SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
SCHULTZ SAV-O STORES, INC.
(Name of Issuer and Person Filing Statement)
Preferred Stock, $100 Par Value Per Share
(Title of Class of Securities)
Not Applicable
(CUSIP Number of Class of Securities)
JOHN H. DAHLY
Executive Vice President
Schultz Sav-O Stores, Inc.
2215 Union Avenue
Sheboygan, Wisconsin 53081
(414) 457-4433
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf
of the Person Filing Statement)
______________
With a Copy to:
STEVEN R. BARTH
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 271-2400
______________
September 11, 1995
(Date Tender Offer First Published, Sent
or Given to Security Holders)
CALCULATION OF FILING FEE
Transaction Valuation Amount of Filing Fee
$150,000* $30
* Calculated pursuant to Rule 0-11(b) based upon purchase of 3,000
outstanding shares of Preferred Stock at $50 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 number,
or the Form or Schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
<PAGE>
Item 1.Security and Issuer
(a) The name of the issuer is Schultz Sav-O Stores, Inc., a
Wisconsin corporation (the "Company"), which has its principal
executive offices at 2215 Union Avenue, Sheboygan, Wisconsin
53081, and its telephone number is 414-457-4433.
(b) This schedule relates to the offer by the Company to
purchase all of the 3,000 outstanding shares of its Preferred
Stock, $100 par value per share (the "Preferred Stock"), at a
cash price of $50 per share, as set forth in the Offer to
Purchase dated September 11, 1995 (the "Offer to Purchase"), and
in the related Letter of Transmittal (which together constitute
the "Offer"), copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively. The Offer is being made to all
11 record holders of the Preferred Stock. None of the officers,
directors or affiliates of the Company are record or beneficial
owners of the Preferred Stock.
(c) The Preferred Stock is not listed on any stock exchange or
inter-dealer quotation system and, to the best knowledge of the
Company, there is not an established or informal trading market
for the Preferred Stock. The Company is not aware of any
transactions involving the purchase or sale of Preferred Stock
during the forty business days prior to the date of the Offer.
(d) This schedule is being filed by the Company.
Item 2. Source and Amount of Funds or Other Consideration
(a) - (b) The Company intends to use a portion of its available
cash balances to pay the up to $150,000 aggregate purchase price
for all 3,000 shares of the Preferred Stock at $50 per share.
Item 3. Purpose of the Tender Offer and Plans or Proposals of
the Issuer or Affiliate
(a) - (j) The purpose of the tender offer is to retire the
Company's outstanding Preferred Stock. All shares of Preferred
Stock obtained by the Company pursuant to the tender offer will
be canceled and will not be reissued by the Company.
Item 4. Interest in Securities of Issuer
There have been no transactions in the Preferred Stock during
the past 40 business days by the Company or any affiliate of the
Company or by an officer or director of the Company or any such
affiliate.
Item 5. Contracts, Arrangements, Understandings or
Relationships with Respect to the Issuer's Securities
There are no contracts, arrangements, understandings or
relationships relating, directly or indirectly, to the tender
offer between the Company and any person with respect to any
securities of the Company.
Item 6. Persons Retained, Employed or to be
Compensated
No person has been or will be employed, retained or compensated
by the Company or on behalf of the Company to make solicitations
or recommendations in connection with the tender offer.
Item 7. Financial Information
(a) - (b) The $150,000 maximum aggregate purchase price for all
3,000 shares of the Preferred Stock at $50 per share is not
material to financial condition of the Company and, therefore,
financial data and pro forma financial data is not required.
Item 8. Additional Information
(a) - (e) Not Applicable.
Item 9. Material to be filed as Exhibits
The following exhibits are filed herewith:
(a)(1) Offer to Purchase, dated September 11, 1995.
(a)(2) Form of Letter of Transmittal.
(a)(3) Letter to brokers, dealers, and other nominees who are
preferred stockholders, dated September 11, 1995.
(a)(4) Form of letter to clients who are preferred
stockholders for use by brokers, dealers, and other
nominees.
(a)(5) Letter to preferred stockholders from Chairman,
President and Chief Executive Officer dated September
11, 1995.
(a)(6) Press Release, dated September 11, 1995.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Date: September 11, 1995
SCHULTZ SAV-O STORES, INC.
By /s/ John H. Dahly
John H. Dahly
Executive Vice President
<PAGE>
EXHIBIT INDEX
Exhibit Number Document Description
(a)(1) Offer to Purchase, dated September 11,
1995.
(a)(2) Form of Letter of Transmittal.
(a)(3) Letter to brokers, dealers and other
nominees who are preferred stockholders,
dated September 11, 1995.
(a)(4) Form of letter to clients who are preferred
stockholders for use by brokers, dealers
and other nominees.
(a)(5) Letter to preferred stockholders from
Chairman, President and Chief Executive
Officer dated September 11, 1995.
(a)(6) Press Release, dated September 11, 1995.
SCHULTZ SAV-O STORES, INC.
OFFER TO PURCHASE FOR $50 CASH PER SHARE
UP TO 3,000 SHARES OF ITS
PREFERRED STOCK
THIS OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, MILWAUKEE TIME,
ON WEDNESDAY, OCTOBER 11, 1995, UNLESS THE OFFER IS EXTENDED.
Schultz Sav-O Stores, Inc., a Wisconsin corporation (the
"Company"), hereby invites holders of its Preferred Stock, $100 par value
per share (the "Shares" or the "Preferred Stock"), to tender their Shares
to the Company at a price of $50.00 in cash per share (the "Purchase
Price"), upon the terms and conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which together constitute the
"Offer"). All Shares properly tendered and not withdrawn will be
purchased at the Purchase Price, net to the seller in cash, upon the terms
and subject to the conditions of the Offer.
THIS OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED OF) THE
COMPANY'S COMMON STOCK, $0.05 PAR VALUE PER SHARE.
Shares tendered and purchased by the Company will not receive or
otherwise be entitled to any portion of the regular cash dividend of $3
per Share expected to be paid by the Company on or about January 31, 1996
to holders of record on or about January 1, 1996. Shares which are
tendered but not purchased, or which are not tendered, and remain
outstanding will remain entitled to receipt of such dividend.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS.
SEE SECTION 5.
There is no established trading market for the Shares that can
be used to determine the market value of the Shares. The Purchase Price
has been established by the Board of Directors based solely upon the
recommendation of management. See Section 6 herein. The Company has not
obtained any opinion, report or appraisal relating to the valuation of the
Shares and no representation or warranty is made herein regarding the
fairness of the Purchase Price.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES OF
PREFERRED STOCK. NO DIRECTOR, OFFICER OR AFFILIATE OF THE COMPANY IS A
RECORD OR BENEFICIAL OWNER OF THE PREFERRED STOCK. STOCKHOLDERS MUST MAKE
THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES
TO TENDER.
______________________________
The date of this Offer to Purchase is September 11, 1995.
<PAGE>
IMPORTANT
Any stockholder desiring to tender all or any portion of his or
her shares of Preferred Stock should either (1) complete and sign the
Letter of Transmittal, or a facsimile thereof, in accordance with the
instructions in the Letter of Transmittal and deliver it and all other
required documents to the Company along with the stock certificates for
such Shares if such stockholder is the holder of record with respect to
such Shares, or (2) request his or her broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for him or her if
his or her broker, dealer, commercial bank, trust company or other nominee
is the holder of record with respect to such Shares. STOCKHOLDERS OF
RECORD MUST PROPERLY COMPLETE THE LETTER OF TRANSMITTAL IN ORDER TO EFFECT
A VALID TENDER OF THE SHARES OF PREFERRED STOCK HELD IN THEIR NAME.
Questions and requests for assistance may be directed to John H.
Dahly, Executive Vice President of the Company, at telephone number 414-
457-4433. Additional copies of this Offer to Purchase and the Letter of
Transmittal may be obtained from the Company by contacting Mr. Dahly.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files, reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy and
information statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: Midwest Regional
Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511
and Northeast Regional Office, Seven World Trade Center, New York, New
York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates or by contacting Mr. Dahly at the Company.
The Company has filed an Issuer Tender Offer Statement on
Schedule 13E-4 (the "Schedule 13E-4") with the Commission covering the
Offering, which includes certain additional information relating to the
Offer.
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN
FROM TENDERING SHARES OF PREFERRED STOCK 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
IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR
MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Number Of Shares of Preferred Stock . . . . . . . . . . . . 2
2. Procedure For Tendering Shares of Preferred Stock . . . . . 2
Proper Tender of Shares. . . . . . . . . . . . . . . . 2
Signature Guarantees. . . . . . . . . . . . . . . . . 3
Method of Delivery. . . . . . . . . . . . . . . . . . 3
Federal Income Tax Withholding. . . . . . . . . . . . 3
Determination of Validity; Rejection of Shares; Waiver
of Defects; No Obligation To Give Notice of Defects. 3
Tender Constitutes an Agreement. . . . . . . . . . . . 4
3. Withdrawal Rights . . . . . . . . . . . . . . . . . . . . . 4
4. Acceptance For Payment And Payment For Shares of
Preferred Stock . . . . . . . . . . . . . . . . . . . . . 5
5. Certain Conditions Of The Offer . . . . . . . . . . . . . . 5
6. Price Range of Shares of Preferred Stock . . . . . . . . . 8
7. Purpose Of The Offer . . . . . . . . . . . . . . . . . . . 8
8. Source And Amount Of Funds . . . . . . . . . . . . . . . . 9
9. Shares of Preferred Stock Outstanding . . . . . . . . . . . 9
10. Certain Legal Matters; Regulatory Approvals . . . . . . . . 10
11. Certain Federal Income Tax Consequences . . . . . . . . . . 10
Stockholders Owning No Other Company Equity Stock. . . . . 11
Stockholders Owning Common Stock. . . . . . . . . . . . . . 11
Treatment of Dividend Income for Corporate Stockholders. . 12
Backup Withholding. . . . . . . . . . . . . . . . . . . . . 13
12. Extension Of The Offer; Termination; Amendments . . . . . . 13
13. Fees And Expenses . . . . . . . . . . . . . . . . . . . . . 14
14. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
To The Holders Of Preferred Stock
Of Schultz Sav-O Stores, Inc.:
INTRODUCTION
The Company hereby invites its stockholders to tender their
shares of the Company's Preferred Stock, $100 par value per share (the
"Shares" or the "Preferred Stock"), to the Company at a cash price of $50
per share (the "Purchase Price") upon the terms and conditions set forth
in this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer"). All Shares properly tendered and not
withdrawn prior to the Expiration Date (as defined in Section 1) will be
purchased at the Purchase Price, net to the seller in cash, upon the terms
and subject to the conditions of the Offer. The Offer is not a redemption
of Preferred Stock under the Company's Restated Articles of Incorporation.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES
BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 5.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES OF PREFERRED STOCK. NO DIRECTOR, OFFICER OR AFFILIATE OF
THE COMPANY IS A RECORD OR BENEFICIAL OWNER OF THE SHARES OF PREFERRED
STOCK. STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER
SHARES OF PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO TENDER.
There are currently 3,000 Shares outstanding. The 3,000 Shares
that the Company is offering to purchase represent 100% of the Shares
outstanding.
THIS OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED
OF) THE COMPANY'S COMMON STOCK $0.05, PAR VALUE PER SHARE.
THE OFFER
Over the past several years, the Company's operations have
generated substantial cash, resulting in a strong balance sheet. The
Company has, among other things, utilized its increasing cash resources to
fund its operations and thereby minimize its incurrence of debt, to
repurchase shares of its Common Stock, $0.05 per value per share (the
"Common Stock"), and to increase cash dividends on its Common Stock. Even
after this Preferred Stock tender offer is completed, the Company will
have substantial cash balances as well as ready access to other sources of
capital sufficient to meet its anticipated ongoing operational and capital
expenditure needs. Therefore, the Board of Directors believes that the
purchase of Shares is an attractive use of a portion of the Company's
available cash on behalf of its stockholders, and is consistent with the
Company's long-term corporate goal of increasing stockholder value. The
Board of Directors encourages preferred stockholders to carefully consider
the Offer because it provides an opportunity to obtain cash for their
shares of Preferred Stock, an opportunity which is normally not available
due to the lack of any active trading market in the Preferred Stock.
Since the Preferred Stock yields a before-tax dividend of only 3% per
year, obtaining cash in return for a tender of Preferred Stock also
creates a potential opportunity for preferred stockholders to reinvest the
cash proceeds received from tending their shares of Preferred Stock into
higher yielding investments.
Neither the Company nor the Board of Directors is making any
recommendation to any stockholder as to whether to tender or refrain from
tendering shares of Preferred Stock. No director, officer or affiliate of
the Company is a record or beneficial owner of shares of Preferred Stock.
1. Number Of Shares of Preferred Stock
Upon the terms and subject to the conditions of the Offer, the
Company will accept for payment and purchase all 3,000 of the outstanding
shares of Preferred Stock or such lesser number of Shares as are properly
tendered on or prior to the Expiration Date (and not withdrawn in
accordance with Section 3) at a cash price of $50 per share. The term
"Expiration Date" means 12:00 Midnight, Milwaukee time, on October 11,
1995, unless the Company, in its sole discretion, shall have extended the
period of time during which the Offer is 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. For a description of
the Company's right to extend the period of time during which the Offer is
open, and to delay, terminate or amend the Offer, see Section 12.
All Shares purchased pursuant to the Offer will be purchased at
the Purchase Price. All Shares tendered which are not purchased pursuant
to the Offer for any reason will be returned to the tendering stockholders
at the Company's expense as promptly as practicable.
If (i) the Company increases or decreases the price to be paid
for Shares, or decreases the number of Shares being sought 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
notice of such increase or decrease is first published, sent or given in
the manner described in Section 11, the Offer will automatically be
extended until the expiration of ten business days from the date of
publication of such notice. For purposes of the Offer, a "business day"
means any day other than a Saturday, Sunday or federal holiday and
consists of the time period from 12:01 A.M. through 12:00 Midnight,
Milwaukee time.
2. Procedure For Tendering Shares of Preferred Stock
Proper Tender of Shares. To tender shares of Preferred Stock
pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal (or manually executed facsimile thereof) with any required
signature guarantees and any other documents required by the Letter of
Transmittal must be received by the Company at the address set forth on
the first page of the Letter of Transmittal along with the certificates
for the Shares to be tendered.
Notwithstanding any other provision hereof, payment for Shares
tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Company of certificates for such Shares, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees and any other documents
required by the Letter of Transmittal.
Shares tendered and purchased by the Company will not receive or
otherwise be entitled to the regular annual cash dividend of $3.00 per
Share expected to be paid by the Company on or about January 31, 1996 to
holders of record on or about January 1, 1996. Shares which are tendered
but not purchased, or which are not tendered, and remain outstanding will
remain entitled to receipt of such dividend.
Signature Guarantees. No signature guarantee is required on the
Letter of Transmittal if the Letter of Transmittal is signed by the
registered holder of the Shares exactly as the name of the registered
holder appears on the certificate tendered therewith, and payment is to be
made directly to such registered holder. In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by a member
firm of a registered national securities exchange, a member of the Stock
Transfer Association's approval medallion program (such as STAMP, SEMP or
MSP) or a commercial bank or trust company having an office, branch or
agency in the United States (each such entity, an "Eligible Institution").
See Instruction 1 of the Letter of Transmittal. If a certificate
representing Shares is registered in the name of a person other than the
signer of 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, 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 with the signature on the
certificate or stock power guaranteed by an Eligible Institution.
Method of Delivery. THE METHOD OF DELIVERY OF SHARES AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING
STOCKHOLDER. IF CERTIFICATES FOR SHARES ARE TO BE SENT BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
Federal Income Tax Withholding. To prevent federal income tax
backup withholding equal to 31% of the gross payments made pursuant to the
Offer, each stockholder who does not otherwise establish an exemption from
such withholding must notify the Company of such stockholder's correct
taxpayer identification number and provide certain other information by
completing the Form W-9 enclosed with the Letter of Transmittal.
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 form of documents and the validity,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties.
The Company reserves the absolute right to reject any or all tenders of
Shares determined by it not to be in proper 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 of Shares. No tender of Shares
will be deemed to be properly made until all defects and irregularities
have been cured or waived. Neither the Company nor any other person will
be under any duty to give notification of any defect or irregularity in
tenders or incur any liability for failure to give any such notice.
Tender Constitutes an Agreement. The tender of Shares pursuant
to the procedures described above will constitute a binding agreement
between the tendering stockholder and the Company upon the terms and
subject to the conditions of the Offer.
3. Withdrawal Rights
Except as otherwise provided in this Section 3, tenders of
Shares pursuant to the Offer will be 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 as
provided in the Offer, may also be withdrawn after 12:00 Midnight,
Milwaukee time, on November 6, 1995.
For a withdrawal to be effective, a written notice of withdrawal
must be timely received by the Company at the address set forth on the
first page of the Letter of Transmittal. Any such notice of withdrawal
must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If the certificates have been delivered to the Company, then,
prior to the release of such certificates, the tendering stockholder must
submit the serial numbers shown on the particular certificates evidencing
the Shares to be withdrawn and the signature on the notice of withdrawal
must be guaranteed by an Eligible Institution, except in the case of
Shares tendered by an Eligible Institution. 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. Neither the Company nor any other person
shall be obligated to give any notice of any defects or irregularities in
any notice of withdrawal and none of them shall incur any liability for
failure to give any such notice. Any Shares properly withdrawn will
thereafter be deemed not tendered for purposes of the Offer. However,
withdrawn Shares may be retendered prior to the Expiration Date by again
following the procedures described in Section 2.
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 Company may, subject to applicable law, retain all tendered Shares,
and the Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in this
Section 3.
4. Acceptance For Payment And Payment For Shares of Preferred Stock
Upon the terms and subject to the conditions of the Offer, the
Company will accept for payment as soon as practicable after the
Expiration Date 3,000 Shares (or such lesser number of Shares as are
properly tendered and not withdrawn), at a cash price of $50 per Share.
Payment for Shares accepted for payment pursuant to the Offer
will be made by check in the amount of $50 for each tendered Share via
U.S. mail to each tendering shareholder at the address specified for such
payment in the applicable Letter of Transmittal. Certificates for all
Shares which are tendered but not purchased will be returned as soon as
practicable after the Expiration Date or termination of the Offer without
expense to the tendering stockholder. Under no circumstances will
interest be paid by the Company by reason of any delay in paying for any
Shares or otherwise. In addition, if certain events occur, the Company
may not be obligated to purchase Shares pursuant to the Offer. See
Section 5.
The Company will pay all stock transfer taxes, if any, payable
on the transfer to it of Shares purchased pursuant to the Offer, except if
payment of the Purchase Price is to be made to 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. In
such circumstances, 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 evidence satisfactory to the Company of the payment
of such taxes or exemption therefrom is submitted. See Instruction 6 of
the Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE
FULLY AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED FEDERAL INCOME TAX WITHHOLDING OF
31% OF THE GROSS PROCEEDS PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT
TO THE OFFER. SEE SECTION 2.
5. 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 payment for, Shares tendered, if at any
time on or after September 11, 1995 and at or before the payment for any
such Shares, any of the following events shall have occurred (or shall
have been determined by the Company to have occurred) which, in the
Company's sole judgment in any such case and regardless of the
circumstances (including any action or omission to act by the Company),
makes it inadvisable to proceed with the Offer or with such acceptance for
purchase or payment:
(a) there shall have been threatened, instituted or pending
any action or proceeding by any government or governmental
authority or regulatory or administrative agency, domestic or
foreign, or by any other person, domestic or foreign, before any
court or governmental authority or regulatory or administrative
agency, domestic or foreign, (i) that challenges or seeks to
make illegal, or delay or otherwise directly or indirectly
restrain or prohibit the making of the Offer, the acceptance for
payment of or payment for some or all of the Shares by the
Company or otherwise directly or indirectly relating in any
manner to or affecting the Offer, or (ii) that otherwise, in the
sole judgment of the Company, has or may have a material adverse
effect on the business, financial condition, income, operations
or prospects of the Company or has or may materially impair the
contemplated benefits of the Offer to the Company; or
(b) any action shall have been threatened, instituted,
pending or taken or approval withheld or any statute, rule,
regulation, judgment or order or injunction proposed, sought,
enacted, enforced, promulgated, amended, issued or deemed
applicable to the Offer or the Company by any court, government
or governmental authority or regulatory or administrative
agency, domestic or foreign, that, in the sole judgment of the
Company might, directly or indirectly, result in any of the
consequences referred to in clauses (i) or (ii) of paragraph (a)
above; or
(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 by any governmental, regulatory or
administrative authority or agency or any other event that, in
the sole judgment of the Company, might affect the extension of
credit by banks or other lending institutions, (v) any
significant decrease in the market price of the Common Stock, or
any change in the general political, market, economic or
financial conditions in the United States or abroad that has or
may have material adverse effects with respect to the Company's
business, operations or prospects or the trading in the Common
Stock, (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
Jones Industrial Average (4,700.72 at the close of business on
September 8, 1995 or the Standard and Poor's Index of 500
Industrial Companies (572.68 at the close of business on
September 8, 1995) by an amount in excess of 10%, measured from
the close of business on September 8, 1995; or
(d) a tender or exchange offer for some or all of the
Shares (other than the Offer) or the Common Stock or a proposal
with respect to a merger, consolidation or other business
combination with or involving the Company shall have been
proposed to be made or shall have been made by another person;
or
(e) any entity, group (as that term is used in Section
13(d)(3) of the Exchange Act) or person (other than entities,
groups or persons, if any, who have filed with the Commission a
Schedule 13G or a Schedule 13D with respect to any shares of
Common Stock on or before September 8, 1995) shall have acquired
or proposed to acquire beneficial ownership of more than 5% of
the outstanding Common Stock; or
(f) any such entity, group or person that has publicly
disclosed any such beneficial ownership of more than 5% of the
outstanding shares of Common Stock prior to such date shall have
acquired, or proposed to acquire, beneficial ownership of
additional shares of Common Stock constituting more than 2% of
the outstanding Common Stock or shall have been granted an
option or right to acquire beneficial ownership of additional
shares constituting more than 2% of the outstanding Common
Stock; or
(g) any person or group shall have filed a Notification and
Report Form under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 reflecting an intent to acquire the Company or any
of its Common Stock; or
(h) any change or changes have occurred (or any development
shall have occurred involving any prospective change or changes)
in the business, assets, liabilities, condition (financial or
otherwise), operations, results of operations or prospects of
the Company that, in the sole judgment of the Company, have or
may have a material effect with respect to the Company.
The foregoing conditions are for the sole benefit of the Company
and may be asserted by the Company in its sole discretion regardless of
the circumstances (including any action or inaction by the Company) giving
rise to any such conditions, or may be waived by the Company in its sole
discretion, in whole or in part at any time. The failure by the Company
at any time to exercise its rights under any of the foregoing conditions
shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right which may be asserted at
any time or from time to time. Any determination by the Company
concerning the events described in this Section 5 shall be final and
binding on all parties.
6. Price Range of Shares of Preferred Stock
The Preferred Stock is not listed on any stock exchange or
inter-dealer quotation system and, to the best knowledge of the Company,
there is not an established or informal trading market for the Preferred
Stock. The Company is not aware of any transaction involving the purchase
or sale of Preferred Stock during the forty business days prior to the
date of the Offer.
The Purchase Price has been established by the Board of
Directors based solely upon the recommendation of management. No
assurance can be given that the Purchase Price is equal to the price that
could be obtained if a trading market existed for the Preferred Stock.
The Company has not obtained any opinion, report or appraisal relating to
the valuation of the Preferred Stock and no representation or warranty is
made herein regarding the fairness of the Purchase Price. The Offer is
not a redemption of Preferred Stock under the Company's Restated Articles
of Incorporation, which require, among other things, that any redemption
of Preferred Stock be made at the par value thereof.
7. Purpose Of The Offer
Over the past several years, the Company's operations have
generated substantial cash, resulting in a strong balance sheet. The
Company has, among other things, utilized its increasing cash resources to
fund its operations and thereby minimize its incurrence of debt, to
repurchase shares of its Common Stock and to increase cash dividends on
its Common Stock. Even after this Preferred Stock tender offer is
completed, the Company will have substantial cash balances as well as
ready access to other sources of capital sufficient to meet its
anticipated ongoing operational and capital expenditure needs. Therefore,
the Board of Directors believes that the purchase of Shares is an
attractive use of a portion of the Company's available cash on behalf of
its stockholders, and is consistent with the Company's long-term corporate
goal of increasing stockholder value. The Board of Directors encourages
preferred stockholders to carefully consider the Offer because it provides
an opportunity to obtain cash for their shares of Preferred Stock, an
opportunity which is normally not available due to the lack of any active
trading market in the Preferred Stock. Since the Preferred Stock yields a
before-tax dividend of only 3% per year, obtaining cash in return for a
tender of Preferred Stock also creates a potential opportunity for
preferred stockholders to reinvest the cash proceeds received from tending
their shares of Preferred Stock into higher yielding investments.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING ANY OR ALL OF SUCH STOCKHOLDER'S SHARES OF PREFERRED STOCK AND
NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION.
PREFERRED STOCKHOLDERS ARE URGED TO EVALUATE FULLY ALL INFORMATION IN THE
OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER THEIR SHARES OF PREFERRED STOCK AND,IF SO, HOW
MANY SHARES OF PREFERRED STOCK TO TENDER AND THE PRICE OR PRICES AT WHICH
TO TENDER.
If any shares of Preferred Stock remain outstanding after the
termination of the Offering, the Company may in the future purchase shares
of Preferred Stock in private transactions, through tender offers or
otherwise, or redeem shares of Preferred Stock as provided in the
Company's Restated Articles of Incorporation. Any such purchases may be
on the same terms as, or on terms which are more or less favorable to
stockholders than, the terms of the Offer. However, Rule 13e-4(f)(6)
under the Exchange Act generally prohibits the Company and its affiliates
from purchasing any shares of Preferred Stock, other than pursuant to the
Offer, until at least ten business days after the expiration or
termination of the Offer. Any redemption would be on the terms provided
in the Company's Restated Articles of Incorporation, which require, among
other things, that any redemption of Preferred Stock be made at the par
value thereof. Any possible future purchases or redemptions by the
Company will depend on many factors, including the results of the Offer,
the Company's business and financial position and general economic and
market conditions.
8. Source And Amount Of Funds
If the Company were to purchase all 3,000 outstanding Shares
pursuant to the Offer at a Purchase Price of $50 per Share, the maximum
aggregate cost of the Offer to the Company would be $150,000 (not
including expenses associated with the Offer), which would be paid from
cash balances of the Company. At July 15, 1995 the Company had cash and
short-term investments of approximately $18.9 million. The Company's
management does not believe the amount of the maximum aggregate cost of
the Offer is material to the financial condition of the Company. The fees
and expenses associated with the Offer are estimated by the Company to be
approximately $10,000 and will be paid by the Company.
9. Shares of Preferred Stock Outstanding
The Company has 3,000 issued and outstanding shares of Preferred
Stock held of record by 11 holders. The 3,000 Shares that the Company is
offering to purchase pursuant to the Offer represent 100% of such issued
and outstanding Shares. None of the Company's executive officers or
directors are record holders or beneficial owners of any Shares.
The purchase of Shares pursuant to the Offer will reduce the
number of shares and will likely reduce the number of stockholders of
Preferred Stock.
Shares of Preferred Stock acquired by the Company pursuant to
the Offer will be cancelled and will not be reissued by the Company.
10. Certain Legal Matters; Regulatory Approvals
The Company is not aware of any license or regulatory permit
that it believes is 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 of ownership of
Shares by the Company as contemplated herein. Should any such approval or
other action be required, the Company will make a good faith effort to
obtain such approval or other action. The Company is unable to predict
whether it will be 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 consideration 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 are subject to certain conditions. See Section 5.
11. Certain Federal Income Tax Consequences
The following is a general summary under currently applicable
law of certain federal income tax considerations generally applicable to
the Offer. The discussion set forth below is for general information only
and the tax treatment described herein may vary depending upon each
stockholder's particular circumstances and tax position. Certain
stockholders (including insurance companies, tax-exempt organizations,
financial institutions or broker-dealers, foreign corporations and persons
who are not citizens or residents of the United States) may be subject to
special rules not discussed below. No ruling from the Internal Revenue
Service ("IRS") will be applied for with respect to the federal income tax
consequences discussed herein and, accordingly, there can be no assurance
that the IRS will agree with the conclusions stated. The discussion does
not consider the effect of any applicable foreign, state, local or other
tax laws. EACH STOCKHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS
TO THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE OFFER, INCLUDING
THE APPLICABILITY AND EFFECT OF ANY FOREIGN, STATE, LOCAL OR OTHER TAX
LAWS, ANY RECENT CHANGES IN APPLICABLE TAX LAWS AND ANY PROPOSED
LEGISLATION.
For purposes of this discussion, stockholders are assumed to
hold their Shares as capital assets, and "Equity Stock" means any equity
security issued by the Company, including both the Preferred Stock and the
Common Stock.
The sale of Shares pursuant to the Offer will be a taxable
transaction, the consequences of which will be determined under the stock
redemption rules of Section 302 of the Internal Revenue Code of 1986, as
amended (the "Code"). Under these rules, the entire cash proceeds
received by a stockholder for his or her Shares pursuant to the Offer will
be treated as a distribution taxable as a dividend (assuming the Company
has sufficient earnings and profits, as discussed below), without regard
to whether gain or loss is realized, unless the particular stockholder
satisfies one of the three tests described below. If any of those tests
is satisfied, the stockholder will recognize capital gain or loss equal to
the difference between the cash proceeds received for the Shares pursuant
to the Offer and the stockholder's tax basis for such Shares.
Under Section 302 of the Code, the entire proceeds received from
the sale of Shares pursuant to the Offer will be treated as a distribution
taxable as a dividend unless the sale (a) results in a "complete
redemption" of all of the stockholder's Equity Stock in the Company, (b)
is "substantially disproportionate" with respect to the stockholder or (c)
is "not essentially equivalent to a dividend" with respect to the
stockholder. In determining whether any of these tests is satisfied, a
stockholder must take into account both shares of Equity Stock in the
Company actually owned by such stockholder and any shares of Equity Stock
constructively owned by such stockholder under the rules set forth in
Section 318 of the Code. Under Section 318, a stockholder generally is
considered to own shares of Equity Stock, which such stockholder has the
option to acquire and shares of Equity Stock owned (and, in some cases,
constructively owned) by certain members of the stockholder's family and
by certain entities (such as corporations, partnerships, trusts and
estates) in which such stockholder, a member of such stockholder's family
or related entity has an interest.
Stockholders Owning No Other Company Equity Stock. A sale of
Shares pursuant to the Offer will result in a "complete redemption" of all
of the stockholder's Equity Stock in the Company if, pursuant to the
Offer, the Company purchases all of the Shares actually and constructively
owned by the stockholder and the stockholder does not own (actually or
constructively) any other Equity Stock in the Company. If the
stockholder's sale of Shares pursuant to the Offer includes all of the
shares of Equity Stock in the Company actually owned by the stockholder
and, in the case of a stockholder who is an individual, the stockholder
continues to own constructively only Shares or other Company Equity Stock
held by family members, such stockholder may qualify for "complete
redemption" treatment if such stockholder is eligible for, and properly
complies with the procedures for waiving the constructive ownership rules
regarding attribution from family members. Under certain circumstances,
entities which are stockholders also may waive the constructive ownership
rules regarding attribution of shares of Equity Stock between family
members if the waiver procedures are followed by both the entity and any
related person through whom the constructively owned shares of Equity
Stock are in turn attributable to the entity. A proper waiver is subject
to several conditions, one of which is that the stockholder (and, also, in
the case of a waiver by an entity, any such related person) may not have
an interest in the Company (including an interest as an officer, director
or employee), other than an interest as a creditor, for ten years after
the sale of Shares. Stockholders should consult their own tax advisors as
to the availability of the waiver procedures.
Stockholders Owning Common Stock. The sale of Shares pursuant
to the Offer would be "substantially disproportionate" with respect to a
stockholder if, immediately after the Offer, the stockholder owns less
than 50% of the total combined voting power of all classes of Equity Stock
entitled to vote and such stockholder's actual and constructive percentage
ownership of voting Equity Stock then outstanding is less than 80% of the
stockholder's actual and constructive percentage ownership of voting
Equity Stock outstanding immediately before the purchase of Shares
pursuant to the Offer. The sale of Shares pursuant to the Offer cannot be
treated as substantially disproportionate because the Shares do not have
any voting rights. Accordingly, the sale of Shares pursuant to the Offer
will not reduce the stockholder's actual and constructive percentage
ownership of voting Equity Stock of the Company.
Whether the sale of Shares pursuant to the Offer is "not
essentially equivalent to a dividend" depends upon the individual
stockholder's facts and circumstances, but in any case requires a
"meaningful reduction" in the stockholder's proportionate interest in the
Company. This test is particularly applicable to the sale of Shares
pursuant to the Offer by a stockholder who actually or constructively owns
Common Stock of the Company but who does not control or participate in the
management of the Company. Under these circumstances, the sale of Shares
does not meet either of the "complete redemption" or "substantially
disproportionate" tests, but the holder of the Shares has sustained a
reduction of dividend and liquidation rights in favor of the holders of
the Company's Common Stock. In addition, because there is no consistent
relationship between the percentage of outstanding Shares held by a
stockholder and the percentage of Common Stock held by a stockholder, the
sale of all of the Shares pursuant to the Offer should be treated as "not
essentially equivalent to a dividend," and therefore be treated as a
return of capital and capital gain for federal tax purposes. However,
Stockholders seeking to rely on this test should consult their own tax
advisors as to the application of this standard to their particular
situations.
Stockholders should be aware that an acquisition or disposition
of Shares or other shares of Equity Stock of the Company by a stockholder
substantially contemporaneously with the Offer will be taken into account
in determining whether any of the three tests described above is
satisfied. Stockholders should consult their own tax advisors as to the
effect of such events on the application of such tests.
If none of the tests described above is satisfied with respect
to a stockholder, such stockholder's receipt of cash for Shares pursuant
to the Offer will be treated as a distribution taxable as a dividend,
provided that the Company has sufficient earnings and profits. Otherwise,
the distribution will be treated as a return of capital to the extent of
the stockholder's basis in the Shares and will be treated as capital gain
with respect to any excess. The Company has represented that it has
current or accumulated earnings and profits in excess of the aggregate
amount to be paid for the 3,000 outstanding Shares.
Treatment of Dividend Income for Corporate Stockholders. Any
income which is treated as a dividend pursuant to the rules described
above will be eligible for the 70% dividends received deduction allowable
to domestic corporate stockholders under Section 243 of the Code, subject
to applicable limitations, including those relating to "debt-financed
portfolio stock" under Section 246A of the Code and to the holding period
requirements of Section 246 of the Code. Also, any amount treated as a
dividend will constitute an "extraordinary dividend" subject to the
provisions of Section 1059 of the Code. In addition, the aggregation
rules of Section 1059 may require that other dividends received by the
stockholders on stock of the Company be treated as "extraordinary
dividends". Under Section 1059, a corporate stockholder must reduce the
tax basis of such stockholder's Shares (but not below zero) by the portion
of any "extraordinary dividend" which is deducted under the dividends
received deduction and, if such portion exceeds the stockholder's tax
basis for the stock, must treat any such excess as additional gain on the
subsequent sale or other disposition of such Shares.
Backup Withholding. See Section 2 concerning the potential
application of federal backup withholding.
12. Extension Of The Offer; Termination; Amendments
The Company expressly reserves the right, in its sole
discretion, and regardless of whether or not any of the conditions
specified in Section 5 shall have occurred, at any time or from time to
time, to extend the period of time during which the Offer for the Shares
is open by giving a public announcement thereof no later than 9:00 a.m.
Milwaukee time, on the next business day after the previously scheduled
Expiration Date. There can be no assurance that the Company will exercise
its right to extend the Offer for the Shares. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to
the Offer.
The Company also expressly reserves the right, in its sole
discretion, (i) to delay payment for any Shares not theretofore paid for
or to terminate the Offer and not to accept for payment any Shares not
theretofore accepted for payment, upon the occurrence of any of the
conditions specified in Section 5, or (ii) at any time or from time to
time to amend the Offer for the Shares in any respect, including
decreasing the number of Shares the Company may purchase or increasing or
decreasing the Purchase Price it may pay pursuant to the Offer.
Any such extension, delay, termination or amendment will be
followed as promptly as practicable by a public announcement thereof.
Without limiting the manner in which the Company may choose to make any
public announcement, except as provided by applicable law (including Rule
13e-4(e)(2) under the Exchange Act), the Company shall have no obligation
to publish, advertise or otherwise communicate any such public
announcement.
If the Company makes a material change in the terms of the Offer
for the Shares or the information concerning the Offer for the Shares, or
if it waives a material condition of the Offer for the Shares, the Company
will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-
4(e)(2) under the Exchange Act, which 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 upon the facts and circumstances, including the relative
materiality of such terms or information. The Company confirms that its
payment is limited by Rule 13e-4(f)(5) under the Exchange Act, which
requires that an issuer pay the consideration offered or return the
tendered securities promptly after the termination or withdrawal of a
tender offer. If (i) the Company increases or decreases the Purchase
Price to be paid for the Shares, or the Company decreases the number of
Shares being sought and (ii) the Offer for the Shares 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 notice of such
increase or decrease is first published, sent or given, the Offer for the
Shares will be extended until the expiration of such period of ten
business days.
13. Fees And Expenses
The Company will not pay any fees or commissions to any broker
or dealer or any other person for soliciting tenders of Shares pursuant to
the Offer. Brokers, dealers, commercial banks and trust companies will,
upon request, be reimbursed by the Company for reasonable and necessary
costs and expenses incurred by them in forwarding materials to their
customers.
14. Miscellaneous
The Company is not aware of any jurisdiction in which the making
of the Offer or the acceptance for payment of Shares in connection
therewith would not be in compliance with the laws of such jurisdiction.
If the Company becomes aware of any jurisdiction where the making of the
Offer would not be in compliance with such laws, the Company will make a
good faith effort to comply with such laws or seek to have such laws
declared inapplicable to the Offer. If after such good faith effort the
Company cannot comply with any such laws, the Offer will not be made to,
nor will tenders be accepted from or on behalf of, holders of Shares in
any such jurisdictions.
SCHULTZ SAV-O STORES, INC.
September 11, 1995
LETTER OF TRANSMITTAL
To Accompany Shares of
PREFERRED STOCK
of
SCHULTZ SAV-O STORES, INC.
Tendered pursuant to Offer to Purchase dated September 11, 1995
TO BE EFFECTIVE IN MAKING A TENDER OF YOUR PREFERRED STOCK, THIS
LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND SIGNED IN ACCORDANCE WITH
THE INSTRUCTIONS ATTACHED HERETO, TOGETHER WITH CERTIFICATES FOR THE
PREFERRED STOCK OF SCHULTZ SAV-O STORES, INC. COVERED HEREBY, MUST BE
RECEIVED BY SCHULTZ SAV-O STORES, INC. AT THE APPROPRIATE ADDRESS SET
FORTH BELOW NOT LATER THAN 12:00 MIDNIGHT, MILWAUKEE TIME, ON WEDNESDAY,
OCTOBER 11, 1995, UNLESS THE OFFER IS EXTENDED.
THIS OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED
OF) THE COMPANY'S COMMON STOCK, $0.05 PAR VALUE PER SHARE.
THIS OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
MILWAUKEE TIME, ON WEDNESDAY, OCTOBER 11, 1995, UNLESS THE
OFFER IS EXTENDED.
TO: SCHULTZ SAV-O STORES, INC.
By Mail: By Hand or Overnight Delivery:
Schultz Sav-O Stores, Inc. John H. Dahly
Attn: John H. Dahly Schultz Sav-O Stores, Inc.
2215 Union Avenue 2215 Union Avenue
P.O. Box 419 Sheboygan, Wisconsin 53081
Sheboygan, Wisconsin 53082-0419
Questions regarding tender procedures may be directed to John H.
Dahly, Executive Vice President, at Schultz Sav-O Stores, Inc., telephone
number (414) 457-4433.
PLEASE READ CAREFULLY THE INSTRUCTIONS INCLUDED HEREIN
DESCRIPTION OF SHARES OF PREFERRED STOCK TENDERED
(See Instructions 3 and 4)
NAMES AND ADDRESS(ES) OF
REGISTERED HOLDER(S) (Please
fill in exactly as name(s) CERTIFICATE(S) TENDERED
appear on Certificate(s) (Attach signed list if necessary)
NUMBER OF
SHARES
REPRESENTED NUMBER OF
CERTIFICATE BY SHARES
NUMBER(S) CERTIFICATE(S) TENDERED*
__________ ____________ __________
__________ ____________ __________
__________ ____________ __________
__________ ____________ __________
TOTAL SHARES TENDERED:
* If you desire to tender fewer than all shares of Preferred Stock
evidenced by any certificates listed above, please indicate in
this column the number of shares of Preferred Stock you wish to
tender. If you fail to indicate the number of shares of Preferred
Stock tendered, all shares of Preferred Stock evidenced by such
certificates will be deemed to have been tendered. See
Instruction 4.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
TO SCHULTZ SAV-O STORES, INC.:
The undersigned hereby tenders to Schultz Sav-O Stores, Inc., a
Wisconsin corporation (the "Company"), the above-described shares of the
Company's Preferred Stock, $100 par value per share (the "Shares" or the
"Preferred Stock"), 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
September 11, 1995, 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 of the Offer
(including, if the Offer is extended or amended, the terms or conditions
of any such extension or amendment), the undersigned hereby sells, assigns
and transfers to or upon the order of the Company all right, title and
interest in and to all Shares tendered hereby that are purchased pursuant
to the Offer and hereby represents and warrants to the Company that:
(a) the undersigned understands that tenders of Shares
pursuant to the procedures described in Section 2 of the Offer
to Purchase and in the Instructions hereto will constitute the
undersigned's acceptance of the terms and conditions of the
Offer;
(b) when and to the extent the Company accepts the 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 Company deems necessary or
desirable to complete the assignment, transfer and purchase of
the Shares tendered hereby; and
(d) the undersigned has read, understands and agrees with,
all of the terms of the Offer.
With respect to holders of certificates representing Shares
tendered hereby, the names and addresses of the registered holders should
be printed, if they are not already printed above, exactly as they appear
on the certificates representing such 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 undersigned understands that the Company will, upon the
terms and subject to the conditions of the Offer, pay $50 in cash for each
Share (the "Purchase Price") properly tendered and not withdrawn pursuant
to the Offer, and that the Company will return all other tendered but not
purchased Shares. The undersigned understands that Shares tendered and
purchased by the Company will not receive or otherwise be entitled to any
portion of the regular cash dividend of $3 per Share expected to be paid
by the Company on or about January 31, 1996 to holders of record on or
about January 1, 1996. Shares which are tendered but not purchased, or
which are not tendered, and remain outstanding will remain entitled to
receipt of such dividend. The undersigned also understands that under no
circumstances will interest be paid by the Company by reason of any delay
in paying for any Shares or otherwise.
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. In either event, the undersigned understands that
certificate(s) for any Shares not properly 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 their registered
holder if the Company purchases none of the Shares represented by such
certificate.
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 Purchase Price for such of the tendered Shares
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.
All authority conferred or agreed to be conferred in this Letter
of Transmittal shall survive the death or incapacity of the undersigned
and any obligations of the undersigned under this Letter of Transmittal
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned. Except as stated in the Offer to Purchase,
this tender is irrevocable.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4 and 5) (See Instructions 1, 4, 5, 6 and 7)
To be completed ONLY if To be completed ONLY if
certificate(s) for Shares not certificate(s) for Shares not
tendered or not purchased and/or tendered or not purchased and/or
any check for the Purchase Price of any check for the Purchase Price of
Shares purchased are to be issued Shares purchased are to be sent to
in the name of someone other than someone other than the undersigned
the undersigned. or to the undersigned at an address
other than that shown above.
Issue [_] Check
[_] Certificate(s) to: Issue [_] Check
[_] Certificate(s) to:
Name: ________________________
(Please Print) Name: _________________________
(Please Print)
Address: ________________________
________________________ Address:
(Include Zip Code) _________________________________
___________________________
(Tax Identification or _________________________________
Social Security Number) (Include Zip Code)
STOCKHOLDER(S) SIGN HERE
(See Instructions 1 and 5)
(PLEASE COMPLETE 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 attorney-in-fact, executor, administrator, trustee, guardian, officer
of a corporation or another acting in a fiduciary or representative
capacity, please set forth the full title. See Instruction 5.
X_____________________________________________________________________
X______________________________________________________________________
(Signature(s) of Registered Holder(s))
Name(s): ______________________________________________________________
(Please Print)
Capacity (full title): ________________________________________________
Address: ___________________________________________________________
___________________________________________________________
Area Code and Telephone Number: ______________________________
Tax ID Number or Social Security Number: _____________________
Dated: ____________________________________________________
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Authorized Signature: __________________________________________
Name(s): ____________________________________________________________
(Please Print)
Title: _______________________________________________________
Name of Firm: ______________________________________________________
Address: ___________________________________________________________
_________________________________________________________________
(Including Zip Code)
Area Code and Telephone Number: _________________________________
Tax ID Number or Social Security Number: ________________________
Dated: _________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required if:
this Letter of Transmittal is signed by the registered holder of the
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.
In all other cases, a registered national securities exchange, a member of
the Stock Transfer Association's approved medallion program (such as
STAMP, SEMP or MSP) or a commercial bank or trust company having an
office, branch or agency in the United States (each such entity, an
"Eligible Institution") must guarantee all signatures on this Letter of
Transmittal. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. This Letter of
Transmittal is to be used only if certificates are delivered with it to
the Company. Certificates for all physically tendered Shares, together in
each case with an executed facsimile of the Letter of Transmittal and any
other documents required by this Letter of Transmittal, should be mailed
or delivered to the Company at the appropriate address set forth herein
and must be delivered to the Company on or before the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES
OF PREFERRED STOCK, IS AT THE OPTION AND RISK OF THE TENDERING
STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
The Company will not accept any alternative or contingent tenders, nor
will it purchase any fractional Shares. All tendering stockholders, by
execution of this Letter of Transmittal (or a photocopy 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 of Preferred Stock 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. If fewer than all of the
Shares evidenced by any certificate are to be tendered, fill in the number
of Shares which are to be tendered in the column entitled "Number of
Shares of Preferred Stock Tendered." In such case, if any tendered Shares
are purchased, a new certificate for the remainder of the Shares 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 certificates listed and
delivered to the Company will be deemed to have been tendered.
5. 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 photocopies 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 powers 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). SIGNATURES ON SUCH CERTIFICATES MUST BE GUARANTEED
BY AN ELIGIBLE INSTITUTION. If this Letter of Transmittal is signed by
any person other than the registered holder(s) of the certificate(s)
listed, the certificate(s) must be endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appears on the certificate(s), and the signature(s)
or such certificate(s) or stock powers must be guaranteed by an Eligible
Institution. See Instruction 1.
(e) If this Letter of Transmittal or any certificates or stock
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such person should so indicate when
signing and must submit proper evidence satisfactory to the Company of
their authority so to act.
6. Stock Transfer Taxes. Except as provided in this Instruction 6, 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 Purchase Price 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 of any person other than the
registered holder(s); or
(c) tendered certificates are registered in the name of
any person other than the person(s) signing the Letter of
Transmittal;
then the Company will deduct from the 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 an exemption
from them is submitted.
7. 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 certificate(s) and/or check(s) 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.
8. 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 determination shall be firm 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. Neither the Company 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.
9. 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 and this Letter of Transmittal may be
obtained from, John H. Dahly, the Executive Vice President of the Company
at the address and telephone number set forth on the first page of this
Letter of Transmittal.
10. Form W-9. Under U.S. Federal income tax law, a stockholder whose
tendered Shares are accepted for payment is required to provide the
Company with such stockholder's correct taxpayer identification number
("TIN") on Form W-9 enclosed herewith. If the Company is not provided
with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that
are made to such stockholder or other payee with respect to Shares
purchased pursuant to the Offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding
and reporting requirements. See the enclosed Form W-9 for more
instructions.
If backup withholding applies, the Company is required to withhold 31% of
any such payments made to the stockholder or other payee. Backup
withholding is not an additional tax. Rather, the tax liability of
persons 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 form the Internal Revenue Service.
The stockholder is required to give the Company the TIN (e.g., social
security number or employer identification number) of the record owner of
the Shares or of the last transferee appearing on the transfers attached
to, or endorsed on, the Shares. If the Shares are in more than one name
or are not in the name of the actual owner, consult the enclosed Form W-9
for additional guidance on which number to report.
OFFER TO PURCHASE FOR CASH UP TO 3,000 SHARES OF ITS
PREFERRED STOCK AT A PURCHASE PRICE OF $50 PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS
EXPIRE AT 12:00 MIDNIGHT, MILWAUKEE TIME, ON
OCTOBER 11, 1995, UNLESS THE OFFER IS EXTENDED
To Brokers, Dealers and Other Nominees:
Schultz Sav-O Stores, Inc., a Wisconsin corporation (the
"Company"), is inviting holders of its Preferred Stock, $100 par value per
share (the "Shares" or the "Preferred Stock"), to tender their shares of
Preferred Stock, at a price of $50 per Share, net to the holder in cash
(the "Purchase Price"), upon the terms and subject to the conditions set
forth in the Company's Offer to Purchase, dated September 11, 1995, and in
the related Letter of Transmittal (which together constitute the "Offer").
All Shares properly tendered and not withdrawn prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) will be
purchased at the Purchase Price, net to the Seller in cash, upon the terms
and subject to the conditions of the Offer. See Section 1 of the Offer to
Purchase.
Over the past several years, the Company's operations have
generated substantial cash, resulting in a strong balance sheet. The
Company has, among other things, utilized its increasing cash resources to
fund its operations and thereby minimize its incurrence of debt, to
repurchase shares of its common stock, and to increase cash dividends on
its common stock. Even after this preferred stock tender offer is
completed, the Company will have substantial cash balances as well as
ready access to other sources of capital sufficient to meet its
anticipated ongoing operational and capital expenditure needs. Therefore,
the Board of Directors believes that the purchase of Shares is an
attractive use of a portion of the Company's available cash on behalf of
its stockholders, and is consistent with the company's long-term corporate
goal of increasing stockholder value. The Board of Directors encourages
preferred stockholders to carefully consider the Offer because it provides
an opportunity to obtain cash for their shares of Preferred Stock, an
opportunity which is normally not available due to the lack of any active
trading market in the Preferred Stock. Since the Preferred Stock yields a
before-tax dividend of only 3% per year, obtaining cash in return for a
tender of Preferred Stock also creates a potential opportunity for
preferred stockholders to reinvest the cash proceeds received from tending
their shares of Preferred Stock into higher yielding investments.
Neither the Company nor the Board of Directors is making any
recommendation to any stockholder as to whether to tender or refrain from
tendering shares of Preferred Stock. No director, officer or affiliate of
the Company is a record or beneficial owner of shares of Preferred Stock.
The Offer is not being made for (nor will tenders be accepted
of) the Company's Common Stock, $0.05 par value per share.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES
BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 5 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 September 11, 1995;
2. Letter to Clients who are Preferred Stockholders 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 to Preferred Stockholders of the Company, dated
September 11, 1995, from James H. Dickelman, Chairman, President and Chief
Executive Officer; and
4. Letter of Transmittal for your use and for the information
of your clients (together with accompanying Form W-9 and guidelines);
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, MILWAUKEE
TIME, ON OCTOBER 11, 1995, 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. 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 of Common Stock 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 6 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 Company with certificate(s) representing the
tendered Shares, all in accordance with the instructions set forth in the
Letter of Transmittal and the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be
addressed to, and additional copies of the enclosed material may be
obtained from, John H. Dahly, Executive Vice President of the Company, at
the address and telephone number set forth on the first page of the Letter
of Transmittal.
Very truly yours,
SCHULTZ SAV-O STORES, 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, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT
OR MAKE ANY STATEMENT ON BEHALF OF THE COMPANY OR ANY OTHER PERSON IN
CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND
THE STATEMENTS CONTAINED THEREIN.
SCHULTZ SAV-O STORES, INC.
OFFER TO PURCHASE FOR CASH UP TO 3,000
SHARES OF ITS PREFERRED STOCK AT A
PURCHASE PRICE OF $50 PER SHARE
To Our Clients who are Preferred Stockholders of Schultz Sav-O Stores,
Inc.:
Enclosed for your consideration are the Offer to Purchase dated
September 11, 1995, and the related Letter of Transmittal (which together
constitute the "Offer") prepared in connection with the Offer by Schultz
Sav-O Stores, Inc., a Wisconsin corporation (the "Company"), to purchase
up to 3,000 shares of its Preferred Stock, $100 par value per share (the
"Shares" or the "Preferred Stock"), at a price, net to the seller in cash,
of $50 per Share (the "Purchase Price") upon the terms and subject to the
conditions set forth in the Offer.
All Shares properly tendered prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase) and not withdrawn will be
purchased at the Purchase Price, net to the seller in cash, upon the terms
and subject to the conditions of the Offer. The Company will return all
other Shares. See Section 1 of the Offer to Purchase.
The Offer is not being made for (nor will tenders be accepted
of) the Company's Common Stock, $0.05 par value per share.
WE ARE THE OWNER OF RECORD OF SHARES OF PREFERRED STOCK HELD FOR
YOUR ACCOUNT. AS SUCH, WE ARE THE ONLY ONES WHO CAN TENDER YOUR SHARES OF
PREFERRED STOCK, 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 OF PREFERRED STOCK WE HOLD FOR YOUR
ACCOUNT.
Please instruct us as to whether you wish us to tender any or
all of the Shares we hold for your account on the terms and subject to the
conditions of the Offer.
We call your attention to the following:
1. The Offer is not conditioned upon any minimum number of
Shares being tendered.
2. The Offer and withdrawal rights will expire at 12:00
Midnight, Milwaukee time, on October 11, 1995, unless the Company extends
the Offer.
3. The Offer is for all 3,000 outstanding shares of Preferred
Stock.
4. Tendering stockholders will not be obligated to pay any
brokerage commissions, solicitation fees or, subject to Instruction 6 of
the Letter of Transmittal, stock transfer taxes on the Company's purchase
of Shares pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please
so instruct us by completing, executing, and returning to us the enclosed
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 enclosed 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 AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, MILWAUKEE TIME, ON OCTOBER 11, 1995, UNLESS THE COMPANY EXTENDS
THE OFFER.
The Offer is not being made to, nor will the Company accept
tenders from or on the behalf of, holders of Shares in any jurisdiction in
which the Offer or its acceptance would not comply with the securities or
Blue Sky laws of such jurisdiction.
<PAGE>
INSTRUCTION FORM WITH RESPECT TO THE
SCHULTZ SAV-O STORES, INC.
OFFER TO PURCHASE FOR CASH UP TO 3,000 SHARES OF ITS
PREFERRED STOCK AT A PURCHASE PRICE OF $50 PER SHARE
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offer to Purchase, dated September 11, 1995, and the related
Letter of Transmittal (which together constitute the "Offer") prepared in
connection with the Offer by Schultz Sav-O Stores, Inc., a Wisconsin
corporation (the "Company"), to purchase up to 3,000 shares of its
Preferred Stock, $100 par value per share (the "Shares" or the "Preferred
Stock"), at a price, net to the seller in cash, of $50 per Share (the
"Purchase Price"), upon the terms and subject to the conditions of the
Offer.
The undersigned understands that all Shares properly tendered
and not withdrawn will be purchased at the Purchase Price, net to the
seller in cash, upon the terms and subject to the conditions of the
Offer. The Company will return all other Shares. See Section 1 of the
Offer to Purchase.
The undersigned hereby instruct(s) you to tender to the Company
the number of Shares indicated below held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer to Purchase and the related Letter of Transmittal.
By checking this box, all Shares held by us for your account will be
tendered. If fewer than all Shares are to be tendered, please check
the box and indicate below the aggregate number of Shares to be
tendered by us.
______________ Shares*
* Unless otherwise indicated, it will be assumed that all Shares held
by us for your account are to be tendered.
September 11, 1995
DEAR PREFERRED STOCKHOLDER:
We are pleased to inform you that the Board of Directors of
Schultz Sav-O Stores, Inc. (the "Company") has approved an offer to
purchase up to 3,000 shares of the Company's Preferred Stock, representing
all of the Company's currently outstanding Preferred Stock. This offer
provides preferred stockholders with an opportunity to sell some or all of
their shares without the payment of any brokerage fees. The Company will
use a portion of its available cash on hand to purchase the tendered
shares of Preferred Stock.
Under the terms of the offer, the price to be paid for your
tendered preferred shares will be $50 per share, net to you in cash. This
offer is not a redemption of Preferred Stock under the Company's Restated
Articles of Incorporation.
The Board of Directors has determined to make this offer
because, over the past several years, the Company's operations have
generated substantial cash, resulting in a strong balance sheet. The
Company has, among other things, utilized its increasing cash resources to
fund its operations and thereby minimize its incurrence of debt, to
repurchase shares of its Common Stock and to increase cash dividends on
its Common Stock. Even after this share repurchase is completed, we will
have adequate cash balances as well as ready access to other sources of
capital sufficient to meet anticipated ongoing operational and capital
expenditure needs. Therefore, the Board of Directors believes that the
purchase of shares is an attractive use of a portion of the Company's
available cash on behalf of its stockholders, and is consistent with our
long-term corporate goal of increasing stockholder value. The Board of
Directors encourages preferred stockholders to carefully consider the
Offer because it provides an opportunity to obtain cash for their shares
of Preferred Stock, an opportunity which is normally not available due to
the lack of any active trading market in the Preferred Stock. Since the
Preferred Stock yields a before-tax dividend of only 3% per year,
obtaining cash in return for a tender of Preferred Stock also creates a
potential opportunity for preferred stockholders to reinvest the cash
proceeds received from tending their shares of Preferred Stock into higher
yielding investments.
Neither the Company nor the Board of Directors is making any
recommendation to stockholders as to whether to tender or refrain from
tendering shares of Preferred Stock. No director or executive officer of
the Company owns any shares of Preferred Stock.
Unless extended by the Company, the offer will expire at 12:00
Midnight, Milwaukee time, on October 11, 1995.
The offer is explained in detail in the enclosed Offer to
Purchase and related Letter of Transmittal. We encourage you to read
these materials carefully before making any decision with respect to the
offer. Should you have any questions regarding the offer or need
assistance in tendering your shares, please call John H. Dahly, Executive
Vice President of the Company, at 414-457-4433.
SCHULTZ SAV-O STORES, INC.
/s/ James H. Dickelman
James H. Dickelman
Chairman, President and
Chief Executive Officer
CONTACT: JOHN H. DAHLY
EXECUTIVE VICE PRESIDENT
CHIEF FINANCIAL OFFICER
SCHULTZ SAV-O STORES, INC.
(414) 457-4433
FOR IMMEDIATE RELEASE:
SCHULTZ SAV-O STORES ANNOUNCES SELF-TENDER OFFER
FOR ALL 3,000 OUTSTANDING SHARES OF ITS PREFERRED STOCK
SHEBOYGAN, WI, SEPTEMBER 11, 1995 -- Schultz Sav-O Stores, Inc.
(NASDAQ:SAVO) announced today a self-tender offer for all 3,000
outstanding shares of the Company's Preferred Stock at a cash price of $50
per share. The offer commenced today and will expire on October 11, 1995,
unless extended. This offer is not for and does not affect the Company's
Common Stock.
The offer is not contingent upon any minimum number of shares of
Preferred Stock being tendered, but is subject to various terms and
conditions, as described in offering materials sent today to each holder
of record of the Preferred Stock. The maximum aggregate purchase price
for all 3,000 outstanding shares of Preferred Stock at $50 per share is
$150,000. The Company will use cash on hand to pay for tendered shares of
Preferred Stock. As of July 15, 1995, the Company had cash and short-term
investments of approximately $18.9 million.
James H. Dickelman, chairman, president and chief executive officer,
said, "Over the past several years, the Company's operations have
generated substantial cash, resulting in a strong balance sheet. The
Company has, among other things, utilized its increasing cash resources to
fund its operations and thereby minimize its incurrence of debt, to
repurchase shares of its Common Stock and to increase cash dividends on
its Common Stock. Even after this Preferred Stock tender offer is
completed, the Company will have substantial cash balances as well as
ready access to other sources of capital sufficient to meet its
anticipated ongoing operational and capital expenditure needs. Therefore,
the Board of Directors believes that the purchase of shares of Preferred
Stock is an attractive use of a portion of the Company's available cash of
behalf of its stockholders, and is consistent with the Company's long-term
corporate goal of increasing stockholder value. The Board of Directors
encourages preferred stockholders to carefully consider the Offer because
it provides an opportunity to obtain cash for their shares of Preferred
Stock, an opportunity which is normally not available due to the lack of
any active trading market in the Preferred Stock. Since the Preferred
Stock yields a before-tax dividend of only 3% per year, obtaining cash in
return for a tender of Preferred Stock also creates a potential
opportunity for preferred stockholders to reinvest the cash proceeds
received from tendering their shares of Preferred Stock into higher
yielding investments."
None of the Company's directors or executive officers are record or
beneficial owners of any shares of Preferred Stock.
Schultz Sav-O Stores is making no recommendation to preferred
stockholders regarding their participation in the tender offer.
Schultz Sav-O Stores, Inc. is engaged in the food distribution
business through franchised and corporate-owned retail supermarkets and as
a distributor to independent food stores. The franchised and corporate-
owned retail supermarkets operate under the name of Piggly Wiggly/R/.
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