As filed with the Securities and Exchange Commission on October 31, 1996
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the
Securities Exchange Act of 1934)
(Amendment No. 1)
JEFFERSON BANKSHARES, INC.
(Name of issuer)
JEFFERSON BANKSHARES, INC.
(Name of Person(s) Filing Statement)
Common Stock, $2.50 Par Value Per Share
(Title of Class of Securities)
472387109
(CUSIP Number of Class of Securities)
William M. Watson, Jr., Esq.
123 East Main Street
Post Office Box 711
Charlottesville, Virginia 22902
(804) 972-1100
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person(s) Filing Statement)
----------------------
Copies to
Robert E. Stroud, Esq.
McGuire, Woods, Battle & Boothe, L.L.P.
418 East Jefferson Street
Post Office Box 1288
Charlottesville, Virginia 22902
(804) 977-2500
(Agent for Service of Process)
----------------------
September 26, 1996
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
Transaction Valuation* Amount of filing fee
$35,000,000 $7,000
*Calculated solely for the purpose of determining the filing fee, based upon the
purchase of 1,250,000 shares at $28.00 per share.
/X/ 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.
<TABLE>
<S> <C>
Amount Previously Paid: 7,000 Filing Party: Jefferson Bankshares, Inc.
Form or Registration No.: Schedule 13E-4 Date Filed: September 26, 1996
</TABLE>
<PAGE>
Item 1. Security and Issuer.
(a) The issuer of the securities to which this amended Schedule 13E-4
relates is Jefferson Bankshares, Inc., a Virginia corporation (the "Company"),
and the address of its principal executive office is 123 East Main Street,
Charlottesville, Virginia 22902. The Company's mailing address is Post Office
Box 711, Charlottesville, Virginia 22902.
(b) This amended Schedule 13E-4 relates to the offer by the Company
to purchase up to 1,250,000 shares (or such lesser number of shares as are
properly tendered) of its common stock, $2.50 par value per share (the
"Shares"), 15,146,470 of which Shares were outstanding as of September 25, 1996,
at prices not in excess of $28.00 nor less than $25.00, per Share in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated September 26, 1996 (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. The Company reserves the right, in its sole discretion, to purchase
more than 1,250,000 shares. Officers and directors of the Company may
participate in the Offer on the same basis as the Company's other shareholders.
The Company has been advised that no director or executive officer of the
Company intends to tender any shares pursuant to the Offer. The information set
forth in "Introduction", "The Offer -- Section 1, Number of Shares; Proration"
and "The Offer - - Section 15, Extension of Offer; Termination; Amendment of the
Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "Introduction" and "The Offer --
Section 8, Price Range of Shares; Dividends" of the Offer to Purchase is
incorporated herein by reference.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
(a)-(b) The information set forth in "The Offer -- Section 9,
Source and Amount of Funds" of the Offer to Purchase is incorporated herein by
reference.
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 "The Offer --
Section 9, Source and Amount of Funds," "The Offer -- Section 2, Purpose of the
Offer; Certain Effects of the Offer," "The Offer -- Section 11, Interest of
Directors and Officers; Transactions and Arrangements Concerning Shares" and
"The Offer -- Section 12, Effects of the Offer on the Market for Shares;
Registration under the Exchange Act" of the Offer to Purchase is incorporated
herein by reference.
Item 4. Interest in Securities of the Issuer.
The information set forth in "The Offer -- Section 11, Interest of
Directors and Officers; Transactions and Arrangements Concerning Shares" of the
Offer to Purchase is incorporated herein by reference.
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect
to the Issuer's Securities.
The information set forth in "Introduction" and "The Offer -- Section
9, Source and Amount of Funds," "The Offer -- Section 2, Purpose of the Offer;
Certain Effects of the Offer," and "The Offer -- Section 11, Interest of
Directors and Officers; Transactions and Arrangements Concerning Shares" of the
Offer to Purchase is incorporated herein by reference.
Item 6. Persons Retained, Employed, or to be Compensated.
The information set forth in "Introduction" and "The Offer -- Section
16, Fees and Expenses" of the Offer to Purchase is incorporated herein by
reference.
Item 7. Financial Information.
(a)-(b) The information set forth in "The Offer -- Section 10, Certain
Information Concerning the Company" of the Offer to Purchase is incorporated
herein by reference, the information set forth on pages 24 through 37 of the
Company's Annual Report to Shareholders for the year ended December 31, 1995,
and the information set forth in Item 1 of the Company's Quarterly Report on
Form 10-Q for the six months ended June 30, 1996, is incorporated herein by
reference.
Item 8. Additional Information.
(a) Not applicable.
(b) The information set forth in "The Offer -- Section 13, Certain
Legal Matters; Regulatory Approvals" of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in "The Offer -- Section 12, Effects
of the Offer on the Market for Shares; Registration under the
Exchange Act" of the Offer to Purchase is incorporated herein
by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and
Letter of Transmittal is incorporated herein by reference.
Item 9. Material to Be Filed as Exhibits.
(a)(1) Amended Form of Offer to Purchase, dated September 26, 1996
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this ameneded Schedule 13E-4 is true, complete
and correct.
October 31, 1996 JEFFERSON BANKSHARES, INC.
By: O. Kenton McCartney
President and Chief Executive Officer
[Exhibit (a)(1)]
JEFFERSON BANKSHARES, INC. [LOGO]
Offer to Purchase for Cash up to
1,250,000 Shares of its Common Stock
At a Purchase Price Not in Excess of $28.00
Nor less than $25.00 per Share
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL
RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON OCTOBER 31, 1996,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
Jefferson Bankshares, Inc., a Virginia corporation (the "Company"), hereby
invites its shareholders to tender shares of its Common Stock, $2.50 par value
per share (the "Shares"), at prices not in excess of $28.00 nor less than $25.00
per Share in cash, as specified by shareholders tendering their Shares, upon the
terms and subject to the conditions set forth herein and in the related Letter
of Transmittal (which together constitute the "Offer"). Each shareholder
desiring to tender Shares must specify in the Letter of Transmittal the price
(not more than $28.00 nor less than $25.00 per Share) at which such shareholder
is willing to have his or her Shares purchased by the Company. The Company will
determine the single price per Share (the "Purchase Price"), not in excess of
$28.00 nor less than $25.00 per Share, that it will pay for Shares properly
tendered pursuant to the Offer, taking into account the number of Shares so
tendered and the prices specified by tendering shareholders. The Company will
select the lowest Purchase Price that will allow it to buy 1,250,000 Shares (or
such lesser number of Shares as are properly tendered at prices not in excess of
$28.00 nor less than $25.00 per Share). All Shares properly tendered at prices
at or below the Purchase Price and not withdrawn will be purchased at the
Purchase Price, subject to the terms and the conditions of the Offer, including
the proration and conditional tender provisions. All Shares acquired in the
Offer will be acquired at the Purchase Price. The Company reserves the right, in
its sole discretion, to purchase more than 1,250,000 Shares pursuant to the
Offer. See Section 15.
THIS OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED IN THE OFFER. SEE SECTION 7.
The Shares are traded on the Nasdaq National Market. On September 25, 1996,
the last full trading day on the Nasdaq National Market prior to the
announcement and commencement of the Offer, the closing price as reported on the
Nasdaq National Market was $24.50 per Share. SHAREHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 8.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES,
AND NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION.
SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER,
CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN DECISIONS
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR
PRICES AT WHICH TO TENDER.
IMPORTANT
Any shareholder wishing to tender all or any part of his or her Shares should
either (a) complete and sign a Letter of Transmittal (or a facsimile thereof) in
accordance with the instructions in the Letter of Transmittal and either mail or
deliver it with any required signature guarantee and any other required
documents to The Bank of New York (the "Depositary"), and either mail or deliver
the stock certificates for such Shares to the Depositary (with all such other
documents) or tender such Shares pursuant to the procedure for book-entry tender
set forth in Section 3, or (b) request a broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such shareholder. Holders
of Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee should contact such person if they desire to tender
their Shares. Any shareholder who desires to tender Shares and whose
certificates for such Shares cannot be delivered to the Depositary or who cannot
comply with the procedure for book-entry transfer or whose other required
documents cannot be delivered to the Depositary, in any case, by the expiration
of the Offer must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3.
TO TENDER SHARES PROPERLY, SHAREHOLDERS MUST COMPLETE THE SECTION OF THE
LETTER OF TRANSMITTAL RELATING TO THE PRICE AT WHICH THEY ARE TENDERING SHARES.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent, Georgeson & Company Inc. or to the Dealer
Managers at their respective addresses and telephone numbers set forth on the
back cover of this Offer to Purchase.
<PAGE>
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
The Date of this Offer to Purchase is September 26, 1996
<PAGE>
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON BEHALF
OF THE COMPANY OR THE DEALER MANAGERS AS TO WHETHER SHAREHOLDERS SHOULD TENDER
OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT
AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN
CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE RELATED
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE DEALER MANAGERS.
<PAGE>
TABLE OF CONTENTS
Section Page
TABLE OF CONTENTS (i)
SUMMARY S-1
INTRODUCTION 1
THE OFFER 2
1. Number of Shares; Proration. 2
2. Purpose of the Offer; Certain Effects of the Offer 3
3. Procedures for Tendering Shares. 5
4. Withdrawal Rights 7
5. Purchase of Shares and Payment of Purchase Price 8
6. Conditional Tender of Shares 9
7. Certain Conditions of the Offer 9
8. Price Range of Shares; Dividends 10
9. Source and Amount of Funds 11
10. Certain Information Concerning the Company 11
11. Interest of Directors and Officers; Transactions
and Arrangements Concerning Shares 15
12. Effects of the Offer on the Market for Shares;
Registration under the Exchange Act 15
13. Certain Legal Matters; Regulatory Approvals 16
14. Certain Federal Income Tax Consequences 16
15. Extension of Offer; Termination; Amendment 18
16. Fees and Expenses 19
17. Miscellaneous 19
SCHEDULE A A-1
GLOSSARY FACING BACK COVER
LIST OF CERTAIN FORMS INSIDE BACK COVER
<PAGE>
SUMMARY
This general summary is solely for the convenience of the Company's shareholders
and is qualified in its entirety by reference to the full text and more specific
details in this offer to purchase.
Purchase Price. The Company will select a single Purchase Price
which will be not more than $28.00 nor less than
$25.00 per Share, which represents a 2.0% to 14.3%
premium to the closing price for the Shares on the
last trading day before the announcement and
commencement of the Offer. All Shares tendered at
or below the Purchase Price will be purchased by the
Company at the Purchase Price, subject to
proration. Each shareholder desiring to tender Shares
must specify in the Letter of Transmittal the price
(not more than $28.00 nor less than $25.00 per Share)
at which such shareholder is willing to have his or
her Shares purchased by the Company. Shareholders who
are willing to sell their Shares at any price
within the foregoing range may so indicate on the
Letter of Transmittal by checking the box in Box #2.
Number of Shares to Be
Purchased. 1,250,000 Shares (or such lesser number of Shares
as are properly tendered). The Company reserves the
right, in its sole discretion, to purchase more
than 1,250,000 Shares. See Section 15.
Amount of Shares. Each shareholder may tender all or any portion of
Shares owned by such shareholder.
How to Tender Shares. See the following page and Section 3. Shareholders
with questions may call the Information Agent,
the Dealer Managers, or the Depositary, or consult your
broker for assistance.
Brokerage Commissions. None.
Stock Transfer Tax. None, if payment is made to the registered holder.
Expiration Date. The Offer will expire at 5:00 P.M., New York City
time, on October 31, 1996 unless extended by the
Company.
Payment Date. As soon as practicable after the Expiration Date.
Position of The Company
And Its Directors. Neither the Company nor its Board of Directors
makes any recommendation to any shareholder as to
whether to tender or refrain from tendering Shares.
Withdrawal Rights. Tendered Shares may be withdrawn at any time until
5:00 P.M., New York City time, on October 31, 1996,
unless the Offer is extended by the Company. See
Section 3.
<PAGE>
Odd Lots. Shareholders who own fewer than 100 Shares as of
September 25, 1996 and who tender all such Shares
at or below the Purchase Price and who check Box
#5, "Odd Lots," on the Letter of Transmittal will
have their Shares accepted before other tendered
Shares. By accepting the Offer, such an Odd Lot Holder
would not only avoid brokerage commissions but also
would avoid any discounts to the market price
typically charged by brokers for executing odd lot
trades.
Further Developments
Regarding The Offer. Call the Information Agent or the Dealer
Managers, or consult your broker. Please see below
and the back cover for the address and telephone
numbers of the Dealer Managers and the Information
Agent.
Dividend Payable on
October 31, 1996. The Company's dividend of $.22 per Share declared on
September 25, 1996 payable to holders of record on
October 7, 1996 will be paid on October 31, 1996.
Shareholders of record on October 7, 1996 will be
entitled to receive such dividend, even on Shares sold
in this Offer.
<PAGE>
Dividend Reinvestment
Plan Participants. Participants in the Company's Dividend Reinvestment Plan
may tender Shares to be purchased on October 31, 1996
pursuant to such plan in connection with the payment of
the Company's latest dividend on that date by checking
the box in Box #7 on the Letter of Transmittal. See
Section 3.
Glossary. Several defined terms are used throughout the Offer. A
glossary of selected terms appears at the end of this
Offer to Purchase.
Summary Instructions
For Tendering. If you hold Share certificates and wish to tender those
Shares, you must complete the Letter of Transmittal (the
blue form) as follows:
<PAGE>
o List the certificates and the number of
Shares that you are tendering in Box #1.
o Check the box specifying the price at which
you are tendering in Box #2.
o If you want to give us special payment
instructions, complete Box #3.
o If you want to give us special delivery
instructions, complete Box #4.
o If you are an Odd Lot Holder who is tendering
all your shares, complete Box #5.
o If you want to make a conditional tender of
Shares, complete Box #6.
o If you are a participant in the Company's
Dividend Reinvestment Plan, complete Box #7.
o If you are a participant in the Company's
Employee Stock Purchase Plan, complete Box
#8.
o If your Shares are being delivered by
book-entry or your certificates are being
delivered pursuant to a Notice of Guaranteed
Delivery, complete Box #9.
o Complete substitute Form W-9 to certify your
tax identification number.
o Sign the Letter of Transmittal in Box #10 (in
certain circumstances, signatures must be
guaranteed in Box #10).
You must deliver your Share certificate(s) or comply
with one of the alternate delivery methods. See Section
3.
These documents must be received by the Depositary, The
Bank of New York, no later than 5:00 P.M. New York City
time on October 31, 1996.
Please see Section 3 and the Letter of Transmittal for
more details about how to tender Shares.
Important Numbers. For information, please call:
Information Agent (Georgeson & Company Inc.):
(800) 223-2064.
Dealer Managers (Goldman, Sachs & Co.): (800) 323-5678,
Ext. 9477
<PAGE>
To The Holders Of Common Stock Of Jefferson Bankshares, Inc.:
INTRODUCTION
Jefferson Bankshares, Inc., a Virginia corporation (the "Company"), invites
its shareholders to tender shares of its Common Stock, $2.50 par value per share
(the "Shares"), at prices not in excess of $28.00 nor less than $25.00 per
Share, as specified by shareholders tendering their Shares, upon the terms and
subject to the conditions set forth herein and in the related Letter of
Transmittal (which together constitute the "Offer"). Each shareholder desiring
to tender Shares must specify in Box #2 of the Letter of Transmittal the price
(not more than $28.00 nor less than $25.00 per Share) at which such shareholder
is willing to have his or her Shares purchased by the Company. Shareholders who
are willing to sell their Shares at any price within the foregoing range may
check the box in Box #2 of the Letter of Transmittal to so indicate. The Company
will determine the single price per Share, not in excess of $28.00 nor less than
$25.00 per Share, net to the seller in cash (the "Purchase Price"), that it will
pay for Shares properly tendered pursuant to the Offer, taking into account the
number of Shares so tendered and the prices specified by tendering shareholders.
The Company will select the lowest Purchase Price that will allow it to buy
1,250,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $28.00 nor less than $25.00 per Share). All Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
will be purchased at the Purchase Price, upon the terms and subject to the
conditions of the Offer, including the proration and conditional tender
provisions. Shares tendered at prices in excess of the Purchase Price and Shares
not purchased because of proration or conditional tender will be returned. The
Company reserves the right, in its sole discretion, to purchase more than
1,250,000 Shares pursuant to the Offer. See Section 15.
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED IN THE OFFER. SEE SECTION 7.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 1,250,000 Shares are properly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares first
from all Odd Lot Holders (as defined in Section 1) who properly tender all their
Shares at or below the Purchase Price and then on a pro rata basis from all
other shareholders who properly tender at prices at or below the Purchase Price
(and do not withdraw them prior to the expiration of the Offer), other than
shareholders who tender conditionally, and for whom the condition is not
satisfied. See Sections 1 and 6. All stock certificates representing Shares not
purchased pursuant to the Offer, including Shares tendered at prices greater
than the Purchase Price and not withdrawn and Shares not purchased because of
proration or conditional tenders, will be returned at the Company's expense to
the shareholders who tendered such Shares.
The Purchase Price will be paid to the tendering shareholder in cash for all
Shares purchased. Tendering shareholders will not be obligated to pay brokerage
commissions, solicitation fees or, subject to Instruction 9 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Company.
HOWEVER, ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN
AND RETURN TO THE DEPOSITARY THE FORM W-9 THAT IS INCLUDED IN THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING OF
31% OF THE GROSS PROCEEDS PAYABLE TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER. SEE SECTION 3. Foreign Shareholders should request Form W-8 from the
Depositary. The Company will pay all fees and expenses of the Dealer Managers,
the Depositary and the Information Agent incurred in connection with the Offer.
See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MAKING OF
THE OFFER. HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING
THEIR SHARES AND NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH
RECOMMENDATION. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN
THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE
PRICE OR PRICES AT WHICH TO TENDER.
As of September 25, 1996, the Company had issued and outstanding 15,146,470
Shares and had reserved 197,000 Shares for issuance upon exercise of outstanding
stock options and 1,795,720 Shares for issuance under the Company's Employee
Stock Purchase Plan and the Company's Dividend Reinvestment Plan, and other
stock plans for employees and non-employee directors. The 1,250,000 Shares that
the Company is offering to purchase pursuant to the Offer represent
approximately 8.3% of the outstanding Shares. The Shares are traded on the
Nasdaq National Market under the symbol "JBNK". On September 25, 1996, the last
full trading day on the Nasdaq National Market prior to the announcement and
commencement of the Offer, the closing price as reported on the Nasdaq National
Market was $24.50 per Share. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR THE SHARES. See Section 8.
THE OFFER
1. Number of Shares; Proration.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase up to 1,250,000 Shares or such lesser number of Shares as are properly
tendered (and not withdrawn in accordance with Section 4) prior to the
Expiration Date (as defined below) at prices not in excess of $28.00 nor less
than $25.00 net per Share in cash. This Offer will expire at 5:00 P.M., New York
City time, on October 31, 1996 (the "Expiration Date"), unless and until the
Company, in its sole discretion, shall have extended the period of time during
which the Offer will remain open, in which event the term "Expiration Date"
shall refer to the latest time and date at which the Offer, as so extended by
the Company, shall expire. See Section 15 for a description of the Company's
right to extend, delay, terminate or amend the Offer. The Company reserves the
right to purchase more than 1,250,000 Shares pursuant to the Offer. In
accordance with applicable regulations of the Securities and Exchange Commission
(the "Commission"), the Company may purchase pursuant to the Offer an additional
amount of Shares not to exceed 2% of the number of Shares outstanding on
September 25, 1996 without amending or extending the Offer. See Section 15. In
the event of an over-subscription of the Offer as described below, Shares
tendered at or below the Purchase Price prior to the Expiration Date will be
subject to proration, except for Odd Lots as explained below. The proration
period also expires on the Expiration Date.
The Company will select the lowest Purchase Price that will allow it to buy
1,250,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $28.00 nor less than $25.00 per Share). The Company
reserves the right, in its sole discretion, to purchase more than 1,250,000
Shares. All Shares properly tendered at prices at or below the Purchase Price
and not withdrawn will be purchased at the Purchase Price, subject to the terms
and the conditions of the Offer, including the proration and conditional tender
provisions. All Shares purchased in the Offer will be purchased at the Purchase
Price.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED IN THE OFFER. SEE SECTION 7.
In accordance with Instruction 7 of the Letter of Transmittal, shareholders
desiring to tender Shares must specify the price, not in excess of $28.00 nor
less than $25.00 per Share, at which they are willing to sell their Shares to
the Company (sometimes referred to as a "modified Dutch Auction" tender
process). Shareholders who are willing to sell their Shares at whatever price
may be established by the modified Dutch Auction tender process within the
foregoing range may check the box in Box #2 of the Letter of Transmittal to so
indicate. As promptly as practicable following the Expiration Date, the Company
will, in its sole discretion, determine the Purchase Price that it will pay for
Shares properly tendered pursuant to the Offer and not withdrawn, taking into
account the number of Shares tendered and the prices specified by tendering
shareholders. The Company intends to select the lowest Purchase Price, not in
excess of $28.00 nor less than $25.00 net per Share in cash, that will enable it
to purchase 1,250,000 Shares (or such lesser number of Shares as are properly
tendered) pursuant to the Offer. The Company reserves the right, in its sole
discretion, to purchase more than 1,250,000 Shares. Shares properly tendered
pursuant to the Offer at or below the Purchase Price and not withdrawn will be
purchased at the Purchase Price, subject to the terms and conditions of the
Offer, including the proration and conditional tender provisions. All Shares
tendered and not purchased pursuant to the Offer, including Shares tendered at
prices in excess of the Purchase Price and Shares not purchased because of
proration or conditional tender, will be returned to the tendering shareholders
at the Company's expense as promptly as practicable following the Expiration
Date.
The Company will be deemed to have accepted for payment, subject to
proration, Shares tendered at or below the Purchase Price and not withdrawn if,
as and when the Company gives oral or written notice to The Bank of New York
(the "Depositary") of its acceptance of such Shares for purchase pursuant to the
Offer. Payment for Shares accepted for purchase pursuant to the Offer will be
made by depositing the aggregate Purchase Price for such Shares with the
Depositary, which will act as agent for the tendering shareholders for the
purpose of receiving payment from the Company and transmitting such payments to
tendering shareholders.
Priority of Purchases. Upon the terms and subject to the conditions of the
Offer, if more than 1,250,000 Shares have been properly tendered at prices at or
below the Purchase Price and not withdrawn prior to the Expiration Date, the
Company will purchase properly tendered Shares on the basis set forth below:
(a) first, all Shares properly and unconditionally tendered and not
withdrawn prior to the Expiration Date by any Odd Lot Holder (as
defined below) who:
(1) tenders all Shares owned beneficially or of record by such
Odd Lot Holder at a price at or below the Purchase Price
(tenders of less than all Shares owned by such shareholder will
not qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter
of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery; and
(b) second, after purchase of all of the foregoing Shares, all Shares
properly and conditionally tendered at or below the Purchase Price
in accordance with Section 6, for which the condition was
satisfied, and all other Shares tendered properly and
unconditionally at prices at or below the Purchase Price and not
withdrawn prior to the Expiration Date, on a pro rata basis (with
appropriate adjustments to avoid purchases of fractional Shares)
as described below; and
(c) third, if necessary, Shares properly and conditionally tendered at
or below the Purchase Price and not withdrawn prior to the
Expiration Date, selected by random lot in accordance with Section
6.
Odd Lots. For purposes of the Offer, the term "Odd Lots" shall mean all
Shares properly tendered prior to the Expiration Date at prices at or below the
Purchase Price and not withdrawn by any person (an "Odd Lot Holder") who owned,
beneficially or of record, as of the close of business on September 25, 1996, an
aggregate of fewer than 100 Shares (and so certified in the appropriate place on
the Letter of Transmittal and, if applicable, on the Notice of Guaranteed
Delivery). In order to qualify for this preference, an Odd Lot Holder must
tender all such Shares in accordance with the procedures described in Section 3.
As set forth above, Odd Lots will be accepted for payment before proration, if
any, of the purchase of other tendered Shares. This preference is not available
to partial tenders or to beneficial or record holders of an aggregate of 100 or
more Shares, even if such holders have separate accounts or certificates
representing fewer than 100 Shares. By accepting the Offer, an Odd Lot Holder
would not only avoid the payment of brokerage commissions but also would avoid
any applicable odd lot discounts to the market price in a sale of such holder's
Shares through a broker. Any shareholder wishing to tender all of such
shareholder's Shares pursuant to this Section should complete the box captioned
"Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery.
Proration. If more than 1,250,000 Shares are properly tendered, proration
will occur, and shareholders (other than Odd Lot Holders who tender all their
Shares at or below the Purchase Price) will likely not be able to sell all the
Shares tendered. The Company will determine the proration factor as soon as
practicable following the Expiration Date. Proration for each shareholder
tendering Shares, other than Odd Lot Holders who tender all of their Shares at
or below the Purchase Price, shall be based on the ratio of (i) the number of
Shares the Company determines to purchase divided by (ii) the total number of
Shares tendered by all shareholders at or below the Purchase Price, excluding
from both the numerator and the denominator Odd Lot Holders who tendered all of
their Shares at or below the Purchase Price. Each Shareholder will then sell an
amount of Shares equal to the number of his or her Shares validly tendered times
the proration factor. Because of the difficulty in determining the number of
Shares properly tendered (including Shares tendered by guaranteed delivery
procedures, as described in Section 3) and not withdrawn, and because of the odd
lot procedure, the Company does not expect that it will be able to announce the
final proration factor or to commence payment for any Shares purchased pursuant
to the Offer until approximately seven trading days after the Expiration Date.
The preliminary results of any proration will be announced by press release as
promptly as practicable after the Expiration Date. Shareholders may obtain such
preliminary information from the Depositary or the Dealer Managers and may be
able to obtain such information from their brokers.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares and will be furnished to brokers, banks and similar
persons whose names, or the names of whose nominees, appear on the Company's
shareholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
2. Purpose of the Offer; Certain Effects of the Offer.
The Company believes that the purchase of Shares is an attractive use of a
portion of the Company's available capital on behalf of its shareholders and is
consistent with the Company's long-term goal of increasing shareholder value.
The Company believes it has adequate sources of capital to complete the Share
repurchase and pursue business opportunities.
Over time, the Company's profitable operations have contributed to the growth
of a capital base that exceeds all applicable regulatory standards and the
amount of capital needed to support the Company's banking business. After
evaluating a variety of alternatives to utilize more effectively its capital
base and to attempt to maximize shareholder value, the Company's management and
its Board of Directors believe that the purchase of Shares pursuant to the Offer
is a positive action that is intended to accomplish the desired objectives.
Other actions previously employed, including a high dividend payout ratio and
periodic open market purchases of Shares, have enhanced shareholder value, but
capital remains at high levels, and this affects the Company's ability to
produce desired returns for shareholders.
The Offer is designed to restructure the Company's balance sheet in order to
increase return on equity and earnings per share by reducing the amount of
equity and Shares outstanding. Based upon the current market price of its
Shares, the Company believes that purchase of the Shares is an attractive use of
its funds. Following the purchase of the Shares, the Company believes funds
provided by earnings combined with its other sources of liquidity will be fully
adequate to meet its funding needs for the foreseeable future. Upon completion
of the Offer, the Company expects that it and its wholly owned subsidiary bank,
Jefferson National Bank (the "Bank"), will continue to maintain the highest
regulatory standard for capital, which is designated as "well capitalized" under
the prompt corrective action scheme enacted by the Federal Deposit Insurance
Corporation Improvement Act of 1991.
The Offer will enable shareholders to sell all or a portion of their Shares
at prices greater than the market prices prevailing immediately prior to the
announcement of the Offer. Shareholders may determine the price or prices (not
greater than $28.00 nor less than $25.00 per Share) at which they are willing to
sell their Shares, and, if any such Shares are purchased pursuant to the Offer,
to sell those Shares for cash without the usual transaction costs associated
with open-market sales. In addition, shareholders owning fewer than 100 Shares,
whose Shares are purchased pursuant to the Offer, not only will avoid the
payment of brokerage commissions but will also avoid any applicable odd lot
discounts to the market price typically charged by brokers for executing odd lot
trades.
Shareholders who do not tender their Shares pursuant to the Offer and
shareholders who otherwise retain an equity interest in the Company as a result
of a partial tender of Shares or a proration pursuant to Section 1 of the Offer
will continue to be owners of the Company with the attendant risks and rewards
associated with owning the equity securities of the Company. As noted above, the
Company, following completion of the Offer, will maintain the highest regulatory
capital ranking. Consequently, the Company believes that shareholders will not
be subject to materially greater risk as a result of the reduction of the
capital base.
Shareholders who determine not to accept the Offer will realize a
proportionate increase in their relative equity interest in the Company and,
thus, in the Company's earnings and assets, subject to any risks resulting from
the Company's purchase of Shares and the Company's ability to issue additional
equity securities in the future. For shareholders who do not tender or who
otherwise maintain an equity interest in the Company, the trading price of the
Shares may increase as a result of the Offer. There is no assurance, however,
that the purchase of Shares will achieve its objectives or that the Shares will
trade at or above the price range being offered by the Company.
In addition, to the extent the purchase of Shares pursuant to the Offer
results in a reduction of the number of shareholders of record, the Company's
costs for services to shareholders may be reduced. Finally, the Offer may affect
the Company's ability to qualify for pooling-of-interests accounting treatment
for any merger transaction for approximately the next two years.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES AND
NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. SHAREHOLDERS
ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN
INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH TO
TENDER.
The Company may in the future purchase additional Shares on the open market,
in private transactions, through tender offers or otherwise. Any such purchase
may be on the same terms or on terms which are more or less favorable to
shareholders than the terms of the Offer. However, Rule 13e-4 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), prohibits the
Company and its affiliates from purchasing any Shares, other than pursuant to
the Offer, until at least ten business days after the Expiration Date. Any
possible future purchases by the Company will depend on many factors, including
the market price of the Shares, the results of the Offer, the Company's business
and financial position and general economic and market conditions.
Shares the Company acquires pursuant to the Offer will be restored to the
status of authorized and unissued Shares and will be available for the Company
to issue without further shareholder action (except as required by applicable
law or the rules of the Nasdaq National Market or any other securities exchange
on which the Shares are listed) for purposes including, but not limited to, the
acquisition of other businesses, the raising of additional capital for use in
the Company's business and the satisfaction of obligations under existing or
future employee benefit plans. The Company has no current plans for reissuance
of the Shares repurchased pursuant to the Offer.
3. Procedures for Tendering Shares.
Proper Tender of Shares. For Shares to be tendered properly pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal, the
blue form (or manually signed facsimile thereof), including any required
signature guarantees and any other documents required by the Letter of
Transmittal, must be received prior to 5:00 P.M., New York City time, on the
Expiration Date by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase or (b) the tendering shareholder must comply
with the guaranteed delivery procedure set forth below. IN ACCORDANCE WITH
INSTRUCTION 7 OF THE LETTER OF TRANSMITTAL, SHAREHOLDERS DESIRING TO TENDER
SHARES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE SECTION CAPTIONED
"PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED" IN BOX #2 OF
THE LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF $.125) AT WHICH THEIR
SHARES ARE BEING TENDERED, OR INDICATE THAT THEY ARE WILLING TO SELL THEIR
SHARES AT ANY PRICE WITHIN THE FOREGOING RANGE. Shareholders who desire to
tender Shares at more than one price must complete a separate Letter of
Transmittal for each price at which shares are tendered, provided that the same
Shares cannot be tendered (unless properly withdrawn previously in accordance
with the terms of the Offer) at more than one price. IN ORDER TO PROPERLY TENDER
SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE APPROPRIATE SECTION ON
EACH LETTER OF TRANSMITTAL.
In addition, Odd Lot Holders who tender all such Shares must complete Box #5,
"Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery, in order to qualify for the preferential treatment
available to Odd Lot Holders as set forth in Section 1.
Signature Guarantees and Method of Delivery. No signature guarantee is
required (i) if the Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this Section 3, shall include any
participant in The Depository Trust Company or Philadelphia Depository Trust
Company (collectively, the "Book-Entry Transfer Facilities") whose name appears
on a security position listing as the owner of the Shares) tendered therewith
and such holder has not completed either Box #3, "Special Payment Instructions"
or Box #4, "Special Delivery Instructions" on the Letter of Transmittal; or (ii)
if Shares are tendered for the account of a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., 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 program and has an office, branch or agency in the United States (each
such entity being hereinafter referred to as an "Eligible Institution"). See
Instruction 1 of the Letter of Transmittal. If a certificate for Shares is
registered in the name of a person other than the person executing a Letter of
Transmittal, or if payment is to be made, or Shares not purchased or tendered
are to be issued, to a person other than the registered holder, then the
certificate must be endorsed or accompanied by an appropriate stock power, in
either case, signed exactly as the name of the registered holder appears on the
certificate, and the signature(s) on the stock power and the Letter of
Transmittal must be guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at a Book-Entry Transfer Facility
as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS,
INCLUDING CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF
DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED.
Book-entry Delivery. The Depositary will establish an account with respect to
the Shares for purposes of the Offer at each Book-Entry Transfer Facility within
two business days after the date of this Offer to Purchase, and any financial
institution that is a participant in a Book-Entry Transfer Facility's system may
make book-entry delivery of the Shares by causing such facility to transfer
Shares into the Depositary's account in accordance with the Book-Entry Transfer
Facility's procedures for transfer. Although delivery of Shares may be effected
through a book-entry transfer into the Depositary's account at a Book-Entry
Transfer Facility, either (i) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required signature
guarantees and any other required documents must, in any case, be transmitted to
and received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase prior to the Expiration Date, or (ii) the
guaranteed delivery procedure described below must be followed. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or if time will not permit all
required documents to reach the Depositary prior to the Expiration Date, such
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, telegram or facsimile
transmission, prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the
form the Company has provided with this Offer to Purchase
(specifying the price at which the Shares are being tendered); and
(c) the certificates for all tendered Shares, in proper form for
transfer (or confirmation of book-entry transfer of such Shares into
the Depositary's account at one of the Book-Entry Transfer
Facilities), together with a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) and
any required signature guarantees or other documents required by the
Letter of Transmittal, are received by the Depositary within three
trading days after the date of receipt by the Depositary of such
Notice of Guaranteed Delivery.
Return of Shares. If any tendered Shares are not purchased, or if less than
all Shares evidenced by a shareholder's certificates are tendered, certificates
for unpurchased Shares will be returned as promptly as practicable after the
expiration or termination of the Offer or, in the case of Shares tendered by
book-entry transfer at a Book-Entry Transfer Facility, such Shares will be
credited to the appropriate account maintained by the tendering shareholder at
the appropriate Book-Entry Transfer Facility, in each case without expense to
such shareholder.
Dividend Reinvestment and Employee Stock Purchase Plans. The Depositary for
the Offer also acts as the agent of participants in the Company's Dividend
Reinvestment Plan and Employee Stock Purchase Plan (the "Plans"). Participants
in the Plans may use the Letter of Transmittal to tender such participants'
Shares in the Offer by completing either Box #7 or Box #8, as appropriate on the
Letter on Transmittal. Each participant may direct that all, some or none of the
Shares credited to the participant's account are to be tendered. Shareholders
who intend to tender Shares held in the Plans in addition to Shares which are
not held in the Plans may use one Letter of Transmittal to tender all of such
Shares if such participant wishes to tender all such Shares at the same price
(even if such shareholders have received more than one copy of the Offer).
Separate Letters of Transmittal must be used if a participant in the Plans
intends to tender Shares held in the Plans and Shares not held in the Plans at
different prices. See Instruction 7 to the Letter of Transmittal. Participants
in the Plans who do not wish to tender their shares held in the Plans do not
need to take any action. Participants may complete either Box #7 or Box #8, as
appropriate, on only one Letter of Transmittal submitted by such participant. If
a participant submits more than one Letter of Transmittal and completes such box
on more than one Letter of Transmittal, the participant will be deemed to have
elected to tender all Shares allocated to the shareholder's account under the
relevant Plan at the lowest of the prices specified in such Letters of
Transmittal. Participants in the Dividend Reinvestment Plan who wish to tender
the Shares that will be allocated to their accounts under that Plan on October
31, 1996, in connection with the payment of the Company's quarterly dividend on
that day, should so indicate on the Letter of Transmittal. Participants in the
Dividend Reinvestment Plan may determine the number of Shares allocated to them
on October 31, 1996 under that Plan after 4:00 P.M. New York City time on that
day by reference to the average of the high and low trade prices of the
Company's shares on October 31, 1996 (which may be obtained from the Information
Agent or from brokers), taking into account that the dividend per Share payable
on October 31, 1996 (which will be used to purchase Shares under the Dividend
Reinvestment Plan for participants in that Plan) will be $.22. Participants in
the Dividend Reinvestment Plan may withdraw such Shares by following the
procedure for withdrawal of Shares before 5:00 P.M. New York City time, on
October 31, 1996. See Section 4.
Backup Federal Income Tax Withholding. TO PREVENT BACKUP FEDERAL INCOME TAX
WITHHOLDING EQUAL TO 31% OF THE GROSS PAYMENTS MADE TO SHAREHOLDERS FOR SHARES
PURCHASED PURSUANT TO THE OFFER, EACH SHAREHOLDER WHO DOES NOT OTHERWISE
ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH
THE SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN
OTHER INFORMATION BY COMPLETING THE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL.
Withholding for Foreign Shareholders. Foreign shareholders may be required to
submit Form W-8, certifying non-United States status, to avoid backup
withholding. See Instructions 17 and 18 of the Letter of Transmittal. For a
discussion of certain federal income tax consequences to tendering shareholders,
see Section 14. For this purpose, a "foreign shareholder" is a shareholder that
is not (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States, any State or any political subdivision thereof or (iii) any
estate or trust the income of which is subject to United States federal income
taxation regardless of the source of such income. Even if a foreign shareholder
has provided the required certification to avoid backup withholding, the
Depositary will withhold federal income taxes equal to 30% of the gross payments
payable to a foreign shareholder or his or her agent unless the Depositary
determines that an exemption from or a reduced rate of withholding is available
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 in the United States. In order to obtain an exemption from or
a reduced rate of withholding pursuant to a tax treaty, a foreign shareholder
must deliver to the Depositary a properly completed Form 1001. In order to
obtain an exemption from withholding on the grounds that the gross proceeds paid
pursuant to the Offer are effectively connected with the conduct of a trade or
business within the United States, a foreign shareholder must deliver to the
Depositary a properly completed Form 4224. The Depositary will determine a
shareholder's status as a foreign shareholder and eligibility for a reduced rate
of, or an exemption from, withholding by reference to any outstanding
certificates or statements concerning eligibility for a reduced rate of, or
exemption from, withholding (e.g., Form 1001 or Form 4224) unless facts and
circumstances indicate that such reliance is not warranted. A foreign
shareholder may be able to obtain a refund of all or a portion of any tax
withheld if such shareholder meets one of the three tests for sale treatment
described in Section 14 or is otherwise able to establish that no tax or a
reduced amount of tax is due. Backup withholding generally will not apply to
amounts subject to the 30% or treaty-reduced rate of withholding.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid for Shares to be accepted and the validity,
form, eligibility (including time of receipt) and acceptance of any tender of
Shares will be determined by the Company, in its sole discretion, and its
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders of any Shares that it determines
are not in appropriate form or the acceptance for payment of or payment for
which may be unlawful. The Company also reserves the absolute right to waive any
of the conditions of the Offer or any defect or irregularity in any tender with
respect to any particular Shares or any particular shareholder. No tender of
Shares will be deemed to have been properly made until all defects or
irregularities have been cured by the tendering shareholder or waived by the
Company. None of the Company, the Dealer Managers, the Depositary, or any other
person shall be obligated to give notice of any defects or irregularities in
tenders, nor shall any of them incur any liability for failure to give any such
notice.
Tendering Shareholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the Offer, as well as the tendering shareholder's
representation and warranty to the Company that (a) such shareholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated by the Commission under the Exchange Act and (b) the tender of such
Shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a person,
directly or indirectly, to tender shares for such person's own account unless,
at the time of tender and at the end of the proration period or period during
which shares are accepted by lot (including any extensions thereof), the person
so tendering (i) has a net long position equal to or greater than the amount of
(x) Shares tendered or (y) other securities convertible into or exchangeable or
exercisable for the Shares tendered and will acquire such Shares for tender by
conversion, exchange or exercise and (ii) will deliver or cause to be delivered
such Shares in accordance with the terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on behalf
of another person. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
shareholder and the Company upon the terms and conditions of the Offer.
4. Withdrawal Rights.
Except as otherwise provided in this Section 4, tenders of Shares pursuant to
the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Company pursuant to the Offer, may also be withdrawn
at any time after 12:00 midnight, New York City time, on November 30, 1996. For
a withdrawal to be effective, a notice of withdrawal must be in written,
telegraphic or facsimile transmission form and must be received in a timely
manner by the Depositary at one of its addresses set forth on the back cover of
this Offer to Purchase. Any such notice of withdrawal must specify the name of
the tendering shareholder, the name of the registered holder, if different from
that of the person who tendered such Shares, the number of Shares tendered and
the number of Shares to be withdrawn. If the certificates for Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the release of such certificates, the tendering shareholder must also
submit the certificate numbers shown on the particular certificates evidencing
the Shares to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution (except in the case of Shares tendered by
an Eligible Institution). If Shares have been tendered pursuant to the procedure
for book-entry transfer set forth in Section 3, the notice of withdrawal also
must specify the name and the number of the account at the applicable Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with the procedures of such facility. None of the Company, the Dealer Managers,
the Depositary or any other person shall be obligated to give notice of any
defects or irregularities in any notice of withdrawal nor shall any of them
incur liability for failure to give any such notice. All questions as to the
form and validity (including time of receipt) of notices of withdrawal will be
determined by the Company, in its sole discretion, which determination shall be
final and binding.
Withdrawals may not be rescinded and any Shares withdrawn will thereafter be
deemed not properly tendered for purposes of the Offer unless such withdrawn
Shares are properly retendered prior to the Expiration Date by again following
one of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or is
unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain tendered Shares on behalf of the Company, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in this Section 4.
5. Purchase of Shares and Payment of Purchase Price.
Upon the terms and subject to the conditions of the Offer, as promptly as
practicable following the Expiration Date, the Company (i) will determine the
Purchase Price it will pay for the Shares properly tendered and not withdrawn
prior to the Expiration Date, taking into account the number of Shares so
tendered and the prices specified by tendering shareholders, and (ii) will
accept for payment and pay for (and thereby purchase) Shares properly tendered
at prices at or below the Purchase Price and not withdrawn prior to the
Expiration Date. For purposes of the Offer, the Company will be deemed to have
accepted for payment (and therefore purchased) Shares that are tendered at or
below the Purchase Price and not withdrawn (subject to the proration and
conditional tender provisions of the Offer) only when, as and if it gives oral
or written notice to the Depositary of its acceptance of such Shares for payment
pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, promptly following
the Expiration Date the Company will accept for payment and pay a single
Purchase Price per Share for 1,250,000 Shares (subject to increase or decrease
as provided in Section 15) or such lesser number of Shares as are properly
tendered at prices not in excess of $28.00 nor less than $25.00 per Share and
not withdrawn as permitted in Section 4.
The Company will pay for Shares purchased pursuant to the Offer by depositing
the aggregate Purchase Price therefor with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payment from the
Company and transmitting payment to the tendering shareholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any proration and commence payment for Shares
purchased until approximately seven trading days after the Expiration Date.
Certificates for all Shares tendered and not purchased, including all Shares
tendered at prices in excess of the Purchase Price and Shares not purchased due
to proration or conditional tender, will be returned (or, in the case of Shares
tendered by book-entry transfer, such Shares will be credited to the account
maintained with the Book-Entry Transfer Facility by the participant therein who
so delivered such Shares) to the tendering shareholder at the Company's expense
as promptly as practicable after the Expiration Date without expense to the
tendering shareholders. Under no circumstances will interest on the Purchase
Price be paid by the Company by reason of any delay in making payment. 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 all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or such other person), payable on account of the transfer to
such person will be deducted from the Purchase Price unless satisfactory
evidence of the payment of the stock transfer taxes, or exemption therefrom, is
submitted. See Instruction 9 of the Letter of Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING OF
31% OF THE GROSS PROCEEDS PAID TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER. SEE SECTION 3. ALSO SEE SECTION 3 REGARDING FEDERAL INCOME TAX
CONSEQUENCES FOR FOREIGN SHAREHOLDERS.
6. Conditional Tender of Shares.
Under certain circumstances set forth in Section 1 above, the Company may
prorate the number of Shares purchased pursuant to the Offer. As discussed in
Section 14, the number of Shares to be purchased from a particular shareholder
might affect the tax consequences to such shareholder of such purchase and such
shareholder's decision whether to tender. Accordingly, a shareholder may tender
Shares subject to the condition that a specified minimum number, if any, must be
purchased, and any shareholder wishing to make such a conditional tender should
so indicate in Box #6, "Conditional Tender", on the Letter of Transmittal and,
if applicable, on the Notice of Guaranteed Delivery. It is the tendering
shareholder's responsibility to calculate such minimum number of Shares and each
shareholder is urged to consult his or her own tax advisor. If the effect of
accepting tenders on a pro rata basis is to reduce the number of Shares to be
purchased from any shareholder below the minimum number so specified, such
tender will automatically be deemed withdrawn, except as provided in the next
paragraph, and Shares tendered by such shareholder will be returned as soon as
practicable after the Expiration Date.
However, if so many conditional tenders would be deemed withdrawn that the
total number of Shares to be purchased falls below 1,250,000 Shares, then to the
extent feasible, the Company will select enough of such conditional tenders,
which would otherwise have been deemed withdrawn, to purchase such desired
number of Shares. In selecting among such conditional tenders, the Company will
select by random lot and will limit its purchase in each case to the designated
minimum number of Shares to be purchased.
7. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
under the Exchange Act, if at any time on or after September 26, 1996 and prior
to the Expiration Date (whether any Shares have theretofore been accepted for
payment, purchased or paid for pursuant to the Offer) any of the following
events shall have occurred (or shall have been determined by the Company to have
occurred) that, in the Company's reasonable judgment in any such case and
regardless of the circumstances giving rise thereto (including any action or
omission to act by the Company), makes it inadvisable to proceed with the Offer
or with such acceptance for payment or payment:
(a) there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or administrative
agency, authority or tribunal or any other person, domestic or foreign, before
any court, authority, agency or tribunal that directly or indirectly (i)
challenges the making of the Offer, the acquisition of some or all of the Shares
pursuant to the Offer or otherwise relates in any manner to the Offer, or (ii)
in the Company's reasonable judgment, 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 contemplated benefits of the Offer
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 court or any authority, agency or tribunal that, in the
Company's reasonable judgment, would or might directly or indirectly (i) make
the acceptance for payment of, or payment for, some or all of the Shares
illegal, or otherwise restrict or prohibit consummation of the Offer; (ii) delay
or restrict the ability of the Company, or render the Company unable, to accept
for payment or pay for some or all of the Shares; (iii) materially impair the
contemplated benefits of the Offer to the Company; or (iv) materially 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;
(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) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States; (iii) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States; (iv) any limitation
(whether or not mandatory) by any governmental, regulatory or administrative
agency or authority on, or any event that, in the Company's reasonable judgment,
might affect, the extension of credit by banks or other lending institutions in
the United States; (v) any significant decrease in the market price of the
Shares or in the general level of market prices of equity securities in the
United States or abroad or any change in the general political, market, economic
or financial conditions in the United States or abroad that could, in the
reasonable judgment of the Company, have a material adverse effect on the
Company's business, operations or prospects or the trading in the Shares; (vi)
in the case of any of the foregoing existing at the time of the commencement of
the Offer, a material acceleration or worsening thereof; or (vii) any decline in
either the Standard and Poor's Index of 500 Industrial Companies or the Standard
and Poor's Bank Index by an amount in excess of 10 percent measured from the
close of business on September 25, 1996;
(d) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger or acquisition proposal for the Company,
shall have been proposed, announced or made by another person or shall have been
publicly disclosed, the Company shall have received an offer, or an indication
of interest, from a third party with respect to the acquisition of all or
substantially all of the Company's assets; or the Company shall have learned
that (i) any person or "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) shall have acquired or proposed to acquire beneficial ownership of
more than five percent of the outstanding Shares, or (ii) any new group shall
have been formed that beneficially owns more than five percent of the
outstanding Shares; or
(e) any change or changes shall have occurred in the business, financial
condition, assets, income, operations, prospects or stock ownership of the
Company or its subsidiaries that, in the reasonable judgment of the Company's
Board of Directors, is or may be material to the Company or its subsidiaries.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and may be waived by
the Company, in whole or in part, at any time and from time to time in its sole
discretion. The Company's failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by the Company concerning the events described above
will be final and binding.
8. Price Range of Shares; Dividends.
The Shares are traded on the Nasdaq National Market. The following table sets
forth, for the periods indicated, the high and low closing prices per Share as
reported on the Nasdaq National Market and the cash dividends paid per Share in
each such fiscal quarter:
1994 Dividends
High Low Declared
1st Quarter $22.75 $18.50 $.17
2nd Quarter 23.13 18.50 .17
3rd Quarter 23.25 20.75 .17
4th Quarter 21.13 17.13 .17
1995
1st Quarter $20.75 $19.13 $.19
2nd Quarter 22.13 19.13 .19
3rd Quarter 23.50 21.00 .19
4th Quarter 23.50 20.13 .19
1996
1st Quarter $22.63 $20.00 $.22
2nd Quarter 22.50 20.63 .22
3rd Quarter (through September 25) 25.88 21.50 .22
-----------------------------------------------------------------------------
TENDER OFFER RANGE $28.00 $25.00
-----------------------------------------------------------------------------
On September 25, 1996, the last full trading day prior to the announcement
and commencement of the Offer, the closing price on the Nasdaq National Market
was $24.50 per Share. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR THE SHARES. Current market quotations for the Shares may be obtained from
the Information Agent or from your broker.
All decisions with respect to the payment of future dividends will be made by
the Board of Directors based upon the Company's earnings, financial condition,
anticipated cash needs and such other considerations as the Board of Directors
deems relevant. On September 25, 1996, the Board of Directors declared a
dividend of $.22 per Share payable on October 31, 1996 to shareholders of record
on October 7, 1996. Shareholders of record on October 7, 1996 will be entitled
to receive such dividend, even on Shares sold in the Offer. The Company
anticipates that quarterly dividend payments subsequent to the termination of
the Offer will continue to be made in amounts not less than the most recent
quarter. However, future dividend payments are subject to future earnings
results and other financial considerations, and the Board of Directors may in
its discretion increase or decrease the quarterly dividend. There can be no
assurance that the level of dividends will be consistent with the current
dividends.
9. Source and Amount of Funds.
Assuming that the Company purchases 1,250,000 Shares pursuant to the Offer at
a price not in excess of $28.00 nor less than $25.00 per Share, the cost to the
Company (excluding fees and expenses related to the Offer) is estimated to be
between $31,250,000 and $35,000,000. The Company has a line of credit (the
"Wachovia Facility") from Wachovia Bank of North Carolina, N.A. ("Wachovia") in
the amount of $40,000,000 that will be used in conjunction with its normal
working capital to fund the purchase of the Shares tendered pursuant to the
Offer. The line of credit has a term commencing on September 25, 1996 and ending
January 23, 1997, and represents a general obligation of the Company without
additional security. Borrowings under the line of credit bear a floating
interest rate of LIBOR (London Interbank Offered Rate) plus 50 basis points (or
6.03% as of September 25, 1996), payable at maturity. The Company expects that
the principal source of repayment will be dividends received by the Company from
the Bank, derived from the Bank's cash and other liquid investments as well as
short-term borrowings, which may or may not be secured by assets of the Bank.
The payment of such dividends is subject to the approval of the Bank's Board of
Directors, and, in the case of dividends in excess of approximately $30,000,000,
regulatory approval of the Office of the Comptroller of the Currency (the
"OCC").
The Company also has a commitment for a second line of credit from Wachovia
that will expire unless accepted by the Company before close of business on
December 6, 1996. The second line would be in the amount of $15,000,000 for a
term commencing on the expiration date of the $40,000,000 line of credit and
ending January 22, 1998, and would be used to refinance a portion of the
Company's borrowings under the first line, if necessary. Borrowings under the
second line would also represent a general obligation of the Company without
additional security, bear a floating interest rate of LIBOR plus .45% payable
quarterly in arrears and would be subject to other terms, including a facility
fee of 5 basis points (.05%) payable in advance, and financial covenants
customary in this type of transaction.
The Company also expects that the principal source of repayment of the second
line will be dividends received by the Company from the Bank, subject to the
approval of the Bank's Board of Directors and, if necessary, the OCC.
<PAGE>
To the extent that dividends paid by the Bank to the Company are derived from
borrowings by the Bank, the Company expects that the interest rate on such
borrowings by the Bank will be lower than the interest rates under the Company's
lines of credit described above.
10. Certain Information Concerning the Company.
General. The Company is a bank holding company incorporated in 1979. The
Company owns one subsidiary bank (the "Bank") and four nonbank subsidiaries. The
Company regularly seeks reasonable opportunities to expand its asset base and
trade area and related business endeavors. Within the last five years the
Company has acquired three banks, and the Bank has purchased deposits of a
federal savings bank from the Resolution Trust Corporation, and deposits
associated with offices of two other banks.
Financial Information. Additional financial information concerning the
Company is contained in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 and the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996, copies of which can be obtained from the
Information Agent upon request. See "Additional Information".
Financial Results for the Current Quarter. Financial results for the quarter
that will end on September 30, 1996 are not available and are not included
herein. The Company expects to make public its earnings results and other
relevant financial information for that quarter and the year to date in a news
release on or about October 10, 1996. Copies of that news release will be
available to shareholders from the Information Agent by calling 800-223-2064.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
Although final results are not yet available, the Company projects that net
income in the quarter ending September 30, 1996 will be in the range of $7.0
million to $7.3 million and that net income per share will be in the range of
$.46 to $.48. In the third quarter of 1995, net income was $6.1 million and net
income per share was $.40. The foregoing is a forward looking statement based
upon unaudited financial results through August 31, 1996 and certain financial
trends that are expected to contribute to attaining the projected third quarter
financial results. The expected results for net income and net income per share
involve a number of assumptions, risks, and uncertainties that could cause the
results to differ materially from those anticipated. These assumptions, risks,
and uncertainties include, but are not limited to, any unexpected or unforeseen,
material items of income or expense, any gains or losses resulting from
operations that are not currently known, any revaluations of assets, either
higher or lower, that might impact net income and earnings per share, any
contingency for which the Company may determine the need to establish a
valuation allowance, and any legal or regulatory directive requiring the
recognition of income or expense.
SHAREHOLDERS ARE URGED TO CONSIDER THE POTENTIAL IMPACT ON THE COMPANY'S
SHARE PRICE OF THE FINANCIAL RESULTS FOR THE QUARTER ENDING SEPTEMBER 30, 1996.
Selected Historical Consolidated Financial Information. The following table
presents certain consolidated financial information with respect to the Company,
excerpted or derived from the audited financial statements contained in the
Company's Annual Report to Shareholders (which are included as exhibits to its
Report on Form 10-K) for the years ended December 31, 1995 and December 31, 1994
and from unaudited financial statements contained in the Company's Quarterly
Report on Form 10-Q for the quarters ended June 30, 1996 and June 30, 1995. The
selected information below is qualified in its entirety by reference to such
Reports (which may be obtained from the Information Agent on request and may be
inspected or obtained at the offices of the U. S. Securities and Exchange
Commission in the manner set forth below) and the financial information and
related notes contained therein.
[Intentionally left blank]
<PAGE>
Summary Financial Information
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
At or for Year Ended At or for Six Months Ended
December 31, June 30 (Unaudited),
----------------------------------------------------------------
1995 1994 1996 1995
---------------------------------------------- -----------------
<S> <C>
Income Statement Data
Interest Income $146,373 $129,496 $75,176 $71,328
Interest Expense 58,644 45,393 28,915 27,987
---------------------------------------------- -----------------
Net Interest Income 87,729 84,103 46,261 43,341
Provison for Loan Losses 3,020 1,600 1,620 960
Non-interest Income 19,019 17,910 9,600 8,232
Non-interest Expense 66,580 66,423 33,622 33,371
Provison for Income Tax Expense 12,285 11,390 7,106 5,791
---------------------------------------------- -----------------
Net Income $24,863 $22,600 $13,513 $11,451
============================================== =================
Net Income Per Share $1.64 $1.49 $.89 $.76
Dividends Declared Per Share $.76 $.68 $.44 $.38
- --------------------------------------------------------------------------------------------------------------
Balance Sheet Data
Assets $2,051,188 $1,925,950 $2,080,770 $2,019,702
Earnings Assets 1,878,599 1,740,048 1,909,601 1,834,610
Investment Securities:
Available for Sale 188,669 170,815 193,023 176,232
Held to Maturity 454,509 467,733 418,678 463,094
Loans, Net of Unearned Income 1,220,421 1,101,500 1,282,900 1,170,284
Deposits 1,793,199 1,688,872 1,794,668 1,771,484
Shareholder's Equity 226,540 206,553 229,229 217,509
Book Value per Share $14.92 $13.62 $15.14 $14.34
Shares Outstanding 15,182,235 15,170,250 15,144,572 15,171,764
- --------------------------------------------------------------------------------------------------------------
Selected Financial Ratios
Return on Average Assets 1.25% 1.18% 1.33% 1.17%
Return on Average Equity 11.43 11.05 11.76 10.76
Average Equity to Average Assets 10.92 10.65 11.29 10.90
Net Interest Margin, Taxable Equivalent 4.88 4.87 4.98 4.94
Allowance for Loan Losses to Loans, Net of 1.10 1.25 1.10 1.19
Unearned Income
Non-Performing Assets to Total Assets .50 .67 .42 .51
Annualized Net Loan Losses to Average Loans .29 .16 .16 .15
</TABLE>
<PAGE>
Unaudited Pro Forma Financial Information. The following unaudited pro forma
financial information for the yearended December 31, 1995 and the six months
ended June 30, 1996 shows the effects of the purchase of 1,250,000 Shares
pursuant to the Offer. The pro forma financial information should be read in
conjunction withthe audited financial statements and related notes contained in
the Company's Annual Report on Form 10-K for the year ended December 31, 1995
and the unaudited financial statements contained in the Company'sQuarterly
Report on Form 10-Q for the quarter ended June 30, 1996. The pro forma financial
information does not purport to be indicative of the results that would have
actually been attained had the purchase of the Sharesbeen completed at the dates
indicated or that may be attained in the future.
Selected Pro Forma Financial Information
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
At or for the Year Ended At or for the Six Month Ended
December 31, 1995 June 30, 1996
------------------------------------------------------------------------------------------
Pro Forma Pro Forma Unaudited Pro Forma ProForma
Historical $25.00 $28.00 Historical $25.00 $28.00
-------------- --------------------------------------------- -------------- --------------
<S> <C>
Income Statement Data
Net Interest Income $87,729 $85,845 $85,619 $46,261 $45,319 $45,206
Net Income 24,863 23,638 23,491 13,513 12,901 12,827
Net Income per Share $1.64 $1.70 $1.69 $.89 $.93 $.92
Average Number of Shares 15,181,152 13,931,152 13,931,152 15,168,061 13,918,061 13,918,061
- -----------------------------------------------------------------------------------------------------------------------------
Balance Sheet Data
Assets $2,051,188 $2,051,188 $2,051,188 $2,080,770 $2,080,770 $2,080,770
Debt to Purchase Shares 0 31,250 35,000 0 31,250 35,000
Shareholders' Equity 226,540 195,290 191,540 229,229 197,979 194,229
Book Value per Share $14.92 $14.02 $13.75 $15.14 $14.25 $13.98
Shares Outstanding 15,182,235 13,932,235 13,932,235 15,144,572 13,894,572 13,894,572
- -----------------------------------------------------------------------------------------------------------------------------
Selected Financial Ratios
Return on Average Assets 1.25% 1.19% 1.18% 1.33% 1.27% 1.26%
Return on Average Equity 11.43 12.70 12.88 11.76 12.99 13.16
Average Equity to Average Assets 10.92 9.35 9.16 11.29 9.75 9.57
</TABLE>
Notes to Pro Forma Financial Information
(1) The pro forma financial information reflects the purchase of 1,250,000
Shares of common stock at $25.00 and $28.00 per share, as appropriate.
(2) The balance sheet data give effect to the purchase of Shares as of the
balance sheet date. The income statement data give effect to the purchase of
Shares as of the beginning of each period presented.
<PAGE>
(3) The funds used to purchase Shares were considered to have been obtained from
borrowings under the Wachovia Facility at a rate of interest equal to LIBOR
plus 50 basis points or 6.03% and a tax rate of 35%. To the extent that
these borrowings are repaid with the proceeds of dividends received by the
Company from the Bank, which are in turn financed by the Bank from its
borrowings, the rate of interest paid by the Bank may be slightly less
(about .5%) than the rate paid by the Company. The income statement data
reflects the additional interest expense on borrowings as if such borrowings
were outstanding at the beginning of each period presented. The income
statement does not reflect a savings by the Bank of state franchise tax as a
result of reducing capital, that the Company expects will be approximately
$350,000 annually, commencing in the year following such reduction of
capital by the Bank.
(4) The purchase of Shares was allocated to common stock at its $2.50 per share
par value, and the remainder of the purchase price was allocated to retained
earnings.
(5) Costs incurred in connection with the Offer will be capitalized as part of
the cost of the Shares purchased, and consequently no effect of the costs is
reflected in the Pro Forma Financial Information.
Additional Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the U. S. Securities and Exchange
Commission (the "Commission") relating to its business, financial condition and
other matters. Information, as of particular dates, concerning the Company's
directors and officers, their remuneration, options granted to them, the
principal holders of the Company's securities and any material interest of such
persons in transactions with the Company is required to be disclosed in proxy
statements distributed to the Company's shareholders and filed with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 2120, Washington, D.C. 20549; at its
regional offices located at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, New York, New York 10048, and on
the Commission's Internet web site (http://www.sec.gov). Copies of such material
may also be obtained by mail, upon payment of the Commission's customary
charges, from the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549.
11. Interest of Directors and Officers; Transactions and Arrangements
Concerning Shares.
As of September 25, 1996, the Company had issued and outstanding 15,146,470
Shares, and had reserved 1,992,720 Shares for issuance upon exercise of
outstanding stock options and for issuance under the Company's Employee Stock
Purchase Plan, the Company's Dividend Reinvestment Plan, and other stock plans
for employees and non-employee directors. The 1,250,000 Shares that the Company
is offering to purchase represent approximately 8.3% of the outstanding Shares.
As of September 25, 1996, the Company's directors and executive officers as a
group (18 persons) beneficially owned an aggregate of 834,389 Shares (including
awards granted but not yet vested under the Company's 1985 Incentive Stock Plan)
representing approximately 5.51% of the outstanding Shares, assuming the
exercise by such persons of their currently exercisable options and assuming
vesting of such awards. The Company has been advised that no director or
executive officer of the Company intends to tender any Shares pursuant to the
Offer.
If the Company purchases 1,250,000 Shares pursuant to the Offer, then after
the purchase of Shares pursuant to the Offer, the Company's executive officers
and directors as a group would own beneficially approximately 6.00% of the
outstanding Shares immediately after the Offer, assuming the exercise by such
persons of their currently exercisable options and assuming vesting of such
awards.
Except as set forth in Schedule A, neither the Company, nor any subsidiary of
the Company nor, to the best of the Company's knowledge, any of the Company's
directors or executive officers, nor any affiliates of any of the foregoing, had
any transactions involving the Shares during the 40 business days prior to the
date hereof.
Except for outstanding options to purchase Shares granted from time to time
over recent years to certain employees (including executive officers) of the
Company pursuant to stock option plans for employees, and except as otherwise
described herein, neither the Company nor, to the best of the Company's
knowledge, any of its affiliates, directors or executive officers, or any of the
directors or executive officers of any of its affiliates is a party to any
contract, arrangement, understanding or relationship with any other person
relating, directly or indirectly, to the Offer with respect to any securities of
the Company including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations.
12. Effects of the Offer on the Market for Shares; Registration
under the Exchange Act.
The Company's purchase of Shares pursuant to the Offer will reduce the number
of Shares that might otherwise be traded publicly and may reduce the number of
shareholders. Nonetheless, the Company anticipates that there will be a
sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the Nasdaq National Market, the Company
believes that following its purchase of Shares pursuant to the Offer, the
Company's remaining Shares will continue to qualify to be quoted on the Nasdaq
National Market.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using such Shares as collateral. The Company
believes that, following the purchase of Shares pursuant to the Offer, the
Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
The Shares are registered under the Exchange Act, which requires, among other
things, that the Company furnish certain information to its shareholders and the
Commission and comply with the Commission's proxy rules in connection with
meetings of the Company's shareholders. The Company believes that its purchase
of Shares pursuant to the Offer will not result in the Company's remaining
shares becoming eligible for deregistration under the Exchange Act.
13. Certain Legal Matters; Regulatory Approvals.
The Company is not aware of any license or regulatory permit that appears to
be material to the Company's business that might be adversely affected by the
Company's acquisition of Shares as contemplated herein or of any approval or
other action by, or any filing with, any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the acquisition or ownership of Shares by the Company as
contemplated herein. Should any such approval or other action be required, the
Company presently contemplates that such approval or other action will be
sought. The Company is unable to predict whether it may determine that it is
required to delay the acceptance for payment of or payment for Shares tendered
pursuant to the Offer pending the outcome of any such matter. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that the failure to
obtain any such approval or other action might not result in adverse
consequences to the Company's business. The Company's obligations under the
Offer to accept for payment and pay for Shares is subject to certain conditions.
See Section 7.
14. Certain Federal Income Tax Consequences.
General. The federal income tax discussion set forth below summarizes
the principal federal income tax consequences to U. S. shareholders of sales of
Shares pursuant to the Offer and is included for general information only. The
discussion does not address all aspects of federal income taxation that may be
relevant to a particular shareholder or any relevant foreign, state, local or
other tax laws. Certain shareholders (including insurance companies, tax-exempt
entities, foreign persons, financial institutions, broker dealers, employee
benefit plans, personal holding companies and persons who acquired their Shares
upon the exercise of employee stock options or as compensation) may be subject
to special rules not discussed below. The discussion is based on laws,
regulations, rulings and court decisions currently in effect, all of which are
subject to change, possibly with retroactive effect. The Company has neither
requested nor obtained a written opinion of counsel or a ruling from the
Internal Revenue Service (the "Service") with respect to the tax matters
discussed below. EACH SHAREHOLDER IS URGED TO CONSULT AND RELY ON THE
SHAREHOLDER'S OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO THE
SHAREHOLDER OF SELLING SHARES PURSUANT TO THE OFFER, INCLUDING THE APPLICATION
OF FOREIGN, STATE, LOCAL OR OTHER TAX LAWS.
A sale of Shares pursuant to the Offer will constitute a "redemption" under
the Internal Revenue Code of 1986 (the "Code") and will be a taxable transaction
for federal income tax purposes. If the redemption qualifies as a sale of Shares
by a shareholder under Section 302 of the Code, the shareholder will recognize
gain or loss equal to the difference between (i) the cash received pursuant to
the Offer and (ii) the shareholder's tax basis in the Shares surrendered
pursuant to the Offer. If the redemption does not qualify as a sale of Shares
under Section 302, the shareholder will not be treated as having sold Shares but
will be treated as having received a dividend taxable as ordinary income in an
amount equal to the cash received pursuant to the Offer. As described below,
whether a redemption qualifies for sale treatment will depend largely on the
total number of the shareholder's Shares (including any Shares constructively
owned by the Shareholder) that are purchased. A shareholder desiring to obtain
sale treatment therefore may want to make a conditional tender, as described in
Section 6, to make sure that a minimum number of his or her Shares (if any) are
purchased.
Sale Treatment. Under Section 302 of the Code, a redemption of Shares
pursuant to the Offer will be treated as a sale of such Shares for federal
income tax purposes if such redemption (i) results in a "complete redemption" of
all of the shareholder's stock in the Company, (ii) is "substantially
disproportionate" with respect to the shareholder, or (iii) is "not essentially
equivalent to a dividend" with respect to the shareholder. In determining
whether any of these three tests under Section 302 is satisfied, a shareholder
must take into account not only Shares that the shareholder actually owns, but
also any Shares that the shareholder is treated as owning pursuant to the
constructive ownership rules of Section 318 of the Code. Under these rules, a
shareholder generally is treated as owning (i) Shares owned by the shareholder's
spouse, children, grandchildren, and parents, (ii) Shares owned by certain
trusts of which the shareholder is a beneficiary in proportion to the
shareholder's interest, (iii) Shares owned by any estate of which the
shareholder is a beneficiary in proportion to the shareholder's interest, (iv)
Shares owned by any partnership or "S corporation" in which the shareholder is a
partner or shareholder in proportion to the shareholder's interest, (v) Shares
owned by any non-S corporation of which the shareholder owns at least 50% in
value of the stock and (vi) Shares that the shareholder has an option or similar
right to acquire. A shareholder that is a partnership or S corporation, estate,
trust, or non-S corporation is treated as owning stock owned (as the case may
be) by partners or S corporation shareholders, by estate beneficiaries, by
certain trust beneficiaries, and by 50% shareholders of a non-S corporation.
Stock constructively owned by a person generally is treated as being owned by
that person for the purpose of attributing ownership to another person.
A redemption of Shares from a shareholder pursuant to the Offer will result
in a "complete redemption" of all the shareholder's stock in the Company if,
either (i) the Company purchases all of the Shares actually and constructively
owned by the shareholder, or (ii) the shareholder actually owns no Shares after
all transfers of Shares pursuant to the Offer, constructively owns only Shares
owned by certain family members, and the shareholder qualifies to and does waive
(pursuant to Section 302(c)(2) of the Code) constructive ownership of Shares
owned by family members. Any shareholder desiring to waive such constructive
ownership of Shares should consult a tax advisor about the applicability of
Section 302(c)(2).
A redemption of Shares from a shareholder pursuant to the Offer will be
"substantially disproportionate" with respect to the shareholder if the number
of Shares actually and constructively owned by the shareholder (expessed as a
percentage of all Shares outstanding immediately after all redemptions of Shares
pursuant to the Offer is less than 80% of the number of Shares actually and
constructively owned by the shareholder (expressed as a percentage of all Shares
outstanding) immediately before such redemptions. If exactly 1,250,000 Shares
are redeemed pursuant to the Offer, the number of Shares outstanding after
consummation of the Offer will be approximately 91.75% of the number of Shares
currently outstanding. Consequently, in that case a shareholder must dispose of
more than 26.60% (i.e., 100% minus 80% of 91.75%) of the number of Shares the
shareholder actually and constructively owns in order possibly to qualify for a
substantially disproportionate redemption. If the Company were to exercise its
right to purchase an additional 2% of the outstanding Shares, the number of
Shares outstanding immediately after consummation of the Offer would be
approximately 89.75% of the number of Shares outstanding as of September 25,
1996. Accordingly, a shareholder would have to dispose of more than 28.20%
(i.e., 100% minus 80% of 89.75%) of the number of Shares the shareholder
actually and constructively owns in order possibly to qualify for a
substantially disproportionate redemption.
A redemption of Shares from a shareholder pursuant to the Offer will be "not
essentially equivalent to a dividend" if pursuant to the Offer, the shareholder
experiences a "meaningful reduction" in his or her proportionate interest in the
Company, including voting rights, participation in earnings, and liquidation
rights, arising from the actual and constructive ownership of Shares. The
Service has indicated in a published ruling that a very small reduction in the
proportionate interest of a small minority shareholder who does not exercise any
control over corporate affairs generally constitutes a "meaningful reduction" in
the shareholder's interest in the company. The fact that the redemption fails to
qualify as a sale pursuant to the other two tests is not taken into account in
determining whether the redemption is "not essentially equivalent to a
dividend." If exactly 1,250,000 Shares are redeemed pursuant to the Offer, the
number of Shares outstanding will be reduced by approximately 8.25%.
Consequently, in that case a shareholder must dispose of more than 8.25% of the
number of Shares the shareholder actually and constructively owns in order to
have any reduction in the shareholder's proportionate stock interest in the
Company. If the Company were to exercise its right to purchase an additional 2%
of the outstanding Shares, a shareholder would have to dispose of more than
10.25% of the number of Shares the shareholder actually and constructively owns
in order to have any reduction in the shareholder's proportionate interest.
Shareholders should be aware that their ability to satisfy any of the
foregoing tests also may be affected by proration pursuant to the Offer.
THEREFORE, UNLESS A SHAREHOLDER MAKES A CONDITIONAL TENDER (SEE SECTION 6), THE
SHAREHOLDER (OTHER THAN AN ODD LOT HOLDER WHO TENDERS ALL OF HIS OR HER SHARES
AT OR BELOW THE PURCHASE PRICE) CAN BE GIVEN NO ASSURANCE, EVEN IF HE OR SHE
TENDERS ALL OF THE SHAREHOLDER'S SHARES, THAT THE COMPANY WILL PURCHASE A
SUFFICIENT NUMBER OF SUCH SHARES TO PERMIT THE SHAREHOLDER TO SATISFY ANY OF THE
FOREGOING TESTS. Shareholders also should be aware that an acquisition or
disposition of Shares in the market or otherwise as part of a plan that includes
the shareholder's tender of Shares pursuant to the Offer might be taken into
account in determining whether any of the foregoing tests is satisfied.
Shareholders are urged to consult their own tax advisors with regard to whether
acquisitions from or sales to third parties, including market sales, and a
tender may be so integrated.
If any of the foregoing three tests is satisfied, the shareholder will
recognize gain or loss equal to the difference between the amount of cash
received pursuant to the Offer and the shareholder's tax basis in the Shares
sold. Such gain or loss must be determined separately for each block of Shares
sold (i.e., Shares that were acquired in a single transaction), and will be
capital gain or loss if the shareholder held the Shares as a capital asset.
Capital gain or loss generally will be long-term capital gain or loss if, when
the Company accepts the Shares for payment, the shareholder held the Shares for
more than one year. Long-term capital gains of individuals, estates and trusts
currently are subject to federal income tax at a maximum rate of 28%. Short-term
capital gains of individuals, estates and trusts generally are subject to a
maximum federal income tax rate of 39.6%. Capital gains of corporations
generally are taxed at the federal income tax rates applicable to corporate
ordinary income.
Dividend Treatment. If none of the foregoing three tests under Section 302 of
the Code is satisfied, the shareholder generally will be treated as having
received a dividend taxable as ordinary income in an amount equal to the amount
of cash received by the shareholder pursuant to the Offer, to the extent the
Company has sufficient accumulated or current earnings and profits. The Company
expects that its current and accumulated earnings and profits will be sufficient
to cover the amount of any payments pursuant to the Offer that are treated as
dividends.
Dividend income of individuals, estates and trusts generally is subject to
federal income tax at a maximum rate of 39.6%. Dividend income of corporations,
subject to the provisions discussed below, generally is subject to federal
income tax at a maximum rate of 35%. To the extent that the purchase of Shares
from any shareholder pursuant to the Offer is treated as a dividend, the
shareholder's tax basis in any Shares that the shareholder actually or
constructively owns after consummation of the Offer should be increased by the
shareholder's tax basis in the Shares surrendered pursuant to the Offer.
Treatment of Dividend Income for Corporate Shareholders. In the case of a
corporate shareholder, if the cash received for Shares pursuant to the Offer is
treated as a dividend, the dividend income may be eligible for the 70%
dividends-received deduction under Section 243 of the Code. The
dividends-received deduction is subject to certain limitations; for example, the
deduction may not be available if the corporate shareholder does not satisfy
certain holding period requirements with respect to its tendered Shares or if
the Shares are "debt-financed portfolio stock." If a dividends-received
deduction is available, the dividend (having arisen in a non-pro rata
redemption) also likely will be treated as an "extraordinary dividend" under
Section 1059 of the Code. In that case the corporate shareholder's tax basis in
its remaining Shares (for purposes of determining gain or loss on a future
disposition) will be reduced (but not below zero) by the amount of any
"extraordinary dividend" not taxed because of the dividends-received deduction.
Any amount of the "extraordinary dividend" not taxed because of the
dividends-received deduction and in excess of the corporate shareholder's tax
basis for the remaining Shares generally will be subject to tax as gain on a
subsequent sale or disposition of those Shares. Corporate shareholders should
consult their tax advisors as to the availability of the dividends-received
deduction and the application of Section 1059 of the Code.
SEE SECTION 3 WITH RESPECT TO THE APPLICATION OF BACKUP FEDERAL INCOME TAX
WITHHOLDING.
15. Extension of Offer; Termination; Amendment.
The Company expressly reserves the right, in its sole discretion, at any time
and from time to time, and regardless of whether or not any of the events set
forth in Section 7 shall have occurred or shall be deemed by the Company to have
occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. During any such extension, all Shares previously tendered
and not withdrawn will remain subject to the Offer. The Company also expressly
reserves the right, in its sole discretion, to terminate the Offer and not
accept for payment or pay for any Shares not theretofore accepted for payment or
paid for or, subject to applicable law, to postpone payment for Shares upon the
occurrence of any of the conditions specified in Section 7 hereof prior to the
Expiration Date by giving oral or written notice of such termination or
postponement to the Depositary and making a public announcement thereof. The
Company's reservation of the right to delay payment for Shares which it has
accepted for payment is limited by Rule 13e-4(f)(5) promulgated under the
Exchange Act, which requires that the Company must pay the consideration offered
or return the Shares tendered promptly after termination or withdrawal of a
tender offer. Subject to compliance with applicable law, the Company further
reserves the right, in its sole discretion, and regardless of whether any of the
events set forth in Section 7 shall have occurred or shall be deemed by the
Company to have occurred, to amend the Offer in any respect (including, without
limitation, by increasing or decreasing the number of Shares the Company may
purchase or the range of prices it may pay pursuant to the Offer). Amendments to
the Offer may be made at any time and from time to time effected by public
announcement thereof, such announcement, in the case of an extension, to be
issued no later than 9:00 a.m., New York City time, on the next business day
after the last previously scheduled or announced Expiration Date. Any public
announcement made pursuant to the Offer will be disseminated promptly to
shareholders in a manner reasonably designed to inform shareholders of such
change. Without limiting the manner in which the Company may choose to make a
public announcement, except as required by applicable law, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These 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 or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of such terms or
information. If (i) the Company increases or decreases the price to be paid for
Shares or the number of Shares being sought in the Offer or the Dealer Managers'
soliciting fees and, in the event of an increase in the number of Shares being
sought, such increase exceeds two percent of the outstanding Shares and (ii) the
Offer is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from, and including, the date that such notice
of an increase or decrease is first published, sent or given in the manner
specified in this Section 15, the Offer will be extended until the expiration of
such period of ten business days.
The Company reserves the right, in its sole discretion, to purchase more than
1,250,000 Shares pursuant to the Offer. The acceptance for payment by the
Company of additional Shares not to exceed two percent (2%) of the Shares
outstanding (302,929 Shares) shall not be deemed an increase requiring the Offer
to be extended.
16. Fees and Expenses.
The Company has retained Goldman, Sachs & Co. ("Goldman Sachs") to act as the
Dealer Managers in connection with the Offer. Goldman Sachs will receive a fee
of $.14 per Share purchased by the Company in the Offer, but not less than
$175,000, for their services as Dealer Managers. The Company also has agreed to
reimburse Goldman Sachs for certain reasonable out-of-pocket expenses incurred
in connection with the Offer, including fees and expenses of counsel, and to
indemnify Goldman Sachs against certain liabilities in connection with the
Offer, including liabilities under the federal securities laws. Goldman Sachs
have rendered various investment banking and other advisory services to the
Company in the past, for which they have received customary compensation, and
can be expected to render similar services to the Company in the future.
The Company has retained The Bank of New York to act as Depositary in
connection with the Offer. The Depositary may contact holders of Shares by mail,
telephone, telegraph and personal interviews and may request brokers, dealers
and other nominee shareholders to forward materials relating to the Offer to
beneficial owners. The Depositary will receive reasonable and customary
compensation for its services, will be reimbursed by the Company for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities in connection with the Offer, including certain liabilities under
the federal securities laws.
The Company has retained Georgeson & Company Inc. to act as Information Agent
in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telegraph and personal interviews and may request
brokers, dealers and other nominee shareholders to forward materials relating to
the Offer to beneficial owners. The Information Agent will receive reasonable
and customary compensation for its services, will be reimbursed by the Company
for certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities in connection with the Offer, including certain liabilities
under the federal securities laws.
No fees or commissions will be payable to brokers, dealers or other persons
(other than fees to the Dealer Managers, the Information Agent and the
Depositary as described above) for soliciting tenders of Shares pursuant to the
Offer. The Company, however, upon request, will reimburse brokers, dealers and
commercial banks for customary mailing and handling expenses incurred by such
persons in forwarding the Offer and related materials to the beneficial owners
of Shares held by any such person as a nominee or in a fiduciary capacity. No
broker, dealer, commercial bank or trust company has been authorized to act as
the agent of the Company, the Dealer Managers or the Depositary for purposes of
the Offer. The Company will pay or cause to be paid all stock transfer taxes, if
any, on its purchase of Shares except as otherwise provided in Instruction 9 in
the Letter of Transmittal.
17. Miscellaneous.
The Company is not aware of any jurisdiction where the making of the Offer is
not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares residing in such jurisdiction. In any jurisdiction the
securities or blue sky laws of which require the Offer to be made by a licensed
broker or dealer, the Offer is being made on the Company's behalf by the Dealer
Managers or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the Commission an Issuer Tender Offer
Statement on Schedule 13E-4 which contains additional information with respect
to the Offer. Such Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and in
the same manner as is set forth in Section 10 with respect to information
concerning the Company.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGERS IN CONNECTION
WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE DEALER MANAGERS.
JEFFERSON BANKSHARES, INC.
September 26, 1996
<PAGE>
SCHEDULE A
CERTAIN TRANSACTIONS INVOLVING THE COMPANY'S SHARES
BY THE COMPANY'S
EXECUTIVE OFFICERS AND DIRECTORS
During the 40 business days prior to September 25, 1996, the only transactions
effected in the Shares by the Company's executive officers and directors were as
follows:
<TABLE>
<CAPTION>
Person who Date of Number Where and How
Effected Transaction Transaction of Shares Price the Transaction was Effected
- ------------------------------------ ----------------- --------------- -------------- -------------------------------------
<S> <C>
Campbell, Jr., Robert H. 07-31-1996 78.4813 $22.4020 Dividend Reinvestment
Campbell, Jr., Robert H. 07-31-1996 22.3194 22.4020 Optional Cash Purchase under Dividend
Reinvestment Plan
Campbell, Jr., Robert H. 07-31-1996 2.2154 22.4020 Dividend Reinvestment
(by Spouse)
Casteen, III, John T. 07-31-1996 23.8599 22.4020 Dividend Reinvestment
Eagleburger, Lawrence S. 07-31-1996 5.1539 22.5000 Dividend Reinvestment
Fulton, Jr., Donald W. 07-31-1996 49.4326 22.4020 Dividend Reinvestment
Fulton, Jr., Donald W. 08-01-1996 4.3956 22.7500 Purchase under Employee Stock Purchase
Plan
Fulton, Jr., Donald W. 09-03-1996 4.2328 23.6250 Purchase under Employee Stock Purchase
Plan
Glaize, III, Fred L. 07-31-1996 67.8402 22.5000 Dividend Reinvestment
Glaize, III, Fred L. 07-31-1996 27.9502 22.4020 Dividend Reinvestment
Glaize, III, Fred L. 07-31-1996 25.5772 22.4020 Dividend Reinvestment
(by Glaize Development)
Glaize, III, Fred L. 08-01-1996 17.7285 22.5625 Purchase under Directors Deferred
Compensation Plan
Harrell, Henry H. 07-31-1996 20.0837 22.5000 Dividend Reinvestment
Harrell, Henry H. 07-31-1996 98.6492 22.4020 Dividend Reinvestment
Harrell, Henry H. 08-01-1996 27.7008 22.5625 Purchase under Directors Deferred
Compensation Plan
Kay, Jr., Alex J. 07-31-1996 25.0774 22.5000 Dividend Reinvestment
Kay, Jr., Alex J. 08-01-1996 27.7008 22.5625 Purchase Under Directors Deferred
Compensation Plan
McCartney, O. K. 07-31-1996 109.9773 22.4020 Dividend Reinvestment
McCartney, O. K. 08-01-1996 21.9780 22.7500 Purchase under Employee Stock Purchase
Plan
McCartney, O. K. 09-03-1996 21.1640 23.6250 Purchase under Employee Stock Purchase
Plan
Nelson, Jr., Allen T. 07-31-1996 1.6762 22.4020 Dividend Reinvestment
Nelson, Jr., Allen T. 08-01-1996 8.7912 22.7500 Purchase under Employee Stock Purchase
Plan
<PAGE>
Nelson, Jr., Allen T. 09-03-1996 8.4656 23.6250 Purchase under Employee Stock Purchase
Plan
Rosenthal, Gilbert M. 07-31-1996 78.5736 22.5000 Dividend Reinvestment
Rosenthal, Gilbert M. 07-31-1996 76.4651 22.4020 Dividend Reinvestment
Rosenthal, Gilbert M. 08-01-1996 17.7285 22.5625 Purchase under Directors Deferred
Compensation Plan
Watson, Jr., William M. 07-31-1996 23.2484 22.4020 Dividend Reinvestment
Watson, Jr., William M. 08-02-1996 39.5604 22.7500 Purchase under Employee Stock Purchase
Plan
Watson, Jr., William M. 09-03-1996 38.0952 23.6250 Purchase under Employee Stock Purchase
Plan
Williamson, Jr., H. A. 07-31-1996 147.7908 22.4020 Dividend Reinvestment
</TABLE>
<PAGE>
GLOSSARY
Bank. Jefferson National Bank, 123 East Main Street,
Charlottesville, VA 22902.
Book-entry
Transfer Facilities. The Depository Trust Company, 55 Water Street, New York,
NY 10041 and Philadelphia Depository Trust Company,
2000 Market Street, Philadelphia, PA 19103, collectively.
Code. The Internal Revenue Code of 1986.
Commission. The Securities and Exchange Commission.
Company. Jefferson Bankshares, Inc., 123 East Main
Street, Charlottesville, VA 22902.
Dealer Managers. Goldman, Sachs & Co., 85 Broad Street, New York, NY
10004. The Dealer Managers are available to answer
questions regarding the Offer and the procedure for
tendering Shares. You may call the Dealer Managers on
(800) 323-5678 Ext. 9477 or (212) 902-9477.
Depositary. The Bank of New York., 101 Barclay Street, New York,
NY 10286. Your Letter of Transmittal (and share
certificates, if applicable) must be received by The
Bank of New York by the Expiration Date.
Eligible
Institution. Any member firm of a registered national securities
exchange, member of the National Association of
Securities Dealers, Inc., a commercial bank, a
trust company, a savings bank, a savings and loan
association, or a credit union with membership in an
approved signature guarantee program, having an office,
branch or agency in the United States.
Exchange Act. The Securities Exchange Act of 1934, as amended.
Expiration Date. The time and date at which the Offer shall expire, which
shall be 5:00 P.M., New York City time, on October 31,
1996, unless extended by the Company.
Foreign Shareholder. A shareholder that is not (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the
United States, any State or any political subdivision
thereof, or (iii) any estate or trust the income of which
is subject to United States federal income taxation
regardless of the source of such income.
Information Agent. Georgeson & Company Inc., Wall Street Plaza, New York,
NY 10005. The Information Agent is available to
answer questions regarding the Offer and the
procedure for tendering Shares. You may call the
Information Agent on (800) 223-2064 or (212) 440-9800.
OCC. The Office of the Comptroller of the Currency.
Odd Lots. All Shares properly tendered prior to the Expiration
Date at prices at or below the Purchase Price and not
withdrawn by any Odd Lot Holder.
Odd Lot Holder. Any person who owned, beneficially or of record, as of
the close of business on September 25, 1996, an
aggregate of fewer than 100 Shares (and so certifies in
the appropriate place on the Letter of Transmittal and,
if necessary, on the Notice of Guaranteed Delivery).
Offer. The Company's Offer to Purchase for cash up to 1,250,000
Shares of its common stock at a Purchase Price not in
excess of $28.00 nor less than $25.00 per Share, together
with the related Letter of Transmittal.
Plans. The Company's Dividend Reinvestment Plan and Employee
Stock Purchase Plan.
<PAGE>
Purchase Price. The single per Share price, not in excess of $28.00
nor less than $25.00 per Share, that the Company will
pay for Shares properly tendered pursuant to the Offer,
taking into account the number of Shares so tendered
and the prices specified by tendering shareholders.
The Company will select the lowest Purchase Price that
will allow it to buy 1,250,000 Shares.
Shares. Shares of Jefferson Bankshares, Inc. common stock,
par value $2.50 per share.
LIST OF CERTAIN FORMS
Letter of
Transmittal. The blue form which accompanies this Offer to Purchase.
Shareholders wishing to Tender Shares must complete, sign and
return the Letter of Transmittal (and share certificates, if
applicable) to the Depositary by the Expiration Date.
Notice of
Guaranteed
Delivery. The form for use if you desire to tender Shares, but cannot
deliver your Share certificates to the Depositary (or complete
procedures for book-entry transfer) prior to the Expiration
Date. Note that this document does require a signature
guarantee by an Eligible Institution (such as your broker).
Transmittal
Form. The yellow form for use if you wish to tender Shares held
in "street" name by your broker. For such Shares, you
must use the broker instruction letter, not the Letter of
Transmittal.
<PAGE>
Manually signed photocopies of the Letter of Transmittal will be accepted from
Eligible Institutions. The Letter of Transmittal and certificates for Shares and
any other required documents should be sent or delivered by each shareholder or
his or her broker, dealer, commercial bank, trust company or nominee to the
Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<PAGE>
By Mail:
Tender & Exchange Department
P.O. Box 11248
Church Street Station
New York, NY 10286-1248
By Facsimile:
(For Eligible Institutions Only)
(212) 815-6213
Confirm Facsimile by Telephone
(For Confirmation Only)
(800) 507-9357
By Hand/Overnight Delivery:
Tender & Exchange Department
101 Barclay Street
Receive and Deliver Window
New York, NY 10286
<PAGE>
Any questions or requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may be
directed to the Information Agent at the telephone numbers and locations listed
below. Shareholders may also contact their local broker, dealer, commercial bank
or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
Georgeson & Company Inc. [LOGO]
Wall Street Plaza
New York, New York 10005
(800) 223-2064 TOLL FREE
(212) 440-9800 in New York.
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(800) 323-5678 ext. 9477 TOLL FREE
(212) 902-9477 in New York.
September 26, 1996
