SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE
ACT OF 1934)
FIRST SHENANGO BANCORP, INC.
(Name of Issuer)
FIRST SHENANGO BANCORP, INC.
(Name of Person(s) Filing Statement)
Common Stock, Par Value $0.10 per Share
(Title of Class of Securities)
336409107
-------------------
(CUSIP Number of Class of Securities)
Francis A. Bonadio
President and Chief Executive Officer
First Shenango Bancorp, Inc.
25 North Mill Street
New Castle, Pennsylvania 16101
(800) 982-8322
With Copies to:
Samuel J. Malizia, Esq.
Lloyd H. Spencer, Esq.
Malizia, Spidi, Sloane & Fisch, P.C.
One Franklin Square
1301 K Street, N.W.
Suite 700 East
Washington, DC 20005
(202) 434-4660
(Name, Address and Telephone Number
of Persons Authorized to Receive Notices and Communications
on Behalf of Person(s) filing Statement)
October 25, 1996
(Date tender offer first published, sent or given to security holders)
<PAGE>
CALCULATION OF FILING FEE
================================================================================
Amount of
Transaction Valuation* Filing Fee
================================================================================
$4,750,000 $950.00
================================================================================
* For purposes of calculating fee only. Based on the Offer for 200,000 shares at
the maximum tender offer price per share of $23.75.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: Not Applicable Filing Party: Not Applicable
Form or Registration No.: Not Applicable Date Filed: Not Applicable
2
<PAGE>
This Issuer Tender Offer Statement (the "Statement") relates to the tender
offer by First Shenango Bancorp, Inc., a Pennsylvania corporation (the
"Company"), to purchase up to 200,000 shares of common stock, par value $0.10
per Share (the "Shares"), at prices not greater than $23.75 nor less than $20.50
per Share upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated October 25, 1996 (the "Offer to Purchase") and the related
Letter of Transmittal (which are herein collectively referred to as the
"Offer"). The Offer is being made to all holders of Shares, including officers,
directors and affiliates of the Company.
Item 1. Security and Issuer.
(a) The name of the issuer is First Shenango Bancorp, Inc., a Pennsylvania
corporation. The address of its principal executive office is 25 North Mill
Street, New Castle, Pennsylvania 16101.
(b) The classes of securities to which this Statement relates are the
Shares. The information set forth in "INTRODUCTION" in the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in "INTRODUCTION" and "Price Range of Shares;
Dividends" in the Offer to Purchase is incorporated herein by reference.
(d) This statement is being filed by the Issuer.
Item 2. Source and Amount of Funds or Other Consideration.
(a)-(b) The information set forth in "Source and Amount of Funds" in the
Offer to Purchase is incorporated herein by reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer.
(a)-(j) The information set forth in "INTRODUCTION", "Number of Shares;
Proration", "Background and Purpose of the Offer" and "Effects of the Offer on
the Market for Shares; Registration under the Exchange Act" in the Offer to
Purchase is incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
The information set forth in "Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning Shares" in the Offer to Purchase is
incorporated herein by reference.
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<PAGE>
Item 5. Contracts, Arrangements, Understandings or Relationships With Respect to
the Issuer's Securities.
The information set forth in "INTRODUCTION", "Number of Shares; Proration",
"Background and Purpose of the Offer", "Effects of the Offer on the Market for
Shares; Registration under the Exchange Act" and "Interest of Directors and
Executive Officers; Transactions and Arrangements Concerning Shares" in the
Offer to Purchase is incorporated herein by reference.
Item 6. Persons Retained, Employed or to be Compensated.
The information set forth in "Fees and Expenses" in the Offer to Purchase
is incorporated herein by reference.
Item 7. Financial Information.
The information set forth in "Certain Information Concerning the Company --
Selected Consolidated Financial Information" and "--Unaudited Pro Forma
Financial Information" in the Offer to Purchase is incorporated herein by
reference.
Item 8. Additional Information.
(a) Not applicable.
(b) The information set forth in "Miscellaneous" in the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in "Effects of the Offer on the Market for
Shares; Registration Under the Exchange Act" in the Offer to Purchase is
incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, is incorporated herein by reference in their entirety.
Item 9. Material to be Filed as Exhibits.
(a)(1) Form of Offer to Purchase dated October 25, 1996.
(a)(2) Form of Letter of Transmittal.
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(a)(3) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees dated October 25, 1996.
(a)(4) Form of Letter to Clients from Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees dated October 25, 1996.
(a)(5) Form of Notice of Guaranteed Delivery.
(a)(6) Form of Letter to Stockholders from the Chief Executive Officer of
the Company dated October 25, 1996.
(a)(7) Form of press release issued by the Company dated October 24, 1996.
(a)(8) Form of question and answer brochure.
(a)(9) Form of Letter to Participants in the First Federal Savings Bank of
New Castle Employee Stock Ownership Plan dated October 25, 1996.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: October 25, 1996.
FIRST SHENANGO BANCORP, INC.
By: /s/ Francis A. Bonadio
---------------------------------------------
Name: Francis A. Bonadio
Title: President and Chief Executive Officer
6
<PAGE>
INDEX OF EXHIBITS
(a)(1) Form of Offer to Purchase dated October 25, 1996.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees dated October 25, 1996.
(a)(4) Form of Letter to Clients from Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees dated October 25,
1996.
(a)(5) Form of Notice of Guaranteed Delivery.
(a)(6) Form of Letter to Stockholders from the Chief Executive
Officer of the Company dated October 25, 1996.
(a)(7) Form of press release issued by the Company dated October
24, 1996.
(a)(8) Form of question and answer brochure.
(a)(9) Form of Letter to Participants in the First Federal Savings
Bank of New Castle Employee Stock Ownership Plan dated
October 25, 1996.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
7
EXHIBIT (a)(1)
<PAGE>
FIRST SHENANGO BANCORP, INC.
Offer To Purchase For Cash Up to 200,000 Shares of its
Common Stock at a Purchase Price not in excess of
$23.75 nor less than $20.50 Per Share
----------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON MONDAY, NOVEMBER 25, 1996, UNLESS THE OFFER IS EXTENDED.
----------------------------------------------
First Shenango Bancorp, Inc., a Pennsylvania corporation (the
"Company"), invites its shareholders to tender shares of its common stock, $0.10
par value per share (the "Shares"), at prices not in excess of $23.75 nor less
than $20.50 per Share in cash, as specified by shareholders tendering their
Shares, upon the terms and subject to the conditions set forth herein and in the
related Letter of Transmittal (which together constitute the "Offer"). The
Company will determine the single per Share price, not in excess of $23.75 nor
less than $20.50 per Share, net to the seller in cash (the "Purchase Price"),
that it will pay for Shares validly tendered pursuant to the Offer, taking into
account the number of Shares so tendered and the prices specified by tendering
shareholders. The Company will select the lowest Purchase Price that will allow
it to buy 200,000 Shares (or such lesser number of Shares as are validly
tendered at prices not in excess of $23.75 nor less than $20.50 per Share). All
Shares validly tendered at prices at or below the Purchase Price and not
withdrawn will be purchased at the Purchase Price, upon the terms and subject to
the conditions of the Offer, including the proration provisions. All Shares
acquired in the Offer will be acquired at the Purchase Price.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED, BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
The Shares are quoted on the Nasdaq National Market ("Nasdaq/NMS"). On
October 24, 1996, the last full trading day on the Nasdaq/NMS prior to the
commencement of the Offer, the closing per Share sales price was $ 21.50.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE
SECTION 8.
Any shareholder wishing to tender all or any part of his or her Shares
should either (a) complete and sign a Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
either mail or deliver it with any required signature guarantee and any other
required documents to ChaseMellon Shareholder Services (the "Depositary"), and
either mail or deliver the stock certificates for such Shares to the Depositary
(with all such other documents) or tender such Shares pursuant to the procedure
for book-entry delivery set forth in Section 3, or (b) request a broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such shareholder. Holders of Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact that broker,
dealer, commercial bank, trust company or other nominee if such shareholder
desires to tender such Shares. Any shareholder who desires to tender Shares and
whose certificates for such Shares cannot be delivered to the Depositary or who
cannot comply with the procedure for book-entry delivery or whose other required
documents cannot be delivered to the Depositary, in any case, by the expiration
of the Offer must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3. SHAREHOLDERS MUST PROPERLY COMPLETE THE LETTER
OF TRANSMITTAL INCLUDING THE SECTION OF THE LETTER OF TRANSMITTAL RELATING TO
THE PRICE AT WHICH THEY ARE TENDERING SHARES IN ORDER TO EFFECT A VALID TENDER
OF THEIR SHARES.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER. HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND AT WHICH PRICE OR PRICES.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to MacKenzie Partners, Inc. (the "Information Agent"),
at its address and telephone number set forth on the back cover of this Offer to
Purchase.
The Date of this Offer to Purchase is October 25, 1996
<PAGE>
SUMMARY
This general summary is solely for the convenience of the Company's
shareholders and is qualified in its entirety by reference to the full text and
more specific details in this Offer to Purchase.
Purchase Price.................. The Company will select a single Purchase Price
which will not be more than $23.75 nor less
than $20.50 per Share. All Shares purchased by
the Company will be purchased at the Purchase
Price even if tendered at or below the Purchase
Price. Each shareholder desiring to tender
Shares must specify in the Letter of
Transmittal the minimum price (not more than
$23.75 nor less than $20.50 per Share) at which
such shareholder is willing to have his or her
Shares purchased by the Company.
Number of Shares to be
Purchased..................... 200,000 Shares (or such lesser number of Shares
as are validly tendered).
How to Tender Shares............ See Section 3. Call the Information Agent, or
consult your broker for assistance.
Brokerage Commissions........... None.
Stock Transfer Tax.............. None, if payment is made to the registered
holder.
Expiration and Proration
Dates......................... Monday, November 25, 1996, at 5:00 p.m.,
Eastern time, unless extended by the Company.
Payment Date.................... As soon as practicable after the termination of
the Offer.
Position of the Company and
its Directors................. Neither the Company nor its Board of Directors
makes any recommendation to any shareholder as
to whether to tender or refrain from tendering
Shares.
Withdrawal Rights............... Tendered Shares may be withdrawn at any time
until 5:00 p.m., Eastern time, on Monday ,
November 25, 1996, unless the Offer is extended
by the Company, and, unless previously
purchased, after 12:00 midnight, Eastern time,
on Monday, December 23, 1996. See Section 4.
Odd Lots........................ There will be no proration of Shares tendered
by any shareholder owning beneficially less
than 100 Shares as of October 22, 1996, who
tenders all such Shares at or below the
Purchase Price prior to the Expiration Date and
who checks the "Odd Lots" box in the Letter of
Transmittal. See Section 1.
2
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR
MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
--------------------------
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
INTRODUCTION.................................................................. 4
1. Number of Shares; Proration....................................... 5
2. Background and Purpose of the Offer............................... 6
3. Procedures for Tendering Shares................................... 7
4. Withdrawal Rights................................................ 11
5. Purchase of Shares and Payment of Purchase Price................. 12
6. Certain Conditions of the Offer.................................. 12
7. Extension of the Offer; Termination; Amendment................... 14
8. Price Range of Shares; Dividends................................. 15
9. Source and Amount of Funds....................................... 16
10. Certain Information Concerning the Company....................... 16
11. Interest of Directors and Executive Officers; Transactions
and Arrangements Concerning Shares............................... 24
12. Effects of the Offer on the Market for Shares; Registration
under the Exchange Act........................................... 24
13. Certain Federal Income Tax Consequences.......................... 25
14. Fees and Expenses................................................ 27
15. Additional Information........................................... 27
16. Miscellaneous.................................................... 27
Schedule I - Certain Transactions Involving Shares
3
<PAGE>
To the Holders of Common Stock of First Shenango Bancorp, Inc.:
INTRODUCTION
First Shenango Bancorp, Inc., a Pennsylvania corporation (the
"Company"), invites its shareholders to tender shares of its common stock, $0.10
par value per share (the "Shares"), at prices, net to the seller in cash, not in
excess of $23.75 nor less than $20.50 per Share, as specified by shareholders
tendering their Shares, upon the terms and subject to the conditions set forth
herein and in the related Letter of Transmittal (which together constitute the
"Offer"). The Company will determine the single per Share price, not in excess
of $23.75 nor less than $20.50 per Share (the "Purchase Price"), that it will
pay for Shares validly tendered pursuant to the Offer, taking into account the
number of Shares so tendered and the prices specified by tendering shareholders.
The Company will select the lowest Purchase Price that will allow it to buy
200,000 Shares (or such lesser number of Shares as are validly tendered). All
Shares acquired in the Offer will be acquired at the Purchase Price. All Shares
validly tendered at prices at or below the Purchase Price 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, including the proration provisions.
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 200,000 Shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy shares first
from all Odd Lot Holders (as defined in Section 1) who validly tender all their
Shares at or below the Purchase Price and then on a pro rata basis from all
other shareholders who validly tender at prices at or below the Purchase Price
(and did not withdraw them prior to the expiration of the Offer). See Section 1.
All Shares not purchased pursuant to the Offer, including Shares tendered at
prices greater than the Purchase Price and not withdrawn and Shares not
purchased because of proration, will be returned at the Company's expense to the
shareholders who tendered such Shares.
The Purchase Price will be paid net to the tendering shareholder in cash
for all Shares purchased. Tendering shareholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Company. HOWEVER, ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO
COMPLETE, SIGN AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 THAT IS
INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL
INCOME TAX WITHHOLDING. SEE SECTION 3 OF THIS OFFER TO PURCHASE AND INSTRUCTION
12 OF THE LETTER OF TRANSMITTAL. The Company will pay all fees and expenses of
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") and MacKenzie
Partners, Inc. (the "Information Agent") incurred in connection with the Offer.
See Section 14.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER. HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING THEIR SHARES. EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES AND AT WHICH PRICE OR PRICES.
As of October 24, 1996, there were 2,258,047 Shares outstanding (not
including Treasury Shares) and 106,745 Shares issuable upon exercise of stock
options under the Company's stock option plans. The 200,000 Shares that the
Company is offering to purchase pursuant to the Offer represent approximately
8.86% of the outstanding Shares. The Shares are quoted on the Nasdaq National
Market ("Nasdaq/NMS"), under the symbol "SHEN". SHAREHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES. See Section 8.
4
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THE OFFER
1. Number of Shares; Proration.
Upon the terms and subject to the conditions of the Offer, the Company
will purchase up to 200,000 Shares or such lesser number of Shares as are
validly tendered (and not withdrawn in accordance with Section 4) prior to the
Expiration Date (as defined below) at prices not in excess of $23.75 nor less
than $20.50 net per Share in cash. The term "Expiration Date" means 5:00 p.m.,
Eastern time, on Monday, November 25, 1996, unless and until the Company, in its
sole discretion, shall have extended the period of time during which the Offer
will remain open, in which event the term "Expiration Date" shall refer to the
latest time and date at which the Offer, as so extended by the Company, shall
expire. In the event of an oversubscription of the Offer as described below,
Shares tendered at or below the Purchase Price prior to the Expiration Date will
be subject to proration except for Odd Lots as explained below. The proration
period also expires on the Expiration Date.
The Company will, upon the terms and subject to the conditions of the
Offer, determine the Purchase Price (not greater than $23.75 nor less than
$20.50 per Share) that it will pay for Shares validly tendered pursuant to the
Offer taking into account the number of Shares so tendered and the prices
specified by tendering shareholders. The Company will select a single per Share
Purchase Price that will allow it to buy 200,000 Shares (or such lesser number
as are validly tendered at prices not greater than $23.75 nor less than $20.50
per Share) pursuant to the Offer. The Company reserves the right, in its sole
discretion, to purchase more than 200,000 Shares pursuant to the Offer.
If (i) the Company increases or decreases the price to be paid for
Shares, increases the number of Shares being sought and any such increase in the
number of Shares being sought exceeds 2% of the outstanding Shares, or decreases
the number of Shares being sought, or incurs dealer manager soliciting fees and
(ii) the Offer is scheduled to expire less than ten business days from and
including the date that notice of such increase or decrease is first published,
sent or given in the manner specified in Section 7, the Offer will be extended
for at least ten business days from and including the date of such notice. For
purposes of the Offer, a "business day" means any day other than Saturday,
Sunday or federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, Eastern time.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
In accordance with Instruction 5 of the Letter of Transmittal,
shareholders desiring to tender Shares must specify the price, not in excess of
$23.75 nor less than $20.50 per Share, at which they are willing to sell their
Shares to the Company. Shares validly tendered pursuant to the Offer at or below
the Purchase Price and not withdrawn will be purchased at the Purchase Price,
subject to the terms and conditions of the Offer, including the proration
provisions. All Shares tendered and not purchased pursuant to the Offer,
including Shares tendered at prices in excess of the Purchase Price and Shares
not purchased because of proration will be returned to the tendering
shareholders at the Company's expense as promptly as practicable following the
Expiration Date.
Priority of Purchases. Upon the terms and subject to the conditions of
the Offer, if more than 200,000 Shares (or such greater number of Shares as the
Company may elect to purchase) have been validly tendered at prices at or below
the Purchase Price and not withdrawn prior to the Expiration Date, the Company
will purchase validly tendered Shares on the basis set forth below:
(a) first, all Shares tendered and not withdrawn prior to the Expiration
Date by any Odd Lot Holder (as defined below) who:
(1) tenders all Shares beneficially owned by such Odd Lot Holder
at a price at or below the Purchase Price (tenders of less than all
Shares owned by such shareholder will not qualify for this preference);
and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
5
<PAGE>
(b) second, after purchase of all of the foregoing Shares, all other
Shares validly tendered at prices at or below the Purchase Price and not
withdrawn prior to the Expiration Date, on a pro rata basis (with
appropriate adjustments to avoid purchases of fractional Shares) as
described below.
Odd Lots. For purposes of the Offer, the term "Odd Lots" shall mean all
Shares validly tendered prior to the Expiration Date at prices at or below the
Purchase Price and not withdrawn by any person (an "Odd Lot Holder") who owned,
beneficially or of record, as of the close of business on October 22, 1996 and
as of the Expiration Date, an aggregate of fewer than 100 Shares and so
certified in the appropriate place on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery. In order to qualify for this
preference, an Odd Lot Holder must tender all such Shares in accordance with the
procedures described in Section 3. As set forth above, Odd Lots will be accepted
for payment before proration, if any, of the purchase of other tendered Shares.
This preference is not available to partial tenders or to beneficial or record
holders of an aggregate of 100 or more Shares, even if such holders have
separate accounts or certificates representing fewer than 100 Shares. By
accepting the Offer, an Odd Lot Holder would not only avoid the payment of
brokerage commissions but also would avoid any applicable odd lot discounts in a
sale of such holder's Shares. Any shareholder wishing to tender all of such
shareholder's Shares pursuant to this Section should complete the box captioned
"Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery.
The Company also reserves the right, but will not be obligated, to
purchase all Shares validly tendered by any shareholder who tendered all Shares
owned, beneficially or of record, at or below the Purchase Price and who, as a
result of proration, would then own, beneficially, an aggregate of fewer than
100 Shares. If the Company exercises this right, it will increase the number of
Shares that it is offering to purchase by the number of Shares purchased through
the exercise of the right.
Proration. In the event that proration of tendered Shares is required,
the Company will determine the proration factor as soon as practicable following
the Expiration Date. Proration for each shareholder tendering Shares, other than
Odd Lot Holders, shall be based on the ratio of the number of Shares tendered by
such shareholder to the total number of Shares tendered by all shareholders,
other than Odd Lot Holders, at or below the Purchase Price. Because of the
difficulty in determining the number of Shares validly tendered (including
Shares tendered by guaranteed delivery procedures, as described in Section 3)
and not withdrawn, and because of the odd lot procedure, the Company does not
expect that it will be able to announce the final proration factor or to
commence payment for any Shares purchased pursuant to the Offer until
approximately seven over-the-counter ("OTC") trading days after the Expiration
Date. The preliminary results of any proration will be announced by press
release as promptly as practicable after the Expiration Date. Shareholders may
obtain such preliminary information from the Information Agent and may be able
to obtain such information from their brokers.
This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
Company's shareholder list or, if applicable, who are listed as participants in
a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
2. Background and Purpose of the Offer.
The Offer is designed to reposition the Company's balance sheet to
increase return on equity and earnings per share by redeploying a portion of the
Company's equity capital. Following completion of the Offer, the Company and its
wholly owned subsidiary, First Federal Savings Bank of New Castle (the "Bank"),
will continue to have strong capital positions and will continue to qualify as
"well capitalized" institutions under the prompt corrective action provisions
enacted by the Federal Deposit Insurance Corporation Improvements Act of 1991.
On a pro forma basis as of September 30, 1996, giving effect to the Offer at the
maximum Purchase Price of $23.75 per Share and assuming acceptance of the
maximum number of Shares in the Offer, the Company would have had an equity to
assets ratio of 10.77%, and the Bank would have had a total risk-based capital
ratio of approximately 16.55% and a leverage ratio of approximately 8.57%.
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<PAGE>
The Offer will enable shareholders to sell a portion of their Shares
while retaining a continuing equity interest in the Company if they so desire.
The Offer will increase the Company's leverage, with an attendant increase in
the risks and rewards for persons who retain a continuing equity interest in the
Company. In addition, persons who determine not to accept the Offer will realize
a proportionate increase in their relative equity interest in the Company, and
thus in the Company's future earnings and assets, subject to increased risks
resulting from higher leverage and to the Company's ability to issue additional
Shares or other equity securities in the future.
The Offer may provide shareholders who are considering a sale of all or
a portion of their Shares the opportunity to determine the price or prices (not
greater than $23.75 nor less than $20.50 per Share) at which they are willing to
sell their Shares and, if any such Shares are purchased pursuant to the Offer,
to sell those Shares for cash without the usual transaction costs associated
with open-market sales. In addition, shareholders owning fewer than 100 Shares
whose Shares are purchased pursuant to the Offer not only will avoid the payment
of brokerage commissions but also will avoid any applicable odd lot discounts
payable on a sale of their Shares in an OTC transaction. The Offer also gives
shareholders the opportunity to sell Shares at prices greater than market prices
prevailing prior to announcement of the Offer. To the extent the purchase of
Shares in the Offer results in a reduction in the number of shareholders of
record, the costs of the Company for services to shareholders may be reduced.
For shareholders who do not tender, there is no assurance that the price of the
stock will not trade below the price currently being offered by the Company
pursuant to the Offer. For shareholders who do tender, the trading price of
stock may increase as a result of the Offer or an unexpected acquisition at a
premium could occur in the future. Finally, the Offer may affect the Company's
ability to qualify for pooling-of-interests accounting treatment for any
acquisition transaction for approximately the next two years.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY SUCH
RECOMMENDATION. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN
THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE
PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED.
Following completion of the Offer, the Company may repurchase additional
Shares in the open market, in privately negotiated transactions or otherwise.
Any such purchases may be on the same terms or on terms which are more or less
favorable to shareholders than the terms of the Offer. Rule 13e-4 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") prohibits the
Company and its affiliates from purchasing any Shares, other than pursuant to
the Offer, until at least ten business days after the Expiration Date. Any
possible future purchases by the Company will depend on many factors, including
the market price of the Shares, the results of the Offer, the Company's business
and financial position and general economic and market conditions.
Shares the Company acquires pursuant to the Offer will be held in the
Company's treasury and will be available for the Company to issue without
further shareholder action (except as required by applicable law or the rules of
the Nasdaq/NMS). Such Shares could be issued without shareholder approval for
such purposes as, among others, the acquisition of other businesses or the
raising of additional capital for use in the Company's business.
3. Procedures for Tendering Shares.
Proper Tender of Shares. For Shares to be validly tendered pursuant to
the Offer, (a) the certificates for such Shares (or confirmation of receipt of
such Shares pursuant to the procedures for book-entry delivery set forth below),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) including any required signature guarantees
and any other documents required by the Letter of Transmittal, must be received
prior to 5:00 p.m., Eastern time, on the Expiration Date by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase or
(b) the tendering shareholder must comply with the guaranteed delivery procedure
set forth below.
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IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL,
SHAREHOLDERS DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST PROPERLY
INDICATE IN THE SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES
ARE BEING TENDERED" ON THE LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF
$.125) AT WHICH THEIR SHARES ARE BEING TENDERED. SHAREHOLDERS WHO DESIRE TO
TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE LETTER OF
TRANSMITTAL FOR EACH PRICE AT WHICH SHARES ARE TENDERED, PROVIDED THAT THE SAME
SHARES CANNOT BE TENDERED (UNLESS PROPERLY WITHDRAWN PREVIOUSLY IN ACCORDANCE
WITH THE TERMS OF THE OFFER) AT MORE THAN ONE PRICE. IN ORDER TO VALIDLY TENDER
SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE APPROPRIATE SECTION ON
EACH LETTER OF TRANSMITTAL.
In addition, Odd Lot Holders who tender all such Shares must complete
the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on
the Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Holders as set forth in Section 1.
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal (i) if the Letter of Transmittal is signed
by the registered holder of the Shares (which term, for purposes of this Section
3, shall include any participant in The Depository Trust Company or The
Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities") whose name appears on a security position listing as the owner of
the Shares) tendered therewith and such holder has not completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal; or (ii) if Shares are tendered for
the account of a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office, branch or agency in the United States.
In all other cases, all signatures on the Letter of Transmittal must be
guaranteed by an eligible guarantor institution (bank, stockbroker, savings and
loan association or credit union with membership in an approved signature
guarantee medallion program) pursuant to Rule 17Ad-15 promulgated under the
Exchange Act (an "Eligible Institution"). See Instruction 1 of the Letter of
Transmittal. If a certificate for Shares is registered in the name of a person
other than the person executing a Letter of Transmittal, or if payment is to be
made, or Shares not purchased or tendered are to be issued, to a person other
than the registered holder, 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.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities as described above), a properly completed and duly executed
Letter of Transmittal (or manually signed facsimile thereof) and any other
documents required by the Letter of Transmittal. THE METHOD OF DELIVERY OF ALL
DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL AND ANY
OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING
SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with
respect to the Shares for purposes of the Offer at each Book-Entry Transfer
Facility within two business days after the date of this Offer to Purchase, and
any financial institution that is a participant in a Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing such
facility to transfer Shares into the Depositary's account in accordance with the
Book-Entry Transfer Facility's procedures for transfer. Although delivery of
Shares may be effected through a book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility, either (i) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof)
with any required signature guarantees and any other required documents must, in
any case, be transmitted to and received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or (ii) the guaranteed delivery procedure described
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below must be followed. DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Backup Federal Income Tax Withholding. To prevent backup federal income
tax withholding on payments made to shareholders for Shares purchased pursuant
to the Offer, each shareholder who does not otherwise establish an exemption
from such withholding must provide the Depositary with the shareholder's correct
taxpayer identification number and provide certain other information by
completing the substitute Form W-9 included in the Letter of Transmittal.
Foreign shareholders may be required to submit Form W-8, certifying non-United
States status, to avoid backup withholding. See Instructions 12 and 13 of the
Letter of Transmittal. For a discussion of certain federal income tax
consequences to tendering shareholders, see Section 13.
Withholding For Foreign Shareholders. The Depositary will withhold
federal income taxes equal to 30% of the gross payments payable to a foreign
shareholder or his agent unless the Depositary determines that an exemption from
or a reduced rate of withholding is available pursuant to a tax treaty or an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business in the United
States. In order to obtain an exemption from or a reduced rate of withholding
pursuant to a tax treaty, a foreign shareholder must deliver to the Depositary a
properly completed Form 1001 (or any related successor form). For this purpose,
a foreign shareholder is a shareholder that is not (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States, any State or any political
subdivision thereof, or (iii) an estate or trust the income of which is subject
to United States federal income taxation regardless of the source of such
income. In order to obtain an exemption from withholding on the grounds that the
gross proceeds paid pursuant to the Offer are effectively connected with the
conduct of a trade or business within the United States, a foreign shareholder
must deliver to the Depositary a properly completed Form 4224 (or any related
successor form). The Depositary will determine a shareholder's status as a
foreign shareholder and eligibility for a reduced rate of, or an exemption from,
withholding by reference to any outstanding certificates or statements
concerning eligibility for a reduced rate of, or exemption from, withholding
(e.g., Form 1001 or Form 4224) unless facts and circumstances indicate that such
reliance is not warranted. A foreign shareholder who has not previously
submitted the appropriate certificates or statements with respect to a reduced
rate of, or exemption from, withholding for which such shareholder may be
eligible should consider doing so in order to avoid excess withholding. A
foreign shareholder may be eligible to obtain a refund of tax withheld if such
shareholder meets one of the three tests for sale treatment described in Section
13 or is otherwise able to establish that no tax or a reduced amount of tax is
due.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant
to the Offer and such shareholder's Share certificates are not immediately
available (or the procedures for book-entry delivery cannot be completed on a
timely basis) or if time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such Shares may nevertheless be
tendered, provided that all of the following conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, telegram or facsimile
transmission, on or prior to the Expiration Date, a properly completed and duly
executed Notice of Guaranteed Delivery substantially in the form the Company has
provided with this Offer to Purchase (specifying the price at which the Shares
are being tendered), including (where required) a signature guarantee by an
Eligible Institution; and
(c) the certificates for all tendered Shares, in proper form for
transfer (or confirmation of book-entry delivery of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities), together
with a properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof) and any required signature guarantees or other
documents required by the Letter of Transmittal, are received by the Depositary
within three OTC trading days after the date of receipt by the Depositary of
such Notice of Guaranteed Delivery.
If any tendered Shares are not purchased, or if less than all Shares
evidenced by a shareholder's certificates are tendered, certificates for
unpurchased Shares will be returned as promptly as practicable after the
expiration or
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termination of the Offer or, in the case of Shares tendered by book-entry
delivery at a Book-Entry Transfer Facility, such Shares will be credited to the
appropriate account maintained by the tendering shareholder at the appropriate
Book-Entry Transfer Facility, in each case without expense to such shareholder.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid therefor and the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Company, in its sole discretion, and its determination
shall be final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders of any Shares that it determines are not in
appropriate form or the acceptance for payment of or payment for which may be
unlawful. The Company also reserves the absolute right to waive any of the
conditions of the Offer or any defect or irregularity in any tender with respect
to any particular Shares. No tender of Shares will be deemed to have been
validly made until all defects or irregularities have been cured by the
tendering shareholder or waived by the Company. None of the Company, the
Depositary, the Information Agent or any other person shall be obligated to give
notice of any defects or irregularities in tenders, nor shall any of them incur
any liability for failure to give any such notice.
Employee Stock Ownership Plan. As of October 24, 1996, the Company's
Employee Stock Ownership Plan (the "ESOP") owned 108,470 Shares of which 30,858
were allocated to the accounts of the participants. Shares allocated to
participants' accounts will, subject to the limitations of the Employee
Retirement Income Security Act of 1974, as amended, and applicable regulations
thereunder ("ERISA"), be tendered by the Trustee of the plan according to the
instructions of participants to the Trustee. Decisions as to whether to tender
Shares not allocated to participants' accounts will made by the Trustee subject
to the terms of the plan and ERISA. The Trustee will make available to the
participants whose accounts hold allocated Shares all documents furnished to the
shareholders in connection with the Offer generally and will provide additional
information in a separate letter with respect to the operations of the Offer to
the participants of the ESOP. Each participant will also receive a form upon
which the participant may instruct the Trustee regarding the Offer. Each
participant may direct that all, some or none of the Shares allocated to the
participant's account be tendered. Participants will also be afforded withdrawal
rights. See Section 4.
Under ERISA the Company will be prohibited from purchasing any Shares
from the ESOP (including Shares allocated to the accounts of participants) if
the Purchase Price is less than the prevailing market price of the Shares on the
date the Shares are accepted for payment pursuant to the Offer. If Shares
tendered from the ESOP would have been accepted pursuant to the terms of the
Offer except for this prohibition, such Shares shall automatically be deemed to
be withdrawn.
Dividend Reinvestment Plan. Shares credited to participants' accounts
under the Company's Dividend Reinvestment Plan (the "Dividend Reinvestment
Plan") will be tendered by ChaseMellon Shareholder Services, L.L.C. as
administrator, according to instructions provided to the administrator from
participants in the Dividend Reinvestment Plan. Dividend Reinvestment Plan
Shares for which the administrator has not received timely instructions from
participants will not be tendered. The administrator will make available to the
participants whose accounts are credited with Shares under the Dividend
Reinvestment Plan all documents furnished to stockholders generally in
connection with the Offer. BECAUSE THE DEPOSITARY FOR THE OFFER ALSO ACTS AS
ADMINISTRATOR OF THE DIVIDEND REINVESTMENT PLAN, PARTICIPANTS IN THE DIVIDEND
REINVESTMENT PLAN MAY USE THE LETTER OF TRANSMITTAL TO INSTRUCT THE
ADMINISTRATOR REGARDING THE OFFER BY COMPLETING THE BOX ENTITLED "TENDER OF
DIVIDEND REINVESTMENT PLAN SHARES." Each participant may direct that all, some
or none of the Shares credited to the participant's account under the Dividend
Reinvestment Plan be tendered and the price at which such participant's Shares
are to be tendered. Participants in the Dividend Reinvestment Plan are urged to
read the Letter of Transmittal and related materials carefully.
If a participant tenders all of such participant's Dividend Reinvestment
Plan Shares, and all such Shares are purchased by the Company pursuant to the
Offer, such tender will be deemed to be authorization and written notice to
ChaseMellon Shareholder Services, L..L.C. of termination of such participant's
participation in the Dividend Reinvestment Plan.
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Company Stock Bonus Plans. Holders of outstanding but unvested stock
bonus awards under the Management Stock Bonus Plan and the Directors Stock Bonus
Plan may not participate in the Offer with respect to such unvested awards.
Tendering Shareholder's Representation and Warranty; Company's
Acceptance Constitutes an Agreement. A tender of Shares pursuant to any of the
procedures described above will constitute the tendering shareholder's
acceptance of the terms and conditions of the Offer, as well as the tendering
shareholder's representation and warranty to the Company that (a) such
shareholder has a net long position in the Shares being tendered within the
meaning of Rule 14e-4 promulgated by the Commission under the Exchange Act and
(b) the tender of such Shares complies with Rule 14e-4. It is a violation of
Rule 14e-4 for a person, directly or indirectly, to tender Shares for such
person's own account unless, at the time of tender and at the end of the
proration period, the person so tendering (i) has a net long position equal to
or greater than the amount of (x) Shares tendered or (y) other securities
convertible into or exchangeable or exercisable for the Shares tendered and will
acquire such Shares for tender by conversion, exchange or exercise and (ii) will
cause such Shares to be delivered in accordance with the terms of the Offer.
Rule 14e-4 provides a similar restriction applicable to the tender or guarantee
of a tender on behalf of another person. The Company's acceptance for payment of
Shares tendered pursuant to the Offer will constitute a binding agreement
between the tendering shareholder and the Company upon the terms and subject to
the conditions of the Offer.
4. Withdrawal Rights.
Except as otherwise provided in this Section 4, the tender of Shares
pursuant to the Offer is irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Company pursuant to the Offer, may also be withdrawn
at any time after 12:00 midnight, Eastern time, on Monday, December 23, 1996.
FOR A WITHDRAWAL TO BE EFFECTIVE, A NOTICE OF WITHDRAWAL MUST BE IN
WRITTEN, TELEGRAPHIC OR FACSIMILE TRANSMISSION FORM AND MUST BE RECEIVED IN A
TIMELY MANNER BY THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH ON THE BACK
COVER OF THIS OFFER TO PURCHASE. Any such notice of withdrawal must specify the
name of the tendering shareholder, the name of the registered holder, if
different, the number of Shares tendered and the number of Shares to be
withdrawn. If the certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the release of such
certificates, the tendering shareholder must also submit the serial numbers
shown on the particular certificates evidencing the Shares to be withdrawn and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution).
If Shares have been tendered pursuant to the procedure for book-entry delivery
set forth in Section 3, the notice of withdrawal also must specify the name and
the number of the account at the applicable Book Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with the procedures of
such facility. None of the Company, the Depositary, the Information Agent or any
other person shall be obligated to give notice of any defects or irregularities
in any notice of withdrawal nor shall any of them incur liability for failure to
give any such notice. All questions as to the form and validity (including time
of receipt) of notices of withdrawal will be determined by the Company, in its
sole discretion, which determination shall be final and binding on all parties.
Withdrawals may not be rescinded and any Shares withdrawn will
thereafter be deemed not validly tendered for purposes of the Offer. However,
withdrawn Shares may be retendered prior to the Expiration Date by again
following one of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares
or is unable to purchase Shares pursuant to the Offer for any reason, then,
without prejudice to the Company's rights under the Offer, the Depositary may,
subject to applicable law, retain tendered Shares on behalf of the Company, and
such Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in this Section 4.
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5. Purchase of Shares and Payment of Purchase Price.
Upon the terms and subject to the conditions of the Offer, the Company
will determine the Purchase Price it will pay for the Shares validly tendered
and not withdrawn prior to the Expiration Date, taking into account the number
of Shares so tendered and the prices specified by tendering shareholders, and
will accept for payment and pay for (and thereby purchase) Shares validly
tendered at prices at or below the Purchase Price as promptly as practicable
following the Expiration Date. For purposes of the Offer, the Company will be
deemed to have accepted (and therefor purchased) Shares which are tendered at or
below the Purchase Price and not withdrawn (subject to the proration provisions
of the Offer) when, as and if it gives oral or written notice to the Depositary
of its acceptance of such Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date the Company will accept for payment and pay a
single per Share Purchase Price for 200,000 Shares (subject to increase or
decrease as provided in Section 7) or such lesser number of Shares as are
validly tendered at prices not in excess of $23.75 or less than $20.50 per Share
and not withdrawn as permitted in Section 4.
The Company will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering shareholders.
In the event of proration, the Company will determine the proration
factor and pay for those tendered Shares accepted for payment as soon as
practicable after the Expiration Date; however, the Company does not expect to
be able to announce the final results of any proration and commence payment for
Shares purchased until approximately seven OTC trading days after the Expiration
Date. Certificates for all Shares tendered and not purchased, including all
Shares tendered at prices in excess of the Purchase Price and Shares not
purchased due to proration, will be returned (or, in the case of Shares tendered
by book-entry delivery, such Shares will be credited to the account maintained
with the Book-Entry Transfer Facility by the participant therein who so
delivered such Shares) to the tendering shareholder as promptly as practicable
after the Expiration Date without expense to the tendering shareholders. Under
no circumstances will interest on the Purchase Price be paid by the Company by
reason of any delay in making payment.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or such other person), payable on account of the transfer to
such person will be deducted from the Purchase Price unless evidence
satisfactory to the Company of the payment of the stock transfer taxes, or
exemption therefrom, is submitted. See Instruction 7 of the Letter of
Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY,
SIGN AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER
OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING.
SEE SECTION 3 OF THIS OFFER TO PURCHASE AND INSTRUCTION 12 OF THE LETTER OF
TRANSMITTAL. ALSO SEE SECTION 3 REGARDING FEDERAL INCOME TAX CONSEQUENCES FOR
FOREIGN SHAREHOLDERS.
6. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, the Company shall not
be required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment of,
or the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
under the Exchange Act (see Section 7), if at any time on or after October 25,
1996 and prior to the time of payment for any such Shares any of
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the following events shall have occurred (or shall have been determined by the
Company to have occurred) which, in the Company's reasonable judgment in any
such case and regardless of the circumstances giving rise thereto (including any
action or omission to act by the Company), makes it inadvisable to proceed with
the Offer or with such acceptance for payment or payment:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or administrative
agency or authority or tribunal or any other person, domestic or foreign, or
before any court or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, which: (1) challenges the making of the
Offer, the acquisition of Shares pursuant to the Offer or otherwise relates in
any manner to the Offer or (2) in the Company's reasonable judgment, could
materially affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiaries, taken as a whole,
or otherwise materially impair in any way the contemplated future conduct of the
business of the Company or any of its subsidiaries or materially impair the
Offer's contemplated benefits to the Company; or
(b) there shall have been any claim, action or proceeding threatened,
pending or taken, or any consent, license, authorization, permit or approval
withheld, or any law, statute, rule, regulation, judgment, order or injunction
threatened, proposed, sought, promulgated, enacted, entered, enforced or deemed
to be applicable to the Offer or the Company, by or before any court or any
government or governmental, regulatory or administrative agency or authority
(federal, state, local or foreign) or tribunal, domestic or foreign, which, in
the reasonable judgment of the Company, could or might directly or indirectly
(i) make the acceptance for payment of, or payment for, some or all of the
Shares illegal or otherwise restrict or prohibit the consummation of the Offer,
(ii) delay or restrict the ability of the Company, or render the Company unable,
to accept for payment or pay for some or all of the Shares, (iii) materially
affect the business, condition (financial or other), income, operations or
prospects of the Company and its subsidiaries, taken as a whole, or otherwise
materially impair in any way the contemplated future conduct of the business of
the Company or any of its subsidiaries, or (iv) materially impair the
contemplated benefits of the Offer to the Company; or
(c) there shall have occurred any of the following events: (i) the
commencement of any state of war, international crisis or national emergency;
(ii) the declaration of any banking moratorium or suspension of payments by
banks in the United States or any limitation on the extension of credit by
lending institutions in the United States; (iii) any general suspension of
trading or limitation of prices for securities on any securities exchange or in
the over-the-counter market in the United States; (iv) any significant adverse
change in the market price of the Shares or any change in the general political,
market, economic or financial conditions in the United States or abroad that
could have a material adverse effect upon the trading of the Shares; or (v) in
the case of any of the foregoing existing at the time of the commencement of the
Offer, in the reasonable judgment of the Company, a material acceleration or
worsening effect thereof; or
(d) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger or acquisition proposal for the Company,
shall have been proposed, announced or made by another person or shall have been
publicly disclosed, or the Company shall have learned that any person or "group"
(within the meaning of Section 13(d)(3) of the Exchange Act), shall have
acquired or proposed to acquire beneficial ownership of more than five percent
of the outstanding Shares, or any new group shall have been formed that
beneficially owns more than 5% of the outstanding Shares (other than any such
person, entity or group who have filed a Schedule 13D or Schedule 13G with the
Commission on or before September 30, 1996); or
(e) there shall have occurred any event which, in the reasonable
judgment of the Company, has resulted in an actual or threatened material
adverse change in the business, financial condition, assets, income, operations,
prospects or stock ownership of the Company or which may adversely affect the
value of the Shares; and, in the reasonable judgment of the Company, such event
makes it inadvisable to proceed with the Offer or with acceptance for payment of
or payment for any Shares.
The foregoing conditions are for the sole benefit of the Company and may
be asserted by the Company regardless of the circumstances (including any action
or inaction by the Company) giving rise to any such condition,
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and may be waived by the Company, in whole or in part, at any time and from time
to time in its sole discretion. The Company's failure at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination by the Company concerning the
events described above will be final and binding on all parties.
7. Extension of the Offer; Termination; Amendment.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or been determined by the Company to
have occurred, (a) to extend the period of time during which the Offer is open
by giving oral or written notice of such extension to the Depositary and making
a public announcement thereof no later than 9:00 a.m., Eastern time, on the next
business day after the previously scheduled Expiration Date, and (b) to amend
the Offer in any respect (including, without limitation, by increasing or
decreasing the range of prices it may pay for Shares or the number of Shares
being sought in the Offer) by giving oral or written notice of such amendment to
the Depositary and, as promptly as practicable thereafter, making a public
announcement thereof. If (i) the Company increases or decreases the price to be
paid for Shares, the number of Shares being sought in the Offer or incurs dealer
manager soliciting fees and, in the event of an increase in the number of Shares
being sought, such increase exceeds two percent of the outstanding Shares and
(ii) the Offer is scheduled to expire at any time earlier than the expiration of
a period ending on the tenth business day from, and including, the date that
such notice of an increase or decrease is first published, sent or given in the
manner specified in this Section 7, the Offer will, at least, be extended until
the expiration of such period of ten business days. The Company also expressly
reserves the right, in its sole and absolute discretion, to terminate the Offer
and not to accept for payment or pay for Shares upon the occurrence of any of
the conditions specified in Section 6 by giving oral or written notice of such
termination to the Depositary and, as promptly as practicable thereafter, making
a public announcement thereof. Without limiting the manner in which the Company
may choose to make a public announcement, except as required 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 other than by making a release to the Dow Jones News Service. The
rights reserved by the Company in this paragraph are in addition to the
Company's rights under Section 6. Payment for Shares accepted for payment
pursuant to the Offer may be delayed in the event of proration due to the
difficulty of determining the number of validly tendered Shares. See Sections 1
and 5.
14
<PAGE>
8. Price Range of Shares; Dividends.
The Shares are traded over-the-counter and quoted on the Nasdaq/NMS. The
following table sets forth, for the periods indicated, the high and low sales
prices per Share as published by the Nasdaq statistical report and the cash
dividends declared per Share in each such fiscal quarter.
Dividends
Fiscal Year High Low Per Share
- ----------- ---- --- ---------
1994:
1st Quarter.............................. $15 1/2 $14 1/2 $0.06
2nd Quarter.............................. 15 13 1/2 0.06
3rd Quarter.............................. 15 13 3/8 0.07
4th Quarter.............................. 15 13 1/4 0.07
1995:
1st Quarter.............................. 15 1/4 13 3/4 0.09
2nd Quarter.............................. 19 1/2 14 3/4 0.09
3rd Quarter.............................. 22 1/4 18 3/4 0.10
4th Quarter.............................. 22 1/4 19 1/4 0.10
1996:
1st Quarter.............................. 21 1/2 20 1/2 0.10
2nd Quarter.............................. 21 1/2 20 0.12
3rd Quarter. ............................ 21 1/2 20 0.12
4th Quarter (through October 24, 1996)... 21 1/2 20 1/2 --
On October 24, 1996, the last full trading day prior to the commencement
of the Offer, the closing per Share sales price as reported on the Nasdaq/NMS
was $ 21.50. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES.
15
<PAGE>
9. Source and Amount of Funds.
Assuming that the Company purchases 200,000 Shares pursuant to the Offer
at a price of $23.75 per Share, the cost to the Company (including all fees and
expenses relating to the Offer), is estimated to be approximately $4.795
million. On October 8, 1996, the Board of Directors of the Bank declared a
dividend of $50.00 per share on its common stock to be paid on or about November
18, 1996. The Company, which is the Bank's sole stockholder, will use the
proceeds of this dividend ($5.0 million in the aggregate) to purchase Shares
pursuant to the Offer. The Bank obtained the funds to pay the dividend from a
six month FHLB of Pittsburgh advance at an interest rate of 5.70%. Borrowings
from the FHLB are secured by the Bank's stock in the FHLB and qualifying
residential mortgage loans. It is currently anticipated that the FHLB borrowings
will be repaid by income from operations and/or refinancings.
10. Certain Information Concerning the Company.
General
The Company is the holding company for the Bank which was chartered in
1887. The Bank's primary business activities are to attract savings deposits
from the general public and to invest such deposits, together with other sources
of funds in first mortgage residential, commercial and other real estate and
consumer loans, mortgage-backed and investment securities. Its income is derived
largely from interest on loans, mortgaged-backed securities and investment
securities. Its principal expenses are interest paid on deposits and operating
expenses.
The business of the Bank is conducted through four offices located in
New Castle, Pennsylvania and surrounding townships of Neshannock, Union and
Shenango.
The Bank is subject to examination by the Office of Thrift Supervision
and the Federal Deposit Insurance Corporation. The Company, as a savings and
loan holding company, is subject to examination by the Office of Thrift
Supervision.
Selected Consolidated Financial Information
Set forth below is certain selected consolidated financial information
with respect to the Company, excerpted or derived from the audited financial
statements contained in the Company's Annual Reports on Form 10-K for the years
ended December 31, 1995 and 1994 and from the unaudited financial statements
contained in the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996. The selected information below is qualified in its entirety
by reference to such Reports (which may be inspected or obtained at the offices
of the Commission in the manner set forth below) and the financial information
and related notes contained therein.
16
<PAGE>
First Shenango Bancorp, Inc.
Summary Historical Financial Information
At December 31, At September 30,
-------------------------------------------------
1994 1995 1995 1996
-------------------------------------------------
(Dollars In Thousands)
Selected Financial Condition
and Other Data
Assets........................ $311,940 $332,121 $332,357 $384,088
Loans Receivable, net......... 215,286 228,278 225,528 255,454
Investment securities held to
maturity..................... 40,535 -- 43,592 --
Investment securities
available for sale........... 36,256 80,587 40,582 112,436
Real estate owned and other
repossessed assets........... 294 943 212 939
Deposits...................... 249,957 254,406 255,558 263,167
Stockholders' equity.......... 43,881 47,623 46,271 46,118
Year Ended Nine Months Ended
December 31, September 30,
-------------------------------------------------
1994 1995 1995 1996
-------------------------------------------------
Interest income............... $20,722 $23,787 $17,530 $20,289
Interest expense.............. 10,685 12,719 9,370 10,902
------- ------- ------- -------
Net interest income........... 10,037 11,068 8,160 9,387
Provision for loan losses..... 786 918 685 674
Non-interest income........... 804 966 726 801
Non-interest expense.......... 6,671 6,131 4,550 6,510
Income taxes.................. 1,111 1,906 1,376 1,146
------- ------- ------- -------
Net income .............. $ 2,273 $ 3,079 $ 2,275 $ 1,858
======= ======= ======= =======
Net income per share.......... $ 1.00 $ 1.34 $ 1.00 $ 0.82
======= ======= ======= =======
Dividends per share........... $ 0.26 $ 0.38 $ 0.28 $ 0.34
======= ======= ======= =======
17
<PAGE>
At or For At or For
Year Ended Nine Months Ended
December 31, September 30,
-------------------------------------------------
1994 1995 1995 1996
-------------------------------------------------
Selected financial ratios:
Return on average assets...... .75% .96% .96% .69%
Return on average equity...... 5.26% 6.74% 6.73% 5.25%
Dividend payout ratio......... 25.68% 27.50% 28.39% 40.33%
Stockholders' equity/
total assets................. 14.07% 14.34% 13.92% 12.01%
Non-performing loans/total
assets....................... .71% .21% .68% .26%
Real estate owned/total
assets....................... .09% .28% .06% .24%
Allowance for loan losses/
gross loans receivable....... 1.24% 1.07% 1.36% 1.04%
18
<PAGE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information of the Company
for the fiscal year ended December 31, 1995 and the nine months ended September
30, 1996 shows the effects of the purchase of 200,000 Shares pursuant to the
Offer. The income statement data give effect to the purchase of Shares pursuant
to the Offer as if it had occurred at the beginning of each period presented.
The balance sheet data give effect to the purchase of Shares pursuant to the
Offer as if it had occurred as of the date of the respective balance sheets. The
pro forma financial information should be read in conjunction with the audited
financial statements and related notes contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995 and the unaudited financial
statements contained in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996. The pro forma financial information does not
purport to be indicative of the results that would actually have been attained
had the purchases of the Shares been completed at the dates indicated or that
may be attained in the future.
First Shenango Bancorp, Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Nine Months Ended September 30, 1996
(In thousands, except per share data and ratios)
Shares Purchased at
-------------------
$23.75 $20.50
per Share per Share
--------- ---------
Interest income ................................ $ 20,289 $ 20,289
Interest expense (3) ........................... 11,107 11,079
---------- ----------
Net interest income .......................... 9,182 9,210
Provision for loan losses ...................... 674 674
---------- ----------
Net interest income after provision
for loan losses ............................ 8,508 8,536
Non-interest income ............................ 801 801
Non-interest expense ........................... 6,510 6,510
---------- ----------
Income before income taxes ..................... 2,799 2,827
Income taxes (3) ............................... 1,068 1,079
---------- ----------
Net income ................................... $ 1,731 $ 1,748
========== ==========
Net income per share ......................... $ .83 $ .84
========== ==========
Weighted average shares outstanding (2) ........ 2,075,000 2,075,000
See Notes to Unaudited Pro Forma Financial Information on page 23
19
<PAGE>
First Shenango Bancorp, Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 1995
(In thousands, except per share data and ratios)
Shares Purchased at
-------------------
$23.75 $20.50
per Share per Share
--------- ---------
Interest income ................................ $ 23,787 $ 23,787
Interest expense (3) ........................... 12,992 12,955
---------- ----------
Net interest income .......................... 10,795 10,832
Provision for loan losses ...................... 918 918
---------- ----------
Net interest income after provision
for loan losses ............................ 9,877 9,914
Non-interest income ............................ 966 966
Non-interest expense ........................... 6,131 6,131
---------- ----------
Income before income taxes ..................... 4,712 4,749
Income taxes (3) ............................... 1,802 1,816
---------- ----------
Net income ................................... $ 2,910 $ 2,933
========== ==========
Net income per share ......................... $ 1.39 $ 1.40
========== ==========
Weighted average shares outstanding (2) ........ 2,090,000 2,090,000
See Notes to Unaudited Pro Forma Financial Information on page 23
20
<PAGE>
First Shenango Bancorp, Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1996
(In thousands, except per share data)
Shares Purchased at
-------------------
$23.75 $20.50
per Share per Share
--------- ---------
ASSETS
Cash and cash equivalents ........................ $ 7,740 $ 7,740
Investment securities held to maturity ........... -- --
Investment securities available for sale ......... 112,436 112,436
Loans receivable, net ............................ 255,454 255,454
Other assets ..................................... 8,458 8,458
--------- ---------
Total assets .................................. $ 384,088 $ 384,088
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
- -----------
Deposits ......................................... $ 263,167 $ 263,167
Borrowings (3) ................................... 75,860 75,210
Other liabilities ................................ 3,693 3,693
--------- ---------
Total liabilities ............................. 342,720 342,070
--------- ---------
Stockholders' equity
- --------------------
Common stock ..................................... 234 234
Paid in capital .................................. 22,386 22,386
Retained earnings ................................ 26,343 26,343
Unrealized loss on securities available for sale . (526) (526)
Treasury stock (1)(2)(4) ......................... (6,351) (5,701)
Less stock acquired by MSBPs and ESOP ............ (718) (718)
--------- ---------
Total stockholders' equity .................... 41,368 42,018
--------- ---------
Total liabilities and stockholders' equity .... $ 384,088 $ 384,088
========= =========
Stockholders' equity/total assets ............... 10.77% 10.94%
========= =========
Book value per common share ..................... $ 20.10 $ 20.42
========= =========
See Notes to Unaudited Pro Forma Financial Information on page 23
21
<PAGE>
First Shenango Bancorp, Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1995
(In thousands, except per share data)
Shares Purchased at
-------------------
$23.75 $20.50
per Share per Share
--------- ---------
ASSETS
Cash and cash equivalents ........................ $ 15,831 $ 15,831
Investment securities held to maturity ........... -- --
Investment securities available for sale ......... 80,587 80,587
Loans receivable, net ............................ 228,278 228,278
Other assets ..................................... 7,425 7,425
--------- ---------
Total assets .................................. $ 332,121 $ 332,121
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
- -----------
Deposits ......................................... $ 254,406 $ 254,406
Borrowings (3) ................................... 31,416 30,766
Other liabilities ................................ 3,426 3,426
--------- ---------
Total liabilities ............................. $ 289,248 $ 288,598
--------- ---------
Stockholders' equity
- --------------------
Common stock ..................................... $ 234 $ 234
Paid in capital .................................. 22,340 22,340
Retained earnings ................................ 25,235 25,235
Unrealized gain on securities
available for sale ............................. 1,197 1,197
Treasury stock (1)(2)(4) ......................... (5,282) (4,632)
Less stock acquired by MSBPs & ESOP .............. (851) (851)
--------- ---------
Total stockholders' equity .................... 42,873 43,523
--------- ---------
Total liabilities and stockholders' equity .... $ 332,121 $ 332,121
========= =========
Stockholders' equity/total assets ............... 12.91% 13.10%
========= =========
Book value per common share ..................... $ 20.33 $ 20.64
========= =========
See Notes to Unaudited Pro Forma Financial Information on page 23
22
<PAGE>
First Shenango Bancorp, Inc.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(1) The pro forma financial information reflects the repurchase of 200,000
shares of stock at $23.75 and $20.50 per share, as appropriate.
(2) The balance sheet data give effect to the purchase of shares as of the
balance sheet date. The income statement data give effect to the
purchase of shares as of the beginning of each period presented.
(3) The funds used to purchase shares were considered to have been obtained
from borrowings. The pro forma data assumes a rate of interest of 5.75%
and a tax rate of 38%. The income statement data reflect the additional
interest expense on borrowings as if such borrowings were outstanding at
the beginning of each period presented.
(4) No effect has been given to costs incurred in connection with the Offer.
Such costs are not expected to be material and will be capitalized as
part of the costs of the stock purchased.
23
<PAGE>
11. Interest of Directors and Executive Officers; Transactions and
Arrangements Concerning Shares.
As of October 24, 1996, the Company's directors and executive officers
as a group beneficially owned (including pursuant to options) an aggregate of
280,250 Shares (approximately 11.98% of the outstanding Shares including Shares
issuable upon the exercise of options held by directors and officers). Such
ownership includes 81,151 Shares as of October 24, 1996 subject to stock options
which are held by directors and executive officers.
Except as set forth in Schedule I, neither the Company, nor any
subsidiary of the Company nor, to the best of the Company's knowledge, any of
the Company's directors or executive officers, nor any affiliates of any of the
foregoing, had any transactions involving the Shares during the 40 business days
prior to the date hereof.
Except for outstanding options to purchase Shares granted from time to
time over recent years to certain employees (including executive officers) and
directors of the Company pursuant to the Company's stock option plan and except
as otherwise described herein, neither the Company nor, to the best of the
Company's knowledge, any of its directors or executive officers, is a party to
any contract, arrangement, understanding or relationship with any other person
relating, directly or indirectly, to the Offer including, but not limited to,
any contract, arrangement, understanding or relationship concerning the transfer
or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies, consents or authorizations.
Certain officers and directors may tender Shares into the Offer. Such
Shares will be purchased pursuant to the terms and subject to the conditions of
the Offer and will be treated in the same manner as Shares tendered by other
shareholders. It is uncertain the number of Shares, if any, that will be
tendered by executive officers and directors and the prices at which such Shares
will be tendered. To the extent executive officers and directors do not tender
Shares into the Offer, the percentage of Shares outstanding held by executive
officers and directors will increase as a result of the purchase of Shares
pursuant to the Offer.
12. Effects of the Offer on the Market for Shares; Registration under
the Exchange Act.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of shareholders. Nonetheless, the Company anticipates that there will be
a sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the Nasdaq/NMS, the Company does not believe
that its purchase of Shares pursuant to the Offer will cause the Company's
remaining Shares to be delisted from the Nasdaq/NMS.
The Shares are currently "margin securities" under the rules of the
Federal Reserve Board. This has the effect, among other things, of allowing
brokers to extend credit to their customers using such Shares as collateral. The
Company believes that, following the purchase of Shares pursuant to the Offer,
the Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
The Savings and Loan Holding Company Act and the Change in Bank Control
Act each set forth thresholds with respect to the ownership of voting shares of
a savings and loan holding company of 5% to 10%, respectively, over which the
owner of such voting shares may be determined to control such savings and loan
holding company. If, as a result of the Offer, the ownership interest of any
shareholder in the Company is increased over these thresholds, such shareholder
may be required to reduce its ownership interest in the Company or file a notice
with regulators. Each shareholder whose ownership interest may be so increased
is urged to consult the shareholder's own legal counsel with respect to the
consequences to the shareholder of the Offer.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and the Commission and comply with the Commission's proxy rules in
24
<PAGE>
connection with meetings of the Company's shareholders. The Company believes
that its purchase of Shares pursuant to the Offer will not result in the Shares
becoming eligible for deregistration under the Exchange Act.
13. Certain Federal Income Tax Consequences
General. The federal income tax discussion set forth below summarizes
the principal federal income tax consequences to domestic shareholders of sales
of stock pursuant to the Offer and is included for general information only. The
discussion does not address all aspects of federal income taxation that may be
relevant to a particular shareholder nor any relevant foreign, state, local or
other tax laws. Certain shareholders (including, but not limited to, insurance
companies, tax-exempt entities, foreign persons, financial institutions, broker
dealers, employee benefit plans, personal holding companies and persons who
acquired their Shares upon the exercise of employee stock options or as
compensation) may be subject to special rules not discussed below. The
discussion is based on laws, regulations, rulings and court decisions currently
in effect as of the date of this Offer to Purchase, all of which are subject to
change. The Company intends that, under the terms of the Offer, sales of Shares
will be completed in 1996 and shareholders will receive payment for purchased
Shares in 1996. In that event, shareholders will report the sale of Shares
pursuant to the Offer in 1996 for tax purposes. In the event that sales are not
completed this year and/or shareholders receive payments for Shares in 1997,
shareholders may be required to report the sale of Shares pursuant to the Offer
next year for tax purposes. The Company has neither requested nor obtained a
written opinion of counsel or a ruling from the Internal Revenue Service (the
"Service") with respect to the tax matters discussed herein. PRIOR TO TENDERING
ANY SHARES PURSUANT TO THE OFFER, EACH SHAREHOLDER IS STRONGLY ADVISED TO
CONSULT WITH THEIR OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF THE
OFFER TO SUCH SHAREHOLDER, INCLUDING THE APPLICATION OF FOREIGN, STATE, LOCAL,
OR OTHER TAX LAWS.
In general, a sale of Shares pursuant to the Offer will be a taxable
transaction for federal income tax purposes. Such sale will constitute a
"redemption" within the meaning of Section 317 of the Internal Revenue Code of
1986, as amended (the "Code"). Each tendering shareholder will recognize either
gain or loss from a sale of Shares or dividend income, depending upon the
application of Section 302 of the Code to the shareholder's particular facts and
circumstances. If the redemption qualifies as a sale of Shares under Section
302, the cash received pursuant to the Offer will be treated as a distribution
from the Company in part or full payment in exchange for the Shares surrendered
("Sale Treatment"). Sale Treatment will result in the shareholder's recognizing
gain or loss equal to the difference between (i) the cash received pursuant to
the Offer and (ii) the shareholder's tax basis in the Shares surrendered. If the
redemption does not qualify for Sale Treatment, the shareholder will not be
treated as having sold Shares but will be treated as having received a dividend
taxable as ordinary income in an amount equal to the cash received pursuant to
the Offer ("Dividend Treatment").
Sale Treatment. Under Section 302 of the Code, a sale of Shares pursuant
to the Offer will be treated as a sale of such Shares for federal income tax
purposes if such sale of Shares (i) results in a "complete redemption" of all of
the shareholder's stock in the Company, (ii) is a "substantially
disproportionate redemption" with respect to the shareholder, or (iii) is "not
essentially equivalent to a dividend" with respect to the shareholder. In
determining whether any of these three tests under Section 302 is satisfied,
shareholders must take into account not only Shares that they actually own, but
also any Shares that they are deemed to own pursuant to the constructive
ownership rules of Section 318 of the Code. Pursuant to these constructive
ownership rules, shareholders will be treated as owning a certain amount of
(i) Shares held by certain family members, including the shareholder's spouse,
children, grandchildren, and parents, (ii) Shares owned by certain trusts of
which the shareholder is a beneficiary, (iii) Shares owned by an estate of which
the shareholder is a beneficiary, (iv) Shares owned by any partnership or "S
corporation" in which the shareholder is a partner or shareholder, (v) Shares
owned by any non-S corporation of which the shareholder owns at least 50% in
value of the stock and (vi) Shares that the shareholder can acquire by exercise
of an option or similar right. A shareholder that is a partnership or
S corporation, estate, trust, or non-S corporation is treated as owning stock
owned (as the case may be) by partners or S corporation shareholders, by estate
beneficiaries, by certain trust beneficiaries, and by 50% shareholders of a
non-S corporation. Stock constructively owned by a person generally is treated
as being owned by that person for the purpose of attributing ownership to
another person.
25
<PAGE>
A shareholder's sale of Shares pursuant to the Offer will generally
result in a "complete redemption" of all the shareholder's stock in the Company
if, pursuant to the Offer, the Company purchases all of the Shares actually
owned by the shareholder and subsequently the shareholder does not
constructively own any Shares. If the shareholder's sale of Shares pursuant to
the Offer would satisfy the complete redemption requirement but for the
shareholder's constructive ownership of Shares held by certain family members,
such shareholder may, under certain circumstances, be entitled to waive such
constructive ownership, provided the shareholder complies with the provisions of
Section 302(c) of the Code. If the shareholder actually owns no Shares after
selling his or her Shares pursuant to the Offer, constructively owns only Shares
owned by certain family members, and the shareholder qualifies to and does waive
constructive ownership of Shares owned by certain family members, that
redemption of Shares would generally qualify as a "complete redemption."
A shareholder's sale of Shares pursuant to the Offer will be a
"substantially disproportionate redemption" with respect to the shareholder if
the percentage of Shares actually and constructively owned by the shareholder
compared to all the outstanding Shares of the Company immediately following the
sale of Shares pursuant to the Offer (treating as not outstanding all Shares
sold by all the shareholders pursuant to the Offer) is less than 80% of the
percentage of Shares actually and constructively owned by the shareholder
compared to all the outstanding Shares of the Company immediately before the
sale of Shares pursuant to the Offer (treating as outstanding all Shares sold by
the shareholders pursuant to the Offer). This test will be applied to each
shareholder individually, regardless of the effect of the redemption on the
other shareholders.
A shareholder's sale of Shares pursuant to the Offer will "not be
essentially equivalent to a dividend" if, as a result of the sale of Shares
pursuant to the Offer, the shareholder experiences a "meaningful reduction" in
his proportionate interest in the Company, including the shareholder's voting
rights, participation in earnings, and liquidation rights and taking into
account the constructive ownership rules. The Service has indicated in a
published ruling that even a small reduction in the proportionate interest of a
small minority shareholder who does not exercise any control over company
affairs may constitute a "meaningful reduction" in the shareholder's interest in
the company. The fact that the redemption fails to qualify as a sale pursuant to
the other two tests is not taken into account in determining whether the
redemption is "not essentially equivalent to a dividend."
Shareholders should be aware that their ability to satisfy any of the
foregoing tests may be affected by proration pursuant to the Offer. Therefore, a
shareholder can be given no assurance, even if he tenders all of his Shares,
that the Company will purchase a sufficient number of such Shares to permit him
to satisfy any of the foregoing tests. Shareholders should also be aware that it
is possible that, depending on the facts and circumstances, an acquisition or
disposition of Shares in the market or to other parties as part of an integrated
plan may be taken into account in determining whether any of the foregoing tests
is satisfied. Shareholders are strongly advised to consult with their own tax
advisors with regard to whether acquisitions from sales to third parties,
including market sales, may be so integrated. Subsequent open market purchases
by the Company may also be taken into account in determining whether any of the
foregoing tests is satisfied.
If any of the above three tests is satisfied, the tendering shareholder
will recognize gain or loss equal to the difference between the amount of cash
received by the shareholder pursuant to the Offer and the shareholder's tax
basis in the Shares sold. Such gain or loss must be determined separately for
each block of Shares sold (i.e., Shares acquired at the same time in a single
transaction), and will be capital gain or loss, assuming the Shares were held by
the shareholder as a capital asset. Capital gain or loss will be long-term
capital gain or loss if, at the time the Company accepts the Shares for payment,
the Shares were held by the shareholder for more than one year.
Dividend Treatment. If none of the three foregoing tests are satisfied,
the tendering shareholder generally will be treated as having received a
dividend, taxable as ordinary income, in an amount equal to the total cash
received by the shareholder pursuant to the Offer, provided the Company has
sufficient accumulated or current earnings and profits. The Company expects that
its current and accumulated earnings and profits will be sufficient to cover the
amount of all distributions pursuant to the Offer, if any, that are treated as
dividends. To the extent that the purchase of Shares from any shareholder
pursuant to the Offer is treated as a dividend, such shareholder's tax basis in
any Shares which the shareholder actually or constructively retains after
consummation of the Offer will be increased by the shareholder's tax basis in
the Shares surrendered pursuant to the Offer.
26
<PAGE>
Treatment of Dividend Income for Corporate Shareholders. In the case of
a corporate shareholder, if the cash received for Shares pursuant to the Offer
is treated as a dividend, the dividend income may be eligible for the
dividends-received deduction under Section 243 of the Code. The
dividends-received deduction is subject to certain limitations and may not be
available if the corporate shareholder does not satisfy certain holding period
requirements with respect to the Shares or if the Shares are treated as
"debt-financed portfolio stock." The Company believes that the Offer will not
result in a pro rata distribution to all shareholders. Consequently, dividends
received by corporate shareholders pursuant to the Offer will probably be
treated as "extraordinary dividends" as defined by Section 1059 of the Code.
Corporate shareholders should consult their tax advisors as to the availability
of the dividends-received deduction and the application of Section 1059 of the
Code.
SEE SECTION 3 WITH RESPECT TO THE APPLICATION OF BACKUP FEDERAL INCOME
TAX WITHHOLDING.
14. Fees and Expenses.
The Company has retained MacKenzie Partners, Inc. to act as Information
Agent and ChaseMellon Shareholder Services, L.L.C. to act as Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telegraph and personal interviews and may request brokers,
dealers and other nominee shareholders to forward materials relating to the
Offer to beneficial owners. The Information Agent and the Depositary will each
receive reasonable and customary compensation for their respective services and
will be reimbursed by the Company for certain reasonable out-of-pocket expenses,
including attorneys' fees.
No fees or commissions will be payable to brokers, dealers or other
persons (other than fees to the Information Agent and the Depositary as
described above) for soliciting tenders of Shares pursuant to the Offer. The
Company will, however, upon request, reimburse brokers, dealers and commercial
banks for customary mailing and handling expenses incurred by such persons in
forwarding the Offer to Purchase and related materials to the beneficial owners
of Shares held by any such person as a nominee or in a fiduciary capacity. No
broker, dealer, commercial bank or trust company has been authorized to act as
the agent of the Company, the Information Agent or the Depositary for purposes
of the Offer. The Company will pay or cause to be paid all stock transfer taxes,
if any, on its purchase of Shares except as otherwise provided in Instruction 7
in the Letter of Transmittal.
15. Additional Information.
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, options granted to them,
the principal holders of the Company's securities and any material interest of
such persons in transactions with the Company is required to be disclosed in
proxy statements distributed to the Company's shareholders and filed with the
Commission. Such reports, proxy statements and other information are available
for inspection at the public reference facilities of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; and for inspection and
copying at the regional offices of the Commission, located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of such material may also be obtained by
mail, upon payment of the Commission's customary charges, from the Commission's
principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission also maintains a Web site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
16. Miscellaneous.
The Company is not aware of any jurisdiction where the making of the
Offer is not in compliance with applicable law. If the Company becomes aware of
any jurisdiction where the making of the Offer is not in compliance
27
<PAGE>
with any valid applicable law, the Company will make a good faith effort to
comply with such law. If, after such good faith effort, the Company cannot
comply with such law, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares residing in such
jurisdiction.
Pursuant to Rule 13e-4 under the Exchange Act, the Company has filed
with the Commission an Issuer Tender Offer Statement on Schedule 13E-4 which
contains additional information with respect to the Offer. Such Schedule 13E-4,
including the exhibits and any amendments thereto, may be examined, and copies
may be obtained, at the same places and in the same manner as is set forth in
Section 15 with respect to information concerning the Company.
FIRST SHENANGO BANCORP, INC.
October 25, 1996
28
<PAGE>
SCHEDULE I
CERTAIN TRANSACTIONS INVOLVING SHARES
During the 40 business days prior to October 25, 1996, the Company
effected transactions in the Shares as follows:
Person Who Number Price
Effected of Per
Date Transaction Shares Share Nature of Transaction
---- ----------- ------ ----- ---------------------
26-Aug-96 First Shenango 220 $20.500 Purchase
Bancorp, Inc.
28-Aug-96 First Shenango 100 20.500 Purchase
Bancorp, Inc.
20-Sep-96 First Shenango 6,000 20.625 Purchase
Bancorp, Inc.
24-Sep-96 First Shenango 6,300 20.625 Purchase
Bancorp, Inc.
01-Oct-96 First Shenango 100 20.250 Purchase
Bancorp, Inc.
15-Oct-96 First Shenango 50 20.500 Purchase
Bancorp, Inc.
<PAGE>
Manually signed photocopies of the Letter of Transmittal will be
accepted from Eligible Institutions. The Letter of Transmittal and certificates
for Shares and any other required documents should be sent or delivered by each
shareholder or his or her broker, dealer, commercial bank, trust company or
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Mail: By Hand/Overnight Delivery:
P.O. Box 798 120 Broadway
Midtown Station 13th Floor
New York, New York 10018 New York, New York 10271
(Attention: Reorganization Department) (Attention: Reorganization Department)
By Facsimile Transmission:
(Eligible Institutions Only)
(201) 329-8936
Confirm by Telephone:
(201) 296-4209
Any questions or requests for assistance or additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
location listed below. Shareholders may also contact their local broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free
(800) 322-2885
EXHIBIT (a)(2)
<PAGE>
LETTER OF TRANSMITTAL
To Accompany Shares of Common Stock
of
FIRST SHENANGO BANCORP, INC.
==============================
Tendered Pursuant to the Offer to Purchase
Dated October 25, 1996
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., EASTERN TIME, ON MONDAY, NOVEMBER 25, 1996,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To: CHASEMELLON SHAREHOLDER SERVICES, L.L.C. Depositary
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Reorganization Dept. (201) 329-8936 Reorganization Dept.
P.O. Box 798 (for Eligible Institutions Only) 120 Broadway
Midtown Station 13th Floor
New York, New York 10018 Confirm by Telephone: New York, New York 10271
(201) 296-4209
</TABLE>
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
(See Instructions 3 and 4)
- --------------------------------------------------------------------------------
Name(s) and Address(es) of Registered
Holder(s) (Please fill in exactly as Certificate(s) Tendered
name(s) appear(s) on certificate(s)) (Attached signed list if necessary)
- --------------------------------------------------------------------------------
Number of Shares Number of
Certificate represented by Shares
Number(s)* Certificate(s)* Tendered**
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
- --------------------------------------------------------------------------------
Total Shares Tendered
- --------------------------------------------------------------------------------
* Need not be completed if Shares are delivered by book-entry
transfer.
** If you desire to tender fewer than all Shares evidenced by any
certificates listed above, please indicate in this column the
number of Shares you wish to tender. Otherwise, all Shares
evidenced by such certificates will be deemed to have been
tendered. See Instruction 4.
- --------------------------------------------------------------------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE OF THOSE
LISTED ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
This Letter of Transmittal is to be used only (a) if certificates for
Shares (as defined below) are to be forwarded with it (or such certificates will
be delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or (b) if a tender of Shares is to be made by book-entry transfer to
the account maintained by the Depositary at The Depository Trust Company ("DTC")
or Philadelphia Depository Trust Company ("PDTC") (collectively, the "Book-Entry
Transfer Facilities") pursuant to Section 3 of the Offer to Purchase.
Stockholders whose certificates are not immediately available or who
cannot deliver their certificates for Shares and all other required documents to
the Depositary before the Expiration Date (as defined in the Offer to Purchase)
or whose Shares cannot be delivered on a timely basis pursuant to the procedure
for book-entry transfer must tender their Shares according to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2. Delivery of the Letter of Transmittal and any other required
documents to one of the Book-Entry Transfer Facilities does not constitute
delivery to the Depositary.
<PAGE>
- --------------------------------------------------------------------------------
|_| CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF
THE BOOK-ENTRY TRANSFER FACILITIES, AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:_________________________________________
Check Box of Applicable Book-Entry Transfer Facility:
|_| DTC |_| PDTC
Account Number: _______________________________________________________
Transaction Code Number: _____________________________________________
|_| CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
DEPOSITARY, AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): ______________________________________
Date of Execution of Notice of Guaranteed Delivery: ___________________
Name of Institution Which Guaranteed Delivery: _______________________
Check Box of Applicable Book-Entry Transfer Facility and Give Account
Number if Delivered by Book-Entry Transfer:
|_| DTC |_| PDTC
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
ODD LOTS
(See Instruction 9)
To be completed ONLY if Shares are being tendered by or on behalf of a
person owning beneficially, as of the close of business on October 22, 1996, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
|_| was the beneficial owner as of the close of business on
October 22, 1996 and will continue to be the beneficial owner
as of the Expiration Date, of an aggregate of fewer than 100
Shares, all of which are being tendered; or
|_| is a broker, dealer, commercial bank, trust company or other
nominee which:
(a) is tendering, for the beneficial owners thereof,
Shares with respect to which it is the record holder;
and
(b) believes, based upon representations made to it by
such beneficial owners, that each such person was the
beneficial owner as of the close of business on
October 22, 1996 and each such person will continue
to be the beneficial owner as of the Expiration Date,
of an aggregate of fewer than 100 Shares and is
tendering all of such Shares.
- --------------------------------------------------------------------------------
Ladies and Gentlemen:
The undersigned hereby tenders to First Shenango Bancorp, Inc., a
Pennsylvania corporation (the "Company"), the above describe shares of the
Company's common stock, par value $0.10 per share (the "Shares") at the price
per Share indicated in this Letter of Transmittal, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Company's Offer to
Purchase dated October 25, 1996, receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which together constitute the "Offer").
Subject to, and effective on 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 or orders the registration of such Shares tendered by book-entry transfer
that are purchased pursuant to the Offer to or upon the order of the Company and
hereby irrevocably constitutes and appoints the Depositary as attorney-in-fact
of the undersigned with respect to such Shares, with full power of substitution
(such power of attorney being an irrevocable power coupled with interest), to:
(a) deliver certificates for such Shares, or transfer ownership of such
Shares on the account books maintained by a Book-Entry Transfer Facility,
together in either such case with all accompanying evidences of transfer and
authenticity, to or upon the order of the Company, upon receipt by the
Depositary, as the undersigned's agent, of the Purchase Price (as defined below)
with respect to such Shares;
(b) present certificates for such Shares for cancellation and transfer
on the Company's books; and
(c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, subject to the next paragraph, all in
accordance with the terms of the Offer.
<PAGE>
The undersigned hereby represents and warrants that:
(a) the undersigned understands that tenders of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer, including the undersigned's representation and
warranty that (i) the undersigned has a "net long position" in Shares or
"equivalent securities" at least equal to the Shares tendered within the meaning
of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended,
and (ii) such tender of Shares complies with Rule 14e-4.
(b) when and to the extent the Company accepts 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 Depositary or the Company deems necessary or desirable to complete
the assignment, transfer and purchase of the Shares tendered hereby; and
(d) the undersigned has read and agrees to all of the terms of the
Offer.
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 Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates, the number of Shares that the
undersigned wishes to tender and the purchase price at which such Shares are
being tendered should be indicated in the appropriate boxes on this Letter of
Transmittal.
The undersigned understands that the Company will, upon the terms and
subject to the conditions of the Offer, determine a single per Share price (not
greater than $23.75 nor less than $20.50 per Share) that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The undersigned understands that the Company will select
the lowest Purchase Price which will allow it to buy 200,000 Shares (or such
lesser number of Shares as are validly tendered and not withdrawn at prices not
greater than $23.75 nor less than $20.50 per Share) pursuant to the Offer, or
such greater number of Shares as the Company may elect to purchase. The
undersigned understands that all Shares validly tendered and not withdrawn at
prices at or below the Purchase Price will be purchased at the Purchase Price,
net to the seller in cash, upon the terms and subject to the conditions of the
Offer, including the proration provisions, and that the Company will return all
other Shares, including Shares tendered at prices greater than the Purchase
Price and Shares not purchased because of proration.
The undersigned recognizes that under certain circumstances set forth
in the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may accept
for payment fewer than all of the Shares tendered hereby. In either event, the
undersigned understands that certificate(s) for any Shares not tendered or not
purchased will be returned to the undersigned at the address indicated above,
unless otherwise indicated under the "Special Payment Instructions" or "Special
Delivery Instructions" below. The undersigned recognizes that the Company has no
obligation, pursuant to the Special Payment Instructions, to transfer any
certificate for Shares from the name of their registered holder, or to order the
registration or transfer of such Shares tendered by book-entry transfer, if the
Company purchases none of the Shares represented by such certificate or tendered
by such book-entry transfer.
The undersigned understands that acceptance of Shares by the Company
for payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the 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 "Special Payment
Instructions" or "Special Delivery Instructions" below.
<PAGE>
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
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT
WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE
THAN ONE PRICE, USE A SEPARATE
LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED.
(See Instruction 5)
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED (EXCEPT AS OTHERWISE PROVIDED
HEREIN), THERE IS NO VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
|_| $20.500 |_| $21.500 |_| $22.500 |_| $23.500
|_| 20.625 |_| 21.625 |_| 22.625 |_| 23.625
|_| 20.750 |_| 21.750 |_| 22.750 |_| 23.750
|_| 20.875 |_| 21.875 |_| 22.875
|_| 21.000 |_| 22.000 |_| 23.000
|_| 21.125 |_| 22.125 |_| 23.125
|_| 21.250 |_| 22.250 |_| 23.250
|_| 21.375 |_| 22.375 |_| 23.375
- --------------------------------------------------------------------------------
TENDER OF DIVIDEND REINVESTMENT PLAN SHARES
(SEE INSTRUCTION 14)
This section is to be completed ONLY if Shares held in the Company's
Dividend Reinvestment Plan are to be tendered.
|_| By checking this box, the undersigned represents that the
undersigned is a participant in the Company's Dividend
Reinvestment Plan and hereby instructs the Depositary to
tender on behalf of the undersigned the following number of
Shares credited to the Dividend Reinvestment Plan account of
the undersigned at the Purchase Price per Share indicated in
the box entitled "Price (In Dollars) Per Share At Which Shares
Are Being Tendered" in this Letter of Transmittal:
______________ shares(1)
(1) The undersigned understands and agrees that all Shares held in
the Dividend Reinvestment Plan account(s)of the undersigned
will be tendered if the above box is checked and the space
above is left blank.
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 4, 6, 7 and 8)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or any check for the Purchase Price of Shares purchased are to be
issued in the name of and sent to someone other than the undersigned.
Issue |_| Check |_| Certificates to:
Name: _____________________________________________________________________
(Please Print)
Address: _____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(Include Zip Code)
_____________________________________________________________________
(Tax Identification or Social Security Number)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4, 6 and 8)
To be completed ONLY if certificates for Shares not tendered or not
purchased issued in the name of the undersigned and/or any check for the
Purchase Price of Shares purchased issued in the name of undersigned are to be
sent to someone other than the undersigned or to the undersigned at an address
other than that shown above.
Deliver |_| Check |_| Certificates to:
Name: _____________________________________________________________________
(Please Print)
Address: _____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(Include Zip Code)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
STOCKHOLDER(S) SIGN HERE
(See Instructions 1 and 6)
(Please complete Substitute Form W-9 on Reverse Side)
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 6.
________________________________________________________________________________
________________________________________________________________________________
(Signature(s))
Dated:__________________________________________________________________________
Name(s):________________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity (full title):__________________________________________________________
________________________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Area Code and Telephone Number:_________________________________________________
Tax Identification or Social Security Number(s):________________________________
Dated:__________________________________________________________________________
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 6)
Authorized Signature:___________________________________________________________
Name:___________________________________________________________________________
(Please Print)
Title:__________________________________________________________________________
Name of Firm:___________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number:_________________________________________________
Dated:__________________________________________________________________________
Tax Identification or Social Security Number(s)_________________________________
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
Forming Part of the Terms of the Offer
1. Guarantee of Signatures. No signature guarantee is required if
either:
(a) this Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this document, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a security
position listing as the owner of Shares) exactly as the name of the registered
holder appears on the certificate tendered with this Letter of Transmittal
unless such holder has completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions"; or
(b) such Shares are tendered for the account of a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office,
branch or agency in the United States. See Instruction 6.
In all other cases the signature(s) must be guaranteed by an eligible
guarantor institution (bank, stockbroker, savings and loan association or credit
union with membership in an approved signature guarantee medallion program),
pursuant to Rule 17Ad-15 promulgated under the Exchange Act (an "Eligible
Institution"). See Instruction 6.
2. Delivery of Letter of Transmittal and Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be used only if
certificates are delivered with it to the Depositary (or such certificates will
be delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or if tenders are to be made pursuant to the procedure for tender by
book-entry transfer set forth in Section 3 of the Offer to Purchase.
Certificates for all physically tendered Shares, or confirmation of a book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility of
Shares tendered electronically, together in each case with a properly completed
and duly executed Letter of Transmittal or duly executed facsimile of it, and
any other documents required by this Letter of Transmittal, should be mailed or
delivered to the Depositary at the appropriate address set forth herein and must
be delivered to the Depositary on or before the Expiration Date (as defined in
the Offer to Purchase).
Stockholders whose certificates are not immediately available or
who cannot deliver Shares and all other required documents to the Depositary
before the Expiration Date, or whose Shares cannot be delivered on a timely
basis pursuant to the procedure for book-entry transfer, may tender their Shares
by or through any Eligible Institution by properly completing (including the
price at which the Shares are being tendered) and duly executing and delivering
a Notice of Guaranteed Delivery (or a facsimile of it) and by otherwise
complying with the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase. Pursuant to such procedure, the certificates for all
physically tendered Shares or book-entry confirmation, as the case may be, as
well as a properly completed Letter of Transmittal and all other documents
required by this Letter of Transmittal, must be received by the Depositary
within three over-the-counter trading days after receipt by the Depositary of
such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to
Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice. For Shares to be validly tendered pursuant to the guaranteed
delivery procedure, the Depositary must receive the Notice of Guaranteed
Delivery before the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES
FOR SHARES, IS AT THE ELECTION 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, conditional or contingent tenders,
nor will it purchase any fractional Shares. All tendering stockholders, by
execution of this Letter of Transmittal (or a facsimile of it), waive any right
to receive any notice of the acceptance of their tender.
3. Inadequate Space. If the space provided in the box captioned
"Description of Shares Tendered" is inadequate, the certificate numbers and/or
the number of Shares should be listed on a separate signed schedule and attached
to this Letter of Transmittal.
4. Partial Tenders and Unpurchased Shares. (Not applicable to
stockholders who tender by book-entry transfer.) If fewer than all of the Shares
evidenced by any certificate are to be tendered, fill in the number of Shares
which are to be tendered in the column entitled "Number of Shares 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
<PAGE>
specified in the "Special Payment Instructions" or "Special Delivery
Instructions" box on this Letter of Transmittal, as soon as practicable after
the Expiration Date. All Shares represented by the certificate(s) listed and
delivered to the Depositary are deemed to have been tendered unless otherwise
indicated.
5. Indication of Price at Which Shares Are Being Tendered. For Shares
to be validly tendered, the stockholder must check the box indicating the price
per Share at which he or she is tendering Shares under "Price (In Dollars) Per
Share at Which Shares Are Being Tendered" on this Letter of Transmittal. Only
one box may be checked. If more than one box is checked, or if no box is checked
(except as otherwise provided herein), there is no valid tender of Shares. A
stockholder wishing to tender portions of his Share holdings at different prices
must complete a separate Letter of Transmittal for each price at which he or she
wishes to tender each such portion of his or her Shares. The same Shares cannot
be tendered (unless previously validly withdrawn as provided in Section 4 of the
Offer to Purchase) at more than one price.
6. Signatures on Letter of Transmittal, Stock Powers, and Endorsements.
(a) If this Letter of Transmittal is signed by the registered holder(s)
of the Shares tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the certificate without any change whatsoever.
(b) If the Shares are registered in the names of two or more joint
holders, each such holder must sign this Letter of Transmittal.
(c) If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal (or facsimiles of it) as there are different
registrations of certificates.
(d) When this Letter of Transmittal is signed by the registered
holder(s) of the Shares listed and transmitted hereby, no endorsements 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).
If this Letter of Transmittal is signed by a person other than the registered
holder(s) of the certificate(s) listed, or if payment is to be made or
certificate(s) for shares not tendered or not purchased are to be issued to a
person other than the registered holder(s), the certificate(s) must be endorsed
or accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on the certificate(s), and any
signature(s) on such certificate(s) or stock power(s) must be guaranteed by an
Eligible Institution. See Instruction 1.
(e) If this Letter of Transmittal or any 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 for the registered holder(s) of the certificates listed, such persons
should so indicate when signing and must submit proper evidence satisfactory to
the Company of their authority so to act.
7. Stock Transfer Taxes. Except as provided in this Instruction, 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 this Letter of Transmittal;
then the Depositary 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.
8. 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 signer
of 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 and signatures must be
guaranteed as described in Instructions 1 and 6.
9. Odd Lots. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase less than all Shares validly tendered and not withdrawn
before the Expiration Date, the Shares purchased first will consist of all
Shares validly tendered
<PAGE>
and not withdrawn by any stockholder who owned beneficially as of the close of
business on October 22, 1996 and who continues to own as of the Expiration Date,
an aggregate of fewer than 100 Shares and who tenders all of his Shares at or
below the Purchase Price (an "Odd Lot Holder"). This preference will not be
available unless the box captioned "Odd Lots" is completed.
10. Irregularities. The Company will determine, in its sole discretion,
all questions as to the validity, form, eligibility (including time of receipt)
and acceptance for payment of any tender of Shares, and its determination shall
be final and binding on all parties. The Company reserves the absolute right to
reject any or all tenders determined by it 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 or any defects or irregularities 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 validly made until all defects and
irregularities have been cured or waived. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as the
Company shall determine. None of the Company, the Depositary nor any other
person is or will be obligated to give notice of any defects or irregularities
in tenders, nor shall any of them incur any liability for failure to give any
such notice.
11. Questions and Requests for Assistance and Additional Copies.
Questions and requests for assistance may be directed to, or additional copies
of the Offer to Purchase, the Notice of Guaranteed Delivery, and this Letter of
Transmittal may be obtained from the Information Agent at its address and
telephone number set forth at the end of this Letter of Transmittal or from your
broker, dealer, commercial bank or trust company.
12. Substitute Form W-9 and Form W-8. Stockholders other than
corporations and certain foreign individuals may be subject to backup federal
income tax withholding. Each such tendering stockholder or other payee who does
not otherwise establish to the satisfaction of the Depositary an exemption from
backup federal income tax withholding is required to provide the Depositary with
a correct taxpayer identification number ("TIN") on Substitute Form W-9 which is
provided as a part of this Letter of Transmittal, and to indicate that the
stockholder or other payee is not subject to backup withholding by checking the
box in Part 2 of the form. For an individual, his TIN will generally be his
social security number. Failure to provide the information on the form or to
check the box in Part 2 of the form may subject the tendering stockholder or
other payee to 31% backup federal income tax withholding on the payments made to
the stockholder or other payee with respect to Shares purchased pursuant to the
Offer and to a $50 penalty imposed by the Internal Revenue Service. 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. The
box in Part 3 of the form may be checked if the tendering stockholder or other
payee has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 3 is checked and the Depositary
is not provided with a TIN within sixty (60) days, the Depositary will withhold
31% on all such payments thereafter until a TIN is provided to the Depositary.
Stockholders who are foreign individuals should submit Form W-8 to certify that
they are exempt from backup withholding, unless Instruction 13 applies. Form W-8
may be obtained from the Depositary. For additional information concerning
Substitute Form W-9, see the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9."
13. Withholding on Foreign Stockholders. The Depositary will withhold
federal income taxes equal to 30% of the gross payments payable to a foreign
stockholder or his agent unless the Depositary determines that a reduced rate of
withholding or an exemption from withholding is applicable. (Exemption from
backup withholding does not exempt a foreign stockholder from the 30%
withholding.) For this purpose, a foreign stockholder is any stockholder that is
not (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof or (iii) an estate or trust
the income of which is subject to United States federal income taxation
regardless of the source of such income. The Depositary will determine a
stockholder's status as a foreign stockholder and eligibility for a reduced rate
of, or an exemption from, withholding by reference to the stockholder's address
and to any outstanding certificates or statements concerning eligibility for a
reduced rate of, or exemption from, withholding on the grounds that the gross
proceeds paid pursuant to the Offer are effectively connected with the conduct
of a trade or business within the United States, a foreign stockholder must
deliver to the Depositary a properly executed Form 4224. Such form can be
obtained from the Depositary. A foreign stockholder who has not previously
submitted the appropriate certificates or statements with respect to a reduced
rate of, or exemption from, withholding for which such stockholder may be
eligible should consider doing so in order to avoid excess withholding. A
foreign stockholder may be eligible to obtain a refund of tax withheld if such
stockholder meets one of the three tests for capital gain or loss treatment
described in Section 13 of the Offer to Purchase or is otherwise able to
establish that no tax or reduced amount of tax was due. Foreign stockholders are
advised to consult their tax advisors regarding the application of federal
income tax withholding, including eligibility for a withholding tax reduction or
exemption and the refund procedures.
14. Dividend Reinvestment Plan. If a tendering stockholder desires to
have tendered pursuant to the Offer Shares credited to the stockholder's account
under the Company's Dividend Reinvestment Plan (the "Dividend Reinvestment
Plan"), the box captioned "Tender of Dividend Reinvestment Plan Shares" should
be completed. A participant in the Dividend Reinvestment Plan may complete such
box on only one Letter of Transmittal submitted by such participant. If a
participant submits more than one Letter of Transmittal and completes such box
on more than one Letter of Transmittal, the participant will be deemed to have
elected to tender
<PAGE>
all Shares credited to the stockholder's account under the Dividend Reinvestment
Plan at the lowest of the prices specified in such Letters of Transmittal.
If a stockholder authorizes a tender of Shares held in the
Dividend Reinvestment Plan, all such Shares credited to such stockholder's
account(s), including fractional Shares, will be tendered, unless otherwise
specified in the appropriate space in the box captioned "Tender of Dividend
Reinvestment Plan Shares." In the event that the box captioned "Tender of
Dividend Reinvestment Plan Shares" is not completed, no Shares held in the
tendering stockholder's account will be tendered. See Section 3 of the Offer to
Purchase for a further explanation of the procedures for tendering and
consequences of tendering Dividend Reinvestment Plan Shares. If a participant
tenders all of such participant's Dividend Reinvestment Plan Shares and all such
Shares are purchased by the Company pursuant to the Offer, such tender will be
deemed to be authorization and written notice to ChaseMellon Shareholder
Services, L.L.C. of termination of such participant's participation in the
Dividend Reinvestment Plan.
IMPORTANT: This Letter of Transmittal or a manually signed facsimile of
it (together with certificate(s) for Shares or confirmation of book-entry
transfer and all other required documents) or, if applicable, the Notice of
Guaranteed Delivery must be received by the Depositary before the Expiration
Date.
IMPORTANT TAX INFORMATION
Under the United States federal income tax law, a stockholder whose
tendered Shares are accepted for payment generally is required by law to provide
the Depositary with such stockholder's correct TIN on Substitute Form W-9 below.
If the Depositary 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 backup withholding.
Certain stockholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, the stockholder must submit a Form W-8, signed under penalties
of perjury, attesting to the individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary 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.
Purpose of Substitute Form W-9
To prevent backup withholding on payment made to a stockholder or other
payee with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of the stockholder's correct TIN by completing
the form below, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such stockholder is awaiting a TIN) and that:
(a) the stockholder has not been notified by the Internal Revenue
Service that the stockholder is subject to backup withholding as a result of
failure to report all interest or dividends; or
(b) the Internal Revenue Service has notified the stockholder that the
stockholder is no longer subject to backup withholding.
What Number to Give the Depositary
The stockholder is required to give the Depositary the TIN (e.g.,
social security number or employer identification number) of the registered
holder of the Shares. If the Shares are in more than one name or are not in the
name of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
<PAGE>
- --------------------------------------------------------------------------------
PAYER'S NAME
- --------------------------------------------------------------------------------
Part 1 - PLEASE PROVIDE Social Security Number
SUBSTITUTE YOUR TIN IN THE BOX AT
RIGHT AND CERTIFY BY _________________________________
FORM W-9 SIGNING AND DATING OR Employee Identification Number
BELOW
- --------------------------------------------------------------------------------
Part 2 - Check the box if you are NOT subject to backup
withholding under the provisions of Section 3406(a)(1)(C)
of the Internal Revenue Code because (1) you are exempt
from backup withholding, or (2) you have not been
Department of Treasury notified by the Revenue Service that you are subject to
Internal Revenue backup withholding as a result of failure to report all
Service interest or dividends, or (3) the Internal Revenue
Service has notified you that you are no longer subject
to backup withholding. |_|
- --------------------------------------------------------------------------------
CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT THE INFORMATION PROVIDED ON THIS FORM IS TRUE,
CORRECT, AND COMPLETE.
Payer's Request for
Taxpayer Identification Part 3 -
Number (TIN) SIGNATURE____________________DATE_____ Awaiting TIN |_|
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECK THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
================================================================================
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or
(b) I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number within sixty (60)
days, 31%of all reportable payments made to me thereafter will be withheld until
I provide a number.
______________________________ ____________________________
Signature Date
================================================================================
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted from
Eligible Institutions. The Letter of Transmittal and certificates for Shares and
any other required documents should be sent or delivered by each tendering
stockholder or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Reorganization Department (201) 329-8936 Reorganization Department
P.O. Box 798 (for Eligible Institutions Only) 120 Broadway
Midtown Station 13th Floor
New York, New York 10018 Confirm by Telephone: New York, New York 10271
(201) 296-4209
</TABLE>
Any questions or requests for assistance or for additional copies of
the Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at its telephone numbers and
address set forth below. A tendering stockholder may also contact his broker,
dealer, commercial bank or trust company for assistance concerning the Offer. In
order to confirm the delivery of his Shares, a tendering stockholder should
contact the Depositary.
The Information Agent:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free:
(800) 322-2885
October 25, 1996
EXHIBIT (a)(3)
<PAGE>
[MacKenzie Partners Letterhead]
FIRST SHENANGO BANCORP, INC.
Offer to Purchase For Cash
Up to 200,000 Shares of its Common Stock
at a Purchase Price
Not Greater Than $23.75 Nor Less than $20.50 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
EXPIRE AT 5:00 P.M., EASTERN TIME,
ON MONDAY, NOVEMBER 25, 1996, UNLESS
THE OFFER IS EXTENDED.
October 25, 1996
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
First Shenango Bancorp, Inc. a Pennsylvania corporation (the
"Company"), has appointed us to act as Information Agent in connection with its
offer to purchase up to 200,000 shares of its Common Stock, par value $0.10 per
share (the "Shares") at prices, net to the seller in cash, not greater than
$23.75 nor less than $20.50 per Share, specified by tendering stockholders, upon
the terms and subject to the conditions set forth in its Offer to Purchase,
dated October 25, 1996, and the related Letter of Transmittal (which together
constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $23.75 nor less than
$20.50 per Share) that it will pay for Shares validly tendered and not withdrawn
pursuant to the Offer (the "Purchase Price"), taking into account the number of
Shares so tendered and the prices specified by tendering stockholders. The
Company will select the lowest Purchase Price which will allow it to purchase
200,000 Shares (or such lesser number of Shares as are validly tendered and not
withdrawn at prices not greater than $23.75 nor less than $20.50 per Share)
pursuant to the Offer, or such greater number as the Company may elect to
purchase. All Shares validly tendered and not withdrawn at prices at or below
the Purchase Price will be purchased at the Purchase Price, net to the seller in
cash, upon the terms and subject to the conditions of the Offer, including the
proration terms thereof. See Section 1 of the Offer to Purchase.
If, prior to the Expiration Date (as defined in the Offer to Purchase),
more than 200,000 Shares are validly tendered and not withdrawn at or below the
Purchase Price, the Company will, upon the terms and subject to the conditions
of the Offer, buy Shares first from all Odd Lot Holders (as defined in the Offer
to Purchase) who validly tender and do not withdraw all their Shares at or below
the Purchase Price and then on a pro rata basis from all other stockholders
whose Shares are validly tendered and not withdrawn at or below the Purchase
Price.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 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 October 25, 1996;
<PAGE>
2. Letter to Clients that may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name
of your nominee, with space provided for obtaining such clients'
instructions with regard to the Offer;
3. Letter dated October 25, 1996 from Francis A. Bonadio,
President and Chief Executive Officer of the Company, to stockholders
of the Company;
4. Letter of Transmittal for your use and for the information
of your clients (together with accompanying Substitute Form W-9 and
guidelines); and
5. Notice of Guaranteed Delivery to be used to accept the
Offer if the Share certificates and all other required documents cannot
be delivered to the Depositary by the Expiration Date or if the
procedure for book-entry transfer cannot be completed on a timely
basis.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME,
ON MONDAY, NOVEMBER 25, 1996, UNLESS THE OFFER IS EXTENDED.
No fees or commissions will be payable to brokers, dealers or any
person for soliciting tenders of Shares pursuant to the Offer other than fees
paid to the Information Agent or the Depositary as described in the Offer to
Purchase. The Company will, however, upon request, reimburse you for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to the beneficial owners of Shares held by you as a nominee or in a
fiduciary capacity. The Company will pay or cause to be paid any stock transfer
taxes applicable to its purchase of Shares, except as otherwise provided in
Instruction 7 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either certificate(s) representing the tendered Shares or
confirmation of their book-entry transfer all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3, "Procedures for Tendering Shares," of the
Offer to Purchase, tenders may be made without the concurrent deposit of stock
certificates or concurrent compliance with the procedure for book-entry
transfer, if such tenders are made by or through a broker or dealer which is a
member firm of a registered national securities exchange, or a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office, branch or agency in the United States. Certificates
for Shares so tendered (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities described in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal and any other documents
required by the Letter of Transmittal, must be received by the Depositary within
three over-the-counter trading days after timely receipt by the Depositary of a
properly completed and duly executed Notice of Guaranteed Delivery.
<PAGE>
Any inquiries you may have with respect to the Offer should be
addressed to the Information Agent at its address and telephone number set forth
on the back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent, MacKenzie Partners, Inc., telephone: (800) 322-2885.
Very truly yours,
MacKenzie Partners, Inc.
Enclosures
================================================================================
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE
ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
================================================================================
3
EXHIBIT (a)(4)
<PAGE>
FIRST SHENANGO BANCORP, INC.
Offer to Purchase for Cash
Up to 200,000 Shares of its Common Stock
at a Purchase Price Not Greater
than $23.75 Nor Less than $20.50 Per Share
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated
October 25, 1996 and the related Letter of Transmittal (which together
constitute the "Offer") in connection with the Offer by First Shenango Bancorp,
Inc., a Pennsylvania corporation (the "Company"), to purchase up to 200,000
shares of its common stock, par value $0.10 per share (the "Shares") at prices
net to the seller in cash, not greater than $23.75 nor less than $20.50 per
Share, specified by tendering stockholders, on the terms and subject to the
conditions of the Offer.
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $23.75 nor less than
$20.50 per Share) that it will pay for Shares validly tendered and not withdrawn
pursuant to the Offer (the "Purchase Price"), taking into account the number of
Shares so tendered and the prices specified by tendering stockholders. The
Company will select the lowest Purchase Price which will allow it to purchase
200,000 Shares (or such lesser number of Shares as are validly tendered and not
withdrawn at prices not greater than $23.75 nor less than $20.50 per Share)
pursuant to the Offer, or such greater number as the Company may elect to
purchase. All Shares validly tendered and not withdrawn at prices at or below
the Purchase Price will be purchased at the Purchase Price, net to the seller in
cash, upon the terms and subject to the conditions of the Offer, including the
proration terms thereof. The Company will return all other Shares, including
Shares tendered at prices greater than the Purchase Price and Shares not
purchased because of proration. See Section 1 of the Offer to Purchase.
If, prior to the Expiration Date (as defined in the Offer to Purchase),
more than 200,000 Shares are validly tendered and not withdrawn at or below the
Purchase Price, the Company will, upon the terms and subject to the conditions
of the Offer, accept Shares for purchase first from Odd Lot Holders (as defined
in the Offer to Purchase) who validly tender and do not withdraw their Shares at
or below the Purchase Price and then on a pro rata basis from all stockholders
whose Shares are validly tendered and not withdrawn at or below the Purchase
Price. See Section 1 of the Offer to Purchase.
We are the holder of record of Shares held for your account. As such,
we are the only ones who can tender your Shares, and then only pursuant to your
instructions. We are sending you the Letter of Transmittal for your information
only; you cannot use it to tender Shares we hold for your account.
Please instruct us as to whether you wish us to tender any or all of
the Shares we hold for your account on the terms and subject to the conditions
of the Offer.
We call your attention to the following:
1. You may tender Shares at prices, net to you in cash, not
greater than $23.75 nor less than $20.50 per Share, as indicated in the
attached instruction form.
2. The Offer is not conditioned upon any minimum number of
Shares being tendered.
3. The Offer, proration period and withdrawal rights will
expire at 5:00 p.m., Eastern time, on Monday, November 25, 1996, unless
the Company extends the Offer.
4. The Offer is for 200,000 Shares (depending on the Purchase
Price), constituting approximately 8.86% of the Shares outstanding as
of October 24, 1996.
<PAGE>
5. Tendering stockholders will not be obligated to pay any
brokerage commissions, solicitation fees or, subject to Instruction 7
of the Letter of Transmittal, stock transfer taxes on the Company's
purchase of Shares pursuant to the Offer.
6. If you owned beneficially as of the close of business on
October 22, 1996 and will continue to own beneficially as of the
Expiration Date an aggregate of fewer than 100 Shares and you instruct
us to tender on your behalf of all such Shares at or below the Purchase
Price before the Expiration Date and check the box captioned "Odd Lots"
in the attached instruction form, the Company, upon the terms and
subject to the conditions of the Offer, will accept all such Shares for
purchase before proration, if any, of the purchase of other Shares
tendered and not withdrawn at or below the Purchase Price.
7. If you wish to tender portions of your Share holdings at
different prices, you must complete separate instructions for each
price at which you wish to tender each such portion of your Shares. We
must submit separate Letters of Transmittal on your behalf for each
price you will accept. The same Shares cannot be tendered at different
prices unless such tendered Shares are withdrawn and retendered.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the attached
instruction form. An envelope to return your instructions to us is enclosed. If
you authorize us to tender your Shares, we will tender all such Shares unless
you specify otherwise on the attached instruction form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT
US TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE OFFER.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN
TIME, ON MONDAY, NOVEMBER 25, 1996 UNLESS THE COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if before the
Expiration Date a greater number of Shares are validly tendered and not
withdrawn at or below the Purchase Price than the Company will accept for
purchase, the Company will accept Shares for purchase at the Purchase Price in
the following order of priority:
(a) first, all Shares validly tendered and not withdrawn at or below
the Purchase Price before the Expiration Date by any Odd Lot Holder
who:
(1) tenders all Shares beneficially owed by such Odd Lot
Holder at or below the Purchase Price (partial tenders will not qualify
for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) then, after purchase of all of the foregoing Shares, all other
Shares validly tendered and not withdrawn at or below the Purchase
Price before the Expiration Date on a pro rata basis (with adjustments
to avoid purchases of fractional Shares), as provided in the Offer to
Purchase.
The Company is not making the Offer to, nor will it accept tenders from
or on behalf of, owners of Shares in any jurisdiction in which the Offer or its
acceptance would violate the securities, blue sky or other laws of such
jurisdiction.
2
<PAGE>
Instruction Form
With Respect to the
FIRST SHENANGO BANCORP, INC.
Offer to Purchase for Cash
Up to 200,000 Shares of Its Common Stock
at a Purchase Price Per Share Not Greater
than $23.75 Nor Less than $20.50 Per Share
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated October 25, 1996 and related Letter of Transmittal
(which together constitute the "Offer"), in connection with the Offer by First
Shenango Bancorp, Inc., a Pennsylvania corporation (the "Company"), to purchase
up to 200,000 shares of its common stock, par value $0.10 per share (the
"Shares") at prices, net to the Seller in cash, not greater than $23.75 nor less
than $20.50 per Share, specified by tendering stockholders, upon the terms and
subject to the conditions of the Offer.
The undersigned acknowledges that the Company will, upon the terms and
subject to the conditions of the Offer, determine a single per Share price (not
greater than $23.75 nor less than $20.50 per Share) that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price which
will allow it to purchase 200,000 Shares (or such lesser number of Shares as are
validly tendered and not withdrawn at prices not greater than $23.75 nor less
than $20.50 per Share) pursuant to the Offer, or such greater number as the
Company may elect to purchase. All Shares validly tendered and not withdrawn at
prices at or below the Purchase Price will be purchased at the Purchase Price,
net to the seller in cash, upon the terms and subject to the conditions of the
Offer, including the proration terms thereof. The Company will return all other
Shares. See Section 1 of the Offer to Purchase.
The undersigned hereby instruct(s) you to tender to the Company the
number of Shares indicated below or, if no number is indicated, all Shares you
hold for the account of the undersigned, at the price per Share indicated below,
pursuant to the terms and subject to the conditions of the Offer. The Company
will return Shares tendered at prices greater than the Purchase Price and Shares
not purchased because of proration.
Aggregate number of Shares to be tendered by you for
the account of the undersigned:
________________Shares
- ----------
* Unless otherwise indicated, all of the Shares held for the account of the
undersigned will be tendered.
-----------------------------------------------------------
ODD LOTS
|_| By checking this box, the undersigned represents
that the undersigned owned beneficially as of the
close of business on October 22, 1996 and will
continue to own beneficially as of the Expiration
Date an aggregate of fewer than 100 Shares and is
instructing the holder to tender all such Shares.
-----------------------------------------------------------
3
<PAGE>
--------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT
WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE
THAN ONE PRICE, USE A SEPARATE
INSTRUCTION FORM FOR EACH PRICE SPECIFIED.
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF NO
BOX IS CHECKED (EXCEPT AS OTHERWISE PROVIDED
HEREIN), THERE IS NO VALID TENDER OF SHARES.
--------------------------------------------
|_| $20.500 |_| $21.625 |_| $22.750
|_| 20.625 |_| 21.750 |_| 22.875
|_| 20.750 |_| 21.875 |_| 23.000
|_| 20.875 |_| 22.000 |_| 23.125
|_| 21.000 |_| 22.125 |_| 23.250
|_| 21.125 |_| 22.250 |_| 23.375
|_| 21.250 |_| 22.375 |_| 23.500
|_| 21.375 |_| 22.500 |_| 23.625
|_| 21.500 |_| 22.625 |_| 23.750
--------------------------------------------
======================================================================
SIGNATURE BOX
Signature(s)____________________________________________________________________
Dated ____________________________________________________________________, 1996
Name(s) and Address(es)_________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
((Please Print)
Area Code and Telephone Number__________________________________________________
Taxpayer Identification or
Social Security Number__________________________________________________________
================================================================================
4
EXHIBIT (a)(5)
<PAGE>
NOTICE OF GUARANTEED DELIVERY
of
Shares of Common Stock
of
FIRST SHENANGO BANCORP, INC.
This form or a facsimile of it must be used to accept the Offer, as
defined below, if:
(a) certificates for common stock, par value $0.10 per share (the
"Shares"), of First Shenango Bancorp, Inc., a Pennsylvania corporation, are not
immediately available or certificates for Shares and all other required
documents cannot be delivered to the Depositary before the Expiration Date (as
defined in Section 1 of the Offer to Purchase, as defined below); or
(b) Shares cannot be delivered on a timely basis pursuant to the
procedure for book-entry transfer.
This form or a facsimile of it, signed and properly completed, may be
delivered by hand, mail, telegram or facsimile transmission to the Depositary.
See Section 3 of the Offer to Purchase.
To: CHASEMELLON SHAREHOLDER SERVICES, L.L.C. Depositary
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Reorganization Department (201) 329-8936 Reorganization Department
P.O. Box 798 (for Eligible Institutions Only) 120 Broadway
Midtown Station 13th Floor
New York, New York 10018 Confirm by Telephone: New York, New York 10271
(201) 296-4209
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE
SHOWN ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A
FACSIMILE NUMBER OTHER THAN THAT LISTED ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to First Shenango Bancorp, Inc., at the price per
Share indicated below, net to the seller in cash, upon the terms and conditions
set forth in the Offer to Purchase, dated October 25, 1996 (the "Offer to
Purchase") and the related Letter of Transmittal (which together constitute the
"Offer"), receipt of which is hereby acknowledged, ________ Shares pursuant to
the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase.
================================================================================
ODD LOTS
To be completed ONLY if Shares are being tendered by or on behalf of a
person owning beneficially as of the close of business on October 22, 1996 and
who will continue to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares.
The undersigned either (check one):
|_| was the beneficial owner as of the close of business on October 22, 1996 and
will continue to be the beneficial owner as of the Expiration Date, of an
aggregate of fewer than 100 Shares, all of which are being tendered; or
|_| is a broker, dealer, commercial bank, trust company or other nominee which:
(a) is tendering, for beneficial owners, Shares with respect to which it
is the registered holder; and
(b) believes, based upon representations made to it by such beneficial
owners, that each such person was the beneficial owner as of the close
of business on October 22, 1996 and each such person would continue to
be the beneficial owner as of the Expiration Date, of an aggregate of
fewer than 100 Shares and is tendering all of such Shares.
================================================================================
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT
WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE
THAN ONE PRICE, USE A SEPARATE
LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED.
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF NO
BOX IS CHECKED (EXCEPT AS OTHERWISE PROVIDED
HEREIN), THERE IS NO VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
|_| $20.500 |_| $21.625 |_| $22.750
|_| 20.625 |_| 21.750 |_| 22.875
|_| 20.750 |_| 21.875 |_| 23.000
|_| 20.875 |_| 22.000 |_| 23.125
|_| 21.000 |_| 22.125 |_| 23.250
|_| 21.125 |_| 22.250 |_| 23.375
|_| 21.250 |_| 22.375 |_| 23.500
|_| 21.375 |_| 22.500 |_| 23.625
|_| 21.500 |_| 22.625 |_| 23.750
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
Certificate Nos. (if available):
________________________________________________________________________________
________________________________________________________________________________
Name(s):
________________________________________________________________________________
________________________________________________________________________________
Please type or print
Address(es):____________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Zip Code
Area Code and
Telephone Number:_______________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGN HERE
________________________________________________________________________________
________________________________________________________________________________
Dated:_______________, 1996
If Shares will be tendered by book-entry transfer, check box of applicable
Book-Entry Facility:
|_| The Depository Trust Company
|_| Philadelphia Depository Trust Company
Account Number:
________________________________________________________________________________
- --------------------------------------------------------------------------------
3
<PAGE>
GUARANTEE
THE UNDERSIGNED IS (1) A MEMBER FIRM OF A REGISTERED SECURITIES
EXCHANGE; (2) A MEMBER OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.;
OR (3) A COMMERCIAL BANK OR TRUST COMPANY HAVING AN OFFICE, BRANCH OR AGENCY IN
THE UNITED STATES, AND REPRESENTS THAT:
(A) THE ABOVE-NAMED PERSON(S) HAS A "NET LONG POSITION" IN SHARES OR
"EQUIVALENT SECURITIES" AT LEAST EQUAL TO THE SHARES TENDERED WITHIN THE MEANING
OF RULE 14E-4 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED;
AND
(B) SUCH TENDER OF SHARES COMPLIES WITH SUCH RULE 14E-4;
AND GUARANTEES THAT THE DEPOSITARY WILL RECEIVE CERTIFICATES FOR THE SHARES
TENDERED HEREBY IN PROPER FORM FOR TRANSFER, OR SHARES WILL BE TENDERED PURSUANT
TO THE PROCEDURE FOR BOOK-ENTRY TRANSFER AT THE DEPOSITORY TRUST COMPANY OR
PHILADELPHIA DEPOSITORY TRUST COMPANY, IN ANY CASE, TOGETHER WITH A PROPERLY
COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER DOCUMENTS
REQUIRED BY THE LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE OF THEM),
ALL WITHIN THREE OVER-THE-COUNTER TRADING DAYS AFTER THE DAY THE DEPOSITARY
RECEIVES THIS NOTICE.
================================================================================
Name of Firm:__________________________ Address:____________________________
_______________________________________ ____________________________________
Authorized Signature
____________________________________
____________________________________
Name:__________________________________ Zip Code
Please Print
Area Code and
Telephone Number:___________________
Title:_________________________________ Dated:________________________, 1996
========================================================== =====================
4
EXHIBIT (a)(6)
<PAGE>
LETTERHEAD OF FIRST SHENANGO BANCORP, INC.
President
and Chief Executive Officer
October 25, 1996
To Our Stockholders:
First Shenango Bancorp, Inc. (the "Company") is offering to purchase
200,000 shares (approximately 8.86% of its currently outstanding shares) of its
common stock from its stockholders at a cash price not greater than $23.75 nor
less than $20.50 per share. The Company is conducting the Offer through a
procedure commonly referred to as a "Modified Dutch Auction." This procedure
allows you to select the price within that price range at which you are willing
to sell your shares to the Company. Based upon the number of shares tendered and
the prices specified by the tendering stockholders, the Company will determine a
single per share purchase price within that price range which will allow it to
buy 200,000 shares (or such lesser number of shares as are validly tendered and
not withdrawn at prices not greater than $23.75 nor less than $20.50 per share)
(the "Purchase Price"). Subject to possible proration in the event more than
200,000 shares are tendered at or below the Purchase Price, all of the shares
that are validly tendered at prices at or below that Purchase Price (and are not
withdrawn) will be purchased at that same Purchase Price, net to the selling
stockholder in cash. Since the Company is purchasing stock directly from its
stockholders, there are no brokerage commissions. All other shares which have
been tendered and not purchased will be returned to the stockholder.
For those stockholders who own an aggregate of fewer than 100 shares,
the Offer may represent an opportunity to sell all of their shares without
having to pay brokerage commissions.
The Offer, proration period and withdrawal rights expire at 5:00 p.m.,
Eastern time, on Monday, November 25, 1996, unless the Offer is extended.
Neither the Company nor its Board of Directors makes any recommendation
to any stockholder as to whether to tender or refrain from tendering shares. You
must make your own decision whether to tender shares and, if so, how many shares
to tender and at which price or prices.
This Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you want to tender your shares, the instructions on
how to tender shares are also explained in detail in the enclosed materials. I
encourage you to read these materials, along with a Question and Answer Brochure
that answers some of the frequently asked questions for this type of
transaction, carefully before making any decision with respect to the Offer.
Very truly yours,
EXHIBIT (a)(7)
<PAGE>
FINANCIAL EARNINGS RELEASE
- --------------------------------------------------------------------------------
FIRST SHENANGO BANCORP, INC.
First Federal Plaza, 25 N. Mill Street, New Castle, PA 16101
Contacts: Francis A. Bonadio, President and Chief Executive Officer
Lonny D. Robinson, Vice President, Chief Financial Officer
and Treasurer
Phone: 412-654-6605
FAX: 412-656-8066
FOR IMMEDIATE RELEASE
FIRST SHENANGO BANCORP, INC., ANNOUNCES THIRD QUARTER EARNINGS AND SHARE
REPURCHASE OF UP TO 200,000 SHARES
NEW CASTLE, PA, October 24, 1996 -- First Shenango Bancorp, Inc., today reported
net income for the third quarter ended September 30, 1996, of $11,000 or $0.00
per common share equivalent as compared to net income of $840,000 or $0.37 per
common share equivalent for the third quarter ended September 30, 1995. Net
income for the nine month period ending September 30, 1996 was $1,858,000 or
$0.82 per common share equivalent as compared to $2,275,000 or $1.00 per common
share equivalent for the nine month period ending September 30, 1995.
Francis A. Bonadio, President and Chief Executive Officer, noted that the
Corporation had previously informed its shareholders of pending legislation to
recapitalize the Savings Association Insurance Fund by requiring SAIF-insured
savings institutions to pay a one-time special assessment. That legislation, the
Deposit Insurance Funds Act of 1996, signed into law on September 30, 1996,
required a one-time assessment of 65.7 cents for every $100 of deposits. As a
result of this legislation on September 30, 1996, First Federal Savings Bank of
New Castle, a subsidiary of the Corporation, recorded a charge to earnings of
$1,030,000 net of taxes. Without this charge, First Shenango's income for the
quarter would have been $1,041,000 or $0.46 per share. Net income for the nine
months ended September 30, 1996, would have been $2,888,000 or $1.27 per share.
Net interest income after provision for loan losses increased to $3,057,000 for
the quarter ended September 30, 1996, compared to $2,601,000 for the quarter
ended September 30, 1995, a 17.53% increase. First Shenango's net interest
margin as a percentage of interest-earning assets, on a fully taxable-equivalent
basis for the quarter ended September 30,1996, was 3.60%, unchanged from the
quarter ended September 30, 1995. Non-interest income decreased to $254,000 for
the quarter ended September 30, 1996, from $297,000 for the quarter ended
September 30, 1995. Non-interest expense increased by 117.38% to $3,289,000 for
the quarter ended September 30,1996, from $1,513,000 for the quarter ended
September 30, 1995, primarily due to the previously mentioned SAIF assessment.
Total shareholder's equity was $46,118,000 at September 30, 1996, a decline from
$47,623,000 at December 31, 1995 of $1,505,000 or 3.16%. Due to rising interest
rates during this nine-month period, the unrealized gain on securities available
for sale decreased from $1,197,000 net of tax at December 31, 1995, to an
unrealized loss of $526,000 net of tax at September 30, 1996. First Shenango
also purchased 56,458 shares in its stock repurchase program during this period
which reduced stockholders' equity by $1,165,000.
<PAGE>
At September 30, 1996, First Shenango's assets totalled $384,088,000, compared
to $332,121,000 at December 31, 1995.
First Shenango Bancorp, Inc. will commence a "Modified Dutch Auction"
self-tender offer on October 25, 1996 for up to 200,000 common shares, or
approximately 8.86 percent of its 2,258,047 common shares currently outstanding.
The offer will allow common shareholders to specify prices at which they are
willing to tender their shares at a price not greater than $23.75 and not less
than $20.50 per share. After receiving tenders, the Company will select a single
per share price which will allow it to buy up to 200,000 shares. All shares
purchased will be purchased at the company-selected price for cash, even if
tendered at a lower price. If more than the maximum number of shares sought is
tendered at or below the company-selected price, tendering shareholders owning
fewer than 100 shares will have their shares purchased without proration. Other
shares will be purchased pro rata. The offer will not be conditioned on a
minimum number of shares being tendered, but will be subject to certain
conditions set forth in the offering documents.
The tender offer, proration period and withdrawal rights will expire at 5:00
p.m. on November 25, 1996 unless extended by the Company. On October 24, 1996
the closing price of the Company's common stock was $ 21.50 on the Nasdaq
National Market.
MacKenzie Partners, Inc., New York, New York will act as information agent for
the offer.
Shareholders will, in general, be able to tender their shares free of all
brokerage commissions and stock transfer taxes, if any, which will be paid by
the Company. Each shareholder is urged to consult his tax advisor as to the
particular tax consequences of the tender offer to such shareholder. The full
details of the offer, including complete instructions on the tender process
procedure along with the transmittal forms and other data will be mailed to
shareholders on October 25, 1996.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATIONS TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES IN THE OFFER AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY
SUCH RECOMMENDATION.
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell shares of First Shenango Bancorp, Inc. common stock. The offer is made
solely by the Offer to Purchase, dated October 25, 1996, and the related Letter
of Transmittal.
First Shenango Bancorp is the holding company for First Federal Savings Bank of
New Castle, which operates four full-service offices in Lawrence County,
Pennsylvania. The Company's stock is traded under the symbol "SHEN" on the
Nasdaq National Market.
2
<PAGE>
FIRST SHENANGO BANCORP, INC. (SHEN)
FINANCIAL HIGHLIGHTS (Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
INCOME STATEMENT DATA 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $7,130,000 $6,066,000 $20,289,000 $17,530,000
Interest expense 3,848,000 3,253,000 10,902,000 9,370,000
--------- --------- ---------- ----------
Net interest income before
provision for loan losses 3,282,000 2,813,000 9,387,000 8,160,000
Provision for loan losses 225,000 212,000 674,000 685,000
---------- ----------- ----------- -----------
Net interest income after
provision for loan losses 3,057,000 2,601,000 8,713,000 7,475,000
Net gain on sale of investments
and loans 52,000 84,000 214,000 87,000
Other non-interest income 202,000 213,000 587,000 639,000
SAIF special assessment 1,666,000 -- 1,666,000 --
Other non-interest expense 1,623,000 1,513,000 4,844,000 4,550,000
--------- --------- ---------- ----------
Income before income taxes 22,000 1,385,000 3,004,000 3,651,000
Income taxes 11,000 545,000 1,146,000 1,376,000
---------- ----------- ---------- ----------
Net income $ 11,000 $ 840,000 $ 1,858,000 $ 2,275,000
========== ========= ========== ==========
=====================================================================================================
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
COMMON SHARE DATA
(PER SHARE BASIS) 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $0.00 $0.37 $0.82 $1.00
Cash dividend declared $0.12 $0.10 $0.34 $0.28
Common share equivalents 2,261,295 2,294,695 2,274,779 2,286,132
- -----------------------------------------------------------------------------------------------------
<CAPTION>
BALANCE SHEET DATA September 30, December 31, September 30,
1996 1995 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total assets $384,088,000 $332,121,000 $332,357,000
Loans receivable, net 255,454,000 228,278,000 225,528,000
Investment securities 112,436,000 80,587,000 82,731,000
Deposits 263,167,000 254,406,000 255,558,000
Shareholders equity 46,118,000 47,623,000 46,271,000
Common shares outstanding
(net of treasury shares) 2,258,197 2,309,308 2,314,308
Book value per common share
outstanding $20.42 $20.62 $19.99
</TABLE>
3
<PAGE>
FIRST SHENANGO BANCORP, INC. (SHEN)
FINANCIAL HIGHLIGHTS (Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
AVERAGE BALANCES 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets $376,036,000 $321,691,000 $360,640,000 $316,525,000
Shareholders' equity 46,682,000 45,480,000 47,241,000 45,167,000
Interest-earnings assets 366,611,000 313,055,000 351,141,000 308,127,000
Interest-bearing liabilities 322,022,000 270,061,000 306,243,000 266,436,000
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
RATIOS(1) 1996(1) 1995(1) 1996 (1) 1995 (1)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Return on average assets 0.01% 1.04% 0.69% 0.96%
Return on average assets (2) 1.10% N/A 1.07% N/A
Return on average equity 0.09% 7.33% 5.25% 6.73%
Return on average equity (2) 8.87% N/A 8.17% N/A
Net interest margin to average assets (3) 3.60% 3.60% 3.59% 3.56%
Operating expense to average assets 3.48% 1.87% 2.41% 1.92%
Operating expense to average assets (2) 1.72% N/A 1.79% N/A
Efficiency ratio 94.43% 50.02% 65.30% 51.77%
Efficiency ratio (2) 46.63% N/A 48.59% N/A
Average interest-earning assets to average
interest-bearing liabilities 113.85% 115.92% 114.66% 115.65%
Average equity to average assets 12.41% 14.14% 13.10% 14.27%
</TABLE>
(1) With the exception of end-of-period ratios, all ratios are based on monthly
average balances and are annualized where appropriate.
(2) Pro forma without the effect of the SAIF special assessment on
September 30, 1996.
(3) Computed on a fully taxable-equivalent basis.
4
EXHIBIT (a)(8)
<PAGE>
================================================================================
QUESTIONS AND ANSWERS
ABOUT THE OFFER OF
FIRST SHENANGO BANCORP, INC.,
TO PURCHASE FOR CASH UP TO 200,000 SHARES
OF COMMON STOCK AT A PURCHASE PRICE OF
$20.50 TO $23.75 PER SHARE
================================================================================
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE OFFER TO PURCHASE ITS STOCK BY
FIRST SHENANGO BANCORP, INC.
THE HOLDING COMPANY FOR
FIRST FEDERAL SAVINGS BANK OF NEW CASTLE
The following information is designed to answer frequently asked questions about
the offer by First Shenango Bancorp, Inc. to purchase shares of its common
stock. Shareholders are referred to the Offer to Purchase and Letter of
Transmittal for a detailed description of the terms and conditions of the offer.
Q. WHAT IS THIS OFFER TO PURCHASE?
A. First Shenango Bancorp, Inc., ("First Shenango" or the "Company") is
inviting its shareholders to tender shares of its common stock, $0.10 par
value per share (the "Shares"), at prices not in excess of $23.75 nor less
than $20.50 per share in cash, as specified by shareholders tendering their
Shares, in the enclosed Letter of Transmittal (the "Offer"). The Company
will determine the single per Share price, not in excess of $23.75 nor less
than $20.50 per Share, net to the seller in cash (the "Purchase Price"),
that it will pay for Shares, taking into account the number of Shares
tendered and the prices specified by tendering shareholders. The Company
will select the lowest Purchase Price that will allow it to buy 200,000
Shares (or such lesser number of Shares as are validly tendered at prices
not in excess of $23.75 nor less than $20.50 per Share). This type of
issuer tender offer is commonly referred to as a "Modified Dutch Auction".
Q. WHAT IS A "MODIFIED DUTCH AUCTION?"
A. A modified dutch auction is a process whereby a company makes a direct
tender offer to its own shareholders to purchase a specified number of
shares of its stock within a specified price range per share. In this case,
First Shenango is making a direct offer to all of its shareholders to
purchase in the aggregate 200,000 Shares of its common stock at a price not
in excess of $23.75 nor less than $20.50 per Share. This process allows
each stockholder to elect whether he or she wishes to sell his or her
stock, and the price he or she is willing to sell at within the given price
range. After receiving all tendered securities at the termination of the
Offer, the Company may choose the lowest price within the specified range
that will permit it to purchase the amount of securities sought.
Q. WHAT WILL BE THE FINAL PURCHASE PRICE?
A. All Shares acquired in the Offer will be acquired at the Purchase Price.
The Company will select the lowest Purchase Price that will allow it buy up
to 200,000 Shares. All shareholders tendering at or below the Purchase
Price will receive the same amount. For example, if 100,000 Shares are
tendered at $21.00 per Share, 100,000 Shares are tendered at $22.00 per
Share and 150,000 Shares are tendered at $23.00 per Share, 200,000 Shares
will be purchased at $22.00 per Share from the persons who tendered at
$21.00 through $22.00, and the 150,000 Shares tendered at $23.00 per Share
will be returned and not purchased.
Q. WHAT WILL HAPPEN IF MORE THAN 200,000 SHARES ARE TENDERED AT OR BELOW THE
PURCHASE PRICE?
A. In the event more than 200,000 Shares are tendered at or below the Purchase
Price, the Company will, upon the terms and subject to the conditions of
the Offer, accept Shares for purchase first from Odd Lot Holders (as
defined in the Offer to Purchase) who validly tender and do not withdraw
their
2
<PAGE>
Shares at or below the Purchase Price and then on a pro rata basis from all
other stockholders whose Shares are validly tendered and not withdrawn at
or below the Purchase Price.
Q. AT WHAT PRICE MAY I TENDER MY SHARES?
A. Stockholders may elect to tender their Shares in increments of 1/8th of a
dollar starting at $20.50 per share up to and including $23.75 per Share.
The election as to the number of Shares and the price a shareholder is
willing to tender are to be indicated on the Letter of Transmittal.
Q. DO I HAVE TO SELL MY STOCK TO THE COMPANY?
A. No. No shareholder is required to tender any of his or her stock for sale
to the Company. Each shareholder may individually elect to sell part or all
of his or her stock at the price he or she specifies between no less than
$20.50 nor more than $23.75 per Share.
Q. HOW MUCH STOCK IS THE COMPANY ATTEMPTING TO PURCHASE?
A. The Company is offering to purchase up to 200,000 Shares of its 2,258,047
Shares outstanding or 8.86% of the outstanding stock.
Q. WHAT IF THE TERMS OF THE OFFER CHANGE?
A. In the event the terms of the Offer are materially changed, the Company
will generally give notice of the change and, under certain circumstances,
the expiration date will be extended up to 10 business days from such
notice, and shareholders will be able to change or withdraw their tender
during such extension.
Q. WHAT HAPPENS IF I DO NOT TENDER MY STOCK TO THE COMPANY TO PURCHASE?
A. Nothing will happen if you do not tender any or all of your Shares. Your
Shares will remain outstanding without a change in the terms or ownership
rights. You will continue to own the same number of Shares without any
adjustment, and you will continue to receive the same dividend and voting
rights. However, since the Company will purchase up to 200,000 of its
outstanding Shares, the percentage of the outstanding stock which you own
will increase since the number of outstanding Shares will be reduced.
Q. CAN I TENDER PART OF MY STOCK AT DIFFERENT PRICES?
A. Yes, you can elect to tender part of your stock at one price and an
additional amount at a second price. For example, if you owned 1,500
Shares, you could tender 500 Shares at $21.00, 500 Shares at $22.00 and
keep the remaining 500 Shares. If you tender part of your stock at more
than one price, you must use a separate Letter of Transmittal for each
price. However, you can not tender the same stock at different prices. In
the prior example, the stockholder owning 1,500 Shares can not tender 1,500
Shares at $21.00 and 1,500 Shares at $22.00.
3
<PAGE>
Q. IS THERE A BROKERAGE FEE?
A. No. The Company will purchase stock directly from each shareholder at the
Purchase Price without the use of a broker.
Q. CAN I CHANGE OR CANCEL MY TENDER?
A. You may increase or decrease the number of Shares and/or price indicated in
the Letter of Transmittal or withdraw it entirely up until November 25,
1996 unless the Offer is extended. Generally after November 25, 1996, you
cannot. If you desire to change or withdraw your tender, you are
responsible to make certain that a valid withdrawal is received by the
November 25, 1996 deadline. Except as discussed in the Offer to Purchase,
tenders are irrevocable after the November 25, 1996 deadline.
Q. HOW CAN I GET MORE INFORMATION?
A. If you have a question, please call MacKenzie Partners, Inc., our
Information Agent, at (800) 322- 2885.
THIS BROCHURE IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO
SELL SECURITIES. THE OFFER TO PURCHASE THE STOCK OF THE COMPANY IS MADE ONLY BY
THE FIRST SHENANGO BANCORP, INC. OFFER TO PURCHASE DOCUMENT DATED OCTOBER 25,
1996 AND THE ACCOMPANYING LETTER OF TRANSMITTAL.
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EXHIBIT (a)(9)
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[First Shenango Bancorp Letterhead]
IMMEDIATE ATTENTION REQUIRED
October 25, 1996
RE: DIRECTION CONCERNING TENDER OF SHARES
DEAR ESOP PARTICIPANT:
Enclosed are materials that require your immediate attention. They
describe matters directly affecting your participant account in the First
Federal Savings Bank of New Castle Employee Stock Ownership Plan (the "ESOP").
Read all the materials carefully. You will need to complete the enclosed
Direction Form and return it in the postage paid envelope provided. THE DEADLINE
FOR RECEIPT OF YOUR COMPLETED DIRECTION FORM IS 5:00 P.M., EASTERN TIME, FRIDAY,
NOVEMBER 22, 1996 (UNLESS EXTENDED). YOU SHOULD COMPLETE THE FORM AND RETURN IT
EVEN IF YOU DECIDE NOT TO PARTICIPATE IN THE TRANSACTION DESCRIBED IN THE
MATERIALS.
The remainder of this letter summarizes the transaction and your rights
and alternatives under the ESOP, but you also should review the more detailed
explanation provided in the other materials.
BACKGROUND
First Shenango Bancorp, Inc. (the "Company"), the parent corporation of
First Federal Savings Bank of New Castle, has made a tender offer to purchase up
to 200,000 shares of its common stock (the "Offer"). The objectives of the
Offer, and financial and other information relating to the Offer, are described
in detail in the enclosed Offer to Purchase, which is being provided to all
shareholders of the Company.
As a participant in the ESOP, you are directly affected, because the
Company's Offer extends to the approximately 108,470 shares of the Company's
stock currently held by the ESOP. Only the Trustee of the ESOP can tender the
shares of common stock held by the ESOP. However, as an ESOP participant, you
may direct the Trustee whether or not to tender the shares that are allocated to
your ESOP Account as of October 24, 1996. If you elect to have the Trustee
tender these shares, you also are entitled to specify the price or prices at
which they should be tendered.
To assure the confidentiality of your decision, the Company has
retained MacKenzie Partners, Inc. to tabulate the directions of ESOP
participants. You will note from the enclosed envelope that your Direction Form
is to be returned to MacKenzie Partners, Inc. The Trustee will decide whether to
tender or hold shares of the ESOP that currently have not been allocated to
participants' ESOP Accounts. The Trustee will also decide the disposition of
shares that are allocated to Accounts of participants who fail to return timely
or properly complete the Direction Form. The
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Trustee will determine whether the implementation of any participant directions
or adherence to any ESOP provisions would be contrary to its fiduciary duties in
accordance with the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). As the fiduciary to the ESOP, the Trustee will make the final
determination as to whether participants' directions will be followed taking
into account the ESOP's purpose and the interest of all participants. Although
it is not anticipated that any participant direction will violate ERISA, such
that the direction would have to be reversed or disregarded, the United States
Department of Labor requires that the Trustee, as the fiduciary for ESOP
participants, retain this discretion.
HOW THE OFFER WORKS
The details of the Offer are described in the enclosed materials, which
you should review carefully. However, in broad outline, the Offer will work as
follows with respect to ESOP participants.
- The Company has offered to purchase up to 200,000 shares of
its common stock at a price between $20.50 and $23.75 per
share.
- If you want any of the shares that are allocated to your ESOP
Account sold, you need to direct that they be offered (or
"tendered") for sale.
- You also need to specify the price at which you want the
shares tendered which price must be between the two limits
above.
- After the deadline for the tender of shares by all
shareholders, including the ESOP, MacKenzie Partners, Inc.
will tabulate all directions, and the Company will determine
the price, between the two limits, that it will pay for shares
validly tendered pursuant to the Offer (the "Purchase Price").
- All shares validly tendered at prices at or below the Purchase
Price and not withdrawn will be purchased at the Purchase
Price, upon the terms and subject to the conditions of the
Offer, including the proration provisions.
- If you tender any shares at a price in excess of the Purchase
Price as finally determined, those shares will not be
purchased by the Company, and they will remain allocated to
your ESOP Account.
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This form of transaction is commonly called a "Dutch Auction" and
requires some strategy on your part. For example, if you determine that it is
advisable that your ESOP plan assets be sold at this time, you may want to
tender your shares at a price at or near the lower limit. If you are not sure
whether or not you want to participate, but would be willing to sell at a price
above the lower limit, then you may want to specify a higher price, not to
exceed the upper limit. If you do not want to sell shares allocated to your ESOP
Account at this time under any circumstances, an option is provided for you to
direct that shares allocated to your ESOP Account be held.
The Trustee may override any direction that it determines is contrary
to its fiduciary duties under ERISA, as previously described. In particular, the
Company will be prohibited from purchasing shares from the ESOP if the Purchase
Price, as finally determined, is less than the fair market price of the shares
on the date the shares are accepted for purchase. Finally, the Company will
prorate the number of shares purchased from shareholders if there is an excess
of shares tendered over the exact number desired at the Purchase Price as
ultimately determined.
PROCEDURE FOR DIRECTING TRUSTEE
A Direction Form for making your direction is enclosed. You must
complete this form and return it in the enclosed envelope in time to be received
no later than 5:00 p.m., Eastern time, on Friday, November 22, 1996 (unless the
Offer is extended or amended). If your form is not received by this deadline, or
if it is not fully and properly completed, the shares in your ESOP Account will
be tendered or held as decided by the Trustee.
To properly complete your Direction Form, you must do the following:
(1) On the face of the form, check Box 1 or 2. CHECK ONLY ONE BOX. Make
your decision which box to check as follows:
- CHECK BOX 1 if you do not want the shares presently allocated
to your ESOP Account tendered for sale at any price and simply
want the Trustee to continue holding such shares allocated to
your Account.
- CHECK BOX 2 in all other cases and complete lines A to E of
the table immediately below Box 2. (You should not complete
the table if you checked Box 1). Use lines A through C to
specify the number of shares that you want to tender at each
price indicated. Typically, you would elect to have all of
your shares tendered at a single price; however, the form
gives you the option of splitting your shares among several
prices. You must state the number of shares to be sold at each
indicated price by filling in the number of shares in the box
immediately below the price.
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After you have specified your tender price or prices, you
should total the number of shares in each row A through C and
insert the total of each line in the box provided at the end
of that line. Specify the number of shares, if any, that you
do not want tendered, but wish the Trustee to hold, in the
single box on line D.
Finally, total the shares in the end boxes of rows A to D and
insert the total in the box on line E. The total in this box
must equal the number of shares allocated to your ESOP Account
as shown on the address label on the reverse side of the
Direction Form.
(2) Turn the Direction Form over, and date and sign it in the
spaces provided.
(3) Return the Direction Form in the enclosed postage prepaid
envelope to be received by MacKenzie Partners, Inc. no later
than 5:00 p.m., Eastern time, on Friday, November 22, 1996
(unless this deadline is extended). Be sure to return the form
even if you decide not to have the Trustee tender any shares.
Your direction will be deemed irrevocable unless withdrawn by 5:00
p.m., Eastern time, on Friday, November 22, 1996 (unless the Offer is extended).
To be effective, a notice of withdrawal of your direction must be in writing and
must be received by MacKenzie Partners, Inc. at the following address:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
Facsimile Transmission (212) 929-0308
Your notice of withdrawal must include your name, address, Social Security
number, and the number of shares allocated to your ESOP Account. Upon receipt of
your notice of withdrawal by MacKenzie Partners, Inc., your previous direction
will be deemed cancelled. You may direct the re-tendering of any shares in your
Account by repeating the previous instructions for directing the tendering set
forth in this letter.
INVESTMENT OF TENDER PROCEEDS
For any ESOP shares that are tendered and purchased by the Company, the
Company will pay cash to the ESOP. The Trustee then will determine whether to
reinvest in shares of the Company's stock or in alternative investments, being
guided by the ESOP's terms and the trust agreement, and subject to the
limitations of ERISA. At present, it is anticipated that the cash proceeds for
any stock purchased in the Offer will be allocated to your ESOP Account and
invested in certificates of deposit at First Federal Savings Bank of New Castle.
Please be advised that to the extent that common stock is tendered and converted
to cash, you will no longer be eligible to receive cash dividends paid on such
ESOP shares sold and you will not participate in any appreciation or
depreciation in the future
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market value of the common stock sold. Future allocations of common stock may be
made to your participant Account in accordance with the terms of the ESOP.
Individual participants in the ESOP will not receive any portion of the
tender proceeds at this time. All such proceeds and the assets will remain in
the ESOP and may be withdrawn only in accordance with the ESOP's terms. No gain
or loss will be recognized by the ESOP or participants in the ESOP for federal
income tax purposes in connection with the tender or sale of shares held in the
ESOP.
NO RECOMMENDATION
THE COMPANY'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MAKING OF
THE OFFER. HOWEVER, NEITHER THE COMPANY, ITS BOARD OF DIRECTORS, THE TRUSTEE,
THE ESOP COMMITTEE, OR ANY OTHER PARTY MAKES ANY RECOMMENDATIONS TO PARTICIPANTS
AS TO WHETHER TO TENDER SHARES, THE PRICE AT WHICH TO TENDER, OR WHETHER TO
REFRAIN FROM TENDERING SHARES. EACH PARTICIPANT MUST MAKE HIS OR HER OWN
DECISION WHETHER TO TENDER ALL, A PORTION OR NO SHARES AND AT WHAT PRICE, IF
ANY.
CONFIDENTIALITY
AS MENTIONED ABOVE, MACKENZIE PARTNERS, INC. HAS BEEN RETAINED TO HELP
ASSURE THE CONFIDENTIALITY OF YOUR DECISION AS AN ESOP PARTICIPANT. YOUR
DECISION WILL NOT BE DISCLOSED TO ANY DIRECTORS, OFFICERS, OR EMPLOYEES OF FIRST
SHENANGO BANCORP, INC. OR FIRST FEDERAL SAVINGS BANK OF NEW CASTLE, EXCEPT FOR
THE PURPOSE OF ALLOCATING PROCEEDS TO YOUR ESOP ACCOUNT IN THE EVENT THAT ALL OR
A PORTION OF YOUR SHARES ARE SOLD.
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FURTHER INFORMATION
Although MacKenzie Partners, Inc. also has no recommendation and cannot
advise you what to do, its representatives are prepared to answer any question
that you may have on the procedures involved in the Dutch Auction and your
direction. MacKenzie Partners, Inc. can also help you complete your Direction
Form.
For this purpose, you may contact MacKenzie Partners, Inc. at the
following toll-free number:
MacKenzie Partners, Inc.
1-800-322-2885
Please consider this letter and the enclosed materials carefully and
then return your Direction Form promptly.
Sincerely,
Trustees for the First Federal Savings Bank of New Castle
Employee Stock Ownership Plan
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<PAGE>
FIRST FEDERAL SAVINGS BANK OF NEW CASTLE
EMPLOYEE STOCK OWNERSHIP PLAN
DIRECTION FORM
BEFORE COMPLETING THIS FORM, PLEASE READ CAREFULLY
THE ACCOMPANYING OFFER TO PURCHASE
See the Address Label on Reverse Side of This Form for the
Number of Shares Allocated to Your Plan Account
In accordance with the First Shenango Bancorp, Inc. (the "Company") Offer
to Purchase dated October 25, 1996, a copy of which I have received and read, I
hereby direct the Plan's Trustee as follows (check only one box):
|_| 1. To refrain from tendering and to hold all shares allocated to my
Account.
|_| 2. To tender shares allocated to my Account at the price or prices
indicated below, except for any shares to be held as indicated on line D
below:
- --------------------------------------------------------------------------------
Price $20.500 $20.625 $20.750 $20.875 $21.000 $21.125 $21.250 $21.375 $21.500
- --------------------------------------------------------------------------------
A Number
of
Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Price $21.625 $21.750 $21.875 $22.000 $22.125 $22.250 $22.375 $22.500 $22.625
- --------------------------------------------------------------------------------
B Number
Of
Shares
- --------------------------------------------------------------------------------
Price $22.750 $22.875 $23.000 $23.125 $23.250 $23.375 $23.500 $23.625 $23.750
- --------------------------------------------------------------------------------
C Number
Of
Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
D Shares
To Be
Held
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
E Total
Shares
- --------------------------------------------------------------------------------
Total the number of shares in each of rows A through C and insert that
total in the box at the end of each row. Show shares to be held in the box at
the end of row D. Total the numbers in the end boxes of rows A to D and insert
that total number in the end box of row E. The total in the box of row E must
equal the number of shares allocated to your Account as shown on the address
label on the reverse side of this form.
INSTRUCTIONS
Carefully complete the face portion of this Direction Form. Then insert
today's date and sign your name in the spaces provided below. Enclose the form
in the included postage prepaid envelope and mail it promptly. Your Direction
Form must be received no later than 5:00 p.m., Eastern time, on Friday, November
22, 1996. Direction Forms that are not fully or properly completed, dated and
signed, or that are received after the deadline, will not be processed, and the
shares allocated to your Account will be held or tendered, and if tendered, at a
price, as determined by the Trustee. Note that the Trustee also has the right to
disregard any direction that it determines cannot be implemented without
violation of applicable law.
Neither the Company, its Board of Directors, the Trustee, the
Committee, nor any other party makes any recommendation to participants as to
whether to tender shares, the price at which to tender, or to refrain from
tendering shares. Each participant must make his or her own decision on these
matters.
Date: __________, 1996 ________________________________________
Your Signature
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