As filed with the Securities and Exchange Commission on May 30, 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)
SCOTT & STRINGFELLOW FINANCIAL, INC.
(Name of issuer)
SCOTT & STRINGFELLOW FINANCIAL, INC.
(Name of Person(s) Filing Statement)
Common Stock, $0.10 Par Value Per Share
(Title of Class of Securities
809386105
(CUSIP Number of Class of Securities)
CHARLES E. MINTZ
CHIEF FINANCIAL OFFICER
SENIOR VICE PRESIDENT
SCOTT & STRINGFELLOW FINANCIAL, INC.
909 EAST MAIN STREET
RICHMOND, VIRGINIA 23219
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person(s) Filing Statement)
----------------------
COPIES TO:
DAVID W. ROBERTSON, ESQ.
MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
ONE JAMES CENTER
901 EAST CARY STREET
RICHMOND, VIRGINIA 23219
MAY 30, 1996
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
Transaction Valuation* Amount of filing fee
$3,800,000 $760
*Calculated solely for the purpose of determining the filing fee, based upon the
purchase of 200,000 shares at $19.00 per share.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: N/A FILING PARTY: N/A
FORM OR REGISTRATION NO.: N/A DATE FILED: N/A
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<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4 relates is
Scott & Stringfellow Financial, Inc., a Virginia corporation (the "Company"),
and the address of its principal executive office is 909 East Main Street,
Richmond, Virginia 23219.
(b) This schedule 13E-4 relates to the offer by the Company to purchase
up to 200,000 shares or such lesser number of shares as are properly tendered)
of its common stock, $0.10 par value per share (the "Shares"), 2,197,951 of
which Shares were outstanding as of May 29, 1996, at prices not in excess of
$19.00 nor less than $17.00, net per Share in cash, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated May 30, 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. 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 William P.
Schubmehl, Vice Chairman and Director of the Company, intends to tender 17,800
Shares in the Offer. Mr. Schubmehl retired as President and Chief Executive
Officer of the Company in December, 1995. The Company has also been advised that
Victor L. Harper, Senior Vice President and a member of the Management Committee
of the Company intends to tender 600 Shares in the Offer. Except as set forth
herein, 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" and "The Offer -- Section 1, Number of Shares;
Proration" 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" or 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" is
incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENT, 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 11 through 23 of the
Company's Annual Report to Shareholders for the year ended June 30, 1995, filed
as Exhibit (g)(1) hereto, is incorporated herein by reference, and the
information set forth on pages 2 through 8 of the Company's Quarterly
<PAGE>
Report on Form 10-Q for the nine months ended March 29, 1996, filed as Exhibit
(g)(2) is incorporated hereby 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, Effect of the
Offer on the Market for Shares; Registration under the Exchange Act" of the
Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and Letter of
Transmittal is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase, dated May 30, 1996
(2) Form of Letter of Transmittal (including Certification of
Taxpayer Identification Number on Form W-9).
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(6) Form of Memorandum, dated May 30, 1996, to participants in the
Scott & Stringfellow Financial, Inc. Employee Stock Purchase
Plan.
(7) Text of Press Release issued by the Company, dated May 29, 1996.
(8) Form of Letter to Shareholders of the Company, dated May 30,
1996, from John Sherman, Jr., President and Chief Executive
Officer of the Company.
(9) Form of Letter to Participants in the Scott & Stringfellow
Financial, Inc. Employee Stock Purchase Plan, dated May 30,
1996, from John Sherman, Jr., President and Chief Executive
Officer of the Company.
(b)(1) The Master Borrowing Note Agreement with Crestar Bank filed as
Exhibit 10 with the Company's Annual Report on Form 10-K for the
fiscal year ended June 24, 1994 is incorporated herein by
reference.
(2) The Broker Loan Agreement with Crestar Bank filed as Exhibit 10
with the Company's Annual Report on Form 10-K for the fiscal
year ended June 24, 1994 is incorporated herein by reference.
(3) The Broker Loan Agreement with NationsBank of Virginia, N.A.
filed as Exhibit 10 with the Company's Annual Report on Form
10-K for the fiscal year ended June 24, 1994 is incorporated
herein by reference.
(c) Not applicable
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) Pages 16 through 24 of the Company's Annual Report to
Shareholders , filed as Exhibit 13 to the company's Annual Report
on Form 10-K for the year ended June 30, 1995 are incorporated
herein by reference.
(2) Pages 2 through 8 of the Company's Quarterly Report on Form 10-Q
for the nine months ended March 29, 1996 are incorporated herein
by reference.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule 13E-4 is true, complete and
correct.
May 30, 1996 SCOTT & STRINGFELLOW FINANCIAL, INC.
By: /s/ CHARLES E. MINTZ.
Charles E. Mintz.
Senior Vice President and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
<S> <C> <C>
(a)(1) Form of Offer to Purchase, dated May 30, 1996.
(2) Form of Letter of Transmittal (including Certification of
Taxpayer Identification Number on Form W-9).
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees.
(6) Form of Memorandum, dated May 30, 1996, to Participants in
the Scott & Stringfellow Financial, Inc.
Employee Stock Purchase Plan.
(7) Text of Press Release issued by the Company, dated
May 29, 1996.
(8) Form of Letter to Shareholders of the Company, dated
May 30, 1996, from John Sherman, Jr., President and
Chief Executive Officer of the Company.
(9) Form of Letter to Participants in the Scott & Stringfellow
Financial, Inc. Employee Stock Purchase Plan, dated
May 30, 1996, from John Sherman, Jr., President and
Chief Executive Officer of the Company.
(b) not applicable.
(c) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
EXHIBIT 1
<PAGE>
SCOTT & STRINGFELLOW FINANCIAL, INC.
Offer To Purchase For Cash Up To
200,000 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $19.00
Nor Less Than $17.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, JUNE 27, 1996, UNLESS THE OFFER IS EXTENDED.
Scott & Stringfellow Financial, Inc., a Virginia corporation (the
"Company"), hereby invites its shareholders to tender shares of its Common
Stock, $0.10 par value per share (the "Shares"), at prices not in excess of
$19.00 nor less than $17.00 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"). The Company will determine the single per Share price, not in excess
of $19.00 nor less than $17.00 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 200,000 Shares (or such lesser number of Shares
as are properly tendered at prices not in excess of $19.00 nor less than $17.00
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 200,000 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 System (the "NASDAQ").
On May 28, 1996, the last full trading day on the NASDAQ National Market prior
to the announcement of the Offer, the bid and ask per Share price as reported on
the NASDAQ National Market was $15.25 and $16.00, respectively. On May 29, 1996,
the last full trading day on the NASDAQ National Market prior to the
commencement of the Offer, the closing per Share sales price as reported on the
NASDAQ National Market was $18.50. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 8.
THE BOARD OF DIRECTORS OF THE COMPANY HAS 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.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED. EXCEPT AS SET
FORTH IN SECTION 11, THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR
EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
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 American Stock Transfer & Trust Company (the
"Depositary"), and either mail or deliver the stock certificates for such Shares
to the Depositary (with all such other documents) or tender such Shares pursuant
to the procedure for book-entry 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.
<PAGE>
TO PROPERLY TENDER SHARES, 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 Depositary or to the Dealer Manager at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase.
THE DEALER MANAGER FOR THE OFFER IS:
SCOTT & STRINGFELLOW, INC.
THE DATE OF THIS OFFER TO PURCHASE IS MAY 30, 1996
<PAGE>
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY OR THE DEALER MANAGER 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.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
SUMMARY S-1
INTRODUCTION 1
THE OFFER 2
1. NUMBER OF SHARES; PRORATION 2
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER 4
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 8
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 16
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS 16
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES 17
15. EXTENSION OF OFFER; TERMINATION; AMENDMENT 19
16. FEES AND EXPENSES 20
17. MISCELLANEOUS 20
</TABLE>
<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.
<TABLE>
<S> <C>
Purchase price The Company will select a single Purchase Price which will be not more than $19.00 nor less
than $17.00 per Share. All Shares purchased by the Company will be purchased at the Purchase
Price even if tendered at or below the Purchase Price. Each shareholder desiring to tender
Shares must specify in the Letter of Transmittal the minimum price (not more than $19.00 nor
less than $17.00 per Share) at which such shareholder is willing to have his or her Shares
purchased by the Company.
Number of shares to be 200,000 Shares (or such lesser number of Shares as are properly tendered).
purchased.
How to tender shares See Section 3. Call the Depositary, the Dealer Manager or consult your broker for assistance.
Brokerage commissions. None.
Stock transfer tax None, if payment is made to the registered holder.
Expiration and proration Thursday, June 27, 1996 at 5:00 P.M., New York City time, unless extended by the Company.
dates.
Payment date As soon as practicable after the termination of the Offer.
Position of the company Neither the Company nor its Board of Directors makes any recommendation to any shareholder as
and its directors. 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 Thursday,
June 27, 1996, unless the Offer is extended by the Company, and, unless previously purchased,
after 12:00 Midnight on Friday, July 26, 1996. See Section 3.
Odd lots There will be no proration of Shares tendered by any shareholder owning beneficially less than
100 Shares as of May 29, 1996 who tenders all such Shares prior to the Proration Date and who
checks the "Odd Lots" box in the Letter of Transmittal.
Further developments Call the Depositary or the Dealer Manager or consult your broker.
regarding the offer.
</TABLE>
S-1
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF SCOTT & STRINGFELLOW FINANCIAL, INC.:
INTRODUCTION
Scott & Stringfellow Financial, Inc., a Virginia corporation (the
"Company"), invites its shareholders to tender shares of its Common Stock, $0.10
par value per share (the "Shares"), at prices not in excess of $19.00 nor less
than $17.00 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"). The Company will
determine the single per Share price, not in excess of $19.00 nor less than
$17.00 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
200,000 Shares (or such lesser number of Shares as are properly tendered). All
Shares acquired in the Offer will be acquired at the Purchase Price. 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
200,000 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 200,000 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 did not withdraw them prior to the expiration of the Offer). See Section 1.
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 net to the tendering shareholder in cash
for all Shares purchased. Tendering shareholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Company. HOWEVER, ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO
COMPLETE, SIGN AND RETURN TO THE DEPOSITARY THE 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. The Company will pay all fees and
expenses of Scott & Stringfellow, Inc. (the "Dealer Manager") and American Stock
Transfer & Trust Company (the "Depositary") incurred in connection with the
Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS 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 ELIGIBLE
SHARES. EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER ELIGIBLE
SHARES AND, IF SO, HOW MANY ELIGIBLE SHARES AND AT WHAT PRICE OR PRICES ELIGIBLE
SHARES SHOULD BE TENDERED. EXCEPT AS SET FORTH IN SECTION 11, THE COMPANY HAS
BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER
ANY SHARES PURSUANT TO THE OFFER.
1
<PAGE>
The Scott & Stringfellow Financial, Inc. Employee Stock Purchase Plan (the
"Stock Purchase Plan") holds Shares in accounts for participants of the Stock
Purchase Plan. Mellon Bank, N.A. (the "Stock Purchase Plan Trustee") serves as
trustee for the Stock Purchase Plan. Under the terms of the Stock Purchase Plan,
a participant may instruct the Stock Purchase Plan trustee to tender all or part
of certain Shares allocated to one or more of the participant's accounts and in
such case must specify the price at which such Shares are to be tendered.
Participants should note that a participant who sells more than 50% of his or
her shares in a calendar year shall cease to be a "Participating Employee" (as
defined in the Stock Purchase Plan) for 12 months, Participants should refer to
the Summary Plan Description for more information. See Section 3.
As of May 29, 1996, the Company had issued and outstanding 2,197,951 Shares
and had 291,762 Shares reserved for issuance upon exercise of outstanding stock
options and 157,818 Shares reserved for issuance upon stock options eligible to
be granted under the Scott & Stringfellow Stock Option Plan. The 200,000 Shares
that the Company is offering to purchase pursuant to the Offer represent
approximately 9.10% of the outstanding Shares. The Shares are traded on the
NASDAQ National Market System (the "NASDAQ National Market") under the symbol
"SCOT". On May 28, 1996, the last full trading day on the NASDAQ National Market
prior to the announcement of the Offer, the bid and ask per Share price as
reported on the NASDAQ National Market was $15.25 and $16.00, respectively. On
May 29, 1996, the last full trading day on the NASDAQ National Market prior to
the commencement of the Offer, the closing per Share sales price as reported on
the NASDAQ National Market was $18.50. 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 200,000 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 $19.00 nor less than $17.00 net per Share in cash. The
term "Expiration Date" means 5:00 P.M., New York City time, on Thursday, June
27, 1996, 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 200,000 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
outstanding Shares 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
200,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $19.00 nor less than $17.00 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 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 5 of the Letter of Transmittal, shareholders
desiring to tender Shares must specify the price, not in excess of $19.00 nor
less than $17.00 per Share, at which they are willing to sell their Shares to
the Company. 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 $19.00 nor less than $17.00 net per Share in cash, that will enable it
to purchase 200,000 Shares (or such lesser number of Shares as are properly
tendered) pursuant to the Offer. 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,
2
<PAGE>
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.
PRIORITY OF PURCHASERS. Upon the terms and subject to the conditions of the
Offer, if more than 200,000 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 tendered and not withdrawn prior to the
Expiration Date by any Odd Lot Holder (as defined below) who:
(1) tenders all Shares beneficially owned 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 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 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 May 29, 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 in a sale of such holder's Shares. 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.
The Company also reserves the right, but will not be obligated, to purchase
all Shares duly tendered by any shareholder who tendered all Shares owned,
beneficially or of record, at or below the Purchase Price and who, as a result
of proration, would then own, beneficially or of record, an aggregate of fewer
than 100 Shares. If the Company exercises this right, it will increase the
number of Shares that it is offering to purchase by the number of Shares
purchased through the exercise of the right.
PRORATION. In the event that proration of tendered Shares is required, the
Company will determine the proration factor as soon as practicable following the
Expiration Date. Proration for each shareholder tendering Shares, other than Odd
Lot Holders, shall be based on the ratio of the number of Shares tendered by
such shareholder to the total number of Shares tendered by all shareholders,
other than Odd Lot Holders, at or below the Purchase Price, subject to the
conditional tender provisions described in Section 6. 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 five 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 Manager and may be able to obtain such information from their brokers.
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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 is making the Offer because the Board of Directors believes
that, given the Company's business, assets and prospects and the current market
price of the Shares, the purchase of the Shares is an attractive use of the
Company's funds. The Board of Directors of the Company believes that funds
provided by earnings, combined with its liquid capital base and its present
lines of credit, will be fully adequate to meet the Company's financing needs
for the foreseeable future.
The Offer provides shareholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or prices
(not in excess of $19.00 nor less than $17.00 per Share) at which they are
willing to sell their Shares and, subject to the terms and conditions of the
Offer, to sell those Shares for cash without the usual transaction costs
associated with 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 also will avoid any applicable odd-lot
discounts payable on a sale of their Shares. The Offer also allows shareholders
to sell a portion of their Shares while retaining a continuing equity interest
in the Company if they so desire. 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 future earnings and assets, subject to
increased risks arising from higher leverage resulting from the purchase of
Shares by the Company, and subject to the Company's right to issue additional
Shares and other equity securities in the future.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF
SUCH SHAREHOLDER'S 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.
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3. PROCEDURES FOR TENDERING SHARES.
PROPER TENDER OF SHARES. For Eligible 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 (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 5 OF THE LETTER TRANSMITTAL, SHAREHOLDERS DESIRING TO TENDER SHARES
PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE SECTION CAPTIONED "PRICE (IN
DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED" ON THE LETTER OF
TRANSMITTAL THE PRICE (IN MULTIPLES OF $.25) AT WHICH THEIR SHARES ARE BEING
TENDERED. Shareholders who desire to tender Shares at more than one price must
complete a separate Letter of Transmittal for each price at which Shares are
tendered, provided that the same Shares cannot be tendered (unless properly
withdrawn previously in accordance with the terms of the Offer) at more than one
price. IN ORDER TO 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 the
box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Holders as 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 the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal; or (ii) if Shares are tendered for the account of a member firm
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
(not a savings bank or a savings and loan association) having 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, or stock power guaranteed by an
Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at 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.
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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. Foreign shareholders may be required to submit Form W-8, certifying
non-United States status, to avoid backup withholding. See Instructions 14 and
15 of the Letter of Transmittal. For a discussion of certain federal income tax
consequences to tendering shareholders, see Section 14.
WITHHOLDING FOR FOREIGN SHAREHOLDERS. 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 agent unless the Depositary determines that an
exemption from or a reduced rate of withholding is available pursuant to a tax
treaty or an exemption from withholding is applicable because such gross
proceeds are effectively connected with the conduct of a trade or business in
the United States. In order to obtain an exemption from or a reduced rate of
withholding pursuant to a tax treaty, a foreign shareholder must deliver to the
Depositary a properly completed Form 1001. 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. 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 eligible 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.
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),
including (where required) a signature guarantee by an Eligible
Institution; and
(c) the certificates for all tendered Shares, in proper form for
transfer (or confirmation of book-entry 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.
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.
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STOCK PURCHASE PLAN. Participants in the Stock Purchase Plan who wish to
have the Stock Purchase Plan Trustee thereof tender all or part of the Shares
allocated to their accounts should so indicate by completing, executing and
returning to the Stock Purchase Plan Trustee the election form included with the
memorandum furnished to such participants. THE PARTICIPANTS IN THE STOCK
PURCHASE PLAN MAY NOT USE THE LETTER OF TRANSMITTAL TO DIRECT THE TENDER OF THE
STOCK PURCHASE PLAN SHARES, BUT MUST USE THE SEPARATE ELECTION FORM ENCLOSED
WITH THE MEMORANDUM TO PARTICIPANTS IN THE SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN. STOCK PURCHASE PLAN PARTICIPANTS ARE URGED TO READ
THE SEPARATE INSTRUCTION FORM AND RELATED MATERIALS CAREFULLY. ANY STOCK
PURCHASE PLAN SHARES TENDERED BUT NOT PURCHASED WILL BE RETURNED TO THE
PARTICIPANT'S STOCK PURCHASE PLAN ACCOUNT.
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 Manager, 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 Friday, July 26, 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 serial numbers shown on the
particular certificates for 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 tender 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 Manager, 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.
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<PAGE>
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 per Share Purchase Price for 200,000 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 $19.00 nor less than $17.00 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 five 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 7 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
8
<PAGE>
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 the box captioned "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 200,000 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 May 30, 1996 and prior to the time of payment for any such Shares
(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 sole judgment in any such case and regardless of the circumstances
giving rise thereto (including any action or omission to act by the Company),
makes it inadvisable to proceed with the Offer or with such acceptance for
payment 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 sole 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 sole
judgment, would or might directly or indirectly (i) make the
acceptance for payment of, or payment for, some or all of the
Shares illegal or otherwise restrict or prohibit consummation of
the Offer; (ii) delay or restrict the ability of the Company, or
render the Company unable, to accept for payment or pay for some
or all of the Shares; (iii) materially impair the contemplated
benefits of the Offer to the Company; or (iv) materially 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 sole 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 any change in the general political, market, economic or
financial conditions in the United States or abroad that could, in
the sole 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 Dow
9
<PAGE>
Jones Industrial Average or the Standard and Poor's Index of 500
Industrial Companies by an amount in excess of 10 percent measured
from the close of business on May 29, 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, or the
Company shall have learned that (i) any person or "group" (within
the meaning of Section 13(d)(3) of the Exchange Act), other than
Peter R. Kellogg, Frederic Scott Bocock or Sidney Buford Scott
(see Section 11), shall have acquired or proposed to acquire
beneficial ownership of more than five percent of the outstanding
Shares, or any new group shall have been formed that beneficially
owns more than 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
Company's sole judgment, 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 System. The following table sets forth, for the periods
indicated, the high and low closing per Share sales prices on the NASDAQ
National Market as reported on the NASDAQ National Market System and the cash
dividends paid per Share in each such fiscal quarter:
<TABLE>
<CAPTION>
FISCAL YEAR HIGH(1) LOW(1) DIVIDENDS(1)
<S> <C> <C> <C>
1994:
1st Quarter.......................... $12.50 11.04 .08
2nd Quarter.......................... 12.92 11.67 .09
3rd Quarter.......................... 13.33 11.88 .09
4th Quarter.......................... 12.92 11.25 .09
1995:
1st Quarter.......................... 12.40 11.46 .10
2nd Quarter.......................... 12.00 11.00 .10
3rd Quarter.......................... 13.75 11.00 .10
4th Quarter.......................... 13.50 12.09 .10
1996:
1st Quarter.......................... 14.50 12.25 .10
2nd Quarter.......................... 14.75 13.50 .10
3rd Quarter.......................... 14.75 13.50 .10
</TABLE>
(1) All Common Stock and dividend per share amounts have been adjusted to
reflect a 6:5 stock split effected in the form of a 20% stock dividend declared
on May 18, 1994, and distributed on August 26, 1994, to shareholders of record
on August 5, 1994.
On May 28, 1996, the last full trading day prior to the announcement of the
Offer, the bid and ask per Share price on the NASDAQ National Market was $15.25
and $16.00, respectively. On May 29, 1996, the last full trading day on the
NASDAQ prior to the commencement of the Offer, the closing per Share sales price
on the NASDAQ National Market was $18.50. SHAREHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
On May 28, 1996, the Board of Directors declared an increase in the fourth
quarter dividend to $0.12 per Share to be paid on July 12, 1996 to shareholders
of record on June 28, 1996. Shareholders of record on June 28, 1996 will receive
such dividend notwithstanding any tender of Shares by them pursuant to the
Offer. 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.
10
<PAGE>
9. SOURCE AND AMOUNT OF FUNDS. Assuming that the Company purchases 200,000
Eligible Shares pursuant to the Offer at a price not in excess of $19.00 nor
less than $17.00 per Share, the cost to the Company (including all fees and
expenses relating to the Offer) is estimated to be between $3,500,000 and
$3,900,000. The Company intends to use its working capital to fund the purchase
of the Shares tendered pursuant to the offer. Depending upon available cash
balances on the date of purchase and other cash management and liquidity
considerations, it may be necessary for the Company to utilize funds drawn under
its existing line of credit to satisfy its cash needs upon consummation of the
Share purchase. The Company currently has lines of credit from established
financial institutions totalling an aggregate of $58,000,000. These lines
include a Master Borrowing Note Agreement with Crestar Bank, a Broker Loan
Agreement with Crestar and a Broker Loan Agreement with NationsBank of Virginia,
N.A. Such loan agreements have no stated termination date and are secured by
either customer-owned securities held in margin amounts or firm-owned securities
held in inventory amounts. Loans made pursuant to each of these agreements bear
interest at the respective lender's broker call rate and are payable upon
demand. If the Company finds it necessary or advantageous to borrow funds under
one or more of the foregoing lines of credit to complete the Share purchase in
accordance with the Offer, it will repay such funds from its cash flow from
operations, but has no specific plans at this time with respect to the timing
and manner of any such repayment.
10. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL
The Company was incorporated in 1974. In 1986 the Company conducted an
initial public offering of its common stock, and the Company has been a publicly
held company since that date. The Company is engaged directly or through
subsidiaries in retail securities brokerage, investment banking and financial
services businesses. On March 29, 1996 the Company announced its third quarter
and year-to-date results from continuing operations. Additional information
concerning the Company is contained in the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1995, the Company's Quarterly Report on Form
10-Q for the quarter ended March 29, 1996, the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1995, as amended, and the Company's
Report on Form 10-Q for the Quarter ended September 29, 1995, copies of which
can be obtained from the Company upon request. See " -- Additional
Information".
11
<PAGE>
CERTAIN FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The following financial highlights is a summary of selected items from the
"Selected Historical and Pro Forma Financial Information" and should be read in
conjunction with, and not as a substitute for, the more detailed "Selected
Historical and Pro Forma Financial Information":
AS OF AND FOR THE
AS OF AND FOR THE NINE MONTH PERIODS
FISCAL YEARS ENDED ENDED
JUNE 30, JUNE 24, MARCH 29, MARCH 31,
1995 1994 1996 1995
NET REVENUES $54,119 $52,108 $52,692 $39,131
Net income:
Historical $ 2,101 $ 2,958 $ 3,027 $ 1,523
Pro Forma for Offer at $17.00 $ 1,895 $ 2,797 $ 2,857 $ 1,358
Pro Forma for Offer at $19.00 $ 1,878 $ 2,786 $ 2,844 $ 1,347
EARNINGS PER SHARE:
Historical $ 1.00 $ 1.40 $ 1.40 $ 0.72
Pro Forma for Offer at $17.00 $ 0.99 $ 1.46 $ 1.46 $ 0.71
Pro Forma for Offer at $19.00 $ 0.98 $ 1.45 $ 1.46 $ 0.71
SHAREHOLDERS' EQUITY:
Historical $25,238 $24,022 $28,272 $24,947
Pro Forma for Offer at $17.00 $21,738 $20,522 $24,772 $21,447
Pro Forma for Offer at $19.00 $21,338 $20,122 $24,372 $21,047
BOOK VALUE PER SHARE:
Historical $ 11.97 $ 11.42 $ 12.90 $ 11.81
Pro Forma for Offer at $17.00 $ 11.40 $ 10.78 $ 12.43 $ 11.22
Pro Forma for Offer at $19.00 $ 11.19 $ 10.57 $ 12.23 $ 11.01
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
Set forth below is certain selected historical and pro forma consolidated
financial information with respect to the Company. Historical information was
excerpted or derived from the audited financial statements contained in the
Company's 1995 Annual Report on Form 10-K and from the unaudited financial
statements contained in the Company's Quarterly Report on Form 10-Q for the
period ended March 29, 1996. The historical information below is qualified in
its entirety by reference to such reports (which may be inspected or obtained at
the offices of the Commission in the manner set forth in "Additional
Information" below) and the financial information and related notes contained
therein.
The pro forma information on the financial position of the Company as of
June 30, 1995, June 24, 1994, March 29, 1996, and March 31, 1995 and the pro
forma information on the results of operations for the Company for the fiscal
years ended June 30, 1995 and June 24, 1994 and for the nine month periods ended
March 29, 1996 and March 31, 1995, are presented for the effects of the Offer.
The pro forma information on the Company's financial position assumes that
the Company, on each date presented, borrowed funds under its existing bank
lines of credit, to purchase 200,000 Shares pursuant to the Offer at prices of
$17.00 and $19.00.
The pro forma information on the Company's results of operations assumes
that, at the beginning of each period presented, the Company borrowed funds
under existing bank lines of credit, to purchase 200,000 shares pursuant to the
Offer at prices of $17.00 and $19.00.
The pro forma financial information of the Company is unaudited and does
not purport to be indicative of the future results or the financial position of
the Company or the net income and financial position that would actually have
been attained had the pro forma transactions occurred on the dates or for the
periods indicated.
12
<PAGE>
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS AND RATIOS)
<TABLE>
<CAPTION>
AS OF AND FOR THE YEAR ENDED JUNE 30, AS OF AND FOR THE YEAR ENDED JUNE 24,
PRO PRO PRO PRO
FORMA FORMA FORMA FORMA
$17.00/SH. $19.00/SH. $17.00/SH. $19.00/SH.
1995 PURCHASE PURCHASE 1994 PURCHASE PURCHASE
HISTORICAL PRICE PRICE HISTORICAL PRICE PRICE
<S> <C> <C> <C> <C> <C> <C>
RESULTS OF
OPERATIONS:
Total revenues $ 54,119 $ 54,119 $ 54,119 $ 52,108 $ 52,108 $ 52,108
Net income $ 2,101 $ 1,895 $ 1,878 $ 2,958 $ 2,797 $ 2,786
Earnings per share $ 1.00 $ 0.99 $ 0.98 $ 1.40 $ 1.46 $ 1.45
Weighted average
shares and common
stock
equivalents --
primary 2,109 1,909 1,909 2,115 1,915 1,915
Earnings per share --
fully diluted $ 1.00 $ 0.99 $ 0.98 $ 1.40 $ 1.46 $ 1.45
Weighted average
shares and common
stock
equivalents --
fully diluted 2,110 1,910 1,910 2,115 1,915 1,915
Ratio of earnings to
fixed charges 0.47 0.40 0.39 0.92 0.83 0.82
FINANCIAL POSITION:
Total assets $ 93,266 $ 93,266 $ 93,266 $ 80,702 $ 80,702 $ 80,702
Total liabilities $ 68,028 $ 71,528 $ 71,928 $ 56,680 $ 60,180 $ 60,580
Shareholders' equity $ 25,238 $ 21,738 $ 21,338 $ 24,022 $ 20,522 $ 20,122
Shares outstanding 2,108 1,908 1,908 2,103 1,903 1,903
Book value per share $ 11.97 $ 11.40 $ 11.19 $ 11.42 $ 10.78 $ 10.57
Working capital $ 16,400 $ 12,900 $ 12,500 $ 15,328 $ 11,828 $ 11,428
</TABLE>
13
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS AND RATIOS)
<TABLE>
<CAPTION>
AS OF AND FOR THE NINE MONTH
PERIOD ENDED MARCH 29, 1996 AS OF AND FOR THE NINE MONTH PERIOD
PRO PRO ENDED MARCH 31, 1995
FORMA FORMA PRO FORMA PRO FORMA
$17.00/SH. $19.00/SH. $17.00/SH. $19.00/SH.
PURCHASE PURCHASE PURCHASE PURCHASE
HISTORICAL PRICE PRICE HISTORICAL PRICE PRICE
<S> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Total revenues $ 52,692 $ 52,692 $ 52,692 $ 39,131 $39,131 $39,131
Net income $ 3,027 $ 2,857 $ 2,844 $ 1,523 $ 1,358 $ 1,347
Earnings per share $ 1.40 $ 1.46 $ 1.46 $ 0.72 $ 0.71 $ 0.71
Weighted average shares and common stock
equivalents -- primary 2,155 1,955 1,955 2,104 1,904 1,904
Earnings per share -- fully diluted $ 1.40 $ 1.46 $ 1.45 $ 0.72 $ 0.71 $ 0.71
Weighted average shares and common stock
equivalents -- fully diluted 2,156 1,956 1,956 2,110 1,910 1,910
Ratio of earnings to fixed charges 0.74 0.67 0.67 0.47 0.40 0.40
FINANCIAL POSITION:
Total assets $103,776 $103,776 $103,776 $ 88,536 $88,536 $88,536
Total liabilities $ 75,504 $ 79,004 $ 79,404 $ 63,589 $67,089 $67,489
Shareholders' equity $ 28,272 $ 24,772 $ 24,372 $ 24,947 $21,447 $21,047
Shares outstanding 2,193 1,993 1,993 2,112 1,912 1,912
Book value per share $ 12.90 $ 12.43 $ 12.23 $ 11.81 $ 11.22 $ 11.01
Working capital $ 15,948 $ 12,448 $ 12,048 $ 16,373 $12,873 $12,473
</TABLE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
1. PRO FORMA ADJUSTMENTS TO RESULTS OF OPERATIONS.
Pro forma adjustments to results of operations include interest expense on
pro forma borrowings needed at the beginning of the periods presented to
complete the assumed purchase of 200,000 Shares at prices of $17.00 and
$19.00 and expenses of the offering estimated to equal $100,000. Pro forma
income tax adjustments for these expenses were recognized at the Company's
then current combined federal and state income tax rates, which ranged from
36.1% to 36.6%. The pro forma adjustment to weighted average common stock and
common stock equivalents reflects a decrease of 200,000 Shares outstanding as
of the beginning of each period.
The following pro forma adjustments were made to results of operations for
the fiscal years ended June 30, 1995 and June 24, 1994:
<TABLE>
<CAPTION>
1995 1995 1994 1994
$17.00/SH. $19.00/SH. $17.00/SH. $19.00/SH.
PURCHASE PURCHASE PURCHASE PURCHASE
PRICE PRICE PRICE PRICE
<S> <C> <C> <C> <C>
Historical net income $2,101 $2,101 $2,958 $2,958
Interest expense -223 -249 -154 -172
Offering expenses -100 -100 -100 -100
Income tax benefit 117 126 93 100
Pro forma net income $1,895 $1,878 $2,797 $2,786
</TABLE>
14
<PAGE>
The following pro forma adjustments were made to the nine month periods ended
March 29, 1996 and March 31, 1995:
<TABLE>
<CAPTION>
1996 1996 1995 1995
$17.00/SH. $19.00/SH. $17.00/SH. $19.00/SH.
PURCHASE PURCHASE PURCHASE PURCHASE
PRICE PRICE PRICE PRICE
<S> <C> <C> <C> <C>
Historical net income $3,027 $3,027 $1,523 $1,523
Interest expense -168 -188 -158 -176
Transaction expenses -100 -100 -100 -100
Income tax benefit 98 105 93 100
Pro forma net income $2,857 $2,844 $1,358 $1,347
</TABLE>
2. PRO FORMA ADJUSTMENTS TO FINANCIAL POSITION.
Pro forma adjustments to shareholders' equity for each date presented are as
follows:
<TABLE>
<CAPTION>
$17.00/SH. $19.00/SH.
PURCHASE PURCHASE
PRICE PRICE
<S> <C> <C>
200,000 shares assumed purchased $3,400 $3,800
Estimated transaction costs $ 100 $ 100
Assumed total cost of Offer $3,500 $3,900
</TABLE>
The offer was assumed to be funded on a pro forma basis entirely by assumed
borrowings under the Company's then existing bank lines of credit for each
date presented, at rates available at that time.
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 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. 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 May 29, 1996, the Company had issued and outstanding 2,197,951
Shares, had reserved 291,762 Shares for issuance upon exercise of outstanding
stock options and had reserved an additional 157,818 Shares for issuance upon
exercise of options eligible to be granted pursuant to the Scott & Stringfellow
Financial, Inc. Stock Option Plan. The 200,000 Shares that the Company is
offering to purchase represent approximately 9.10% of the Shares then
outstanding. As of May 23, 1996, the Company's directors and executive officers
as a group (18 persons) beneficially owned an aggregate of 690,927 Shares
representing approximately 31.43% of the outstanding Shares, assuming the
exercise by such persons of their currently exercisable options. As of May 23,
1996, Peter R. Kellogg beneficially owned an aggregate of 250,000 shares
representing approximately 11.4% of the outstanding Shares. This number includes
90,000 Shares indirectly controlled through a corporation which Mr. Kellogg
owns, 60,000 Shares owned by his wife and 35,000 Shares owned by a charitable
foundation, as to all of which Mr. Kellog disclaims beneficial ownership. As of
May 23, 1996, S. Buford Scott, Chairman of the Board of the Company,
beneficially owned an aggregate of 171,220 Shares, including 21,600 Shares owned
by his wife and children, as to which Shares Mr. Scott disclaims beneficial
ownership. As of May 23, 1996, Frederic Scott Bocock, Vice Chairman of the
Company, beneficially owned an aggregate of 193,920 Shares. This number includes
130,000 Shares owned by Mr. Bocock's children and trusts for his children, as to
which Shares Mr. Bocock disclaims beneficial ownership. Beneficial ownership
figures for Mr. Scott and Mr. Bocock assume the exercise by each of his
currently exercisable options.
15
<PAGE>
The Company has been advised that William P. Schubmehl, Vice Chairman and
Director of the Company, intends to tender 17,800 Shares in the Offer. Mr.
Schubmehl resigned as President and Chief Executive Officer of the Company in
December, 1995. The Company has also been advised that Victor L. Harper, Senior
Vice President and a member of the Management Committee of the Company, intends
to tender 600 Shares in the Offer. The Company has been advised that none of its
other Directors or Executive Officers intends to tender any Shares pursuant to
the Offer.
If the Company purchases 200,000 Shares pursuant to the Offer and each
executive officer and director tenders Shares as discussed above, then, assuming
the purchase of all such Shares in the Offer, after the purchase of Shares
pursuant to the Offer, the Company's executive officers and directors as a group
would own beneficially approximately 33.72% of the outstanding Shares
immediately after the Offer, assuming the exercise by such persons of their
currently exercisable options.
On May 9, 1996, Furman G. Wall, Jr., a Director of the Company, purchased
1,000 Shares on the open market at a price of $15.375 per Share. 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 other 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 the Company's stock option plan and except as otherwise
described herein, neither the Company nor, to the best of the Company's
knowledge, any of its affiliates, directors or executive officers, 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 does
not believe that its purchase of Shares pursuant to the Offer will cause the
Company's remaining Shares to cease to be quoted on the NASDAQ National Market
System.
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 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 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.
16
<PAGE>
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
GENERAL. The federal income tax discussion set forth below summarizes the
principal federal income tax consequences to domestic shareholders of sales of
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. 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 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, (iii) Shares owned by any
estate of which the shareholder is a beneficiary, (iv) Shares owned by any
partnership or "S corporation" in which the shareholder is a partner or
shareholder, (v) Shares owned by any non-S corporation of which the shareholder
owns at least 50% in value of the stock and (vi) Shares that the shareholder 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
percentage of Shares actually and constructively owned by the shareholder
compared to all Shares outstanding immediately after all redemptions of Shares
pursuant to the Offer is less than 80% of the percentage of Shares actually and
constructively owned by the shareholder compared to all Shares outstanding
immediately before such redemptions. If exactly 200,000 Shares are redeemed
pursuant to the Offer, the
17
<PAGE>
number of Shares outstanding after consummation of the Offer will be
approximately 90.90% of the number of Shares currently outstanding.
Consequently, in that case a shareholder must dispose of more than 27.28% (I.E.,
1 minus 80% of 90.90%) 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, a shareholder would have to
dispose of more than 28.88% (I.E., 1 minus 80% of 88.90%) 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 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 200,000 Shares are redeemed
pursuant to the Offer, the number of Shares outstanding will be reduced by
approximately 9.10%. Consequently, in that case a shareholder must dispose of
more than 9.10% 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 11.10% 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 SHARES AT OR
BELOW THE PURCHASE PRICE) CAN BE GIVEN NO ASSURANCE, EVEN IF HE TENDERS ALL OF
HIS SHARES, THAT THE COMPANY WILL PURCHASE A SUFFICIENT NUMBER OF SUCH SHARES TO
PERMIT HIM TO SATISFY ANY OF THE FOREGOING TESTS. Shareholders also should be
aware that 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%
18
<PAGE>
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." It should be noted that recent
legislative proposals, if enacted, would reduce the dividends-received deduction
from 70% to 50%. In addition, such proposals would provide that a corporate
shareholder would not be entitled to a dividends-received deduction on
distributions on the Shares if such shareholder protects itself from risk of
loss immediately before or immediately after the shareholder becomes entitled to
the dividend. It is unclear whether, or in what form, such proposals will be
enacted. 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. Recently
introduced legislation, however, would require gain on the portion of the
"extraordinary dividend" not taxed to be recognized at the time when the
"extraordinary dividend" is paid rather than at the time of the sale or
disposition of the remaining Shares. It is unclear whether, or in what form,
such legislation will be enacted. 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. 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 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 decreasing or increasing the consideration offered in the Offer
to holders of Shares or by decreasing or increasing the number of Shares being
sought in 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 Manager
soliciting fees and, in the event of an increase in the number of Shares being
sought, such increase exceeds two percent of
19
<PAGE>
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.
16. FEES AND EXPENSES. The Company has retained Scott & Stringfellow, Inc.
("Scott & Stringfellow") its wholly owned subsidiary, to act as the Dealer
Manager in connection with the Offer. Scott & Stringfellow will receive a fee
for their services as Dealer Manager of $.01 for each Share purchased by the
Company pursuant to the Offer, with a minimum aggregate fee of $1000. The
Company also has agreed to reimburse Scott & Stringfellow for certain reasonable
out-of-pocket expenses incurred in connection with the Offer, including fees and
expenses of counsel.
The Company has retained American Stock Transfer & Trust Company 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.
No fees or commissions will be payable to brokers, dealers or other persons
(other than fees to the Dealer Manager 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
Manager 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 7 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 Manager 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.
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 MANAGER.
SCOTT & STRINGFELLOW FINANCIAL, INC.
May 30, 1996
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<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 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:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/OVERNIGHT DELIVERY:
(Eligible Institutions American Stock Transfer & Trust Co.
American Stock Transfer & Trust Co. Only) 40 Wall Street, 46th Floor
40 Wall Street, 46th Floor (718) 234-5001 New York, NY 10005
New York, NY 10005 (Attention: Reorganization
(Attention: Reorganization Department)
Department) CONFIRM BY TELEPHONE:
(718) 921-8200
FOR INFORMATION CALL:
(718) 921-8200
</TABLE>
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 DEALER MANAGER FOR THE OFFER IS:
SCOTT & STRINGFELLOW, INC.
909 East Main Street
Richmond, Virginia 23219
(804) 643-1811
May 30, 1996
<PAGE>
(This Page Intentionally Left Blank)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
SCOTT & STRINGFELLOW FINANCIAL, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 30, 1996
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON THURSDAY, JUNE 27, 1996, UNLESS THE OFFER IS EXTENDED.
TO: AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/OVERNIGHT DELIVERY:
American Stock Transfer & Trust Co. (Eligible Institutions Only) American Stock Transfer & Trust Co.
40 Wall Street, 46th Floor (718) 234-5001 40 Wall Street, 46th Floor
New York, NY 10005 New York, NY 10005
(Attention: Reorganization CONFIRM BY TELEPHONE: (Attention: Reorganization
Department) (718) 921-8200 Department)
</TABLE>
FOR INFORMATION CALL:
(718) 921-8200
Delivery of this instrument and all other documents to an address or
transmission of instructions to a facsimile number other than as set forth above
does not constitute a valid delivery.
PLEASE READ THE ENTIRE LETTER
OF TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS,
CAREFULLY BEFORE CHECKING ANY BOX BELOW.
This Letter of Transmittal is to be used only if (a) certificates for Shares
(as defined below) are to be forwarded herewith or (b) a tender of Shares is
being made concurrently by book-entry transfer to the account maintained by
American Stock Transfer & Trust Company (the "Depositary") at The Depository
Trust Company, or Philadelphia Depository Trust Company (hereinafter,
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
Section 3 of the Offer to Purchase. See Instruction 2.
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
NAME(S) AND ADDRESS(ES) TENDERED CERTIFICATES
OF REGISTERED HOLDER(S) (ATTACH SIGNED ADDITIONAL LIST
(PLEASE USE PREADDRESSED IF NECESSARY)
LABEL OR FILL IN EXACTLY AS
NAME(S) APPEAR(S) ON CERTIFICATE(S)
CERTIFICATE NO. OF NO. OF SHARES
NUMBER(S) SHARES* TENDERED**
TOTAL SHARES
TENDERED
Indicate in this box order (by certificate number) which Shares are to be
purchased in event of proration. (Attach additional list if necessary.) *** See
Instruction 10.
1st: 2nd: 3rd: 4th: 5th: 6th:
* Need not be completed if Shares are tendered by book-entry transfer.
** If you desire to tender fewer than all Shares evidenced by any certificates
listed above, please indicate in this column the number of Shares you wish
to tender. Otherwise, all Shares evidenced by such certificates will be
deemed to have been tendered. See Instruction 4.
*** If you do not designate an order, in the event less than all Shares tendered
are purchased due to proration, Shares will be selected for purchase by the
Depositary.
NOTE: SIGNATURE MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
SHARES HELD IN THE SCOTT & STRINGFELLOW FINANCIAL, INC. EMPLOYEE STOCK
PURCHASE PLAN (THE "STOCK PURCHASE PLAN") MAY BE TENDERED ONLY BY SUBMITTING A
SEPARATE INSTRUCTION FORM TO THE TRUSTEE AS PROVIDED HEREIN. IF YOU HOLD SHARES
IN THE STOCK PURCHASE PLAN AND OUTSIDE OF SUCH PLANS, YOU MUST TENDER SUCH
SHARES SEPARATELY. THIS LETTER OF TRANSMITTAL MAY BE USED ONLY FOR TENDERING
SHARES NOT HELD IN THE STOCK PURCHASE PLAN.
SHAREHOLDERS WHO CANNOT DELIVER THE CERTIFICATES FOR THEIR SHARES TO THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE (AS
DEFINED BELOW)) OR WHO CANNOT COMPLETE THE PROCEDURE FOR BOOK-ENTRY TRANSFER ON
A TIMELY BASIS OR WHO CANNOT DELIVER A LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE DEPOSITARY PRIOR TO THE EXPIRATION DATE MUST, IN EACH
CASE, TENDER THEIR SHARES PURSUANT TO THE GUARANTEED DELIVERY PROCEDURE SET
FORTH IN SECTION 3 OF THE OFFER TO PURCHASE. SEE INSTRUCTION 2.
SHAREHOLDERS WHO DESIRE TO TENDER SHARES PURSUANT TO THE OFFER (AS DEFINED
BELOW) AND WHO CANNOT DELIVER THEIR CERTIFICATES FOR THEIR SHARES (OR WHO ARE
UNABLE TO COMPLY WITH THE PROCEDURES FOR BOOK-ENTRY TRANSFER ON A TIMELY BASIS)
AND ALL OTHER DOCUMENTS REQUIRED BY THIS LETTER OF TRANSMITTAL TO THE DEPOSITARY
AT OR BEFORE THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE) MAY
TENDER THEIR SHARES ACCORDING TO THE GUARANTEED DELIVERY PROCEDURES SET FORTH IN
SECTION 3 OF THE OFFER TO PURCHASE. SEE INSTRUCTION 2. DELIVERY OF DOCUMENTS TO
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
___CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE BOOK ENTRY-TRANSFER
FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _______________________________________
Check Box of Applicable Book-Entry Facility:
___The Depository Trust Company
___The Philadelphia Depository Company
Account Number: ______________________________________________________
Transaction Code Number: _____________________________________________
___CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): _____________________________________
Date of Execution of Notice of Guaranteed Delivery: __________________
Name of Institution which Guaranteed Delivery: _______________________
Check Box of Applicable Book-Entry Transfer Facility and Give Account
Number if Delivered by Book-Entry Transfer:
___The Depository Trust Company
___Philadelphia Depository Company
Account Number: ______________________________________________________
ODD LOTS
(SEE INSTRUCTION 8)
To be completed ONLY if the Shares are being tendered by or on behalf of a
person owning beneficially or of record, as of the close of business on May 29,
1996, an aggregate of fewer than 100 Shares. The undersigned either (check one
box);
___was the beneficial or record owner, as of the close of business on May 29,
1996, of an aggregate of fewer than 100 Shares, all of which are being
tendered; or
___is a broker, dealer, commercial bank, trust company, or other nominee that
(a) is tendering for the beneficial owner(s) thereof, Shares with respect to
which it is the record holder, and (b) believes, based upon representations
made to it by such beneficial owner(s), that each such person was the
beneficial owner, as of the close of business on May 29, 1996, of an
aggregate of fewer than 100 Shares and is tendering all of such Shares.
In addition the undersigned is tendering Shares either (check one box):
___at the Purchase Price (defined below), as the same shall be determined by the
Company in accordance with the terms of the Offer (persons checking this box
need not indicate the price per Share below); or
___at the price per Share indicated below under "Price (in Dollars) per Share at
which Shares are being tendered in this Letter of Transmittal."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
CONDITIONAL TENDER
(SEE INSTRUCTION 9)
___check here if tender of Shares is conditional on the Company purchasing all
or a minimum number of the tendered Shares and complete the following:
Minimum number of Shares to be sold: _______________________________________
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
TO AMERICAN STOCK TRANSFER & TRUST COMPANY:
The undersigned hereby tenders to Scott & Stringfellow Financial, Inc., a
Virginia corporation (the "Company"), the above described shares of the
Company's common stock, $0.10 par value per share (the "Shares") at the price
per Share indicated in this Letter of Transmittal, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Company's Offer to
Purchase, dated May 30, 1996 (the "Offer to Purchase"), receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer").
Subject to and effective upon acceptance for payment of the Shares tendered
hereby in accordance with the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to all the Shares that are being tendered hereby and orders the registration
of all such Shares if tendered by book-entry transfer and hereby irrevocably
constitutes and appoints the Depositary as the true and lawful agent and
attorney-in-fact of the undersigned (with full knowledge that said Depositary
also acts as the agent of the Company) with respect to such Shares with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(a) deliver certificate(s) for such Shares or transfer ownership of
such Shares on the account books maintained by any of the Book-Entry
Transfer Facilities, together in either such case with all accompanying
evidences of transfer and authenticity, to, or upon the order of, the
Company upon receipt by the Depositary, as the undersigned's agent, of the
aggregate Purchase Price (as defined below) with respect to such Shares;
(b) present certificates for such Shares for cancellation and transfer
on the Company's books; and
(c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, subject to the next paragraph, all in
accordance with the terms of the Offer. The undersigned hereby represents
and warrants to the Company that:
(a) the undersigned understands that tenders of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and
in the instructions hereto will constitute the undersigned's acceptance of
the terms and conditions of the Offer, including the undersigned's
representation and warranty that:
(i) the undersigned has a net long position in Shares or equivalent
securities at least equal to the Shares tendered within the meaning of
Rule 14e-4 under the Securities Exchange Act of 1934, as amended, and
(ii) such tender of Shares complies with Rule 14e-4;
(b) when and to the extent the Company accepts such Shares for
purchase, the Company will acquire good, marketable and unencumbered title
to them, free and clear of all security interests, liens, charges,
encumbrances, conditional sales agreements or other obligations relating to
their sale or transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any
additional documents the Depositary or the Company deems necessary or
desirable to complete the assignment, transfer and purchase of the Shares
tendered hereby; and
(d) the undersigned has read and agrees to all of the terms of the
Offer.
All authorities conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, executors, administrators, successors, assigns,
trustees in bankruptcy, and legal representatives of the undersigned. Except as
stated in the Offer to Purchase, this tender is irrevocable.
The name(s) and address(es) of the registered holder(s) should be printed
above, if they are not already printed above, exactly as they appear on the
certificates representing Shares tendered hereby. The certificate numbers, the
number of Shares represented by such certificates and the number of Shares that
the undersigned wishes to tender, should be set forth in the appropriate boxes
above. The price at which such Shares are being tendered should be indicated in
the box below.
The undersigned understands that the Company will, upon the terms and
subject to the conditions of the Offer, determine a single per Share price (not
in excess of $19.00 nor less than $17.00 per Share) net to the seller in
cash (the "Purchase Price") that it will pay for Shares properly tendered and
not withdrawn prior to the Expiration Date pursuant to the Offer, taking into
account the number of Shares so tendered and the prices (in multiples of $.25)
specified by tendering shareholders. The undersigned understands that the
Company will select the lowest Purchase Price that will allow it to buy 200,000
Shares (or such lesser number of Shares as are properly tendered at prices not
in excess of $19.00 nor less than $17.00 per Share) pursuant to the Offer. The
undersigned understands that all Shares properly tendered at prices at or below
the Purchase Price and not withdrawn prior to the Expiration Date will be
purchased at the Purchase Price, upon the terms and subject to the conditions of
the Offer, including its proration and conditional tender provisions. The
undersigned understands that the Company will return all other Shares not
purchased pursuant to the Offer, including Shares tendered at prices greater
than the Purchase Price and not withdrawn prior to the Expiration Date and
Shares not purchased because of proration or conditional tender.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may accept for payment fewer than all of the Shares tendered hereby. In any such
event, the undersigned understands that certificate(s) for any Shares delivered
herewith but not tendered or not purchased will be returned to the undersigned
at the address indicated above, unless otherwise indicated under the "Special
Payment Instructions" or "Special Delivery Instructions" below. The undersigned
recognizes that the Company has no obligation, pursuant to the Special Payment
Instructions, to transfer any certificate for Shares from the name of its
registered holder, or to order the registration or transfer of Shares tendered
by book-entry transfer, if the Company purchases none of the Shares represented
by such certificate or tendered by such book-entry transfer.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the aggregate Purchase Price for such of the Shares tendered
hereby as are purchased will be issued to the order of the undersigned and
mailed to the address indicated above, unless otherwise indicated under the
Special Payment Instructions or the Special Delivery Instructions below.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5)
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(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.)
___ $17.000 ___ $17.750 ___ $18.500
___ $17.250 ___ $18.000 ___ $18.750
___ $17.500 ___ $18.250 ___ $19.000
<TABLE>
<CAPTION>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 11) (SEE INSTRUCTIONS 1, 4, 6, 7 AND 11)
To be completed ONLY if certificates for Shares not To be completed ONLY if certificates for Shares not tendered
tendered or not purchased and/or any check for the aggregate or not purchased and/or any check for the Purchase Price of
Purchase Price of Shares purchased are to be issued in the Shares purchased, issued in the name of the undersigned, are
name of and sent to someone other than the undersigned. to be mailed to someone other than the undersigned, or to
the undersigned at an address other than that shown above.
Issue: Mail:
___Check to: ___Check to:
___Certificates to: ___Certificates to:
Name(s):_________________________________________________ Name(s):_____________________________________________________
(Please Print) (Please Print)
Address:_________________________________________________ Address:_____________________________________________________
(Zip Code) (Zip Code)
_________________________________________________________
(Taxpayer Identification or Social Security No.)
</TABLE>
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL SHAREHOLDERS)
(PLEASE COMPLETE AND RETURN THE ENCLOSED FORM W-9)
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificate(s) and documents transmitted with
this Letter of Transmittal. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or another
person acting in a fiduciary or representative capacity, please set forth full
title and see Instruction 6.)
______________________________________________________________________________
______________________________________________________________________________
Signature(s) of Owner(s)
Dated:_________________________, 1996
Name(s):______________________________________________________________________
(Please Print)
Capacity (full title): _______________________________________________________
Address:______________________________________________________________________
(Include Zip Code)
Area Code(s) and
Telephone Number(s):__________________________________________________________
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
NAME OF FIRM:_________________________________________________________________
AUTHORIZED SIGNATURE:_________________________________________________________
NAME:_________________________________________________________________________
(Please Print)
Title:________________________________________________________________________
Address:______________________________________________________________________
(Include Zip Code)
Area Code and
Telephone Number:_____________________________________________________________
Dated:_________________________, 1996
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this document, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of such Shares) exactly as the name
of the registered holder appears on the certificate tendered with this
Letter of Transmittal and payment and delivery are to be made directly to
such owner unless such owner has completed either the box entitled "Special
Payment Instructions" or "Special Delivery Instructions" above; or
(b) such Shares are tendered for the account of a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust
company (not a savings bank or savings and loan association) having an
office, branch or agency in the United States (each such entity, an
"Eligible Institution").
In all other cases, an Eligible Institution must guarantee all signatures
on this Letter of Transmittal. See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be used only if certificates for
Shares are delivered with it to the Depositary (or such certificates will be
delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or if a tender for Shares is being made concurrently pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Certificates for all physically tendered Shares or confirmation of
a book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility of Shares tendered electronically, together in each case with a
properly completed and duly executed Letter of Transmittal or duly executed and
manually signed facsimile of it, and any other documents required by this Letter
of Transmittal, should be mailed or delivered to the Depositary at the
appropriate address set forth herein and must be delivered to the Depositary on
or before the Expiration Date (as defined in the Offer to Purchase). DELIVERY OF
DOCUMENTS TO ONE OF THE BOOK-ENTRY TRANSFER FACILITIES DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Shareholders whose certificates are not immediately available or who cannot
deliver certificates for their Shares and all other required documents to the
Depositary before the Expiration Date, or whose Shares cannot be delivered on a
timely basis pursuant to the procedures for book-entry transfer, must, in any
such case, tender their Shares by or through any Eligible Institution by
properly completing and duly executing and delivering a Notice of Guaranteed
Delivery (or facsimile of it) and by otherwise complying with the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedure, certificates for all physically tendered Shares or book-entry
confirmations, as the case may be, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile of it) and all other documents
required by this Letter of Transmittal, must be received by the Depositary
within three trading days after receipt by the Depositary of such Notice of
Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
signature guarantee by an Eligible Institution in the form set forth in such
Notice. For Shares to be tendered validly pursuant to the guaranteed delivery
procedure, the Depositary must receive the Notice of Guaranteed Delivery on or
before the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
<PAGE>
The Company will not accept any alternative, conditional or contingent
tenders, nor will it purchase any fractional Shares, except as expressly
provided in the Offer to Purchase. All tendering shareholders, by execution of
this Letter of Transmittal (or a facsimile of it), waive any right to receive
any notice of the acceptance of their tender.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Shares Tendered" is inadequate, the certificate numbers and/or
the number of Shares should be listed on a separate signed schedule and attached
to this Letter of Transmittal.
4. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to shareholders
who tender by book-entry transfer.) If fewer than all of the Shares evidenced by
any certificate are to be tendered, fill in the number of Shares that are to be
tendered in the column entitled "Number of Shares Tendered," in the box
captioned "Description of Shares Tendered." In such case, if any tendered Shares
are purchased, a new certificate for the remainder of the Shares (including any
Shares not purchased) evidenced by the old certificate(s) will be issued and
sent to the registered holder(s), unless otherwise specified in either the
"Special Payment Instructions" or "Special Delivery Instructions" box on this
Letter of Transmittal, as soon as practicable after the Expiration Date. Unless
otherwise indicated, all Shares represented by the certificate(s) listed and
delivered to the Depositary will be deemed to have been tendered.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to be
properly tendered, the shareholder MUST check the box indicating the price per
Share at which he or she is tendering Shares under "Price (In Dollars) Per Share
at Which Shares Are Being Tendered" on this Letter of Transmittal. ONLY ONE BOX
MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED, THERE
IS NO PROPER TENDER OF SHARES. A shareholder wishing to tender portions of his
or her Share holdings at different prices must complete a separate Letter of
Transmittal for each price at which he or she wishes to tender each such portion
of his or her Shares. The same Shares cannot be tendered (unless previously
properly withdrawn as provided in Section 4 of the Offer to Purchase) at more
than one price.
6. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS.
(a) If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate(s)
without any change whatsoever.
(b) If the Shares are registered in the names of two or more joint
holders, each such holder must sign this Letter of Transmittal.
(c) If any tendered Shares are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles of it) as there are
different registrations of certificates.
(d) When this Letter of Transmittal is signed by the registered
holder(s) of the Shares listed and transmitted hereby, no endorsement(s) of
certificate(s) representing such Shares or separate stock power(s) are
required unless payment is to be made or the certificate(s) for Shares not
tendered or not purchased are to be issued to a person other than the
registered holder(s). SIGNATURE(S) ON SUCH CERTIFICATE(S) MUST BE
GUARANTEED BY AN ELIGIBLE INSTITUTION. If this Letter of Transmittal is
signed by a person other than the registered holder(s) of the
certificate(s) listed, or if payment is to be made or their certificate(s)
for Shares not tendered or not purchased are to be issued to a person other
than the registered holder(s), the certificate(s) must be endorsed or
accompanied by appropriate stock power(s), in either case signed exactly as
the name(s) of the registered holder(s) appears on the certificate(s), and
the signature(s) on such certificate(s) or stock power(s) must be
guaranteed by an Eligible Institution. See Instruction 1.
(e) If this Letter of Transmittal or any certificate(s) or stock
power(s) are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing
and must submit proper evidence satisfactory to the Company of their
authority so to act.
<PAGE>
7. STOCK TRANSFER TAXES. Except as provided in this Instruction 7, no stock
transfer tax stamps or funds to cover such stamps need accompany this Letter of
Transmittal. The Company will pay or cause to be paid any stock transfer taxes
payable on the transfer to it of Shares purchased pursuant to the Offer. If,
however:
(a) payment of the aggregate Purchase Price for Shares tendered hereby
and accepted for purchase is to be made to any person other than the
registered holder(s);
(b) Shares not tendered or not accepted for purchase are to be
registered in the name(s) of any person(s) other than the registered
holder(s); or
(c) tendered certificates are registered in the name(s) of any
person(s) other than the person(s) signing this Letter of Transmittal;
then the Depositary will deduct from such aggregate Purchase Price the amount of
any stock transfer taxes (whether imposed on the registered holder, such other
person or otherwise) payable on account of the transfer to such person, unless
satisfactory evidence of the payment of such taxes or any exemption from them is
submitted.
8. ODD LOTS. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase fewer than all Shares tendered before the Expiration Date
and not withdrawn, the Shares purchased first will consist of all Shares
tendered by any shareholder who each owned of record or owned beneficially, as
of the close of business on May 29, 1996, an aggregate of fewer than 100 Shares,
and who tenders all of his or her Shares at or below the Purchase Price (an "Odd
Lot Owner"). This preference will not be available unless the box captioned "Odd
Lots" is completed.
9. CONDITIONAL TENDERS. As described in Sections 1 and 6 of the Offer to
Purchase, shareholders may condition their tenders on all or a minimum number of
their tendered Shares being purchased ("Conditional Tenders"). If the Company is
to purchase less than all Shares tendered before the Expiration Date and not
withdrawn, the Depositary will perform a preliminary proration, and any Shares
tendered at or below the Purchase Price pursuant to a Conditional Tender for
which the condition was not satisfied shall be deemed withdrawn, subject to
reinstatement if such Conditionally Tendered Shares are subsequently selected by
random lot for purchase subject to Section 1 of the Offer to Purchase.
Conditional tenders will be selected by lot only from shareholders who tender
all of their Shares. All tendered Shares shall be deemed unconditionally
tendered unless the "Conditional Tender" box is completed. The Conditional
Tender alternative is made available so that a shareholder may assure that the
purchase of Shares from the shareholder pursuant to the Offer will be treated as
a sale of such Shares by the shareholder, rather than the payment of a dividend
to the shareholder, for federal income tax purposes. Odd Lot Shares, which will
not be subject to proration, cannot be conditionally tendered. It is the
tendering shareholder's responsibility to calculate the minimum number of Shares
that must be purchased from the shareholder in order for the shareholder to
qualify for sale (rather than dividend) treatment, and each shareholder is urged
to consult his or her own tax advisor.
10. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of
the Offer to Purchase, shareholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase may
have an effect on the federal income tax treatment of the Purchase Price for the
Shares purchased. See Sections 1 and 14 of the Offer to Purchase.
11. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificate(s) for Shares
not tendered or not purchased and/or check(s) are to be issued in the name of a
person other than the signer of the Letter of Transmittal or if such
certificates and/or checks are to be sent to someone other than the person
signing the Letter of Transmittal or to the signer at a different address, the
boxes captioned "Special Payment Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal should be completed as applicable
and signatures must be guaranteed as described in Instruction 1.
<PAGE>
12. IRREGULARITIES. All questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Company in its sole discretion, which determinations
shall be final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders of Shares it determines not to be in proper
form or the acceptance of which or payment for which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Offer and any defect or irregularity in the
tender of any particular Shares, and the Company's interpretation of the terms
of the Offer (including these instructions) will be final and binding on all
parties. No tender of Shares will be deemed to be properly made until all
defects and irregularities have been cured or waived. Unless waived, any defects
or irregularities in connection with tenders must be cured within such time as
the Company shall determine. None of the Company, the Dealer Manager (as defined
in the Offer to Purchase), the Depositary, or any other person is or will be
obligated to give notice of any defects or irregularities in tenders and none of
them will incur any liability for failure to give any such notice.
13. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to, or additional copies of the
Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of
Transmittal may be obtained from, the Depositary at its addresses and telephone
numbers set forth at the end of this Letter of Transmittal or from your broker,
dealer, commercial bank or trust company.
14. FORM W-9 AND FORM W-8. Shareholders other than corporations and certain
foreign persons may be subject to backup federal income tax withholding. Each
tendering shareholder who does not otherwise establish to the satisfaction of
the Depositary an exemption from backup federal income tax withholding is
required to provide the Depositary with a correct taxpayer identification number
("TIN") on Form W-9, which is provided with this Letter of Transmittal. For an
individual, his or her TIN will generally be his or her social security number.
Failure to provide the information requested or to make the certification on the
Form W-9 may subject the tendering shareholder to 31% backup federal income tax
withholding on the payments made to or for the shareholder with respect to
Shares purchased pursuant to the Offer. Failing to furnish a correct TIN may
subject the shareholder to a $50.00 penalty imposed by the Internal Revenue
Service. Providing false information may result in additional penalties. Backup
withholding is not an additional tax. Rather, the tax liability of a person
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.
Shareholders who are foreign persons should submit Form W-8 to certify that they
are exempt from backup withholding. Form W-8 may be obtained from the
Depositary.
15. WITHHOLDING ON FOREIGN SHAREHOLDERS. 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 agent unless the Depositary determines that an
exemption from or a reduced rate of withholding is available pursuant to a tax
treaty or an exemption from withholding is applicable because such gross
proceeds are effectively connected with the conduct of a trade or business in
the United States. In order to obtain an exemption from or a reduced rate of
withholding pursuant to a tax treaty, a foreign shareholder must deliver to the
Depositary a properly completed Form 1001. 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. 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 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
eligible 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 of the Offer to Purchase 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. Foreign
shareholders are urged to consult their tax advisors regarding the application
of federal income tax withholding, including eligibility for a withholding tax
reduction or exemption and refund procedures.
<PAGE>
16. STOCK PURCHASE PLAN. Participants in the Stock Purchase Plan who wish
to have Mellon Bank, N.A., as trustee thereof (the "Stock Purchase Plan
Trustee"), tender all or part of the Shares in such participant's account should
so indicate by completing, executing and returning to the Stock Purchase Plan
Trustee the election form included with the memorandum furnished to such
participants.
THE PARTICIPANTS IN THE STOCK PURCHASE PLAN MAY NOT USE THE LETTER OF
TRANSMITTAL TO DIRECT THE TENDER OF THE STOCK PURCHASE PLAN SHARES, BUT MUST USE
THE SEPARATE ELECTION FORM ENCLOSED WITH THE MEMORANDUM TO PARTICIPANTS IN THE
SCOTT & STRINGFELLOW FINANCIAL, INC. EMPLOYEE STOCK PURCHASE PLAN. STOCK
PURCHASE PLAN PARTICIPANTS ARE URGED TO READ THE SEPARATE INSTRUCTION FORM AND
RELATED MATERIALS CAREFULLY. ANY STOCK PURCHASE PLAN SHARES TENDERED BUT NOT
PURCHASED WILL BE RETURNED TO THE PARTICIPANT'S STOCK PURCHASE PLAN ACCOUNT.
<PAGE>
THE DEPOSITARY FOR THE OFFER IS:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/OVERNIGHT DELIVERY:
American Stock Transfer & Trust Co. (Eligible Institutions American Stock Transfer & Trust Co.
40 Wall Street, 46th Floor Only) 40 Wall Street, 46th Floor
New York, NY 10005 (718) 234-5001 New York, NY 10005
(Attention: Reorganization (Attention: Reorganization
Department) CONFIRM BY TELEPHONE: Department)
(718) 921-8200
FOR INFORMATION CALL:
(718) 921-8200
</TABLE>
THE DEALER MANAGER FOR THE OFFER IS:
SCOTT & STRINGFELLOW, INC.
909 East Main Street
Richmond, Virginia 23219
(804) 643-1811
IMPORTANT: This Letter of Transmittal or a facsimile hereof (together with
certificates for the Shares being tendered and all other required documents), or
a Notice of Guaranteed Delivery must be received prior to 5:00 p.m., New York
City time, on the Expiration Date. SHAREHOLDERS ARE ENCOURAGED TO RETURN A
COMPLETED FORM W-9 WITH THEIR LETTER OF TRANSMITTAL.
SCOTT & STRINGFELLOW FINANCIAL, INC.
NOTICE OF GUARANTEED DELIVERY OF SHARES OF COMMON STOCK
This form or a facsimile hereof must be used to accept the Offer (as
defined below) if:
(a) certificates for shares of common stock, $0.10 par value per share
(the "Shares"), of Scott & Stringfellow Financial, Inc., a Virginia
corporation (the "Company"), cannot be delivered to the Depositary prior to
the Expiration Date (as defined in Section 1 of the Company's Offer to
Purchase dated May 30, 1996 (the "Offer to Purchase")); or
(b) the procedure for book-entry transfer (set forth in Section 3 of
the Offer to Purchase) cannot be completed on a timely basis; or
(c) the Letter of Transmittal (or a facsimile thereof) and all other
required documents cannot be delivered to the Depositary prior to the
Expiration Date.
This form, properly completed and duly executed, may be delivered by hand,
mail or facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
TO: AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/OVERNIGHT DELIVERY:
American Stock Transfer & Trust Co. (Eligible Institutions American Stock Transfer & Trust Co.
40 Wall Street, 46th Floor Only) 40 Wall Street, 46th Floor
New York, NY 10005 (718) 234-5001 New York, NY 10005
(Attention: Reorganization (Attention: Reorganization
Department) CONFIRM BY TELEPHONE: Department)
(718) 921-8200
FOR INFORMATION CALL:
(718) 921-8200
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to the Company at the price per Share
indicated in this Notice of Guaranteed Delivery, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which together constitute the "Offer"), receipt of both of which is
hereby acknowledged, Shares pursuant to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase.
ODD LOTS
To be completed ONLY if the Shares are being tendered by or on behalf of a
person owning beneficially or of record, as of the close of business on May 29,
1996, an aggregate of fewer than 100 Shares. The undersigned either (check one
box);
[ ] was the beneficial or record owner, as of the close of business on May 29,
1996, of an aggregate of fewer than 100 Shares, all of which are being
tendered; or
[ ] is a broker, dealer, commercial bank, trust company, or other nominee that
(a) is tendering for the beneficial owner(s) thereof, Shares with respect to
which it is the record holder, and (b) believes, based upon representations
made to it by such beneficial owner(s), that each such person was the
beneficial owner, as of the close of business on May 29, 1996, of an
aggregate of fewer than 100 Shares and is tendering all of such Shares.
In addition the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the Company in
accordance with the terms of the Offer (persons checking this box need not
indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (in Dollars) per Share
at which Shares are being tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
CONDITIONAL TENDER
(SEE INSTRUCTION 9)
[ ] check here if tender of Shares is conditional on the Company purchasing all
or a minimum number of the tendered Shares and complete the following:
Minimum number of Shares to be sold:
<PAGE>
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A
SEPARATE NOTICE OF GUARANTEE FOR EACH PRICE AT WHICH SHARES ARE TENDERED.)
[ ] $17.000 [ ] $17.750 [ ] $18.500
[ ] $17.250 [ ] $18.000 [ ] $18.750
[ ] $17.500 [ ] $18.250 [ ] $19.000
(Please type or print)
Certificate Nos. (if available):
Name(s)
Address(es)
Area Code(s) and Telephone Number(s)
SIGN HERE
Signature(s)
Dated:
If Shares will be tendered by book-entry transfer, check one box:
[ ] The Depository Trust Company
[ ] The Philadelphia Depository Company
Account Number:
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned is a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office, branch, or agency in the United States
and represents that: (a) the above-named person(s) "own(s)" the Shares tendered
hereby within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) such tender of Shares complies with
such Rule 14e-4, and guarantees that the Depositary will receive (i)
certificates of the Shares tendered hereby in proper form for transfer, or (ii)
confirmation that the Shares tendered hereby have been delivered pursuant to the
procedure for book-entry transfer (set forth in Section 3 of the Offer to
Purchase) into the Depositary's account at The Depository Trust Company or The
Philadelphia Depository Company, as the case may be, together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and any
other documents required by the Letter of Transmittal, all within three trading
days after the date the Depositary receives this Notice of Guaranteed Delivery.
Authorized Signature:
Name:
(Please Print)
Title:
Name of Firm:
Address:
(Including Zip Code)
Area Code and Telephone Number:
Date: , 1996
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE
SENT WITH THE LETTER OF TRANSMITTAL.
SCOTT & STRINGFELLOW , INC.
Richmond, Virginia 23219
SCOTT & STRINGFELLOW FINANCIAL, INC.
Offer To Purchase For Cash Up To
200,000 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $19.00
Nor Less Than $17.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, JUNE 27, 1996, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Scott & Stringfellow Financial, Inc., a Virginia corporation (the
"Company"), has appointed us to act as Dealer Manager in connection with its
offer to purchase for cash up to 200,000 shares of its Common Stock, $0.10 par
value per share (the "Shares"), at prices not in excess of $19.00 nor less than
$17.00 per Share, specified by its shareholders, upon the terms and subject to
the conditions set forth in its Offer to Purchase, dated May 30, 1996, and in
the related Letter of Transmittal (which together constitute the "Offer").
The Company will determine the single per Share price, not in excess of
$19.00 nor less than $17.00 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 200,000 Shares (or such lesser number of Shares as are
properly tendered). All Shares acquired in the Offer will be acquired at the
Purchase Price. 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 will be returned.
The Company reserves the right, in its sole discretion, to purchase more than
200,000 Shares pursuant to the Offer. See Sections 1 and 15 of the Offer to
Purchase.
If, prior to the Expiration Date (as defined in the Offer to Purchase),
more than 200,000 Shares (or such greater number of Shares as the Company may
elect to purchase) are properly tendered and not withdrawn, the Company will,
upon the terms and subject to the conditions of the Offer, accept Shares for
purchase first from Odd Lot Holders (as defined in the Offer to Purchase) who
properly tender their Shares at or below the Purchase Price and then on a PRO
RATA basis from all other shareholders whose Shares are properly tendered at or
below the Purchase Price and not withdrawn. If any shareholder tenders Shares
and does not wish to have such Shares purchased subject to proration, such
shareholder may tender Shares subject to the condition that a specified minimum
number of Shares (which may be represented by designated stock certificates) or
none of such Shares be purchased. See Sections 1, 3 and 6 of the Offer to
Purchase.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED
PURSUANT TO THE OFFER. SEE SECTION 7 OF THE OFFER TO PURCHASE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase, dated May 30, 1996;
2. Letter to Clients which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
3. Letter, dated May 30, 1996, from John Sherman, Jr., President and
Chief Executive Officer of the Company, to shareholders of the Company;
4. Letter of Transmittal for your use and for the information of your
clients (together with accompanying Form W-9 and guidelines); and
5. Notice of Guaranteed Delivery to be used to accept the Offer if the
Share certificates and all other required documents cannot be delivered to
the Depositary by the Expiration Date or if the procedure for book-entry
transfer cannot be completed on a timely basis.
<PAGE>
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THURSDAY, JUNE 27, 1996, UNLESS THE OFFER IS EXTENDED.
No fees or commissions will be payable to brokers, dealers or any person
for soliciting tenders of Shares pursuant to the Offer other than fees paid to
the Dealer Manager or the Depositary as described in the Offer to Purchase. The
Company will, however, upon request, reimburse you for customary mailing and
handling expenses incurred by you in forwarding any of the enclosed materials to
the beneficial owners of Shares held by you as a nominee or in a fiduciary
capacity. The Company will pay or cause to be paid any stock transfer taxes
applicable to its purchase of Shares, except as otherwise provided in
Instruction 7 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either certificate(s) representing the tendered Shares or
confirmation of their book-entry transfer all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3, "The Offer -- Procedure for Tendering Shares,"
of the Offer to Purchase, tenders may be made without the concurrent deposit of
stock certificates or concurrent compliance with the procedure for book-entry
transfer, if such tenders are made by or through a broker or dealer which is a
member firm of a registered national securities exchange, or a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office, branch or agency in the United States. Certificates
for Shares so tendered (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the "Book-Entry Transfer
Facilities" described in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal and any other documents
required by the Letter of Transmittal, must be received by the Depositary within
three trading days after timely receipt by the Depositary of a properly
completed and duly executed Notice of Guaranteed Delivery.
Any inquiries you may have with respect to the Offer should be addressed to
the Depositary or to the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Depositary, telephone: (718) 921-8200.
Very truly yours,
SCOTT & STRINGFELLOW, INC.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES, THE DEALER
MANAGER OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY
DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE
OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED
THEREIN.
SCOTT & STRINGFELLOW FINANCIAL, INC.
Offer To Purchase For Cash Up To
200,000 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $19.00
Nor Less Than $17.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, JUNE 27, 1996, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 30,
1996, and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the Offer by Scott & Stringfellow Financial, Inc., a
Virginia corporation (the "Company"), to purchase up to 200,000 shares of its
Common Stock, $0.10 par value per share (the "Shares") at prices not in excess
of $19.00 nor less than $17.00 per Share, specified by tendering shareholders,
upon the terms and subject to the conditions set forth in the Offer.
The Company will determine the single per Share price, not in excess of
$19.00 nor less than $17.00 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 200,000 Shares (or such lesser number of Shares as are
properly tendered). All Shares acquired in the Offer will be acquired at the
Purchase Price. 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 will be returned.
The Company reserves the right, in its sole discretion, to purchase more than
200,000 Shares pursuant to the Offer. See Sections 1 and 15 of the Offer to
Purchase.
If, prior to the Expiration Date (as defined in the Offer to Purchase),
more than 200,000 Shares (or such greater number of Shares as the Company may
elect to purchase) are properly tendered and not withdrawn, the Company will,
upon the terms and subject to the conditions of the Offer, accept Shares for
purchase first from Odd Lot Holders (as defined in the Offer to Purchase) who
properly tender their Shares at or below the Purchase Price and then on a PRO
RATA basis from all other shareholders whose Shares are properly tendered at or
below the Purchase Price and not withdrawn. If any shareholder tenders Shares
and does not wish to have such Shares purchased subject to proration, such
shareholder may tender Shares subject to the condition that a specified minimum
number of Shares (which may be represented by designated stock certificates) or
none of such Shares be purchased. See Sections 1, 3 and 6 of the Offer to
Purchase.
We are the owner of record of Shares held for your account. As such, we are
the only ones who can tender your Shares, and then only pursuant to your
instructions. WE ARE SENDING YOU THE LETTER OF TRANSMITTAL FOR YOUR INFORMATION
ONLY; YOU CANNOT USE IT TO TENDER SHARES WE HOLD FOR YOUR ACCOUNT.
<PAGE>
Please instruct us as to whether you wish us to tender any or all of the
Shares we hold for your account on the terms and subject to the conditions of
the Offer.
We call your attention to the following:
1. You may tender Shares at prices not in excess of $19.00 nor less
than $17.00 per Share as indicated in the attached Instruction Form, net to
you in cash.
2. You may condition your tender of Shares on the Company purchasing
all or a minimum number of your Shares.
3. You may designate the priority in which your Shares shall be
purchased in the event of proration.
4. The Offer is not conditioned on any minimum number of Shares being
tendered pursuant to the Offer.
5. The Offer, proration period and withdrawal rights will expire at
5:00 P.M., New York City time, on Thursday, June 27, 1996, unless the
Company extends the Offer.
6. The Offer is for 200,000 Shares, constituting approximately 9.10%
of the Shares outstanding as of May 29, 1996.
7. Tendering shareholders will not be obligated to pay any brokerage
commissions, solicitation fees, or, subject to Instruction 7 of the Letter
of Transmittal, stock transfer taxes on the Company's purchase of Shares
pursuant to the Offer.
8. If you beneficially held, as of the close of business on May 29,
1996, an aggregate of fewer than 100 Shares, and you instruct us to tender
on your behalf all such Shares at or below the Purchase Price before the
Expiration Date (as defined in the Offer to Purchase) and check the box
captioned "Odd Lots " in the attached Instruction Form, the Company, upon
the terms and subject to the conditions of the Offer, will accept all such
Shares for purchase before proration, if any, of the purchase of other
Shares properly tendered at or below the Purchase Price.
9. If you wish to tender portions of your Shares at different prices,
you must complete a separate Instruction Form for each price at which you
wish to tender each such portion of your Shares. We must submit separate
Letters of Transmittal on your behalf for each price you will accept.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is enclosed.
If you authorize us to tender your Shares, we will tender all such Shares unless
you specify otherwise on the attached Instruction Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE OFFER.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON THURSDAY, JUNE 27, 1996, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if more than 200,000
Shares have been properly tendered at prices at or below the Purchase Price and
not withdrawn prior to the Expiration Date (as defined in the Offer to
Purchase), the Company will purchase properly tendered Shares on the basis set
forth below:
(a) FIRST, all Shares properly tendered and not withdrawn prior to the
Expiration Date by any Odd Lot Holder (as defined below) who:
<PAGE>
(1) tenders all Shares beneficially owned 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 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 in the Section 1 of the Offer to Purchase; and
(c) THIRD, if necessary, Shares 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 of the Offer to Purchase.
You may condition your tender on the Company purchasing a minimum number of
your tendered Shares. In such case, if as a result of the preliminary proration
provisions in the Offer to Purchase the Company would purchase less than such
minimum number of your Shares, then the Company will not purchase any of your
Shares, except as provided in the next sentence. In such case, if as a result of
conditionally tendered Shares not being purchased the total number of Shares
that would have been purchased is less than 200,000, the Company will select, by
random lot, for purchase from shareholders who tender all their Shares,
conditionally tendered Shares for which the condition, based on a preliminary
proration, has not been satisfied. See Section 1 of the Offer to Purchase.
The Offer is being made to all holders of Shares. The Company is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If the Company becomes aware
of any valid state statute prohibiting the making of the Offer, the Company will
make a good faith effort to comply with such statute. If, after such good faith
effort, the Company cannot comply with such statute, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of Shares in such
state. In those jurisdictions whose securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of the Company by the Dealer Manager or one or more
registered brokers or dealers licensed under the laws of such jurisdictions.
<PAGE>
INSTRUCTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF SCOTT & STRINGFELLOW FINANCIAL, INC.
Please tender to Scott & Stringfellow Financial, Inc. (the "Company"), on
my behalf, the number of Shares indicated below, which are beneficially
owned by me and registered in your name, upon terms and subject to the
conditions contained in the Offer to Purchase of the Company dated May 30, 1996,
and the related Letter of Transmittal, the receipt of both of which is
acknowledged.
Number of Shares to be tendered: Shares
ODD LOTS
(SEE INSTRUCTION 8)
[ ] By checking this box the undersigned represents that the undersigned owned,
beneficially or of record, as of the close of business on May 29, 1996, an
aggregate of fewer than 100 Shares and is tendering all of such Shares.
In addition the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the Company in
accordance with the terms of the Offer (persons checking this box need not
indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (in Dollars) per Share
at which Shares are being tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED CONDITIONAL TENDER
[ ] check here if tender of Shares is conditional on the Company purchasing all
or a minimum number of the tendered Shares and complete the following:
Minimum number of Shares to be sold:
<PAGE>
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A
SEPARATE INSTRUCTION FORM FOR EACH PRICE AT WHICH SHARES ARE TENDERED.)
[ ] $17.000 [ ] $17.750 [ ] $18.500
[ ] $17.250 [ ] $18.000 [ ] $18.750
[ ] $17.500 [ ] $18.250 [ ] $19.000
<PAGE>
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS 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.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED.
Signature:
Name:
(Please Print)
(Taxpayer Identification or
Social Security Number)
Address:
(Including Zip Code)
Area Code and Telephone Number:
Date: , 1996
IMPORTANT: SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-9 WITH THEIR
INSTRUCTION FORM.
SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
To: Participants in the Scott & Stringfellow Financial, Inc. Employee Stock
Purchase Plan
Re: Scott & Stringfellow Financial, Inc.'s Offer to Purchase for Cash Up to
200,000 Shares of its Common Stock
Date: May 30, 1996
This memorandum is being sent to you because you are a participant in the
Scott & Stringfellow Financial, Inc. Employee Stock Purchase Plan (the "Stock
Purchase Plan").
The Stock Purchase Plan is described in the Summary Plan Description
("SPD"). Please refer to the relevant SPD for more information regarding the
Stock Purchase Plan.
SCOTT & STRINGFELLOW FINANCIAL, INC. IS OFFERING TO PURCHASE SHARES OF ITS
COMMON STOCK
Scott & Stringfellow Financial, Inc. (the "Company") is inviting its
shareholders to tender shares of the Company's common stock, $0.10 par value per
share (the "Shares"), for sale directly to the Company. Shareholders are being
invited to tender their Shares at prices not in excess of $19.00 nor less than
$17.00 per Share. The details of the invitation are described in the Company's
Offer to Purchase, dated May 30, 1996 (the "Offer to Purchase") and this
memorandum (which together constitute the "Offer" for purposes of tendering
Shares held in your Stock Purchase Plan account). Copies of the Offer to
Purchase and certain related materials which are being sent to the Company's
shareholders generally, are enclosed for your review.
The Letter of Transmittal referred to above and in the Offer to Purchase
cannot be used to tender the Shares held in your Stock Purchase Plan account:
the enclosed Election Form for the Stock Purchase Plan is a substitute for the
Letter of Transmittal and must be used to tender Shares in your Stock Purchase
Plan account.
YOUR DECISION WHETHER TO TENDER
As a participant in the Stock Purchase Plan you may direct Mellon Bank,
N.A., the trustee of the Stock Purchase Plan (the "Trustee") to tender Shares
allocated to your Stock Purchase Plan account pursuant to the Offer.
HOW TO TENDER SHARES; COMPLETION OF ELECTION FORM
If you wish to direct the Trustee to tender all or part of the Shares in
your Stock Purchase Plan account, you must complete and return the enclosed
Election Form in accordance with the instructions specified on the Election
Form. Before deciding whether or not to tender your Shares, please carefully
read the enclosed materials.
YOUR ELECTION WILL BE EFFECTIVE ONLY IF YOUR PROPERLY COMPLETED ELECTION
FORM IS RECEIVED BY THE TRUSTEE AT ITS ADDRESS SET FORTH ON THE ENCLOSED RETURN
ENVELOPE NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, JUNE 25, 1996.
Election Forms that are received after this deadline, and Election Forms which
are not properly completed, will not be accepted. Examples of improperly
completed Election Forms include Forms which are not signed and Forms which
contain incorrect or incomplete information. Your decision to tender (or not to
tender) is a personal decision you should make based upon your own personal
circumstances and desires.
Stock Purchase Plan participants who desire to tender Shares at more than
one price must complete a separate Election Form for each price at which Shares
are tendered, provided that the same Shares cannot be tendered (unless properly
withdrawn in accordance with the terms of the Offer) at more than one price. IN
ORDER TO PROPERLY TENDER SHARES, ONE AND ONLY ONE BOX MUST BE CHECKED IN THE
APPROPRIATE SECTION ON EACH ELECTION FORM.
<PAGE>
CHANGING YOUR INSTRUCTION TO TRUSTEE
As more fully described in Section 4 of the Offer to Purchase, tenders will
be deemed irrevocable unless withdrawn by the dates specified therein. If you
instruct the Trustee to tender Shares, and you subsequently decide to change
your instructions, you may do so by sending a notice of withdrawal to the
Trustee. The notice of withdrawal will be effective only if it is in writing and
is received by the Trustee at or before 5:00 P.M., New York City Time, on
Tuesday, June 25, 1996, at the address set forth on the enclosed return
envelope. Any notice of change of instruction to the Trustee must specify your
name, your social security number, the number of Shares tendered, and the number
of Shares to be withdrawn. Upon receipt of a timely written notice of change of
instruction to the Trustee, previous instructions to tender with respect to such
Shares will be deemed cancelled. If you later wish to retender Shares, you may
call Mellon Bank, N.A., the Plan Trustee to obtain a new Election Form. Any new
Election Form must be received by American Stock Transfer & Trust Company,
who is acting as an agent for the Plan Trustee, at or before 5:00 P.M. New York
City Time, on Tuesday, June 25, 1996.
IF YOU HAVE QUESTIONS
If you have any questions about the Offer or any of the other matters
discussed above, please call the Depositary, American Stock Transfer & Trust
Company, at (718) 921-8200. If you have questions about the Stock Purchase Plan,
please refer to the Company's SPD. Additional copies of the SPD for the Stock
Purchase Plan may be obtained from the Plan Administrator.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
PARTICIPANT AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
PARTICIPANT MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE OR PRICES.
<PAGE>
ELECTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF SCOTT & STRINGFELLOW FINANCIAL, INC.
Please tender to Scott & Stringfellow Financial, Inc. (the "Company"), on
my behalf, the number of Shares indicated below held in the Scott & Stringfellow
Financial, Inc. Employee Stock Purchase Plan (the "Stock Purchase Plan"), which
are beneficially owned by me and held by you under the Stock Purchase Plan, upon
terms and subject to the conditions contained in the Offer to Purchase of the
Company dated May 30, 1996, the receipt of which is acknowledged.
Number of Shares to be tendered: Shares
ODD LOTS
(SEE INSTRUCTION 8)
[ ] By checking this box the undersigned represents that the undersigned owned,
beneficially or of record, as of the close of business on May 29, 1996, an
aggregate of fewer than 100 Shares and is tendering all of such Shares.
In addition the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the Company in
accordance with the terms of the Offer (persons checking this box need not
indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (in Dollars) per Share
at which Shares are being tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED CONDITIONAL TENDER
[ ] check here if tender of Shares is conditional on the Company purchasing all
or a minimum number of the tendered Shares and complete the following:
Minimum number of Shares to be sold:
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE, MUST COMPLETE
A SEPARATE ELECTION FORM FOR EACH PRICE AT WHICH SHARES ARE TENDERED.)
[ ] $17.000 [ ] $17.750 [ ] $18.500
[ ] $17.250 [ ] $18.000 [ ] $18.750
[ ] $17.500 [ ] $18.250 [ ] $19.000
<PAGE>
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS 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.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED.
Signature:
Name:
(Please Print)
(Taxpayer Identification or
Social Security Number)
Address:
(Including Zip Code)
Area Code and Telephone Number:
Date: , 1996
IMPORTANT: THIS STOCK PURCHASE PLAN PARTICIPANT'S ELECTION FORM (OR A
MANUALLY SIGNED FACSIMILE THEREOF) MUST BE RECEIVED BY THE
TRUSTEE PRIOR TO 5:00 P.M. ON TUESDAY, JUNE 25, 1996.
PARTICIPANTS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-9 WITH
THEIR ELECTION FORM.
[SCOTT & STRINGFELLOW FINANCIAL, INC. LOGO]
Established 1893
909 East Main Street Richmond, VA 23219
* * * NEWS RELEASE * * *
FOR IMMEDIATE RELEASE For Further Information:
Charles E. Mintz (804) 782-8839
Jennifer S. Harris (804) 782-8751
May 29, 1996
SCOTT & STRINGFELLOW FINANCIAL ANNOUNCES SHARE BUYBACK
RICHMOND, VA--Scott & Stringfellow Financial, Inc. (Nasdaq NMS: SCOT) announced
today that its Board of Directors has authorized the purchase of up to 200,000,
or approximately 9.1% of the outstanding shares, of its common stock from
existing shareholders. The offer is expected to begin on May 30, 1996 and end on
June 27, 1996.
Scott & Stringfellow Financial, Inc., is conducting the offer through a
procedure commonly referred to as a "Dutch Auction". The offer to purchase
shares will be at prices not more than $19.00, nor less than $17.00 a share. The
company will consider the offers, selecting the lowest purchase price that will
allow the purchase of 200,000 shares. All shares purchased in the offering will
be made at the same price. If the number of shares properly tendered is equal to
or less than the number of shares the company seeks to purchase through the
offer, the purchase price will be the highest price specified by tendering
shareholders. If the number of shares tendered is greater than the number
sought, the company will select the purchase price that will allow it to buy the
number of shares it seeks.
Scott & Stringfellow, Inc. will act as dealer manager in this offering, and
American Stock Transfer & Trust Company was named as depositary. As of May 28,
1996 Scott & Stringfellow Financial, Inc., had 2,197,951 shares of the Company's
common stock outstanding.
Scott & Stringfellow Financial, Inc. is a publicly-held holding company which
operates Scott & Stringfellow, Inc. founded in 1893 and the South's oldest
continuous member of the New York Stock Exchange, and Scott & Stringfellow
Capital Management, Inc., a 14-year-old investment advisory firm with
approximately $300 million in assets under management. The company has
approximately 523 employees, including 226 investment brokers, located in 28
offices in Virginia, North Carolina, South Carolina and West Virginia. Total
revenues for fiscal 1995 (ended on June 30, 1995) were $54.1 million. Scott &
Stringfellow Financial common stock trades on the Nasdaq National Market System
under the symbol SCOT.
###
May 30, 1996
Dear Shareholders of Scott & Stringfellow Financial, Inc.
Enclosed please find an Offer to Purchase up to 200,000 shares, or approximately
9.1% of the currently outstanding shares of the Company's common stock, from
existing shareholders. The price will not be in excess of $19 or less than $17
per share. Enclosed with this letter are the necessary forms for you to
participate, if you so choose.
I encourage each shareholder to read carefully the Offer to Purchase and related
materials. Neither Scott & Stringfellow Financial, Inc., nor our Board of
Directors makes any recommendation whether to tender shares. Each shareholder
independently should make their decision after consulting with their appropriate
advisors.
On May 28, 1996, the last full trading day on the NASDAQ National Market prior
to the announcement of the Offer, the bid and ask per Share price as reported on
the NASDAQ National Market was $15.25 and $16.00, respectively. On May 29, 1996,
the last trading day prior to the commencement of the offer, the closing price
per share for Scott & Stringfellow Financial, Inc., common stock on the NASDAQ
National Market was $18.50. Scott & Stringfellow is conducting the offer through
a procedure commonly referred to as a "Dutch Auction". This procedure allows you
to select the lowest price within the specified price range at which you are
willing to sell your shares to Scott & Stringfellow. Scott & Stringfellow will
pay the same per share price (the "Purchase Price") for all shares purchased in
the offer. If the number of shares properly tendered is equal to or less than
the number of shares the company seeks to purchase through the offer, the
purchase price will be the highest price of those specified by tendering
shareholders.
If tendering shareholders properly tender more than the number of shares Scott &
Stringfellow seeks to purchase, we will take into account the number of shares
so tendered and select the Purchase Price that allows us to buy the number of
shares we are seeking to purchase through the offer. In such circumstances,
Scott & Stringfellow would not purchase the shares of any tendering shareholder
who specified a price per share above the Purchase Price.
Sincerely,
John Sherman, Jr.
Enclosure
[Scott & Stringfellow Financial, Inc. Letterhead]
May 30, 1996
TO PARTICIPANTS IN THE SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
Scott & Stringfellow Financial, Inc. is offering to purchase up to 200,000
shares, or approximately 9.10% of the currently outstanding shares, of its
common stock (the "Shares") from existing shareholders. The price will not be in
excess of $19.00 nor less than $17.00 per share. As a participant in Scott &
Stringfellow's Employee Stock Purchase Plan, you will be able to tender Shares
in your plan account.
The enclosed memorandum to Employee Stock Purchase Plan participants
contains information regarding the tender offer that is relevant to Employee
Stock Purchase Plan participants. Also enclosed with this letter is the election
form that all Employee Stock Purchase Plan participants must complete and return
to American Stock Transfer & Trust Company, who is serving as an agent
for the Plan Trustee, by June 25, 1996, if they wish to tender their Employee
Stock Purchase Plan Shares.
I encourage you to read carefully the memorandum, the election form and the
other enclosed materials, including the Offer to Purchase. Neither Scott &
Stringfellow nor our Board of Directors makes any recommendation to any Employee
Stock Purchase Plan participant whether to tender all or any Shares in the
Employee Stock Purchase Plan. Each Employee Stock Purchase Plan participant
should independently decide whether to tender Shares, taking into account his or
her personal circumstances. Your decision will not affect in any way the terms
of your employment with Scott & Stringfellow.
As an Employee Stock Purchase Plan participant, you will have the
opportunity to sell your plan Shares at a price greater than market prices
prevailing prior to announcement of the offer. On May 28, 1996, the last trading
day prior to the announcement of the offer, the bid and ask price per share for
Scott & Stringfellow's common stock on the NASDAQ National Market System was
$15.25 and 16.00, respectively. On May 29, 1996, the last trading day prior to
the commencement of the offer, the closing price per share for Scott &
Stringfellow's common stock on the NASDAQ National Market was $18.50. Scott &
Stringfellow is conducting the offer through a procedure commonly referred to as
a "Dutch Auction." This procedure allows you to select the lowest price within
the specified price range at which you are willing to sell your Shares to Scott
& Stringfellow. Scott & Stringfellow will pay the same per Share price (the
"Purchase Price") for all Shares it purchases in the offering. If the number of
Shares properly tendered is equal to or less than the number of Shares the
Company seeks to purchase through the offer, the Purchase Price will be the
highest price of those specified by tendering shareholders.
If tendering shareholders properly tender more than the number of Shares
Scott & Stringfellow seeks to purchase through the offer, Scott & Stringfellow
will take into account the number of Shares so tendered and certain other
factors described in the Offer to Purchase and select the Purchase Price that
will allow Scott & Stringfellow to buy the number of Shares that it seeks to
purchase through the offer. In such circumstances, Scott & Stringfellow would
not purchase the Shares of any tendering shareholder who specified a price per
Share above the Purchase Price.
The enclosed Offer to Purchase and accompanying materials contain a
substantial amount of information and may seem complicated. The Depositary will
provide assistance with any questions you may have concerning these materials.
Please feel free to call the Depositary at (718) 921-8200.
Sincerely,
John Sherman, Jr.
President and Chief Executive Officer
