tax
purposes, the maximum rate imposed on individual's net capital gains is 20%).
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<PAGE>
If none of the above three tests is satisfied, the tendering
stockholder will be treated as having received a distribution by the Company
with respect to such stockholder's Shares in an amount equal to the cash
received by the stockholder pursuant to the Offer. The distribution will be
treated as a dividend taxable as ordinary income to the extent that the Company
has accumulated earnings and profits from the current year or prior years (or
both). In general, any amount received by a stockholder will be subject to the
tax applicable to the stockholder's other income (for United States federal
income tax purposes, the maximum rate for individuals is 39.6%). The amount of
the distribution in excess of the Company's current or accumulated earnings and
profits will be treated as a return of the stockholder's tax basis in the
Shares, and then as gain from the sale or exchange of such Shares. The tendering
stockholder's basis in the Shares surrendered pursuant to the Offer will not
reduce the amount of dividend and generally will be added to such stockholder's
basis in his or her remaining Shares, if any.
CONSTRUCTIVE OWNERSHIP.
In determining whether any of the three tests under Section 302 of the
Code is satisfied, stockholders must take into account not only the Shares that
are actually owned by the stockholder, but also Shares that are constructively
owned by the stockholder within the meaning of Section 318 of the Code. Under
Section 318 of the Code, a stockholder may constructively own Shares actually
owned, and in some cases constructively owned, by certain related individuals or
entities and Shares that the stockholder has the right to acquire by exercise of
an option or by conversion.
CONTEMPORANEOUS TRANSACTIONS/PRORATION.
Each stockholder should be aware that contemporaneous dispositions or
acquisitions of Shares by a stockholder or related individuals or entities may
affect whether any of the three tests under Section 302 of the Code has been
satisfied. Each stockholder should be aware that because proration may occur in
the Offer, even if all the Shares actually and constructively owned by a
stockholder are tendered pursuant to the Offer, fewer than all of such Shares
may be purchased by the Company. Thus, proration may affect whether the
surrender by a stockholder pursuant to the Offer will meet any of the three
tests under Section 302 of the Code. See Section 6 for information regarding
each stockholder's option to make a conditional tender of a minimum number of
Shares. A stockholder should consult his or her own tax advisor regarding
whether to make a conditional tender of a minimum number of Shares, and the
appropriate calculation thereof.
SECTION 302 TESTS.
The receipt of cash by a stockholder will be "substantially
disproportionate" if (i) after the sale, the stockholder actually and
constructively owns less than 50% of the total combined voting power of all
classes of stock entitled to vote; (ii) the percentage of the outstanding voting
stock in the Company actually and constructively owned by the stockholder
immediately following the surrender of Shares pursuant to the Offer is less than
80% of the percentage of the outstanding voting stock in the Company actually
and constructively owned by such stockholder immediately before the sale of
Shares pursuant to the Offer; and (iii) the percentage of
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outstanding shares of common stock (whether voting or nonvoting) in the Company
actually and constructively held by the stockholder immediately following the
surrender of Shares pursuant to this Offer is less than 80% of the percentage of
the outstanding shares of common stock (whether voting or nonvoting) in the
Company actually and constructively held by the stockholder immediately prior to
the surrender of Shares pursuant to this Offer. A stockholder's percentage
ownership of common stock in the Company for purposes of applying clause (iii)
of the preceding sentence is determined using the fair market value of each
share.
The receipt of cash by a stockholder will be a "complete redemption" if
either (i) the stockholder owns no Shares in the Company either actually or
constructively immediately after the Shares are surrendered pursuant to the
Offer, or (ii) the stockholder actually owns no Shares in the Company
immediately after the surrender of Shares pursuant to the Offer and, with
respect to Shares constructively owned by the stockholder immediately after the
Offer, the stockholder is eligible to waive (and effectively waives)
constructive ownership of all such Shares under procedures described in Section
302(c) of the Code.
Even if the receipt of cash by a stockholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, a
stockholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test if the stockholder's surrender of Shares pursuant to the Offer
results in a "meaningful reduction" in the stockholder's proportionate interest
in the Company. Whether the receipt of cash by a stockholder will be "not
essentially equivalent to a dividend" will depend upon the individual
stockholder's facts and circumstances. The IRS has indicated in published
rulings that even a small reduction in the proportionate interest of a small
minority stockholder in a publicly held corporation who exercises no control
over corporate affairs may constitute such a "meaningful reduction."
CORPORATE STOCKHOLDER TREATMENT.
Stockholders that are corporations will be subject to tax at the
corporation's regular tax rate on any capital gain recognized (for United States
federal income tax purposes, the maximum rate for corporations is 35%). If a
sale of Shares by a corporate stockholder is treated as a dividend, the
corporate stockholder will also be subject to tax on the dividend at the
corporation's regular tax rate. However, if the sale is treated as a dividend, a
corporate stockholder may be entitled (subject to certain limitations) to claim
the appropriate dividends-received as a deduction under Section 243 of the Code
(generally 70% for corporations that own less than 20% of the distributing
corporation).
In addition, amounts received by a corporate stockholder pursuant to
the Offer that are treated as a dividend may constitute an "extraordinary
dividend" under Section 1059 of the Code. Generally, an "extraordinary dividend"
is a dividend that (i) equals or exceeds 10% of the stockholder's basis in the
Shares (treating all dividends having ex-dividend dates within an 85-day period
as a single dividend) or (ii) exceeds 20% of the stockholder's adjusted basis in
the Shares (treating all dividends having ex-dividend dates within a 365-day
period as a single dividend). If applicable, a corporate stockholder, which held
its Shares for two years or less on the date of the Offer, would be required
under Section 1059(a) of the Code to reduce its basis (but not below zero) in
its Shares by the non-taxed portion of the extraordinary dividend (I.E., the
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<PAGE>
portion of the dividend for which a deduction is allowed), and if such portion
exceeds the stockholder's tax basis for its Shares, to treat the excess as gain
from the sale of such Shares in the year in which a sale or disposition of such
Shares occurs (which, in certain circumstances, may be the year in which Shares
are sold pursuant to the Offer).
ESTIMATED TAX PAYMENTS.
Stockholders should consult their own tax advisors regarding any
possible impact on their obligation to make estimated tax payments as a result
of the recognition of any capital gain (or the receipt of any ordinary income)
caused by the surrender of any Shares to the Company pursuant to the Offer.
FOREIGN STOCKHOLDERS.
The Company will withhold United States federal income tax at a rate of
30% from gross proceeds paid pursuant to the Offer to a foreign stockholder or
his agent, unless the company determines that a reduced rate of withholding is
applicable pursuant to a tax treaty or that an exemption from withholding is
applicable because such gross proceeds are effectively connected with the
conduct of a trade or business by the foreign stockholder within the United
States. For this purpose, a foreign stockholder is any stockholder that is not
(i) a citizen or resident of the United States, (ii) a corporation, partnership
or other entity created or organized in or under the laws of the United States,
or (iii) an estate or trust the income of which is subject to United States
federal income taxation regardless of its source. Without definite knowledge to
the contrary, the Company will determine whether a stockholder is a foreign
stockholder by reference to the stockholder's address. A foreign stockholder may
be eligible to file for a refund of such tax or a portion of such tax if such
stockholder (i) meets the "complete redemption," "substantially
disproportionate" or "not essentially equivalent to a dividend" tests described
above, (ii) is entitled to a reduced rate of withholding pursuant to a treaty
and the Company withheld at a higher rate, or (iii) is otherwise able to
establish that no tax or a reduced amount of tax was due. In order to claim an
exemption from withholding on the ground that gross proceeds paid pursuant to
the Offer are effectively connected with the conduct of a trade or business by a
foreign stockholder within the United States or that the foreign stockholder is
entitled to the benefits of a tax treaty, the foreign stockholder must deliver
to the Depositary (or other person who is otherwise required to withhold United
States tax) a properly executed statement claiming such exemption or benefits.
Such statements may be obtained from the Depositary.
BACKUP WITHHOLDING.
SEE SECTION 3 WITH RESPECT TO THE APPLICATION OF THE UNITED STATES
FEDERAL INCOME TAX BACKUP WITHHOLDING.
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.
The Company expressly reserves the right, in its sole discretion and at
any time or from time to time, to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Depositary and making a public announcement thereof. There
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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 theretofore accepted for payment or, to postpone payment for Shares
upon the occurrence of any of the conditions specified in Section 7 hereof, by
giving oral or written notice of such termination to the Depositary and making a
public announcement thereof and (ii) at any time, or from time to time, to amend
the Offer in any respect. Amendments to the Offer may be effected by public
announcement. Without limiting the manner in which the Company may choose to
make public announcement of any extension, termination or amendment, the Company
shall have no obligation (except as otherwise required by applicable law) to
publish, advertise or otherwise communicate any such public announcement, 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.
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 law. 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 United States Securities and Exchange 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 (b) increase (except for an increase not exceeding 2% of the
outstanding Shares) or decrease the number of Shares it seeks.
17. FEES AND EXPENSES.
Alex Sheshunoff has been retained by the Company to render a written
opinion as to the valuation and to render a fairness opinion in connection with
the contemplated stock repurchase. The fairness opinions are included in
Schedule C. For its services, Alex Sheshunoff has been paid $20,000 upon
delivery of the written fairness opinion. In addition, Alex Sheshunoff has been
or will be reimbursed for its reasonable out-of-pocket expenses. The Company has
agreed to indemnify Alex Sheshunoff and its affiliates from and against any
losses, expenses, claims, damages, or liabilities relating to or arising out of
the engagement or the performance thereof.
The Company has retained The First National Bank of Ottawa as
Depositary in connection with the offer. The Depositary will receive reasonable
and customary compensation for their services and will also be reimbursed for
certain out-of-pocket expenses. The Company has agreed to indemnify the
Depositary against certain liabilities, including certain liabilities
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under the federal securities laws, in connection with the Offer. The Depositary
has not been retained to make solicitations or recommendations in connection
with the Offer.
The Company will not pay any fees or commissions to any broker, dealer
or other person for soliciting tenders of Shares pursuant to the Offer. The
Company will, upon request, reimburse brokers, dealers, commercial banks and
trust companies for reasonable and customary handling and mailing expenses
incurred by them in forwarding materials relating to the Offer to their
customers.
18. MISCELLANEOUS.
The 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 one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
FIRST OTTAWA BANCSHARES, INC.
December 6, 1999
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SCHEDULE A
SUMMARY HISTORICAL FINANCIAL INFORMATION
<TABLE>
<CAPTION>
(audited) (unaudited)
Year Ended Nine Months Ended
December 31, September 30,
------------------------------- -------------------------------
1997 1998 1998 1999
------------- -------------- ------------- -------------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Interest income $16,989 $17,055 $12,570 $12,173
Interest expense 8,519 8,651 6,435 6,182
Net interest income 8,470 8,404 6,135 5,991
Provision for loan losses 480 460 270 270
Noninterest income 1,372 1,905 1,367 1,277
Noninterest expense 5,884 6,347 4,509 4,538
Provision for income taxes 696 543 585 419
Net income 2,782 2,959 2,138 2,041
Earnings per share
(750,000 shares outstanding) 3.71 3.95 2.85 2.72
As of December 31, As of September 30,
------------------------------- -------------------------------
1997 1998 1998 1999
------------- -------------- ------------- -------------
(Dollars in thousands)
BALANCE SHEETS DATA:
Securities available for sale $107,363 $116,823 $108,526 $95,066
Total assets 243,417 249,674 246,339 236,792
Loans, net 120,626 118,335 117,679 126,630
Deposits 194,502 194,629 198,488 190,090
Total liabilities 214,925 220,415 216,211 208,736
Total shareholders' equity 28,492 29,259 30,128 28,056
SELECTED FINANCIAL RATIOS:
Return on average assets (1) 1.20% 1.23% 1.20% 1.13%
Return on average equity (1) 9.94% 10.11% 10.15% 9.42%
Average equity to average assets 12.08% 12.16% 11.80% 12.03%
</TABLE>
NOTES TO SUMMARY HISTORICAL FINANCIAL INFORMATION
(1) September 30 ratios are annualized.
A-1
<PAGE>
SCHEDULE B
PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1999
----------------------------------------------------------------
Pro Forma Pro Forma
Historical Adjustments (1) (unaudited)
------------------ ------------------ -------------------
(In thousands, except per share data)
<S> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Interest income $12,173 ($312) $11,861
Interest expense 6,182 6,182
Net Interest income 5,991 (312) 5,679
Provision for loan losses 270 270
Noninterest income 1,277 1,277
Noninterest expense 4,538 4,538
Provision for income taxes 419 (106) 313
Net income 2,041 (206) 1,835
Earnings per share
(750,000 shares outstanding, 662,281 pro forma
shares outstanding) 2.72 2.77
<CAPTION>
As of September 30, 1999
----------------------------------------------------------------
Pro Forma Pro Forma
Historical Adjustments (1) (unaudited)
------------------ ------------------ -------------------
(Dollars in thousands)
<S> <C> <C> <C>
BALANCE SHEETS DATA:
Securities available for sale $95,066 (5,000) $90,066
Total assets 236,792 (5,000) 231,792
Loans, net 126,630 126,630
Deposits 190,090 190,090
Total liabilities 208,736 208,736
Total shareholders' equity 28,056 (5,000) 23,056
SELECTED FINANCIAL RATIOS:
Return on average assets (2) 1.13% 1.04%
Return on average equity (2) 9.42% 10.24%
Average equity to average assets 12.03% 10.16%
</TABLE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
(1) The funds used to purchase the 87,719 shares at $57.00 per share for
$5,000,000 will be obtained from the proceeds of sales of investment
securities. It is assumed these investment securities will have an
effective yield of 6.232% ($5,000,000 x 6.232%=$311,600). A tax rate of 34%
is assumed ($311,600 x 34%=$105,944). The income statement data reflects
the reduction in interest income on the investment securities as if the
investments were sold on January 1, 1999.
(2) September 30 ratios are annualized.
B-1
<PAGE>
SCHEDULE C
[Alex Sheshunoff & Co. Investment Banking Letterhead]
July 14, 1999
Board of Directors
First National Bank of Ottawa
701 LaSalle Street
Ottawa, Illinois 61350
Members of the Board:
First National Bank of Ottawa (the "Company") has approved a Tender Offer (the
"Offering") to purchase a maximum of 87,719 shares at a price of $57 per share
(the "Offer Price"). Except to the extent that the Company's purchase of shares
would result in a "going private" transaction, all shares validly tendered by or
on behalf of any stockholder who owned an aggregate of less than 100 shares will
be accepted for repurchase by the Company before proration of other shares
tendered.
You requested Alex Sheshunoff & Co. Investment Banking's ("Sheshunoff's")
opinion, as to whether the Offering Price is fair from a financial point of view
to the Company's Common Stockholders. In connection with our opinion, Sheshunoff
has: (i.) reviewed a draft copy of the Offering Memorandum; (ii.) reviewed
certain publicly available financial statements and other information of the
Company; (iii.) reviewed certain internal financial statements and other
financial and operating data concerning the Company; (iv.) analyzed certain
budget and financial projections of the Company prepared by its management; (v.)
analyzed the pro forma impact of the Offering on the Company's earnings, book
value and tangible book value per share, (vi.) discussed the Company's past and
current operations, financial condition, and prospects with its executive
management; (vii.) compared the Company from a financial point of view with
certain other publicly traded companies (the "Guideline Companies") which
Sheshunoff deemed to be relevant; (viii.) reviewed reported market prices and
historical trading activity of the Guideline Companies' common stock; (ix.)
performed such other analyses and examinations as Sheshunoff has deemed
appropriate.
Sheshunoff assumed and relied upon without independent verification the accuracy
and completeness of the information supplied or otherwise made available to us
by the Company. Sheshunoff did not make an independent evaluation of the assets
or liabilities of the Company, nor was Sheshunoff furnished with any such
appraisals. Sheshunoff assumed that the Company's budgets and financial
forecasts were reasonably prepared and reflect the best currently available
estimates and judgments of the Company's management, as to its future financial
performance. Sheshunoff assumed such forecasts and projections will be realized
in the amounts and at the times contemplated thereby. Sheshunoff assumed that
obtaining any necessary regulatory approvals and third party consents for the
Offering will not have an adverse effect on the Company.
Sheshunoff is not an expert in the evaluation of loan portfolios for the purpose
of assessing the adequacy of the allowance for losses, and assumed that such
allowances, for each of the
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companies, are in the aggregate, adequate to cover such losses. Sheshunoff did
not review any individual credit files nor made any independent evaluation,
appraisal or physical inspection of the assets or individual properties of the
Company. Sheshunoff was not furnished with any such evaluations or appraisals.
Sheshunoff did not assess, nor were we furnished with any assessments, of the
Company's compliance with operational and regulatory standards for its data
processing and other systems compliance with the Year 2000 capability. If the
Company is not in compliance with the year 2000 capability, in accordance with
the regulatory timetable, the value of the shares may be adversely impacted.
Sheshunoff's opinion is necessarily based on economic, market and other
conditions in effect on, and the information made available to it, as of the
date hereof. Events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion. Sheshunoff assumed that there are no
material changes in the Company's assets, financial condition, results of
operations, business or prospects since the date of the Company's last financial
statements reviewed by it, and that off-balance sheet activities will not
materially impact the future financial position or results of operation of the
Company.
Sheshunoff's opinion is limited to the fairness, from a financial point of view,
to the holders of the Company's Common Stock of the Offering Price. Sheshunoff,
expresses no opinion on the Company's underlying business decision to undertake
the Offering. This letter, and the opinion expressed herein, do not constitute a
recommendation to any stockholder as to the purchase or sale of the Company's
common stock. This letter is for the information of the Board of Directors of
the Company and may not be used for any other purpose without Sheshunoff's prior
written consent.
Based upon and subject to the foregoing, it is Sheshunoff's opinion that, as of
the date hereof, the Offering Price is fair from a financial point of view to
the Company's shareholders.
Very truly yours,
/s/ Alex Sheshuoff & Co. Investment Banking
ALEX SHESHUNOFF & CO.
INVESTMENT BANKING
C-2
<PAGE>
[Alex Sheshunoff & Co. Investment Banking Letterhead]
November 29, 1999
Board of Directors
First National Bank of Ottawa
701 LaSalle Street
Ottawa, Illinois 61350
Members of the Board:
First National Bank of Ottawa (the "Company") has approved a Tender Offer (the
"Offering") to purchase a maximum of 87,719 shares at a price of $57 per share
(the "Offer Price"). Except to the extent that the Company's purchase of shares
would result in a "going private" transaction, all shares validly tendered by or
on behalf of any stockholder who owned an aggregate of less than 100 shares will
be accepted for repurchase by the Company before proration of other shares
tendered.
You have requested a confirmation of our July 14, 1999 opinion, as to whether
the Offering Price is fair from a financial point of view to the Company's
Common Stockholders. Based upon our discussion with management, no material
changes have occurred in the Company's financial condition to alter our July 14,
1999 opinion that the Offering Price is fair from a financial point of view. As
such, it is our opinion that the Offering Price is fair from a financial point
of view to the Company's shareholders as of the date of this letter.
Sheshunoff's opinion is necessarily based on economic, market and other
conditions in effect on, and the information made available to it, as of the
date hereof. Events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion. Sheshunoff assumed that there are no
material changes in the Company's assets, financial condition, results of
operations, business or prospects since the date of the Company's last financial
statements reviewed by it, and that off-balance sheet activities will not
materially impact the future financial position or results of operation of the
Company.
Sheshunoff's opinion is limited to the fairness, from a financial point of view,
to the holders of the Company's Common Stock of the Offering Price. Sheshunoff
expresses no opinion on the Company's underlying business decision to undertake
the Offering. This letter, and the opinion expressed herein, do not constitute a
recommendation to any stockholder as to the purchase or sale of the Company's
common stock. This letter is for the information of the Board of Directors of
the Company and may not be used for any other purpose without Sheshunoff's prior
written consent.
Very truly yours,
/s/ Alex Sheshuoff & Co. Investment Banking
ALEX SHESHUNOFF & CO.
INVESTMENT BANKING
C-3
<PAGE>
The Depositary for the Offer is:
The First National Bank of Ottawa
By Mail, Overnight Delivery, or Hand:
The First National Bank of Ottawa
701-705 LaSalle Street, P.O. Box 657
Ottawa, Illinois 61350
Attention: Corporate Secretary
Facsimile: (815) 434-1695
Any questions concerning tender procedures may be directed to the
Depositary at (815) 434-0044, Attention: Joachim J. Brown.
<PAGE>
FIRST OTTAWA BANCSHARES, INC.
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK
OF
FIRST OTTAWA BANCSHARES, INC.
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED DECEMBER 6, 1999
--------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON MONDAY,
JANUARY 10, 2000, UNLESS THE OFFER IS EXTENDED.
--------------------------------------------------------------------
To: The First National Bank of Ottawa, Depositary
701-705 LaSalle Street, P.O. Box 657
Ottawa, Illinois 61350
Attention: Corporate Secretary
Phone: (815) 434-0044
Facsimile: (815) 434-1695
Ladies and Gentlemen:
The undersigned hereby tenders to First Ottawa Bancshares, Inc., a Delaware
corporation ("First Ottawa"), the shares (the "Shares") of common stock, par
value $1.00, of First Ottawa, described below, at a price per Share of $57.00
net to the seller in cash, without interest thereon (the "Purchase Price"),
pursuant to First Ottawa's offer to purchase up to 87,719 Shares, upon the terms
and subject to the conditions set forth in the offer to purchase dated December
6, 1999 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and
in this Letter of Transmittal (which together constitute the "Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, First Ottawa 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 Purchase or upon the order of First Ottawa
and irrevocably constitutes and appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares, with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by the Book-Entry Transfer Facility (as defined in the Offer to
Purchase), together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of First Ottawa upon receipt by
the Depositary, as the undersigned's agent, of the Purchase Price with respect
to such Shares, (b) present certificates for such Shares for cancellation and
transfer on the books of First Ottawa 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, when and to the extent
the Shares are accepted for payment by First Ottawa, First Ottawa 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.
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ----------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Owner(s) (Please fill in if blank, Shares Tendered
exactly as name(s) appear(s) on certificate(s)) (Attach additional list if necessary)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Number of
Certificate Shares Number of Shares
Number(s)* Represented by Tendered
Certificate*
<S> <C> <C> <C>
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
Total Shares:
- ----------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
ODD LOTS
To be completed ONLY if Shares are being tendered by or on behalf of a
person owning beneficially, as of the close of business on December 3,
1999, and who continues to own beneficially as of the Expiration Date (as
defined in the Offer to Purchase), an aggregate of fewer than 100 Shares.
[ ] By checking this box the undersigned represents that the
undersigned owned beneficially or of record as of the close of
business on December 3, 1999, and continues to own beneficially or
of record as of the Expiration Date, an aggregate of fewer than
100 Shares and is tendering all of such Shares.
CONDITIONAL TENDER
A tendering stockholder may condition his or her tender of Shares upon the
purchase by First Ottawa of a specified minimum number of the Shares tendered
hereby, all as described in the Offer to Purchase, particularly in Section 6
thereof. Unless at least such minimum number of Shares is purchased by First
Ottawa pursuant to the terms of the Offer, none of the Shares tendered hereby
will be purchased. It is the tendering stockholder's responsibility to calculate
such minimum number of Shares, and each stockholder is urged to consult his or
her own tax advisor. Unless this box has been completed and a minimum specified,
the tender will be deemed unconditional.
----------------------------------------------------------------------
Minimum number of Shares that
must be purchased, if any are purchased: ________________Shares
----------------------------------------------------------------------
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.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
-2-
<PAGE>
- -------------------------------------------------------------------------------
IMPORTANT
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
(Signature(s) of Holder(s))
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Dated: , .
---------------------- -----------
(Must be signed by registered owner(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered owner(s) by certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please set forth full title and see Instruction 4.)
(Please Type or Print)
Name(s):
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Include Zip Code)
Capacity (Full Title):
---------------------------------------------------------
Area Code and Telephone Number:
------------------------------------------------
Tax Identification or Social Security Number:
----------------------------------
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 4)
Authorized Signature:
----------------------------------------------------------
Name:
--------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Include Zip Code)
Full Title and Name of Firm:
---------------------------------------------------
Dated: , .
---------------------- -----------
- -------------------------------------------------------------------------------
-3-
<PAGE>
- -------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5 AND 6)
To be completed ONLY if certificate(s) for Shares not tendered or not accepted
for payment or the check for the Purchase Price of Shares accepted for payment
are to be issued in the name of someone other than the undersigned.
Issue: [ ] Check [ ] Certificate(s)
to:
Name:
--------------------------------------------------------------------------
(Please Print)
Address:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Include Zip Code)
-----------------------------------------------------------------------
(Tax Identification or Social Security No.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 6)
To be completed ONLY if certificate(s) for Shares not tendered or not accepted
for payment or the check for the Purchase Price of Shares accepted for payment
are to be sent to someone other than the undersigned, or to the undersigned at
an address other than that above.
Deliver: [ ] Check [ ] Certificate(s) to:
Name:
--------------------------------------------------------------------------
(Please Print)
Address:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Include Zip Code)
- -------------------------------------------------------------------------------
THE FOLLOWING BOX IS TO BE COMPLETED ONLY IF YOU CANNOT LOCATE YOUR
CERTIFICATE(S)
- -------------------------------------------------------------------------------
AFFIDAVIT OF LOST OR DESTROYED CERTIFICATE(S) AND INDEMNITY
CERTIFICATE NUMBER(S) _________________, for ________ Share(s).
The undersigned person(s) states that:
1. I/we am the lawful owner of the above-described certificate(s).
2. The certificate(s) has not been endorsed, transferred, assigned or
otherwise disposed of.
3. I/we have made a diligent search for the certificate(s) and have been
unable to find it, and make this affidavit for the purpose of inducing the
exchange of the certificate(s) without surrender of the certificate(s).
4. I/we hereby agree to surrender the certificate(s) for cancellation should
I/we, at any time, find the certificate(s).
5. I/we agree at all times to indemnify and save harmless First Ottawa, the
Depositary and their affiliates from and against any and all claims,
actions, and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages, costs, charges, counsel fees, and
other expenses of every nature and character by reason of the mislaid,
lost, stolen or destroyed certificate(s) or the making of the payment,
transfer, delivery, or exchange called for by the certificate(s) without
the surrender of it, and whether or not based upon or arising from honoring
or refusing to honor the certificate(s) when presented by anyone or based
upon or arising from inadvertence, accident, oversight, or neglect on the
part of First Ottawa, the Depositary, any of their affiliates or any of
their officers, agents, clerks or employees or omission or failure to
inquire into, contest, or litigate the right of any applicant to receive
any payment, credit, transfer, registration, exchange, or delivery in
respect of the certificate(s), or based upon or arising out of any
determination which First Ottawa, the Depositary or any of their affiliates
may in fact make as to the merits of any claim, right or title or based
upon or arising from any other matter or thing whatsoever.
Signed and delivered this _____ day of ____________, ______.
- --------------------------------------- ----------------------------------
Signature of Affiant (Stockholder) Signature of Affiant (Stockholder)
- -------------------------------------------------------------------------------
-4-
<PAGE>
TO BE COMPLETED BY ALL STOCKHOLDERS
(SEE INSTRUCTION 7)
The stockholder is required to give the Depositary the social security number or
employer identification number of the registered owner of the Shares. If the
Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidance on which number to report.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
PAYER: THE FIRST NATIONAL BANK OF OTTAWA
- --------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND Social security number or
FORM W-9 CERTIFY BY SIGNING AND DATING BELOW. Employer identification number
<S> <C> <C>
Department of the
Treasury
Internal Revenue
Service -------------------------------
Payer's Request
for Taxpayer
Identification
Number (TIN)
- --------------------------------------------------------------------------------------------------------------------
PART 2--CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY
THAT:
(1) The number shown on this 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 either because
(i) I am exempt from backup withholding, (ii) I have not
been notified by the Internal Revenue Service (the "IRS")
that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (iii) the
IRS has notified me that I am no longer subject to backup
withholding.
- --------------------------------------------------------------------------------------------------------------------
SIGNATURE: ____________________________ DATE: ___________ PART 3
NAME (Please Print):_____________________________________ Awaiting TIN [ ]
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
CERTIFICATION INSTRUCTIONS--You must cross out item (2) in Part 2 above if you
have been notified by the IRS that you are 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).
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
INFORMATION.
-5-
<PAGE>
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 (i) 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 (ii) I intend to
mail or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number within 60 days, 31% of all reportable
payments made to me thereafter will be withheld until I provide a taxpayer
identification number to the Depositary.
Signature: ____________________________________________ Date: _________________
Name (Please Print):___________________________________________________________
- -------------------------------------------------------------------------------
MANUALLY SIGNED FACSIMILE COPIES OF THIS LETTER OF TRANSMITTAL WILL BE ACCEPTED.
THIS LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES AND ANY OTHER REQUIRED
DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER OR SUCH STOCKHOLDER'S
BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO THE
DEPOSITARY AT ITS ADDRESSES SET FORTH BELOW.
The First National Bank of Ottawa
701-705 LaSalle Street, P.O. Box 657
Ottawa, Illinois 61350
Attention: Corporate Secretary
-6-
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm
that is a member of a registered national securities exchange or the
National Association of Securities Dealers, Inc., or by a commercial
bank, a trust company, a savings bank, a savings and loan association
or a credit union which has membership in an approved Signature
Guarantee Medallion Program (an "Eligible Institution"). Signatures on
this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered holder(s) of the Shares (which
term, for purposes of this document, shall include any participant in
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 4.
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. The term "Agent's Message" means a message
transmitted by a Book-Entry Transfer Facility to, and received by, the
Depositary and forming a part of a Book-Entry confirmation, which
states that such Book-Entry Transfer Facility has received an express
acknowledgment from the participant in such Book-Entry Transfer
Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Offer to Purchase and the Letter
of Transmittal and that First Ottawa may enforce such agreement against
the participant. Certificates representing old shares of common stock
of The First National Bank of Ottawa that have not been exchanged for
new certificates representing Shares of First Ottawa may be delivered
in lieu of certificates representing such new Shares of First Ottawa.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE
CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK
OF THE TENDERING STOCKHOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF CERTIFICATES FOR SHARES
ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED.
Except as specifically permitted by Section 6 of the Offer to Purchase,
no alternative or contingent tenders will be accepted. See Section 1 of
the Offer to Purchase. By executing this Letter of Transmittal (or
facsimile thereof), the tendering stockholder waives any right to
receive any notice of the acceptance for payment of the Shares.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a
separate signed schedule attached hereto.
4. 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, such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names
on different certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate
stock powers are required unless payment of the Purchase Price is
-7-
<PAGE>
to be made to, or Shares not tendered or not purchased are to be
registered in the name of, any person other than the registered
holder(s). Signatures on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates
evidencing the Shares tendered hereby must be endorsed or accompanied
by appropriate stock powers, in either case, signed exactly as the
name(s) of the registered holder(s) appear(s) on the certificates for
such Shares. Signature(s) on any such certificates or stock powers must
be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is
signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate
when signing, and proper evidence satisfactory to First Ottawa of the
authority of such person so to act must be submitted.
5. STOCK TRANSFER TAXES. First Ottawa 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 transferee or assignee must pay the stock transfer
taxes to First Ottawa or must establish to the satisfaction of First
Ottawa that such taxes have been paid; otherwise, First Ottawa will
withhold issuance of the certificate or will deduct the amount of any
such taxes from the Purchase Price. EXCEPT AS PROVIDED IN THIS
INSTRUCTION, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO
THE CERTIFICATES SUBMITTED HEREWITH.
6. 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 Certificates Tendered," then the
boxes captioned "Special Payment Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal should be completed.
Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account
maintained by such stockholder at the Book-Entry Transfer Facility from
which such transfer was made.
7. SUBSTITUTE FORM W-9 AND FORM W-8. Each tendering stockholder is
required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9 or a properly
completed Form W-8. Failure to provide the information on either
Substitute Form W-9 or Form W-8 may subject the tendering stockholder
to 31% federal income tax backup withholding on the payment of the
Purchase Price. The box in Part 3 of Substitute Form W-9 may be checked
if the tendering stockholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future. If
the box in Part 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.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to First Ottawa or the Depositary at
their respective telephone numbers and addresses listed below. Requests
for additional copies of the Offer to Purchase, this Letter of
Transmittal or other tender offer materials may be directed to First
Ottawa or the Depositary and such copies will be furnished promptly at
First Ottawa's expense. Stockholders may also contact their local
broker, dealer, commercial bank or trust company for assistance
concerning the Offer.
9. 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 First
Ottawa, in its sole discretion, and its determination shall be final
and binding. First Ottawa 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
-8-
<PAGE>
or payment for Shares that may, in the opinion of First Ottawa's
counsel, be unlawful. Except as otherwise provided in the Offer to
Purchase, First Ottawa 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 First Ottawa'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 First Ottawa shall determine. None of
First Ottawa, 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 TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are accepted
for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is his or her social security number. For businesses and
other entities, the number is the employer identification number. If the
Depositary is not provided with the correct TIN or properly completed Form W-8,
the stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such stockholder with respect to
Shares purchased pursuant to the Offer may be subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to these backup withholding
and reporting requirements. In order for a noncorporate foreign stockholder to
qualify as an exempt recipient, that stockholder must complete and sign a Form
W-8, Certificate of Foreign Status, attesting to that stockholder's exempt
status. The Form W-8 can be obtained from the Depositary. Exempt stockholders,
other than noncorporate foreign stockholders, should furnish their TIN and write
"Exempt" in Part 1 of the Substitute Form W-9 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% of any payments made to the stockholder. Backup withholding is not
an additional tax. Rather, the federal income tax liability of persons subject
to backup withholding will be reduced by the amount of the tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.
-9-
<PAGE>
FIRST OTTAWA BANCSHARES, INC.
OFFER TO PURCHASE FOR CASH A MAXIMUM OF 87,719
SHARES OF ITS COMMON STOCK AT A
PURCHASE PRICE OF $57.00 PER SHARE
December 6, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
First Ottawa Bancshares, Inc., a Delaware corporation (the "Company"),
is making an offer to purchase for cash up to a maximum of 87,719 shares of its
common stock, $1.00 par value (the "Shares"), at a price of $57.00 net per Share
and upon the terms and subject to the conditions set forth in the Offer to
Purchase dated December 6, 1999, and in the related Letter of Transmittal (which
together constitute the "Offer").
We enclose copies of the following documents:
1. Offer to Purchase dated December 6, 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. Letter dated December 6, 1999, from Joachim J. Brown, Chief
Executive Officer, to stockholders of the Company;
4. Letter of Transmittal for your use and for the information of
your clients;
5. Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9; and
6 Return envelope addressed to First Ottawa Bancshares, Inc.
Please advise us as to how many additional copies of the tender offer
documents you will require for distribution to your clients by contacting the
Depositary, The First National Bank of Ottawa, 701-705 LaSalle Street, P.O. Box
657, Ottawa, Illinois 61350, Attention: Corporate Secretary.
<PAGE>
No fees or commissions will be payable to brokers, dealers or any other
persons for soliciting tenders of Shares pursuant to the Offer. The Company
will, however, upon request, reimburse you for customary mailing and handling
expenses incurred by you in forwarding any of the enclosed materials to the
beneficial owners of Shares held by you as a nominee or in a fiduciary capacity.
Please forward all invoices for reimbursement to The First National Bank of
Ottawa, 701-705 LaSalle Street, P.O. Box 657, Ottawa, Illinois 61350, Attention:
Corporate Secretary.
We urge you to contact your clients as promptly as possible. The Offer,
proration period and withdrawal rights expire at 12:00 midnight, Eastern time,
on Monday, January 10, 2000, unless the Offer is extended.
Any questions or requests for assistance or additional copies of the
Offer to Purchase and the Letter of Transmittal may be directed to The First
National Bank of Ottawa, 701-705 LaSalle Street, P.O. Box 657, Ottawa, Illinois
61350, Attention: Corporate Secretary.
Very truly yours,
FIRST OTTAWA BANCSHARES, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS THE AGENT OF THE COMPANY 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 ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
-2-
<PAGE>
FIRST OTTAWA BANCSHARES, INC.
OFFER TO PURCHASE FOR CASH A MAXIMUM OF 87,719
SHARES OF ITS COMMON STOCK AT A PURCHASE
PRICE OF $57.00 PER SHARE
December 6, 1999
To Our Clients:
Enclosed for your consideration are the offer to purchase dated
December 6, 1999 (the "Offer to Purchase"), and the related Letter of
Transmittal (which together constitute the "Offer") in connection with the Offer
by First Ottawa Bancshares, Inc., a Delaware corporation (the "Company"), to
purchase for cash up to a maximum of 87,719 shares of its common stock, $1.00
par value (the "Shares"), at a price of $57.00 net per Share (the "Purchase
Price") and upon the terms and subject to the conditions of the Offer. Also
enclosed herewith is certain other material related to the Offer, including a
letter dated December 6, 1999, from Joachim J. Brown, Chief Executive Officer of
the Company, to stockholders of the Company.
If, prior to the Expiration Date (as defined below), more than 87,719
Shares (or such greater number of Shares as the Company may elect to purchase)
are validly tendered, the Company will, upon the terms and subject to the
conditions of the Offer, accept Shares for purchase first from Odd Lot Owners
(as defined in Section 2 of the Offer to Purchase) who validly tender all of
their Shares at or below the Purchase Price and then on a pro rata basis, if
necessary, from all other stockholders whose Shares are validly tendered.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS SUCH,
WE ARE THE ONLY ONES WHO CAN TENDER YOUR SHARES, AND THEN ONLY PURSUANT TO THE
INSTRUCTIONS YOU SET FORTH ON THE ATTACHED INSTRUCTION FORM. 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. The Offer, proration period, and withdrawal rights will
expire at 12:00 midnight, Eastern time, on Monday, January 10, 2000 (the
"Expiration Date"), unless the Company extends the Offer.
2. The Offer is for up to 87,719 Shares, constituting
approximately 11.7% of the Shares outstanding as of December 3, 1999.
<PAGE>
3. Tendering stockholders will not be obligated to pay any
brokerage commissions, solicitation fees or, subject to Instruction 5 of the
Letter of Transmittal, stock transfer taxes on the Company's purchase of
Shares pursuant to the Offer.
4. If you owned beneficially as of the close of business on
December 3, 1999, an aggregate of fewer than 100 Shares and you instruct us
to tender on your behalf all the Shares of which we are the holder of record
before the expiration of the Offer and you check the appropriate space in the
box captioned "Odd Lots" in the attached Instruction Form, the Company will
accept all such Shares for purchase before proration, if any, of the purchase
of other Shares tendered.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, and returning to us the attached
Instruction Form. An envelope to return your 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 OF THE OFFER.
THE OFFER, PRORATION PERIOD, AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON MONDAY, JANUARY 10, 2000, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if before the
Expiration Date more than 87,719 Shares (or such greater number of Shares as the
Company elects to purchase) are validly tendered, the Company will accept Shares
for purchase at the Purchase Price in the following order of priority:
(a) first, all Shares validly tendered prior to the Expiration
Date by any Odd Lot Owner (as defined in Section 2 of the Offer to Purchase)
who:
(1) tenders all Shares beneficially owned by such Odd
Lot Owner (partial tenders will not qualify for this preference); and
(2) completes the section captioned "Odd Lots" on the
Letter of Transmittal; and
(b) then, after purchase of all of the foregoing Shares, all
other Shares validly tendered before the Expiration Date on a pro rata basis, if
necessary (with adjustments to avoid purchases of fractional Shares).
The Offer is not being made to, nor will the Company accept tenders
from, holders of Shares in any jurisdiction in which the Offer or its acceptance
would not comply with the securities or blue sky laws of such jurisdiction. The
Company is not aware of any jurisdiction in which the making of the Offer or the
tender of Shares would not be in compliance with the laws of such jurisdictions.
-2-
<PAGE>
However, the Company reserves the right to exclude holders in any
jurisdiction in which it is asserted that the Offer cannot lawfully be made. So
long as the Company makes a good faith effort to comply with any state law
deemed applicable to the Offer, if it cannot do so, the Company believes that
the exclusion of holders residing in such jurisdictions is permitted under Rule
13e-4(f)(9) promulgated under the Exchange Act. 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 shall be deemed to be made on the Company's behalf
by one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
-3-
<PAGE>
INSTRUCTION FORM
WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH A MAXIMUM OF 87,719 SHARES OF
COMMON STOCK OF FIRST OTTAWA BANCSHARES, INC. AT A PURCHASE PRICE OF $57.00 PER
SHARE.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated December 6, 1999, and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the Offer by First
Ottawa Bancshares, Inc., a Delaware corporation (the "Company"), to purchase for
cash up to a maximum of 87,719 shares of its common stock, $1.00 par value (the
"Shares"), at a price of $57.00 net per Share (the "Purchase Price") and upon
the terms and subject to the conditions of the Offer.
All Shares validly tendered will be purchased at the Purchase Price,
net to the seller in cash, upon the terms and subject to the conditions of the
Offer, including the proration terms thereof. The Company will return all other
Shares. See Section 1 of the Offer to Purchase.
This will instruct you to tender to the Company, on (our) (my) behalf,
the number of Shares indicated below (or if no number is indicated below, all
Shares) which are beneficially owned by (us) (me) and registered in your name,
upon terms and subject to the conditions of Offer.
---------------------------------------------------------------------
NUMBER OF SHARES TENDERED: _______________________ SHARES*
* Unless otherwise indicated, it will be assumed that all Shares
held by us for your account are to be tendered.
---------------------------------------------------------------------
ODD LOTS
To be completed ONLY if Shares are being tendered by or on behalf of a person
owning beneficially, as of the close of business on December 3, 1999, and who
continues to own beneficially as of the Expiration Date, an aggregate of fewer
than 100 Shares.
[ ] By checking this box the undersigned represents that the undersigned
owned beneficially or of record as of the close of business on December
3, 1999, and continues to own beneficially or of record as of the
Expiration Date, an aggregate of fewer than 100 Shares and is tendering
all of such Shares.
CONDITIONAL TENDER
A tendering stockholder may condition his or her tender of Shares upon
the purchase by First Ottawa of a specified minimum number of the Shares
tendered hereby, all as described in the Offer to Purchase, particularly in
Section 6 thereof. Unless at least such minimum number of Shares is purchased by
First Ottawa pursuant to the terms of the Offer, none of the Shares tendered
hereby will be purchased. It is the tendering stockholder's responsibility to
calculate such minimum number of Shares, and each stockholder is urged to
consult his or her own tax advisor. Unless this box has been completed and a
minimum specified, the tender will be deemed unconditional.
----------------------------------------------------------------------------
Minimum number of Shares that
must be purchased, if any are purchased: _______________________ Shares
----------------------------------------------------------------------------
<PAGE>
IMPORTANT SIGN HERE
Signature(s):
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Print Name(s):
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Address:
- ---------------------------------------------------------------
- ---------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
- ---------------------------------------------------------------
Taxpayer Identification or Social Security Number(s):
- ---------------------------------------------------------------
Dated:____________________, _________.
THIS FORM MUST BE RETURNED TO THE BROKERAGE
FIRM MAINTAINING YOUR ACCOUNT.
-2-
<PAGE>
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>
- --------------------------------------------------------------- -----------------------------------------------------------------
For this type of account: Give the Give the EMPLOYER
SOCIAL SECURITY For this type of account: IDENTIFICATION
number of -- number of --
- --------------------------------------------------------------- -----------------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 9. A valid trust, estate, or pension The legal entity (do not
trust furnish the identifying
2. Two or more individuals (joint The actual owner of the number of the personal
account) account or, if combined representative or trustee
funds, the first unless the legal entity
individual on the itself is not designated
account(1) in the account title)(5)
3. Husband and wife (joint account) The actual owner of the 10. Corporate account The corporation
account or, if joint
funds, either person(1) 11. Religious, charitable, or The organization
educational organization account
4. Custodian account of a minor The minor(2) 12. Partnership account held in the The partnership
(Uniform Gift to Minors Act) name of the business
5. Adult and minor (joint account) The adult or, if the 13. Association, club, or other tax- The organization
minor is the only exempt organization
contributor, the
minor(1) 14. A broker or registered nominee The broker or nominee
6. Account in the name of guardian The ward, minor, or 15. Account with the Department of The public entity
or committee for a designated incompetent person(3) Agriculture in the name of a
ward, minor, or incompetent public entity (such as a State or
person local government, school district,
or prison) that receives
7. a. The usual revocable savings The grantor-trustee(1) agricultural program payments
trust account (grantor is
also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or valid
trust under State law
8. Sole proprietorship account The owner(4)
- --------------------------------------------------------------- -----------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a Social Security Number, that
person's number must be furnished.
(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) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your Social Security Number
or Employer Identification Number (if you have one).
(5) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the Taxpayer Identification Number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
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>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
OBTAINING A NUMBER
If you don't have a TIN or you don't know your number, obtain Internal Revenue
Service Form SS-5, Application for Social Security Number Card or Form SS-4,
Application for Employer Identification Number at your 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:
- A corporation.
- A financial institution.
- An organization exempt from tax under Section 501(A) or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A state, the District of Columbia, a possession of the United States
or any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof. An international
organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the
U.S. or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under Section 584(a).
- An exempt charitable remainder trust, or a nonexempt trust described
in Section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under Section
1441.
- Payments to partnerships not engaged in a trade or business in the
U.S. and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid
in money.
- Payments made by certain foreign organizations.
Payments made to a nominee. Payments of interest not generally subject to
backup withholding include the following:
- 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 payer.
- Payments of tax-exempt interest (including exempt interest dividends
under Section 852).
- Payments described in Section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under Section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Substitute 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 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 the IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. 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) 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.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
[The First National Bank of Ottawa Letterhead]
December 6, 1999
To Our Stockholders:
I am pleased to inform you that First Ottawa Bancshares, Inc. (the
"Company") is offering to purchase up to 87,719 shares of its common stock from
stockholders through a tender offer at a price of $57.00 per share. The tender
offer provides stockholders the opportunity to sell shares for cash without the
usual transaction costs, and in the case of those holders who own less than 100
shares, without incurring any applicable odd lot discounts. The tender offer is
not conditioned upon the tender of a minimum number of shares; however, amounts
tendered above 87,719 shares will be prorated, unless the Company elects to
accept a greater number of shares.
The Company believes that the tender offer is an attractive use of a
portion of the Company's available capital and will afford those stockholders
who desire additional liquidity an opportunity to sell all or a portion of the
shares they own.
The terms and conditions of the tender offer are explained in detail in
the enclosed Offer to Purchase and the related Letter of Transmittal. I
encourage you to read these materials carefully before making any decision with
respect to the tender offer. The instructions on how to tender shares are also
explained in detail in the accompanying materials. Please note that if you have
not yet exchanged your old shares of common stock of The First National Bank of
Ottawa (the "Bank") for new shares of common stock of the Company, you may
tender such old shares of the Bank in lieu of new shares of the Company.
Neither the Company nor its Board of Directors makes any recommendation
to stockholders as to whether to tender or refrain from tendering their shares.
Each stockholder must make the decision whether to tender such stockholder's
shares and, if so, how many shares to tender. The Company has been advised that
certain of its directors or executive officers intend to tender shares pursuant
to the tender offer.
The tender offer will expire at 12:00 midnight, Eastern time, on
Monday, January 10, 2000, unless extended by the Company. If you have any
questions regarding the tender offer or need assistance in tendering your
shares, please contact me at (815) 434-0044.
On behalf of your Board of Directors, thank you for your continued
interest and support.
Sincerely,
Joachim J. Brown
Chief Executive Officer and President
