<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 8)
DEGEORGE FINANCIAL CORPORATION
------------------------------
(Name of Issuer)
Common Stock, par value $.10 per share
-----------------------------------------
(Title of Class of Securities)
244783 10 6
---------------
(CUSIP Number)
Jonathan K. Dodge, Esq.
Vice President, Secretary and General Counsel
DeGeorge Financial Corporation
99 Realty Drive
Cheshire, Connecticut 06410
Tel. (203) 699-3400
-------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 12, 1997
----------------------------
(Date of Event which Requires
Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: / /
Check the following box if a fee is being paid with this statement: / /
Page 1 of 13 Pages
Exhibit Index on Page 13
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CUSIP No. 244783-10-6 Page 2 of 13 Pages
1) Name of Reporting Person BNC Acquisition
S.S. or I.R.S. Identification No. of Corp.
Above Person 41-1651186
2) Check the (a) [X]
Appropriate Box (b) [ ]
if a Member of a
Group
3) SEC Use Only
4) Source of Funds 00
5) Check if Not Applicable
Disclosure of
Legal Proceedings
is Required
Pursuant to Items
2(d) or 2(e)
6) Citizenship or Delaware
Place of
Organization
Number of Shares 7) Sole Voting 4,475,744 shares of
Beneficially Owned by Power Common Stock, $.10
Each Reporting Person par value
With:
8) Shared Voting -0-
Power
9) Sole 4,475,744 shares of
Dispositive Common Stock, $.10
Power par value
10) Shared -0-
Dispositive
Power
11) Aggregate Amount Beneficially Owned by 4,475,744 shares of
Each Reporting Person Common Stock, $.10
par value
12) Check if the Aggregate Amount in Row
(11) Excludes Certain Shares
13) Percent of Class Represented by Amount 41.4%
in Row (11)
14) Type of Reporting Person CO/HC
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CUSIP No. 244783-10-6 Page 3 of 13 Pages
1) Name of Reporting Person Peter R. DeGeorge
S.S. or I.R.S. Identification No. of
Above Person
2) Check the (a) [x]
Appropriate Box (b) [ ]
if a Member of a
Group
3) SEC Use Only
4) Source of Funds PF
5) Check if Not Applicable
Disclosure of
Legal Proceedings
is Required
Pursuant to Items
2(d) or 2(e)
6) Citizenship or United States of
Place of America
Organization
Number of Shares 7) Sole Voting 5,668,570 shares of
Beneficially Owned by Power Common Stock, $.10
Each Reporting Person par value
With:
8) Shared Voting -0-
Power
9) Sole 5,668,570 shares of
Dispositive Common Stock, $.10
Power par value
10) Shared -0-
Dispositive
Power
11) Aggregate Amount Beneficially Owned by 5,668,570 shares of
Each Reporting Person Common Stock, $.10
par value
12) Check if the Aggregate Amount in Row
(11) Excludes Certain Shares
13) Percent of Class Represented by Amount 52.4%
in Row (11)
14) Type of Reporting Person IN
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CUSIP No. 244783-10-6 Page 4 of 13 Pages
AMENDMENT NO. 8 TO SCHEDULE 13D
Reference is hereby made to the statement on Schedule 13D as originally
filed with the Securities and Exchange Commission on December 21, 1992 and
amended by Amendment No. 1 (dated January 15 1993), Amendment No. 2 (dated July
8, 1993), Amendment No. 3 (dated October 18, 1993), Amendment No. 4 (dated March
10, 1994), Amendment No. 5 (dated November 9, 1994), Amendment No. 6 (dated
April 30, 1996) and Amendment No. 7 (dated January 6, 1997) thereto (as so
amended, the "Schedule 13D"). Terms defined in the Schedule 13D and not
otherwise defined herein are used herein as so defined.
The Schedule 13D is hereby amended and restated as follows:
Item 1. SECURITY AND ISSUER.
The class of equity securities to which this statement relates is the
common stock, par value $.10 per share (the "DFC Common Stock"), of DeGeorge
Financial Corporation, a Delaware corporation ("DFC"), formerly known as Miles
Homes, Inc. The principal executive office of DFC is located at 99 Realty
Drive, Cheshire, Connecticut 06410.
Item 2. IDENTITY AND BACKGROUND
This statement is being filed pursuant to Section 13(d)(1) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 13d-1
promulgated thereunder by the following corporation and individual (the "Filing
Parties"):
1. BNC Acquisition Corp. ("BNC") is a privately-owned corporation
organized under the laws of the state of Delaware. Its principal
business is that of a holding company. The address of BNC's principal
business and principal office is % DeGeorge Homes of Florida, Inc.
("DeGeorge/Florida"), 140 Intracoastal Pointe Drive, Suite 410,
Jupiter, Florida 33477.
2. Peter R. DeGeorge's present principal occupation or employment is
Chairman of the Board and Chief Executive Officer of DFC. DFC
arranges financing and is currently managing over $200 million in
underwritten construction loans. It provides access to home ownership
for people who lack a sufficient down payment or sufficient income to
support the purchase of the home they desire through conventional
mortgage programs. Through its packaging of financial services and
customer support, the Company enables its customers to reduce the cost
of home construction by eliminating the general contractor, the intent
of which is to create an equity position that serves as the down
payment for permanent financing upon the conclusion of the home
construction process. DFC's address is 99 Realty Drive, Cheshire,
Connecticut 06410. Mr. DeGeorge is also Chairman of the Board, Chief
Executive Officer and President of BNC. His business address is %
DeGeorge/Florida, 140 Intracoastal Pointe Drive, Suite 410, Jupiter,
Florida 33477.
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CUSIP No. 244783-10-6 Page 5 of 13 Pages
The name, business address and present principal occupation or
employment of each executive officer and director of BNC (the "BNC Officers") is
set forth in Schedule I hereto, which is incorporated herein by reference.
None of the Filing Parties nor any of the BNC Officers has, during the
last five years, been convicted in a criminal proceeding (excluding traffic
violations of similar misdemeanors).
None of the Filing Parties nor any of the BNC Officers has, during the
last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws. DFC,
BNC and Peter R. DeGeorge have received subpoenas from the United States
Securities and Exchange Commission (the "Commission") relating to an
investigation by that agency. DFC and Mr. DeGeorge received oral notice that
the staff of the SEC was prepared to recommend charges against DFC, Mr. DeGeorge
and others concerning certain documents filed with the Commission which relate
to fiscal 1994 and prior years. DFC and Mr. DeGeorge are in the process of
discussing a proposed settlement of these proposed charges with the staff of the
Commission.
Item 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
It is expected that approximately $6,800,000 will be necessary to
effect the proposal to acquire Non-Affiliated Shares described in Item 4 below.
It is expected that Peter DeGeorge or an affiliate of Mr. DeGeorge will borrow
some or all of such funds from an entity controlled by Mr. DeGeorge's father,
Lawrence J. DeGeorge.
The 4,475,744 shares of DFC Common Stock currently owned by BNC were
owned by Milestar, Inc., a Delaware corporation ("Milestar"), prior to the
merger of Milestar with and into DFC on October 13, 1994 (the "Merger"). Of
these shares, 80,333 shares had been received by Milestar as a capital
contribution in October 1990 from BNC and had originally been issued to Mr.
DeGeorge for consideration of $.10 per share from his personal funds. Another
3,000 shares of DFC Common Stock were received by Milestar as a capital
contribution in October 1990 from James G. Einloth and had originally been
issued to Mr. Einloth for consideration of $.10 per share from his personal
funds. An additional 3,075,830 shares of DFC Common Stock were received by
Milestar as a result of a stock split which took place immediately prior to
DFC's initial public offering (the "Offering"), the registration statement for
which (File No. 33-50696) was declared effective on December 3, 1992. Finally,
Milestar received 1,720,581 shares of DFC Common Stock in a share exchange
immediately prior to the Offering pursuant to which BNC contributed to Milestar,
which in turn contributed to DFC, all of the outstanding 12 1/2% Cumulative
Preferred Stock of DeGeorge Home Alliance, Inc., a Delaware corporation ("DHA")
and a subsidiary of DFC formerly known as Miles Homes Services, Inc., in
exchange for 545 shares of Milestar common stock (to BNC) and 1,720,581
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CUSIP No. 244783-10-6 Page 6 of 13 Pages
shares of DFC Common Stock (to Milestar). BNC received 4,475,744 shares of DFC
Common Stock in the Merger, as described below.
The DFC Common Stock bought by Mary M. DeGeorge in June of 1993 was
purchased using $620,097.20 of her own personal funds. These shares were
transferred to Mr. Peter R. DeGeorge as part of their divorce settlement in
1995.
On September 23, 1993, Peter R. DeGeorge loaned $2 million to DFC
pursuant to a note which was later converted into DFC Common Stock as described
below. The $2 million loan was made with his own personal funds.
The DFC Common Stock bought by Peter R. DeGeorge in July of 1994 was
purchased using $244,688 of his own personal funds. The DFC Common Stock bought
by Peter R. DeGeorge on December 14, 1995 was purchased using $494,504 of his
own personal funds. The DFC Common Stock bought by Peter R. DeGeorge on
December 17, 1996 was purchased using $182,817 of his own personal funds. The
DFC Common Stock bought by Peter R. DeGeorge on April 15, 1997 was purchased
using $112,129.88 of his own personal funds.
Item 4. PURPOSE OF TRANSACTION.
Mr. DeGeorge and BNC have engaged in the transactions described herein
for the purpose of obtaining a substantial equity interest in DFC and enhancing
the value of that interest.
By letter dated September 12, 1997, Mr. DeGeorge submitted a proposal
(the "Proposal") to the Board of Directors of DFC to acquire all outstanding
shares of DFC not owned by Mr. DeGeorge, BNC and possibly by certain of the
Company's present and former directors, officers and related parties
("Non-Affiliated Shares") for $1.30 in cash per share. A copy of the Proposal
is attached hereto as Exhibit 99(A) and is incorporated herein by reference.
The Proposal is subject to entering into a mutually satisfactory
merger agreement which will contain, among other things, an agreement by DFC to
(a) reimburse Mr. DeGeorge, BNC and the other continuing stockholders (the
"Purchaser Group") for out-of-pocket expenses incurred by or on behalf of the
Purchaser Group in connection with the Purchaser Group's pursuit of the
Proposal, including without limitation, reasonable fees and expenses of the
Purchaser Group's attorneys, accountants, consultants and financing sources in
the event the transaction contemplated by the Proposal is not consummated for
any reason other than a breach of the merger agreement by any member of the
Purchaser Group, and (b) pay Mr. DeGeorge liquidated damages of $100,000 in the
event that DFC is the subject of a change of control involving any person other
than Mr. DeGeorge within one year of the date of the merger agreement.
<PAGE>
CUSIP No. 244783-10-6 Page 7 of 13 Pages
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The following information is based upon 10,810,193 shares of DFC
Common Stock outstanding:
(i) BNC owns 4,475,744 shares of DFC Common Stock, or
approximately 41.4% of the DFC Common Stock outstanding.
(ii) Peter R. DeGeorge owns 100% of the capital stock of
BNC, and therefore may be deemed to beneficially own the shares of DFC
Common Stock owned by BNC. Mr. DeGeorge also beneficially owns (a) an
additional 347,826 shares of DFC Common Stock acquired in connection
with the conversion of a convertible note described in Item 6 below,
(b) 75,000 shares of DFC Common Stock purchased in the open market in
July of 1994, (c) 90,000 shares of DFC Common Stock acquired in a
divorce settlement in 1995, (d) 430,000 shares of DFC Common Stock
purchased in the open market on December 14, 1995, (e) 150,000 shares
of DFC Common Stock purchased in the open market on December 17, 1996,
and (f) 100,000 shares of DFC Common Stock purchased in the open
market on April 15, 1997. Taking all of the above described shares
into account, Mr. DeGeorge beneficially owns 5,668,570 shares of DFC
Common Stock, or approximately 52.4% of the DFC Common Stock
outstanding.
(iii) Peter R. DeGeorge has one outstanding stock option,
which is not currently exercisable or exercisable within 60 days of
the date hereof. Such option would enable Mr. DeGeorge to acquire
400,000 shares of DFC Common Stock at an option exercise price of
$1.50 per share. This option will vest if DFC earns at least
$2,354,000 in fiscal 1997 on a pretax basis. If it vests, this
option has a ten-year term. Based on the Company's current
projections, it now appears that this option will not vest.
(b) BNC has sole power to vote or to direct the vote of all shares of
DFC Common Stock referred to in paragraph (i) above and sole power to dispose or
to direct the disposition of all such shares. Mr. DeGeorge is deemed to have
the sole power to vote or to direct the vote and to dispose of or direct the
disposition of the shares of DFC Common Stock owned by BNC by virtue of his
ownership of 100% of the issued and outstanding stock of BNC.
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CUSIP No. 244783-10-6 Page 8 of 13 Pages
In addition, Mr. DeGeorge has the sole power to vote or to direct the vote and
to dispose of or direct the disposition of the shares of DFC Common Stock
referred to in clauses (a) - (f) of paragraph (ii) above.
(c) None of the Filing Parties has affected any transactions in DFC
Common Stock during the past 60 days except as described herein.
(d) No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the shares of DFC Common Stock beneficially owned by the Filing Parties.
(e) Milestar merged with and into DFC on October 13, 1994, and,
accordingly, is no longer a Filing Party. Pursuant to the Merger, all of the
4,879,744 shares of DFC Common Stock, previously owned by Milestar were
canceled. Each of the 1,545 shares of Milestar common stock outstanding prior
to the Merger was converted pursuant to the Merger into 3,158.4103 shares of DFC
Common Stock, resulting in the issuance of 4,879,744 shares of DFC Common Stock
to the former stockholders of Milestar, principally BNC which received 4,475,744
shares of DFC Common Stock in the Merger.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
-----------------------------
(i) Mr. DeGeorge is a party to a Stock Purchase and Shareholders
Agreement, dated as of November 22, 1988, among DFC, Mr. DeGeorge, Kleinwort
Benson Limited and Creditanstalt Bankverein, as amended by a letter agreement
dated October 7, 1992, and as further amended by a confirmatory letter dated
December 10, 1992 (the "Shareholders Agreement").
Pursuant to the Shareholders Agreement, if Mr. DeGeorge or any of his
affiliates receives an offer from any person (an "Offeror") to purchase shares
of DFC Common Stock owned by Mr. DeGeorge or such affiliates which shares,
aggregated with all prior sales by Mr. DeGeorge or such affiliates of DFC Common
Stock, represent more than fifty percent of the voting power of DFC, and Mr.
DeGeorge determines to accept such offer, prompt notice must be provided to the
other shareholders party to the Shareholders Agreement (the "Banks"). Each of
the Banks then may elect to require Mr. DeGeorge to have the Offeror purchase
all of the shares of DFC Common Stock held by it for the same price per share
and the same terms as those offered to Mr. DeGeorge and his affiliates. Subject
to certain exceptions, Mr. DeGeorge may not consummate the sale of his shares of
DFC Common Stock unless the sale of the shares held by the Banks that have made
the election referenced above shall also be consummated.
If Mr. DeGeorge or his affiliates shall sell to a non-affiliate shares
of DFC Common Stock which shares, aggregated with all prior sales by Mr.
DeGeorge or such affiliates,
<PAGE>
CUSIP No. 244783-10-6 Page 9 of 13 Pages
represent more than fifty percent of the voting power of DFC, Mr. DeGeorge or
his affiliates may, at their option, require each of the Banks to sell to such
non-affiliate all of the shares of DFC Common Stock owned by it, at the same
price per share and on the same terms as those on which Mr. DeGeorge or his
affiliates sells his shares.
(ii) Mr. DeGeorge is a party to a Registration Rights Agreement, dated
December 10, 1992 (the "Registration Rights Agreement"), pursuant to which he
and certain other persons are granted an unlimited number of "piggyback"
registration rights with respect to the shares of DFC Common Stock which each of
them owned directly or beneficially on December 3, 1992. If DFC proposes to
register any of its securities (other than in connection with a business
combination or an employee benefit plan), DFC is require to include in the
filing, and use its best efforts to register, the number of shares of DFC Common
Stock as to which such stockholders request registration. Such registration
rights are subject to certain conditions and limitations, including the right of
DFC to reduce PRO RATA the amount of DFC Common Stock of each stockholder
included in an underwritten public offering if the managing underwriter
determines that the aggregate requested participation will adversely affect the
offering or the offering price.
(iii) On September 23, 1993, DFC obtained a $2 million loan from Peter R.
DeGeorge, the chairman, chief executive officer and principal shareholder of
DFC. This loan was pursuant to a demand note which was payable in either DFC
Common Stock (based upon the NASDAQ closing price on the date of payment) or
cash at the option of DFC. The note bore interest at a rate of 9% per annum.
On December 30, 1993 Mr. DeGeorge demanded payment of the note and DFC
determined, based upon its then existing working capital situation, to pay the
note with 347,826 shares of DFC Common Stock rather than cash. The number of
shares issued was based upon the NASDAQ closing price of $5.75 per share on
December 30, 1993. As of December 30, 1993, approximately $49,000 of interest
was accrued and unpaid on the demand note. This interest was not converted into
DFC Common Stock and on October 26, 1994, the accrued interest on this note of
$52,675.00 was paid in full.
(iv) Effective January 14, 1994, Dauphin Deposit Bank and Trust Company
of Harrisburg, Pennsylvania ("Dauphin") assign to Peter R. DeGeorge the note and
security for its $3.4 million loan to Patwil Homes, Inc., a Delaware corporation
and a subsidiary of DFC ("Patwil"), in exchange for a $3.4 million payment by
Mr. DeGeorge (and payment of accrued interest by Patwil of approximately
$32,000). Subsequently, Mr. DeGeorge released all of the collateral securing
the original Dauphin loan in exchange for a new convertible note from Patwil
(the "Patwil Note") which matured on July 14, 1994, bore interest at 11% per
annum and the unpaid principal and interest of which was convertible at the
option of the holder thereof at any time on or after the maturity date thereof
(unless previously paid) into DFC Common Stock at a price of $6.00 per share,
subject to adjustment in certain circumstances. Accordingly, the Patwil Note
could have been converted into 566,667 shares of DFC Common Stock. Instead, the
Patwil Note was paid in full with the proceeds of a public offering of debt
securities and warrants on April 8, 1994.
<PAGE>
CUSIP No. 244783-10-6 Page 10 of 13 Pages
(v) On February 7, 1994, Messrs. Herbert L. Getzler, the then-President
of DFC, and James G. Einloth, the then-Vice President and Treasurer of DFC,
entered into an agreement with BNC pursuant to which they exchanged their stock
in two other corporations, Star Services, Inc. of Delaware, a Delaware
corporation, and DeGeorge Sports, Inc., a Delaware corporation, and any claims
which either of them had for compensation from either of the above-named
corporations for additional shares of stock of Milestar. Mr. Getzler received
29.945352 shares of the common stock of Milestar and Mr. Einloth received
17.967251 shares of the common stock of Milestar in this transaction. These
Milestar shares were later converted into DFC Common Stock in the Merger.
(vi) Immediately preceding DFC's initial public offering in December
1992, cash dividends declared and payable to BNC by DHA were converted into a
note payable by DHA to BNC in the principal amount of $1,496,601. The note was
originally due on June 30, 1994, but its maturity date was extended to October
31, 1994. This note bore interest at the rate of 6% per annum. This note was
paid in full on October 26, 1994, when the balance due thereon, including
interest, was $1,665,368.79.
(vii) The Merger Agreement was conditioned upon the delivery of an
Agreement of Indemnification by each of BNC and Messrs. Getzler and Einloth in
which they agreed (jointly and severally, in the case of BNC, and severally in
proportion to their respective percentage holdings of common stock of Milestar,
in the case of Messrs. Getzler and Einloth) to indemnify and hold DFC harmless
from any and all liabilities, damages or claims incurred by DFC that may arise
out of or in connection with any liability of Milestar, whether known or
unknown.
(viii) To the extent not described above, the transactions relating to
Peter R. DeGeorge described in the Annual Report on Form 10-K of DFC for the
fiscal year ended December 31, 1996, under the heading "Certain Relationships
with Related Transactions" are hereby incorporated herein by this reference.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 99(A) -- Proposal Letter dated September 12, 1997
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CUSIP No. 244783-10-6 Page 11 of 13 Pages
SCHEDULE I
INFORMATION WITH RESPECT TO DIRECTORS AND
EXECUTIVE OFFICERS OF BNC ACQUISITION CORP.
I. DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name and present principal occupation or
employment of each of the current directors and executive officers of BNC. The
present business address of Mr. DeGeorge is c/o DeGeorge/Florida, 140
Intracoastal Pointe Drive, Suite 410, Jupiter, Florida 33477. The present
business address of Mr. Dodge is 99 Realty Drive, Cheshire, Connecticut 06410.
NAME PRESENT PRINCIPAL OCCUPATION OR
---- -------------------------------
EMPLOYMENT
-----------
Peter R. DeGeorge Chairman of the Board and Chief
Executive Officer of DFC; Chairman
of the Board, President and Chief
Executive Officer of BNC.
Jonathan K. Dodge Vice President, Secretary and
General Counsel of DFC; Vice
President, Secretary and a director
of BNC.
DeGeorge Financial Corporation arranges financing and is currently managing
over $200 million in underwritten construction loans. It provides access to
home ownership for people who lack a sufficient down payment or sufficient
income to support the purchase of the home they desire through conventional
mortgage programs. Through its packaging of financial services and customer
support, the Company enables its customers to reduce the cost of home
construction by eliminating the general contractor, the intent of which is to
create an equity position that serves as the down payment for permanent
financing upon the conclusion of the home construction process.
<PAGE>
CUSIP No. 244783-10-6 Page 12 of 13 Pages
SIGNATURE
After reasonable 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.
Dated: September 12, 1997
BNC ACQUISITION CORP.
By: /s/ Peter R. DeGeorge
--------------------------------
Name: Peter R. DeGeorge
Title: Chairman and Chief Executive
Officer
/s/ Peter R. DeGeorge
-----------------------------------
Peter R. DeGeorge
<PAGE>
CUSIP No. 244783-10-6 Page 13 of 13 Pages
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------------------- -----------------------
Exhibit 99(A) Proposal Letter
dated September 12,
1997
<PAGE>
September 12, 1997
Board of Directors of DeGeorge Financial Corporation
99 Realty Drive
Cheshire, Connecticut 06410
Gentlemen:
I hereby propose to buy-out the shares of DeGeorge Financial
Corporation (the "Company") not already owned directly or indirectly by me and
possibly by certain of the Company's present and former directors, officers and
related parties who may wish to participate in the buy-out with me (the
"Purchaser Group"). I believe that such a transaction will be in the best
interests of the Company and its shareholders and will eliminate potential
creditor apprehensions and low employee morale resulting from the consistently
low prices of the Company's stock.
My proposal contemplates a cash price per share of $1.30 for the
public stockholders which represents a substantial premium over the present and
recent historical market prices of the stock. I have made arrangements for
financing the purchase price of such shares and, accordingly, my proposal is not
subject to financing.
I am prepared to negotiate promptly a mutually acceptable merger
agreement with the Company which I expect would contain limited conditions and
establish the structure for the buy-out. Since I will incur considerable
expense and expend considerable time and effort to effect the merger which I
believe are in the best interests of all shareholders, this proposal is
conditioned upon the merger agreement providing that the Company will (a)
reimburse the Purchaser Group for out-of-pocket expenses incurred by or on
behalf of the Purchaser Group in connection with the Purchaser Group's pursuit
of this proposal, including without limitation, reasonable fees and expenses of
the Purchaser Group's attorneys, accountants, consultants and financing sources
in the event the transaction contemplated by this proposal is not consummated
for any reason other than a breach of the merger agreement by any member of the
Purchaser Group, and (b) pay me liquidated damages of $100,000 in the event that
the Company is the subject of a change of control involving any Person other
than me within one year of the date of the merger agreement.
<PAGE>
Board of Directors of DeGeorge Financial Corporation
September 12, 1997
Page 2
I appreciate that, in considering my proposal, the obligation of the
Board of Directors of the Company is to examine it from the standpoint of the
best interests of the Company's shareholders as a whole. Therefore, I and any
members of the Purchaser Group who may be directors would be happy to recuse
ourselves during any Board meeting at which my proposal is to be considered
unless our presence is requested for the purpose of answering questions.
If you are interested in pursuing my proposal, I request that my
advisors and I be permitted to review any proposed press releases or other
public statements prior to their release.
I and my advisors are ready and eager to meet with you and your
advisors to begin work on the merger agreement. If we work together, I do not
anticipate any difficulties in arranging the details and I am confident that we
can develop a definitive agreement very quickly. I would very much appreciate
hearing from you as soon as possible so that we both might discuss how best to
proceed.
Very truly yours,
/s/ Peter R. DeGeorge
Peter R. DeGeorge
