As filed with the Securities and Exchange Commission on November 20, 1998
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)
WESTERFED FINANCIAL CORPORATION
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(Name of issuer)
WESTERFED FINANCIAL CORPORATION
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(Name of Person(s) Filing Statement)
Common Stock, $0.01 Par Value Per Share
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(Title of Class of Securities)
957550 10 6
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(CUSIP Number of Class of Securities)
Lyle R. Grimes
WesterFed Financial Corporation
110 East Broadway
Missoula, Montana 59802
(406) 721-5254
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of
the Person(s) Filing Statement)
Copies to:
Martin L. Meyrowitz, P.C.
Michael S. Sadow, P.C.
Silver, Freedman & Taff, L.L.P.
1100 New York Avenue, N.W.
Washington, D.C. 20005
(202) 414-6100
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(Agent for Service of Process)
November 20, 1998
(Date Tender Offer First Published, Sent or Given to Security Holders)
<PAGE>
CALCULATION OF FILING FEE
Transaction Valuation* Amount of Filing Fee
$22,000,000 $4,400
*Calculated solely for the purpose of determining the filing fee, based upon the
purchase of 1,100,000 shares at the maximum tender offer price of $20.00 per
share.
[ ] Check box if any of the fee is offset as provided by Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
<PAGE>
Item 1. Security and Issuer.
(a) The issuer of the securities to which this Schedule 13E-4 relates
is WesterFed Financial Corporation, a Delaware corporation (the "Company"), and
the address of its principal executive office, and its mailing address, is 110
East Broadway Missoula, Montana 59802.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase
up to 1,100,000 shares (or such lesser number of shares as are properly
tendered) of its common stock, $0.01 par value per share (the "Shares"),
5,594,361 of which Shares were outstanding as of November 13, 1998, at prices
not in excess of $20.00 nor less than $18.00 per Share in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated November
20, 1998 (the "Offer to Purchase"), and in the related Letter of Transmittal
(which together constitute the "Offer"), copies of which are attached as
Exhibits (a)(1) and (a)(2), respectively, and incorporated herein by reference.
Employee, officers and directors of the Company may participate in the Offer on
the same basis as the Company's other stockholders. The Company has been advised
that one of its directors and two of its executive officers intend to tender
Shares pursuant to the Offer. The Company has also been advised that the trustee
of the Company's Employee Stock Ownership Plan does not intend to tender any
Shares pursuant to the Offer. The information set forth in "Introduction",
"Section 1, Number of Shares; Proration" and "Section 12, Interest of Directors
and Officers; Transactions and Arrangements Concerning Shares" of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in "Introduction" and "Section 8, Price
Range of Shares; Dividends" of the Offer to Purchase is incorporated herein by
reference.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
(a) The information set forth in "Section 11, Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
(a)-(j) The information set forth in "Introduction" and "Section 11,
Source and Amount of Funds," "Section 9, Purpose of the Offer; Certain Effects
of the Offer," "Section 12, Interest of Directors and Officers; Transactions and
Arrangements Concerning Shares" and "Section 13, Effects of the Offer on the
Market for Shares; Registration under the Exchange Act" of the Offer to Purchase
is incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
The information set forth in "Section 12, Interest of Directors and
Officers; Transactions and Arrangements Concerning Shares" and "Schedule A" of
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" and "Section 11, Source and
Amount of Funds," "Section 9, Purpose of the Offer; Certain Effects of the
Offer," and "Section 12, Interest of Directors and Officers; Transactions and
Arrangements Concerning Shares" of the Offer to Purchase is incorporated herein
by reference.
Item 6. Persons Retained, Employed, or to be Compensated.
The information set forth in "Introduction" and "Section 17, Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.
Item 7. Financial Condition.
(a)-(b) The information set forth in "Section 10, Certain Information
Concerning the Company" of the Offer to Purchase is incorporated herein by
reference.
Item 8. Additional Information.
(a) Not applicable.
(b) The information set forth in "Section 14, Certain Legal
Matters; Regulatory Approvals" of the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in "Section 13, Effects of the
Offer on the Market for Shares; Registration under the
Exchange Act" of the Offer to Purchase is incorporated
herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and
Letter of Transmittal is incorporated herein by reference.
Item 9. Material to be Filed as Exhibits.
(a) (1) Form of Offer to Purchase, dated November 20, 1998
(2) Form of Letter of Transmittal (including Certification of
Taxpayer Identification Number on Form W-9).
(3) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(4) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(including the Instruction Form).
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(5) Form of Letter to Stockholders of the Company, dated
November 20, 1998, from Lyle R. Grimes, President and Chief
Executive Officer of the Company.
(6) Form of Memorandum, dated November 20, 1998, to the
Company's employees.
(7) Form of Question and Answer Brochure.
(8) Text of Press Release issued by the Company, dated
November 20, 1998.
(9) Text of Press Announcement to be published in local and
regional newspapers on or after November 20, 1998.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule 13E-4 is true, complete and
correct.
Date: November 20, 1998 WESTERFED FINANCIAL CORPORATION
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By: /s/ Lyle R. Grimes
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Lyle R. Grimes
President and Chief Executive Officer
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<PAGE>
Exhibit (a)(1)
WESTERFED FINANCIAL CORPORATION
Offer to Purchase for Cash
Up to 1,100,000 Shares of its
Common Stock, Par Value $0.01 Per Share
At a Purchase Price Not Greater Than $20.00
Nor Less Than $18.00 Per Share
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THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON MONDAY, DECEMBER 21, 1998,
UNLESS THE OFFER IS EXTENDED
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WesterFed Financial Corporation, a Delaware corporation (the
"Company"), invites its stockholders to tender shares of its Common Stock, par
value $0.01 per share (the "Shares"), at prices, net to the seller in cash,
without interest thereon, not greater than $20.00 nor less than $18.00 per Share
specified by such tendering stockholders, 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 a single per Share
price (not greater than $20.00 nor less than $18.00 per Share) that it will pay
for the Shares validly tendered pursuant to the Offer and not withdrawn (the
"Purchase Price"), taking into consideration the number of Shares so tendered
and the prices specified by the tendering stockholders. The Company will select
the lowest Purchase Price that will enable it to purchase 1,100,000 Shares (or
such lesser number of Shares as are validly tendered and not withdrawn at prices
not greater than $20.00 nor less than $18.00 per Share) pursuant to the Offer.
The Company will purchase all Shares validly tendered at prices at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date (as defined
in Section 1), upon the terms and subject to the conditions of the Offer,
including the provisions thereof relating to proration and conditional tenders
described herein. The Purchase Price will be paid in cash, net to the seller,
without interest thereon, with respect to all Shares purchased. All Shares
tendered at prices in excess of the Purchase Price, Shares not purchased because
of proration and Shares that were conditionally tendered and not accepted for
purchase will be returned. Stockholders must complete the section of the Letter
of Transmittal relating to the price at which they are tendering Shares in order
to validly tender Shares.
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The offer is not conditioned upon any minimum number of shares being
tendered. The offer is, however, subject to other conditions. See Section 7.
Please call the Dealer Manager toll free at (877) 298-6520 with any questions
concerning the Offer.
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IMPORTANT
Any stockholder desiring to tender all or any portion of his or her
Shares should either (i) complete and sign the Letter of Transmittal or a
facsimile thereof in accordance with the instructions in the Letter of
Transmittal, mail or deliver it and any other required documents to Davidson
Trust Co. ( the "Depositary"), and either mail or deliver the certificates
representing Shares to be tendered to the Depositary along with the Letter of
Transmittal or deliver such Shares pursuant to the procedure for book-entry
transfer set forth in Section 3 or (ii) request his or her broker, dealer,
commercial bank, trust company or nominee to effect the transaction for him or
her. A stockholder whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or nominee must contact such broker, dealer,
commercial bank, trust company or nominee if he or she desires to tender such
Shares.
The Board of Directors of the Company has unanimously approved the offer.
Neither the Company nor its Board of Directors makes any recommendation to any
stockholder as to whether to tender all or any Shares. Each stockholder must
make his or her own decision as to whether to tender shares and, if so, how many
to tender and at what price. Directors, officers and employees of the Company
who own Shares may participate in the Offer on the same basis as the Company's
other stockholders.
The Dealer Manager for the Offer is:
Keefe, Bruyette & Woods, Inc.
The date of this Offer to Purchase is November 20, 1998
<PAGE>
As of November 13, 1998, the Company had 5,594,361 Shares issued and
outstanding, and 525,766 Shares issuable upon exercise of outstanding stock
options under the Company's stock option and incentive plan. The 1,100,000
Shares that the Company is offering to purchase pursuant to the Offer represent
approximately 19.7% of the Shares then outstanding. The Shares are traded on the
Nasdaq National Market. The Shares trade under the symbol "WSTR." On November
18, 1998, the closing price of the Shares as reported on the Nasdaq National
Market was $18.00 per Share. Stockholders are urged to obtain current market
quotations for the Shares.
To tender shares properly, stockholders must complete the section of
the Letter of Transmittal relating to the price at which they are tendering
shares.
Questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials may
be directed to the Information Agent/ Dealer Manager at the address and
telephone number set forth on the back cover of this Offer to Purchase, and such
copies will be furnished promptly at the Company's expense. Stockholders may
also contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
No person has been authorized to make any recommendation on behalf of
the Company as to whether stockholders should tender Shares pursuant to the
Offer. No person has been authorized to give any information or to make any
representations in connection with the Offer other than those contained herein
or in the related Letter of Transmittal. If given or made, such recommendation
and such other information and representations must not be relied upon as having
been authorized by the Company.
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<PAGE>
TABLE OF CONTENTS
Section Page
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INTRODUCTION...........................................................1
1. NUMBER OF SHARES; PRORATION............................................2
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES............................3
3. PROCEDURE FOR TENDERING SHARES.........................................3
4. WITHDRAWAL RIGHTS......................................................5
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE.........6
6. CONDITIONAL TENDER OF SHARES...........................................7
7. CERTAIN CONDITIONS OF THE OFFER........................................8
8. PRICE RANGE OF SHARES; DIVIDENDS......................................10
9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER....................10
10. CERTAIN INFORMATION CONCERNING THE COMPANY............................12
11. SOURCE AND AMOUNT OF FUNDS............................................18
12. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING SHARES.......................................18
13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION
UNDER THE EXCHANGE ACT...............................................19
14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS...........................19
15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES...............................20
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS...................22
17. FEES AND EXPENSES.....................................................23
18. MISCELLANEOUS.........................................................23
SCHEDULE A CERTAIN TRANSACTIONS INVOLVING SHARES
BY THE COMPANY OR ITS EXECUTIVE OFFICERS
OR DIRECTORS
i
<PAGE>
To the Holders of Shares of Common Stock of
WesterFed Financial Corporation
INTRODUCTION
WesterFed Financial Corporation, a Delaware corporation (the
"Company"), invites its stockholders to tender shares of its Common Stock, par
value $0.01 per share (the "Shares") at a price, net to the seller in cash,
without interest thereon, not greater than $20.00 nor less than $18.00 per Share
specified by such tendering stockholders, 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 a single per Share price (not greater than
$20.00 nor less than $18.00 per Share) that it will pay for the Shares validly
tendered pursuant to the Offer and not withdrawn (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 that
will enable it to purchase 1,100,000 Shares (or such lesser number of Shares as
is validly tendered and not withdrawn at prices not greater than $20.00 nor less
than $18.00 per Share) pursuant to the Offer. The Company will purchase all
Shares validly tendered at prices at or below the Purchase Price and not
withdrawn on or prior to the Expiration Date (as defined in Section 1), upon the
terms and subject to the conditions of the Offer, including the provisions
relating to proration and conditional tenders described below. The Purchase
Price will be paid in cash, net to the seller, without interest thereon, with
respect to all Shares purchased. Shares tendered at prices in excess of the
Purchase Price, Shares not purchased because of proration and Shares that were
conditionally tendered and not accepted for purchase will be returned.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions. See
Section 7.
If more than 1,100,000 Shares have been validly tendered at or below
the Purchase Price and not withdrawn on or prior to the Expiration Date, the
Company will purchase Shares first from stockholders who owned beneficially as
of the close of business on November 13, 1998, and continue to own beneficially
as of the Expiration Date, an aggregate of fewer than 100 Shares who properly
tender all their Shares at or below the Purchase Price, and then on a pro rata
basis from all other stockholders who validly tender Shares at or below the
Purchase Price, other than stockholders who tender conditionally, and for whom
the condition is not satisfied. See Sections 1, 2 and 6. Tendering stockholders
will not be obligated to pay brokerage commissions, solicitation fees or,
subject to the Instructions to the Letter of Transmittal, stock transfer taxes
on the purchase of Shares by the Company. The Company will pay the expenses of
Keefe, Bruyette & Woods, Inc. (the "Dealer Manager/Information Agent") and
Davidson Trust Co. (the "Depositary") incurred in connection with the Offer. See
Section 17. Any tendering stockholder or other payee who fails to complete and
sign the substitute Form W-9 that is included in the Letter of Transmittal may
be subject to United States federal income tax backup withholding equal to 31%
of the gross proceeds payable to such stockholder or other payee pursuant to the
Offer. See Sections 3 and 15.
As of November 13, 1998, the Company's Employee Stock Ownership Plan
("ESOP") held 338,446 Shares in accounts for participants therein. The Company
has been advised that the trustee of the ESOP does not intend to tender any
Shares pursuant to the Offer.
The Board of Directors has unanimously approved the Offer. Neither the
Company nor its Board of Directors, however, makes any recommendation to any
stockholder as to whether to tender all or any Shares. Each stockholder must
make his or her own decision as to whether to tender Shares and, if so , how
many Shares to tender and at what price. Directors, officers and employees of
the Company who own Shares may participate in the Offer on the same basis as the
Company's other stockholders.
As of November 13, 1998, the Company had 5,594,361 Shares issued and
outstanding, and 525,766 Shares issuable upon exercise of outstanding stock
options under the Company's stock option and incentive plan. The 1,100,000
Shares that the Company is offering to purchase pursuant to the Offer represent
approximately 19.7% of the Shares then outstanding.
<PAGE>
The Shares are traded on the Nasdaq National Market ("NNM"). The Shares
trade under the symbol "WSTR." On November 18, 1998, the closing price of the
Shares on the NNM was $18.00 per Share. See Section 8. Stockholders are urged to
obtain current market quotations for the Shares.
1. NUMBER OF SHARES; PRORATION
Upon the terms and subject to the conditions described herein and in
the Letter of Transmittal, the Company will purchase up to 1,100,000 Shares that
are validly tendered on or prior to the Expiration Date (as defined below) (and
not properly withdrawn in accordance with Section 4) at a price (determined in
the manner set forth below) not greater than $20.00 nor less than $18.00 per
Share. The later of 5:00 p.m., New York City time, on Monday, December 21, 1998,
or the latest time and date to which the Offer is extended pursuant to Section
16, is referred to herein as the "Expiration Date." If the Offer is
oversubscribed as described below, only Shares tendered at or below the Purchase
Price on or prior to the Expiration Date will be eligible for proration. The
proration period also expires on the Expiration Date.
The Company will determine the Purchase Price taking into consideration
the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the lowest Purchase Price that will enable
it to purchase 1,100,000 Shares (or such lesser number of Shares as is validly
tendered and not withdrawn at prices not greater than $20.00 nor less than
$18.00 per Share) pursuant to the Offer. Subject to Section 16, the Company
reserves the right to purchase more than 1,100,000 Shares pursuant to the Offer,
but does not currently plan to do so. The Offer is not conditioned on any
minimum number of Shares being tendered. The Offer is, however, subject to
certain other conditions. See Section 7.
In accordance with Instruction 5 of the Letter of Transmittal, each
stockholder who wishes to tender Shares must specify the price (not greater than
$20.00 nor less than $18.00 per Share) at which the stockholder is willing to
have the Company purchase such Shares. As promptly as practicable following the
Expiration Date, the Company will determine the Purchase Price (not greater than
$20.00 nor less than $18.00 per Share) that it will pay for Shares validly
tendered and not withdrawn pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. All
Shares purchased pursuant to the Offer will be purchased at the Purchase Price.
All Shares not purchased pursuant to the Offer, including Shares tendered at
prices greater than the Purchase Price and Shares not purchased because of
proration or because they were conditionally tendered and not accepted for
purchase, will be returned to the tendering stockholders at the Company's
expense as promptly as practicable following the Expiration Date.
Upon the terms and subject to the conditions of the Offer, if 1,100,000
or fewer Shares have been validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date, the Company will purchase all
such Shares. Upon the terms and subject to the conditions of the Offer, if more
than 1,100,000 Shares have been validly tendered at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date, the Company will purchase
Shares in the following order of priority:
(a) first, all Shares validly tendered at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date by or on behalf of any
stockholder who owned beneficially, as of the close of business on November
13, 1998 and continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares and who validly tenders all of such
Shares (partial and conditional tenders will not qualify for this
preference) and completes the box captioned "Odd Lots" on the Letter of
Transmittal; and
(b) then, after purchase of all of the foregoing Shares, subject to
the conditional tender provisions described in Section 6, all other Shares
validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date on a pro rata basis, if necessary (with
appropriate adjustments to avoid purchases of fractional Shares).
If proration of tendered Shares is required, (i) because of the
difficulty in determining the number of Shares validly tendered, (ii) as a
result of the "odd lot" procedure described in Section 2,and (iii) as a result
of the conditional tender procedure described in Section 6, the Company does not
expect that it will be able to announce the final proration
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<PAGE>
factor or to commence payment for any Shares purchased pursuant to the Offer
until approximately seven NNM trading days after the Expiration Date.
Preliminary results of proration will be announced by press release as promptly
as practicable after the Expiration Date. Holders of Shares may obtain such
preliminary information from the Dealer Manager/Information Agent.
The Company expressly reserves the right, in its sole discretion, at
any time or from time to time, 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. See Section 16. There can
be no assurance, however, that the Company will exercise its right to extend the
Offer.
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
Copies of this Offer to Purchase and the related Letter of Transmittal
are being 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 stockholder 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. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES
Except to the extent that the Company's purchase would result in the
delisting of the Shares on the NNM, all Shares validly tendered at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date by or on
behalf of any stockholder who owned beneficially, as of the close of business on
November 13, 1998, and continues to own beneficially as of the Expiration Date,
an aggregate of fewer than 100 Shares, will be accepted for purchase before
proration, if any, of other tendered Shares. Partial or conditional tenders will
not qualify for this preference, and it is not available to beneficial holders
of 100 or more Shares, even if such holders have separate stock certificates for
fewer than 100 Shares. By accepting the Offer, a stockholder owning beneficially
fewer than 100 Shares will avoid the payment of brokerage commissions and the
applicable odd lot discount payable in a sale of such Shares in a transaction
effected on a securities exchange.
As of November 13, 1998, there were approximately 1,088 holders of
record of Shares. Approximately 386 of these holders of record held individually
fewer than 100 Shares and held in the aggregate approximately 15,546 Shares.
Because of the large number of Shares held in the names of brokers and nominees,
the Company is unable to estimate the number of beneficial owners of fewer than
100 Shares or the aggregate number of Shares they own. Any stockholder wishing
to tender all of his or her Shares pursuant to this Section should complete the
box captioned "Odd Lots" on the Letter of Transmittal.
3. PROCEDURE FOR TENDERING SHARES
To tender Shares validly pursuant to the Offer, a properly completed
and duly executed Letter of Transmittal or facsimile thereof, together with any
required signature guarantees and any other documents required by the Letter of
Transmittal, must be received by the Depositary at its address set forth on the
back cover of this Offer to Purchase and either (i) certificates for the Shares
to be tendered must be received by the Depositary at such address or (ii) such
Shares must be delivered pursuant to the procedures for book-entry transfer
described below (and a confirmation of such delivery received by the
Depositary), in each case on or prior to the Expiration Date.
In accordance with instruction 5 of the Letter of Transmittal, in order
to tender Shares pursuant to the Offer, a stockholder must 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 $0.125) at
which such Shares are being tendered, except that any stockholder who owned
beneficially as of the close of business on November 13, 1998, and continues to
own beneficially as of the Expiration Date, an aggregate of fewer than 100
Shares may check the box in the section of the Letter of Transmittal entitled
"Odd Lots" indicating that the stockholder is tendering all of his or her Shares
at the Purchase Price. For a tender of Shares to be valid, a price box, but only
one price box, on each Letter or Transmittal must be checked.
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<PAGE>
Stockholders wishing to tender Shares at more than one price must
complete separate Letters of Transmittal for each price at which such Shares are
being tendered. The same Shares cannot be tendered at more than one price.
The Depositary will establish an account with respect to the Shares at
The Depository Trust Company ("DTC") or Philadelphia Depository Trust Company
("PDTC") (hereinafter collectively referred to as the "Book-Entry Transfer
Facilities") for purposes of the Offer within two business days after the date
of this Offer to Purchase, and any financial institution that is a participant
in the system of any Book-Entry Transfer Facility may make delivery of Shares by
causing such Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the procedures of such Book-Entry
Transfer Facility. Although delivery of Shares may be effected through
book-entry transfer, a properly completed and duly executed Letter of
Transmittal or a manually signed copy thereof, or an Agent's Message (as defined
below), together with any required signature guarantees and any other required
documents, must, in any case, be transmitted to and received by the Depositary
at its address set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date. Delivery of required documents to one of the Book-Entry
Transfer Facilities in accordance with its procedures does not constitute
delivery to the Depositary and will not constitute a valid tender.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against the participant.
Dividend Reinvestment and Stock Purchase Plan. The Depositary for the
Offer also acts as the agent of participants in the Company's Dividend
Reinvestment and Stock Purchase Plan (the "DRIP"). Participants in the DRIP may
use the Letter of Transmittal to tender such participants' Shares in the Offer
by completing the box captioned "The Following is to be Completed Only by
Participants in the WesterFed Financial Corporation Dividend Reinvestment and
Stock Purchase Plan" on the Letter of Transmittal. Each participant may direct
that all, some or none of the Shares credited to the participant's account are
to be tendered. Stockholders who intend to tender Shares held in the DRIP in
addition to Shares which are not held in the DRIP may use one Letter of
Transmittal to tender all of such Shares if the participant wishes to tender all
such Shares at the same price (even if such stockholders have received more than
one copy of the Offer). Separate Letters of Transmittal must be used if a
participant in the DRIP intends to tender Shares held in the DRIP and Shares not
held in the DRIP at different prices. See Instruction 10 to the Letter of
Transmittal. Participants in the DRIP who do not wish to tender their shares
held in the DRIP do not need to take any action. Participants may complete the
box captioned "The Following is to be Completed Only by Participants in the
WesterFed Financial Corporation Dividend Reinvestment and Stock Purchase Plan"
on only one Letter of Transmittal submitted by such participant. If a
participant submits more than one Letter of Transmittal and completes this box
on more than one Letter of Transmittal, the participant will be deemed to have
elected to tender all Shares allocated to the stockholder's account under the
DRIP at the lowest of the prices specified in such Letters of Transmittal.
Participants in the DRIP who wish to tender the Shares that will be allocated to
their accounts under the DRIP on November 24, 1998, in connection with the
payment of the Company's quarterly dividend on such date, should so indicate on
the Letter of Transmittal. Participants in the DRIP may determine the
approximate number of Shares allocated to them on November 24, 1998 under the
DRIP after 4:00 P.M. New York City time on that day by reference to the average
of the high and low trade prices of the Company's Shares on November 24, 1998
(which may be obtained from the Dealer Manager/Information Agent or from
brokers), taking into account that the dividend per share paid on that date
(which was used to purchase Shares under the DRIP for participants in the DRIP)
was $0.135. Participants in the DRIP may withdraw such Shares by following the
procedure for withdrawal of Shares before 5:00 P.M. New York city time, on the
Expiration Date. See Section 4.
Except as set forth below, all signatures on a Letter of Transmittal
must be guaranteed by a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc., or
by a commercial bank, a trust company, a savings bank, a savings and loan
association or a credit union which has membership in an approved Signature
Guarantee Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"). Signatures on a Letter of Transmittal need not be
guaranteed if (a) the Letter of Transmittal is
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signed by the registered holder of the Shares (which term, for the purposes of
this Section, includes a participant in any Book-Entry Transfer Facility whose
name appears on a security position listing as the holder of the Shares)
tendered therewith and such holder has not completed the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions" on the
Letter of Transmittal or (b) such Shares are tendered for the account of an
Eligible Institution. See Instructions 1 and 6 of the Letter of Transmittal.
The method of delivery of Shares and all other required documents is at
the option and risk of the tendering stockholder. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended.
In all cases sufficient time should be allowed to assure timely delivery.
To prevent United States federal income tax backup withholding equal to
31% of the gross payments made pursuant to the Offer, each tendering stockholder
must provide the Depositary with such stockholder's correct taxpayer
identification number and certain other information by properly completing the
substitute Form W-9 included in the Letter of Transmittal. Foreign stockholders
(as defined in Section 15) must submit a properly completed Form W-8 (which may
be obtained from the Depositary) in order to prevent backup withholding. In
general, backup withholding does not apply to corporations or to foreign
stockholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer (as discussed in Section 15). For a discussion of
certain federal income tax consequences to tendering stockholders, see Section
15. Each stockholder is urged to consult with his or her own tax advisor
regarding his, her or its qualification for exemption from backup withholding
and the procedure for obtaining any applicable exemption.
It is a violation of Rule 14e promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), for a person to tender Shares for
his or her own account unless 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 immediately convertible into, exercisable or exchangeable for the
amount of Shares tendered and will acquire such Shares for tender by conversion,
exercise or exchange of such other securities 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 on behalf of another person. The
tender of Shares pursuant to any one of the procedures described above will
constitute the tendering stockholder's representation and warranty that (i) such
stockholder has a net long position in the Shares being tendered within the
meaning of Rule 14e-4 promulgated under the Exchange Act, and (ii) the tender of
such Shares complies with Rule 14e-4. The Company's acceptance for payment of
Shares tendered pursuant to the Offer will constitute a binding agreement
between the tendering stockholder and the Company upon the terms and subject to
the conditions of the Offer.
All questions as to the Purchase Price, the form of documents, the
number of Shares to be accepted and the validity, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by the Company, in its sole discretion, which determination shall be final and
binding on all parties. The Company reserves the absolute right to reject any or
all tenders of Shares that it determines are not in proper form or the
acceptance for payment of or payment for Shares that may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any defect or irregularity in any tender of any particular Shares. None of
the Company, the Dealer Manager/Information Agent, the Depositary or any other
person is or will be under any duty to give notice of any defect or irregularity
in tenders, nor shall any of them incur any liability for failure to give any
such notice.
Certificates for Shares, together with a properly completed Letter of
Transmittal (or, in the case of a book-entry transfer, an Agent's Message) and
any other documents required by the Letter of Transmittal, must be delivered to
the Depositary and not to the Company. Any such documents delivered to the
Company will not be forwarded to the Depositary and therefore will not be deemed
to be properly tendered.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer may be withdrawn at any
time prior to the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after 12:00 midnight, New York City time,
December 21, 1998 unless theretofore accepted for payment by the Company as
provided in this Offer to Purchase. If
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the Company extends the period of time during which the Offer is open, is
delayed in purchasing 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, on behalf of the Company, retain all Shares tendered,
and such Shares may not be withdrawn except as otherwise provided in this
Section 4, subject to Rule 13e-4(f)(5) under the Exchange Act, which provides
that the issuer making the tender offer shall either pay the consideration
offered, or return the tendered securities promptly after the termination or
withdrawal of the tender offer.
Withdrawal of Shares Held in Physical Form. Tenders of Shares made
pursuant to the Offer may not be withdrawn after the Expiration Date, except
that they may be withdrawn after 12:00 midnight, New York City time, December
21, 1998 unless accepted for payment by the Company as provided in this Offer to
Purchase. For a withdrawal to be effective prior to that time, a stockholder of
Shares held in physical form must provide a written, telegraphic or facsimile
transmission notice of withdrawal to the Depositary at it address set forth on
the back cover page of this Offer to Purchase before the Expiration Date, which
notice must contain: (A) the name of the person who tendered the Shares; (B) a
description of the Shares to be withdrawn; (C) the certificate numbers shown on
the particular certificates evidencing such Shares; (D) the signature of such
stockholder executed in the same manner as the original signature on the Letter
of Transmittal (including any signature guarantee (if such original signature
was guaranteed)); and (E) if such Shares are held by a new beneficial owner,
evidence satisfactory to the Company that the person withdrawing the tender has
succeeded to the beneficial ownership of the Shares. A purported notice of
withdrawal which lacks any of the required information will not be an effective
withdrawal of a tender previously made.
Withdrawal of Shares Held with the Book-Entry Transfer Facility.
Tenders of Shares made pursuant to the Offer may not be withdrawn after the
Expiration Date, except that they may be withdrawn after 12:00 midnight, New
York City time, December 21, 1998 unless accepted for payment by the Company as
provided in this Offer to Purchase. For a withdrawal to be effective prior to
that time, a stockholder of Shares held with any of the Book-Entry Transfer
Facilities must (i) call his or her broker and instruct such broker to withdraw
the tender of Shares by debiting the Depositary's account at such Book-Entry
Transfer Facility for all Shares to be withdrawn; and (ii) instruct the broker
to provide a written, telegraphic or facsimile transmission notice of withdrawal
to the Depositary on or before the Expiration Date. Such notice of withdrawal
shall contain (A) the name of the person who tendered the Shares; (B) a
description of the Shares to be withdrawn; and (C) if such Shares are held by a
new beneficial owner, evidence satisfactory to the Company that the person
withdrawing the tender has succeeded to the beneficial ownership of the Shares.
A purported notice of withdrawal which lacks any of the required information
will not be an effective withdrawal of a tender previously made.
Any permitted withdrawals of tenders of Shares may not be rescinded,
and any Shares so withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer; provided, however, that withdrawn Shares may be
re-tendered by following the procedures for tendering prior to the Expiration
Date.
All questions as to the form and validity (including time of receipt)
of any notice of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties. None
of the Company, the Dealer Manager/Information Agent, the Depositary or any
other person is or will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer and as
promptly as practicable after the Expiration Date, the Company will determine
the Purchase Price, taking into consideration the number of Shares tendered and
the prices specified by tendering stockholders, announce the Purchase Price, and
(subject to the proration and conditional tender provisions of the Offer) accept
for payment and pay the Purchase Price for Shares validly tendered and not
withdrawn at or below the Purchase Price. Thereafter, payment for all Shares
validly tendered on or prior to the Expiration Date and accepted for payment
pursuant to the Offer will be made by the Depositary by check as promptly as
practicable. In all cases, payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or of a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities), a properly completed and duly
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executed Letter of Transmittal or a manually signed copy thereof, with any
required signature guarantees, or in the case of a book-entry delivery an
Agent's Message, and any other required documents.
For purposes of the Offer, the Company shall be deemed to have accepted
for payment (and thereby purchased), subject to proration and conditional
tenders, Shares that are validly tendered and not withdrawn as, if and when it
gives oral or written notice to the Depositary of the Company's acceptance for
payment of such Shares. 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 such proration until
approximately seven NNM trading days after the Expiration Date. The Company will
pay for Shares that it has purchased pursuant to the Offer by depositing the
aggregate Purchase Price therefor with the Depositary. The Depositary will act
as agent for tendering stockholders for the purpose of receiving payment from
the Company and transmitting payment to tendering stockholders. Under no
circumstances will interest be paid on amounts to be paid to tendering
stockholders, regardless of any delay in making such payment.
Certificates for all Shares not purchased, including all Shares
tendered at prices greater than the Purchase Price, Shares not purchased because
of proration and Shares that were conditionally tendered and not accepted, will
be returned (or, in the case of Shares tendered by book-entry transfer, such
Shares will be credited to an account maintained with one of the Book-Entry
Transfer Facilities by the participant therein who so delivered the Shares) as
promptly as practicable following the Expiration Date without expense to the
tendering stockholder.
Payment for Shares may be delayed in the event of difficulty in
determining the number of Shares properly tendered or if proration is required.
See Section 1. In addition, if certain events occur, the Company may not be
obligated to purchase Shares pursuant to the Offer. See Section 7.
The Company will pay or cause to be paid any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the Purchase Price is to be made to, or a
portion of the Shares delivered (whether in certificated form or by book entry)
but not tendered or not purchased are to be registered in the name of, any
person other than the registered holder, or if tendered Shares are registered in
the name of any person other than the person signing the Letter of Transmittal
(unless such person is signing in a representative or fiduciary capacity), 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 will be deducted from the Purchase Price unless satisfactory evidence of
the payment of such taxes, or exemption therefrom, is submitted. See Instruction
7 to the Letter of Transmittal.
Any tendering stockholder or other payee who fails to complete fully
and sign the substitute Form W-9 included in the Letter of Transmittal (or, in
the case of a foreign individual, a Form W-8) may be subject to required federal
income tax withholding of 31% of the gross proceeds paid to such stockholder or
other payee pursuant to the Offer. See Section 3.
6. CONDITIONAL TENDER OF SHARES
Under certain circumstances and subject to the exceptions set forth in
Section 1, the Company may prorate the number of Shares purchased pursuant to
the Offer. As discussed in Section 15, the number of Shares to be purchased from
a particular stockholder might affect the tax treatment of such purchase for the
stockholder and the stockholder's decision whether to tender. Each stockholder
is urged to consult with his or her own tax advisor. Accordingly, a stockholder
may tender Shares subject to the condition that a specified minimum number of
the stockholder's Shares tendered pursuant to a Letter of Transmittal must be
purchased if any Shares so tendered are purchased. Any stockholder desiring to
make such a conditional tender must so indicate in the box captioned
"Conditional Tender" in the Letter of Transmittal.
Any tendering stockholders wishing to make a conditional tender must
calculate and appropriately indicate the minimum number of Shares to be
tendered. If the effect of accepting tenders on a pro rata basis would be to
reduce the number of Shares to be purchased from any stockholder (tendered
pursuant to a Letter of Transmittal) below the minimum number so specified, the
tender will automatically be regarded as withdrawn (except as provided in the
next
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paragraph) and all Shares tendered by the stockholder pursuant to the applicable
Letter of Transmittal will be returned as promptly as practicable thereafter.
If conditional tenders, that would otherwise be so regarded as
withdrawn, would cause the total number of Shares to be purchased to fall below
1,100,000, then, to the extent feasible, the Company will select enough of such
conditional tenders that would otherwise have been so withdrawn to permit the
Company to purchase 1,100,000 Shares. In selecting among these conditional
tenders, the Company will select by lot and will limit its purchase in each case
to the minimum number of Shares designated by the stockholder in the applicable
Letter of Transmittal as a condition to his or her tender.
7. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company will not
be required to accept for payment or pay for any Shares tendered, and may
terminate or amend and may postpone (subject to the requirements of the Exchange
Act for prompt payment for or return of Shares tendered) the acceptance for
payment of Shares tendered, if at any time after December 21, 1998 and at or
before acceptance for payment of any Shares any of the following shall have
occurred:
(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, authority, agency or tribunal
that (i) challenges the acquisition of Shares pursuant to the Offer or
otherwise in any manner relates to or affects the Offer or (ii) in the sole
judgment of the Company, could materially and adversely affect the
business, condition (financial or other), income, operations or prospects
of the Company and its subsidiaries, taken as a whole, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Company or any of its subsidiaries or materially impair the
Offer's contemplated benefits to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any legislative body, court, authority, agency
or tribunal which, in the Company's sole judgment, would or might directly
or indirectly (i) make the acceptance for payment of, or payment for, some
or all of the Shares illegal or otherwise restrict or prohibit consummation
of the Offer, (ii) delay or restrict the ability of the Company, or render
the Company unable, to accept for payment or pay for some or all of the
Shares, (iii) materially impair the contemplated benefits of the Offer to
the Company or (iv) materially affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company or any of
its subsidiaries;
(c) it shall have been publicly disclosed or the Company shall have
learned that (i) any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) has acquired or proposes to acquire
beneficial ownership of more than 5% of the outstanding Shares whether
through the acquisition of stock, the formation of a group, the grant of
any option or right, or otherwise (other than as disclosed in a Schedule
13D or 13G on file with the Securities and Exchange Commission (the
"Commission") on November 20, 1998) or (ii) any such person or group that
on or prior to November 20, 1998 had filed such a Schedule with the
Commission thereafter shall have acquired or shall propose to acquire,
whether through the acquisition of stock, the formation of a group, the
grant of any option or right, or otherwise, beneficial ownership of
additional Shares representing 2% or more of the outstanding Shares;
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, (ii) any significant decline in
the market price of the Shares or in the general level of market prices of
equity securities in the United States or abroad, (iii) any change in the
general political, market, economic or financial condition in the United
States or abroad that could have a material adverse effect on the Company's
business, condition (financial or
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otherwise) , income, operations, prospects or ability to obtain financing
generally or the trading in the Shares, (iv) the declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or any limitation on, or any event which, in the Company's sole
judgment, might affect the extension of credit by lending institutions in
the United States, (v) the commencement of a war, armed hostilities or
other international or national calamity directly or indirectly involving
the United States or (vi) in the case of any of the foregoing existing at
the time of the commencement of the Offer, in the Company's sole judgment,
a material acceleration or worsening thereof;
(e) a tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or a merger, acquisition or other business
combination proposal for the Company, shall have been proposed, announced
or made by another person or group (within the meaning of Section 13(d) (3)
of the Exchange Act);
(f ) there shall have occurred any event or events that has resulted,
or may in the sole judgment of the Company result, directly or indirectly,
in an actual or threatened change in the business, condition (financial or
other), income, operations, stock ownership or prospects of the Company and
its subsidiaries;
and, in the sole judgment of the Company, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance for
payment.
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 of these conditions, and
any such condition may be waived by the Company, in whole or in part, at any
time and from time to time in its sole discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver of
the right and each of these rights 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.
Acceptance of Shares validly tendered in the Offer is subject to the
condition that, as of the Expiration Date, and after giving pro forma effect to
the acceptance of Shares validly tendered, the Company would continue to have at
least 400 stockholders and the Shares would remain listed for quotation on the
NNM. This condition may not be waived.
The Exchange Act requires that all conditions to the Offer must be
satisfied or waived before the Expiration Date.
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8. PRICE RANGE OF SHARES; DIVIDENDS
The following table sets forth the high and low sales prices, and
dividends declared, for the Shares as reported on the NNM for the periods
indicated. The Company's fiscal year-end is June 30.
Dividends
High Low Declared
---- --- --------
Fiscal 1997
- -----------
1st Quarter .................... $ 16.13 $ 13.88 $ .095
2nd Quarter .................... 18.75 15.63 .10
3rd Quarter .................... 21.75 17.75 .105
4th Quarter .................... 20.75 17.25 .151*
Fiscal 1998
- -----------
1st Quarter .................... $ 26.75 $ 20.00 $ .115
2nd Quarter .................... 27.00 22.25 .12
3rd Quarter .................... 26.75 24.50 .125
4th Quarter .................... 26.63 24.00 .18**
Fiscal 1999
- -----------
1st Quarter .................... $ 25.00 $ 16.875 $ .135
2nd Quarter (through
November 18, 1998) ............. 20.63 17.00 --
- -----------
* Includes a special dividend of $0.041 per share.
** Includes a special dividend of $0.05 per share.
On November 18, 1998, the closing price of the Shares on the NNM was
$18.00 per Share. Stockholders are urged to obtain current market quotations for
the Shares.
9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
The Company believes that the purchase of Shares is an attractive use
of a portion of the Company's available capital on behalf of its stockholders
and is consistent with the Company's long-term goal of increasing stockholder
value. The Company believes it has adequate sources of capital to complete the
Share repurchase and pursue business opportunities.
Over time, the Company's profitable operations have contributed to the
growth of a capital base that exceeds all applicable regulatory standards and
the amount of capital needed to support the Company's banking business. After
evaluating a variety of alternatives to utilize more effectively its capital
base and to attempt to maximize stockholder value, the Company's management and
its Board of Directors believe that the purchase of Shares pursuant to the Offer
is a positive action that is intended to accomplish the desired objectives.
Other actions previously employed, including periodic open market purchases of
Shares, the acquisition of Security Bancorp, the Company's quarterly and special
cash dividends, have enhanced stockholder value, but capital remains at high
levels, and this affects the Company's ability to produce desired returns for
stockholders.
The Offer is designed to restructure the Company's balance sheet in
order to increase return on equity and earnings per share by reducing the amount
of equity and Shares outstanding. Based upon the current market price of its
Shares, the Company believes that the purchase of Shares is an attractive use of
its funds. Following the purchase of the Shares, the Company believes funds
provided by earnings, combined with its other sources of liquidity, will be
fully adequate to meet its funding needs for the foreseeable future. Upon
completion of the Offer, the Company expects that it and its wholly owned
subsidiary bank, Western Security Bank (the "Bank"), will continue to maintain
the highest regulatory standard for capital, which is designated as "well
capitalized" under the prompt corrective action scheme enacted by the Federal
Deposit Insurance Corporation Improvement Act of 1991.
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The Offer will enable stockholders who are considering the sale of all
or a portion of their Shares the opportunity to determine the price or prices
(not greater than $20.00 nor less than $18.00 per Share) at which they are
willing to sell their Shares, and, if any such Shares are purchased pursuant to
the Offer, to sell those Shares for cash without the usual transaction costs
associated with open-market sales. The Offer may also give stockholders the
opportunity to sell Shares at prices greater than market prices prevailing prior
to the announcement of the Offer. See Section 8. In addition, qualifying
stockholders owning beneficially fewer than 100 Shares, whose Shares are
purchased pursuant to the Offer, not only will avoid the payment of brokerage
commissions but will also avoid any applicable odd lot discounts to the market
price typically charged by brokers for executing odd lot trades.
Stockholders who do not tender their Shares pursuant to the Offer and
stockholders who otherwise retain an equity interest in the Company as a result
of a partial tender of Shares or a proration pursuant to Section 1 of the Offer
will continue to be owners of the Company with the attendant risks and rewards
associated with owning the equity securities of the Company. As noted above, the
Company, following completion of the Offer, will maintain the highest regulatory
capital ranking. Consequently, the Company believes that stockholders will not
be subject to materially greater risk as a result of the reduction of the
capital base.
Stockholders who determine not to accept the Offer will realize a
proportionate increase in their relative equity interest in the Company and,
thus, in the Company's earnings and assets, subject to any risks resulting from
the Company's purchase of Shares and the Company's ability to issue additional
equity securities in the future. In addition, to the extent the purchase of
Shares pursuant to the Offer results in a reduction of the number of
stockholders of record, the Company's costs for services to stockholders may be
reduced. Finally, the Offer may affect the Company's ability to qualify for
pooling-of-interests accounting treatment for any merger transaction for
approximately the next two years (which could limit alternative stockholder
enhancement vehicles during this period).
If fewer than 1,100,000 Shares are purchased pursuant to the Offer, the
Company may repurchase the remainder of such Shares on the open market, in
privately negotiated transactions or otherwise. In the future, the Company may
determine to purchase additional Shares on the open market, in privately
negotiated transactions, through one or more tender offers or otherwise. Any
such purchases may be on the same terms as, or on terms which are more or less
favorable to stockholders than, the terms of the Offer. However, Rule 13e-4
under 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 future purchases of Shares by the Company would
depend on many factors, including the market price of the Shares, the Company's
business and financial position, and general economic and market conditions.
Shares the Company acquires pursuant to the Offer will be restored to
the status of authorized and unissued Shares, or placed in the Company's
treasury, and will be available for the Company to issue without further
stockholder action (except as required by applicable law or the rules of the NNM
or any other securities exchange on which the Shares are listed) for purposes
including, but not limited to, the acquisition of other businesses, the raising
of additional capital for use in the Company's business and the satisfaction of
obligations under existing or future employee benefit plans. The Company has no
current plans for reissuance of the Shares repurchased pursuant to the Offer.
Neither the Company nor its Board of Directors makes any recommendation
to any stockholder as to whether to tender all or any Shares. Each stockholder
must make his or her own decision whether to tender Shares and, if so, how many
Shares to tender and at what price. Directors, officers and employees of the
Company who own Shares may participate in the Offer on the same basis as the
Company's other stockholders. The Company has been advised that the trustee of
the ESOP does not intend to tender any Shares pursuant to the Offer.
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10. CERTAIN INFORMATION CONCERNING THE COMPANY
General
The Company, a Delaware corporation, is a unitary savings and loan
holding company which was organized in September 1993 at the direction of the
Bank for the purpose of owning all of the outstanding stock of the Bank to be
issued in connection with the Bank's conversion from mutual to stock form. The
Bank, founded in 1911, is a federally chartered savings bank. The Bank is, and
intends to continue to be an independent, community-oriented financial
institution.
The Bank serves the financial needs of communities throughout Montana
through its main office located in Missoula, 33 branch offices and two loan
administrative offices. The Bank attracts deposits from the general public and
uses the deposits, together with borrowings and other funds, to originate loans
secured by mortgages on owner-occupied one- to four-family residences,
multi-family, commercial, agriculture and construction real estate loans and non
real estate commercial, agriculture and consumer loans. These loans are
generally originated within the Bank's primary market area. The Bank also
invests in mortgage-backed securities, investment securities and other
short-term liquid assets. Its deposits are insured up to applicable limits by
the Federal Deposit Insurance Corporation ("FDIC").
The Bank's results of operations are dependent primarily on net
interest income and fee income. Net interest income is the difference between
the interest income earned on its loans, mortgage-backed securities, and
investment portfolio and its cost of funds, consisting of interest paid on its
deposits and borrowed money. The Bank's results of operations are also
significantly affected by general economic and competitive conditions,
particularly changes in market interest rates, government policies and actions
of regulatory authorities.
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.
In November 1998, Mr. Grimes (age 63), the Chairman of the Board,
President and Chief Executive Officer of the Company and the Bank advised the
Board of Directors of the Company that he would like and intends to retire
during 1999 as the President and Chief Executive Officer of the Bank, subject to
the Board finding a replacement for him at this position. Mr. Grimes would
continue in his positions as Chairman of the Board, President and Chief
Executive Officer of the Company and as Chairman of the Board of the Bank. The
Board has hired a search firm to identify potential candidates to fill the
position of President and Chief Executive Officer of the Bank. In this regard,
the Board of Directors has indicated to the search firm that it would like a
candidate with a strong commercial banking background so as to enable the Bank
to continue its transition to commercial banking which started with the
acquisition last year of Security Bancorp.
The Company's principal executive offices are located at 110 East
Broadway, Missoula, Montana 59802 and its telephone number is (406) 721-5254.
12
<PAGE>
Summary Historical Consolidated Financial Data and
Summary Unaudited Pro Forma Consolidated Financial Data
The following summary historical consolidated financial data has been
derived from the consolidated financial statements of the Company. The data
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998 and the Company's Annual Report on Form 10-K
for the year ended June 30, 1998. Copies of these reports may be obtained as
described in Section 18 of this Offer. The income statement data for the years
ended June 30, 1997 and 1998 and the balance sheet data as of the same dates
have been derived from the audited consolidated financial statements of the
Company. The income statement data for the three months ended September 30, 1997
and 1998 and the balance sheet data as of September 30, 1998 have been derived
from the unaudited condensed consolidated financial statements of the Company
which, in the opinion of management, include all adjustments (consisting of
normal recurring adjustments) necessary for a fair presentation of financial
position and results of operations for such periods. Operating results for the
three months ended September 30, 1998 are not necessarily indicative of the
results that may be expected for the entire year ending June 30, 1999.
The following summary unaudited pro forma consolidated financial data
has been derived from the historical consolidated financial statements of the
Company. Such information has not been adjusted for certain costs and expenses
to be incurred as a result of the purchase of Shares pursuant to the Offer. The
summary unaudited pro forma consolidated financial data should be read in
conjunction with the summary historical consolidated financial data included
herein. The pro forma income statement data and balance sheet data are not
necessarily indicative of the financial position or results of operations that
would have been obtained had the Offer been completed as of the dates indicated.
13
<PAGE>
<TABLE>
<CAPTION>
Pro Forma
---------------------------------------------------
Historical June 30, 1998 September 30, 1998
----------------------------------------- ----------------------- ------------------------
Balance Sheet Data: June 30,
------------------------- September 30, $18.00 per $20.00 per $18.00 per $20.00 per
1997 1998 1998 share share share share
---- ---- ---- ----- ----- ----- -----
(Dollars in thousands, except Share amounts)
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents ... $ 17,159 $ 29,068 $ 28,678 $ 29,068 $ 29,068 $ 28,678 $ 28,678
Securities available for sale 83,071 132,646 124,569 112,846 110,646 104,769 102,569
Securities held to maturity . 158,703 132,805 123,232 132,805 132,805 123,232 123,232
Loans receivable, net ....... 630,277 657,293 652,577 657,293 657,293 652,577 652,577
Other assets ................ 66,429 70,324 70,539 70,324 70,324 70,539 70,539
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets ............ $ 955,639 $ 1,022,136 $ 999,595 $ 1,002,336 $ 1,000,136 $ 979,795 $ 977,595
=========== =========== =========== =========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits .................... $ 630,869 $ 636,441 $ 636,599 $ 636,441 $ 636,441 $ 636,599 $ 636,599
Securities sold under
agreements to repurchase ... 7,786 6,233 7,210 6,233 6,233 7,210 7,210
Borrowed funds .............. 191,450 248,953 219,779 248,953 248,953 219,779 219,799
Other liabilities ........... 21,275 20,809 24,561 20,809 20,809 24,561 24,561
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities ....... 851,380 912,436 888,149 912,436 912,436 888,149 888,149
Stockholders' equity:
Common stock ................ 56 56 56 56 56 56 56
Additional paid-in capital .. 67,941 68,923 69,052 68,923 68,923 69,052 69,052
Retained earnings ........... 42,314 46,679 47,706 46,679 46,679 47,706 47,706
Treasury stock .............. (3,081) (3,461) (3,461) (23,261) (25,461) (23,261) (25,461)
Net unrealized gain (loss)
on securities available
for sale ................... (35) 23 484 23 23 484 484
Common stock acquired by:
ESOP/RRP .................. (2,936) (2,520) (2,391) (2,520) (2,520) (2,391) (2,391)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total stockholders'
equity ................ 104,259 109,700 111,446 89,900 87,700 91,646 89,446
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities and
stockholders' equity .. $ 955,639 $ 1,022,136 $ 999,595 $ 1,002,336 $ 1,000,136 $ 979,795 $ 977,595
=========== =========== =========== =========== =========== =========== ===========
Shares outstanding .......... 5,564,904 5,585,303 5,588,862 4,485,303 4,485,303 4,488,862 4,488,862
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Pro Forma
Historical -----------------------------------------------
------------------------------------------------ Three months ended
Year ended June 30, 1998 September 30, 1998
Three months ended ------------------------ ---------------------
Year ended June 30, September 30,
----------------------- ---------------------- $18.00 per $20.00 per $18.00 per $20.00 per
Income Statement Data: 1997 1998 1997 1998 share share share share
- ---------------------- ---- ---- ---- ---- ----- ----- ----- -----
(Dollars in thousands, except Share and per Share amounts)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total interest income .... $ 51,260 $ 74,524 $ 18,329 $ 18,420 $ 73,534 $ 73,424 $ 18,173 $ 18,145
Total interest expense ... 28,407 42,286 10,332 10,565 42,286 42,286 10,565 10,565
------ ------ ------ ------ ------ ------ ------ ------
Net interest income .. 22,853 32,238 7,997 7,855 31,248 31,138 7,608 7,580
Provision for loan losses 400 840 164 240 840 840 240 240
--- --- --- --- --- --- --- ---
Net interest income
after provision for
loan losses ......... 22,453 31,398 7,833 7,615 30,408 30,298 7,368 7,340
Total non-interest income. 4,685 8,381 1,963 2,327 8,381 8,381 2,327 2,327
Total non-interest expense (20,568) (27,759) (6,853) (6,969) (27,759) (27,759) (6,969) (6,969)
------ ------ ----- ----- ------ ------ ----- -----
Income before income
taxes ............... 6,570 12,020 2,943 2,973 11,030 10,920 2,726 2,698
Income taxes ............. (2,063) (4,760) (1,134) (1,219) (4,379) (4,337) (1,124) (1,113)
----- ----- ----- ----- ------ ------ ------ ------
Net income ........... $ 4,507 $ 7,260 $ 1,809 $ 1,754 $ 6,651 $ 6,583 $ 1,602 $ 1,585
========== ========== ========== ========== ========== ========== ========== ==========
Earnings per share-diluted $ 0.96 $ 1.29 $ 0.32 $ 0.31 $ 1.47 $ 1.46 $ 0.35 $ 0.35
========== ========== ========== ========== ========== ========== ========== ==========
Dividends declared
per share ............... $ 0.45 $ 0.54 $ 0.115 $ 0.135 $ 0.54 $ 0.54 $ 0.135 $ 0.135
Weighted average shares
outstanding-diluted ... 4,704,239 5,624,166 5,593,069 5,676,569 4,524,166 4,524,166 4,576,569 4,576,569
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Pro Forma
Historical ----------------------------------------------
--------------------------------------- Year ended Three months ended
June 30, 1998 September 30, 1998
Three months ended ---------------------- ----------------------
Year ended June 30, September 30,
------------------ -------------- $18.00 per $20.00 per $18.00 per $20.00 per
1997 1998 1997 1998 share share share share
---- ---- ---- ---- ----- ----- ----- -----
(annualized) (annualized)
Selected Financial Ratios:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Return on assets (ratio of
net income to average
total assets) .......................... 0.65% 0.72% 0.73% 0.70% 0.65% 0.65% 0.65% 0.64%
Return on equity (ratio of
net income to average
equity) ................................ 5.15% 6.73% 6.84% 6.32% 7.56% 7.67% 7.02% 7.12%
Dividend payout ratio ................... 46.88% 41.86% 35.94% 43.55% 36.73% 36.99% 38.57% 38.57%
Equity to total assets at
end of period .......................... 10.91% 10.73% 10.62% 11.15% 8.97% 8.77% 9.35% 9.15%
Book value per share .................... $18.74 $19.64 $19.03 $19.94 $20.04 $19.65 $20.42 $19.93
Non-performing assets to
total assets at end of period .......... 0.25% 0.49% 0.41% 0.52% 0.50% 0.50% 0.53% 0.53%
Allowance for loan losses to
non-performing assets ................. 191.01% 97.44% 116.74% 94.24% 97.44% 97.44% 94.24% 94.24%
</TABLE>
16
<PAGE>
WESTERFED FINANCIAL CORPORATION
Notes to Unaudited Pro Forma Financial Information
- --------------
(1) The pro forma financial information reflects the repurchase of 1,100,000
Shares at $18.00 and $20.00 per share, as appropriate.
(2) The balance sheet data gives 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 proceeds
from the sale or maturity of securities available for sale. The pro forma
data assumes a rate of interest of 5.0% on the securities and an
incremental tax rate of 38.5%.
(4) No effect has been given to the cost incurred in connection with the Offer.
Such costs are not expected to be material and will be capitalized as part
of the cost of the Shares purchased.
17
<PAGE>
11. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 1,100,000 Shares pursuant to the
Offer at a price of $20.00 per Share, the total amount required by the Company
to purchase such Shares will be $22.0 million, exclusive of fees and other
expenses. The Company will fund such purchase through the sale of securities
held by the Company.
12. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING SHARES
As of November 13, 1998, the Company had 5,594,361 Shares issued and
outstanding, and had reserved 525,766 Shares for issuance upon exercise of
outstanding stock options. The 1,100,000 Shares that the Company is offering to
purchase represent approximately 19.7% of the outstanding Shares. As of November
13, 1998, the Company's directors and executive officers as a group (14 persons)
beneficially owned an aggregate of 720,757 Shares (including awards granted
under the Company's 1993 Stock Option and Incentive Plan) representing
approximately 12.13% of the outstanding Shares, assuming the exercise by such
persons of their currently exercisable options. The Company has been advised
that one of its directors and two of its executive officers intend to tender
Shares pursuant to the Offer. In addition, 338,446 Shares, or approximately
6.05% of the outstanding Shares, are held in the ESOP. The Company has been
advised that the trustee of the ESOP does not intend to tender any Shares
pursuant to the Offer.
Directors, officers and employees of the Company who own Shares may
participate in the Offer on the same basis as the Company's other stockholders.
As stated above, the Company has been advised that one of its directors and two
of its executive officers intend to tender Shares pursuant to the Offer. The
table below identifies the director and the executive officers of the Company
that intend to tender their Shares and sets forth the number of Shares each
expects to tender.
Name Shares to be tendered
---- ---------------------
John E. Roemer, Vice Chairman of the Board 1,997*
Jack E. Lovell, Sr. Vice President 3,100*
James A. Salisbury, Chief Financial Officer (Not determined. Mr.
Salisbury has indicated that
he may tender up to 11,000
Shares. Mr. Salisbury is the
beneficial owner of 71,575
Shares, including options to
purchase 37,268 Shares.)*
- ---------------
* The price at which the tenders will be made has not been determined.
Assuming the Company purchases 1,100,000 Shares pursuant to the Offer,
and neither the trustee of the ESOP nor the directors or executive officers of
the Company tender any Shares pursuant to the Offer, then after the purchase of
Shares pursuant to the Offer, the Company's executive officers and directors as
a group would own beneficially approximately 14.89% of the outstanding Shares,
assuming the exercise by such persons of their currently exercisable options. In
addition, the ESOP would own approximately 7.53% of the outstanding Shares.
Except as set forth in Schedule A, neither the Company, nor any
subsidiary of the Company nor, to the best of the Company's knowledge, any of
the Company's directors and executive officers, nor any affiliate of any of the
foregoing, had any transactions involving the Shares during the 40 business days
prior to the date hereof. See Schedule A.
Except for outstanding options to purchase Shares granted from to time
to time over recent years to certain employees (including executive officers) of
the Company pursuant to the Company's 1993 Stock Option and Incentive
18
<PAGE>
Plan, and except as otherwise described herein, neither the Company nor, to the
best of the Company's knowledge, any of its affiliates, directors or executive
officers, or any of the directors or executive officers of any of its
affiliates, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Offer with respect to any securities of the Company including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies, consents or authorizations.
Except as disclosed in this Offer, the Company has no current plans or
proposals which relate to or would result in: (a) the acquisition by any person
of additional securities of the Company or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (d) any change in the present Board of Directors or management
of the Company; (e) any material change in the present dividend rate or policy,
or indebtedness or capitalization of the Company; (f) any other material change
in the Company's corporate structure or business; (g) any change in the
Company's Certificate of Incorporation or Bylaws or any actions which may impede
the acquisition of control of the Company by any person; (h) a class of equity
security of the Company being delisted from a national securities exchange; (i)
a class of equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the
suspension of the Company's obligation to file reports pursuant to Section 15(d)
of the Exchange Act.
13. 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 stockholders. 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 NNM, the Company believes that following
its purchase of Shares pursuant to the Offer, the Company's remaining Shares
will continue to qualify to be quoted on the NNM.
The Shares are currently "margin securities" under the rules of the
Federal Reserve Board. This has the effect, among other things, of allowing
brokers to extend credit to their customers using such Shares as collateral. The
Company believes that, following the purchase of Shares pursuant to the Offer,
the Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and the U.S. Securities and Exchange Commission (the "Commission") and comply
with the Commission's proxy rules in connection with meetings of the Company's
stockholders.
14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
The Company is not aware of any license or regulatory permit that
appears to be material to the Company's business that might be adversely
affected by the Company's acquisition of Shares as contemplated herein or of any
approval or other action by, or any filing with, any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the acquisition or ownership of Shares by the Company as
contemplated herein. Should any such approval or other action be required, the
Company presently contemplates that such approval or other action will be
sought. The Company is unable to predict whether it may determine that it is
required to delay the acceptance for payment of or payment for Shares tendered
pursuant to the Offer pending the outcome of any such matter. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that the failure to
obtain any such approval or other action might not result in adverse
consequences to the Company's business. The Company's obligations under the
Offer to accept for payment and pay for Shares is subject to certain conditions.
See Section 7.
19
<PAGE>
15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General. The following is a discussion of the material United States
federal income tax consequences to stockholders with respect to a sale of Shares
pursuant to the Offer. The discussion is based upon the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations,
Internal Revenue Service ("IRS") rulings and judicial decisions, all in effect
as of the date hereof and all of which are subject to change (possibly with
retroactive effect) by subsequent legislative, judicial or administrative
action. The discussion does not address all aspects of United States federal
income taxation that may be relevant to a particular stockholder in light of the
stockholder's particular circumstances or to certain types of holders subject to
special treatment under the United States federal income tax laws (such as
certain financial institutions, tax-exempt organizations, life insurance
companies, dealers in securities or currencies, employee benefit plans or
stockholders holding the Shares as part of a conversion transaction, as part of
a hedge or hedging transaction, or as a position in a straddle for tax
purposes). In addition, the discussion below does not consider the effect of any
foreign, state, local or other tax laws that may be applicable to particular
stockholders. The discussion assumes that the Shares are held as "capital
assets" within the meaning of Section 1221 of the Code. The Company has neither
requested nor obtained a written opinion of counsel or a ruling from the IRS
with respect to the tax matters discussed below.
Each stockholder should consult his or her own tax advisor as to the
particular United States federal income tax consequences to that stockholder
tendering Shares pursuant to the Offer and the applicability and effect of any
state, local or foreign tax laws and recent changes in applicable tax laws.
Characterization of the Surrender of Shares Pursuant to the Offer. The
surrender of Shares by a stockholder to the Company pursuant to the Offer will
be a taxable transaction for United States federal income tax purposes and may
also be a taxable transaction under applicable state, local and foreign tax
laws. The United States federal income tax consequences to a stockholder may
vary depending upon the stockholder's particular facts and circumstances. Under
Section 302 of the Code, the surrender of Shares by a stockholder to the Company
pursuant to the Offer will be treated as a "sale or exchange" of such Shares for
United States federal income tax purposes (rather than as a distribution by the
Company with respect to the Shares held by the tendering stockholder) if the
receipt of cash upon surrender (i) is "substantially disproportionate" with
respect to the stockholder, (ii) results in a "complete redemption" of the
stockholder's interest in the Company, or (iii) is "not essentially equivalent
to a dividend" with respect to the stockholder (each as described below).
If any of the above three tests is satisfied, and the surrender of the
Shares is therefore treated as a "sale or exchange" of such Shares for United
States federal income tax purposes, the tendering stockholder will recognize
gain or loss equal to the difference between the amount of cash received by the
stockholder and the stockholder's tax basis in the Shares surrendered pursuant
to the Offer. Any such gain or loss will be capital gain or loss, and will be
long term capital gain or loss if the Shares have been held for more than one
year.
If none of the above three tests is satisfied, the tendering
stockholder will be treated as having received a distribution by the Company
with respect to the stockholder's Shares in an amount equal to the cash received
by the stockholder pursuant to the Offer. The distribution will be treated as a
dividend taxable as ordinary income to the extent of the Company's current or
accumulated earnings and profits for tax purposes. The amount of the
distribution in excess of the Company's current or accumulated earnings and
profits will be treated as a return of the stockholder's tax basis in the
Shares, and then as gain from the sale or exchange of the Shares. The tendering
stockholder's basis in the Shares surrendered pursuant to the Offer generally
will be added to the stockholder's basis in his or her remaining Shares, if any.
Constructive Ownership. In determining whether any of the three tests
under Section 302 of the Code is satisfied, stockholders must take into account
not only the Shares that are actually owned by the stockholder, but also Shares
that are constructively owned by the stockholder within the meaning of Section
318 of the Code. Under Section 318 of the Code, a stockholder may constructively
own Shares actually owned, and in some cases constructively owned, by certain
related individuals or entities and Shares that the stockholder has the right to
acquire by exercise of an option or by conversion.
20
<PAGE>
Proration. Contemporaneous dispositions or acquisitions of Shares by a
stockholder or related individuals or entities may be deemed to be part of a
single integrated transaction and may be taken into account in determining
whether any of the three tests under Section 302 of the Code has been satisfied.
Each stockholder should be aware that because proration may occur in the Offer,
even if all the Shares actually and constructively owned by a stockholder are
tendered pursuant to the Offer, fewer than all of these Shares may be purchased
by the Company. Thus, proration may affect whether the surrender by a
stockholder pursuant to the Offer will meet any of the three tests under Section
302 of the Code. See Section 6 for information regarding each stockholder's
option to make a conditional tender of a minimum number of Shares. A stockholder
should consult his or her own tax advisor regarding whether to make a
conditional tender of a minimum number of Shares, and the appropriate
calculation thereof.
Section 302 Tests. The receipt of cash by a stockholder will be
"substantially disproportionate" if the percentage of the outstanding Shares in
the Company actually and constructively owned by the stockholder immediately
following the surrender of Shares pursuant to the Offer is less than 80% of the
percentage of the outstanding Shares actually and constructively owned by the
stockholder immediately before the sale of Shares pursuant to the Offer.
Stockholders should consult their tax advisors with respect to the application
of the "substantially disproportionate" test to their particular situation.
The receipt of cash by a stockholder will be a "complete redemption" if
either (i) the stockholder owns no Shares in the Company either actually or
constructively immediately after the Shares are surrendered pursuant to the
Offer, or (ii) the stockholder actually owns no Shares in the Company
immediately after the surrender of Shares pursuant to the Offer and, with
respect to Shares constructively owned by the stockholder immediately after the
Offer, the stockholder is eligible to waive (and effectively waives)
constructive ownership of all such Shares under procedures described in Section
302(c) of the Code.
Even if the receipt of cash by a stockholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, a
stockholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test if the stockholder's surrender of Shares pursuant to the Offer
results in a "meaningful reduction" in the stockholder's interest in the
Company. Whether the receipt of cash by a stockholder will be "not essentially
equivalent to a dividend" will depend upon the individual stockholder's facts
and circumstances. The IRS has indicated in published rulings that even a small
reduction in the proportionate interest of a small minority stockholder in a
publicly held corporation who exercises no control over corporate affairs may
constitute such a "meaningful reduction." Stockholders expecting to rely upon
the "not essentially equivalent to a dividend" test should consult their own tax
advisors as to its application in their particular situation.
Corporate Stockholder Dividend Treatment. If a sale of Shares by a
corporate stockholder is treated as a dividend, the corporate stockholder may be
entitled to claim a deduction equal to 70% of the dividend under Section 243 of
the Code, subject to applicable limitations. Corporate stockholders should,
however, consider the effect of Section 246(c) of the Code, which disallows the
70% dividends-received deduction with respect to stock that is held for 45 days
or less. For this purpose, the length of time a taxpayer is deemed to have held
stock may be reduced by periods during which the taxpayer's risk of loss with
respect to the stock is diminished by reason of the existence of certain options
or other transactions. Moreover, under Section 246A of the Code, if a corporate
stockholder has incurred indebtedness directly attributable to an investment in
Shares, the 70% dividends-received deduction may be reduced.
In addition, amounts received by a corporate stockholder pursuant to
the Offer that are treated as a dividend may constitute an "extraordinary
dividend" under Section 1059 of the Code. Generally, an "extraordinary dividend"
is a dividend that (i) equals or exceeds 10% of the stockholder's basis in the
Shares (treating all dividends having ex-dividend dates within an 85-day period
as a single dividend) or (ii) exceeds 20% of the stockholder's adjusted basis in
the Shares (treating all dividends having ex-dividend dates within a 365-day
period as a single dividend). Accordingly, if applicable, a corporate
stockholder would be required under Section 1059(a) of the Code to reduce its
basis (but not below zero) in its Shares by the non-taxed portion of the
dividend (i.e., the portion of the dividend for which a deduction is allowed),
and if such portion exceeds the stockholder's tax basis for its Shares, to treat
the excess as gain from the sale of such Shares in the year in which a sale or
disposition of the Shares occurs (which, in certain circumstances, may be the
year in which Shares are sold pursuant to the Offer).
21
<PAGE>
Additional Tax Considerations. The distinction between long-term
capital gains and ordinary income is relevant because, in general, individuals
currently are subject to taxation at a reduced rate on their "net capital gain"
(i.e., the excess of net long-term capital gains over net short-term capital
losses) for the year.
Stockholders are urged to consult their own tax advisors regarding any
possible impact on their obligation to make estimated tax payments as a result
of the recognition of any capital gain (or the receipt of any ordinary income)
caused by the surrender of any Shares to the Company pursuant to the Offer.
Foreign Stockholders. The Company will withhold United States federal
income tax at a rate of 30% from gross proceeds paid pursuant to the Offer to a
foreign stockholder or his agent, unless the Company determines that a reduced
rate of withholding is applicable pursuant to a tax treaty or that an exemption
from withholding is applicable because such gross proceeds are effectively
connected with the conduct of a trade or business by the foreign stockholder
within the United States. 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 (iii) an estate or trust the income of which is
subject to United States federal income taxation regardless of its source.
Without definite knowledge to the contrary, the Company will determine whether a
stockholder is a foreign stockholder by reference to the stockholder's address.
A foreign stockholder may be eligible to file for a refund of such tax or a
portion of such tax if such stockholder (i) meets the "complete redemption,"
"substantially disproportionate" or "not essentially equivalent to a dividend"
tests described above, (ii) is entitled to a reduced rate of withholding
pursuant to a treaty and the Company withheld at a higher rate, or (iii) is
otherwise able to establish that no tax or a reduced amount of tax was due. In
order to claim an exemption from withholding on the ground that gross proceeds
paid pursuant to the Offer are effectively connected with the conduct of a trade
or business by a foreign stockholder within the United States or that the
foreign stockholder is entitled to the benefits of a tax treaty, the foreign
stockholder must deliver to the Depositary (or other person who is otherwise
required to withhold United States tax) a properly executed statement claiming
such exemption or benefits. Such statements may be obtained from the Depositary.
Foreign stockholders are urged to consult their own tax advisors regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and the refund
procedures.
Backup Withholding. See Section 3 with respect to the application of
the United States federal income tax backup withholding.
The tax discussion set forth above is included for general information
only and may not apply to Shares acquired in connection with the exercise of
stock options or pursuant to other compensation arrangements with the Company.
The tax consequences of a sale pursuant to the Offer may vary depending upon,
among other things, the particular circumstances of the tendering stockholder.
No information is provided herein to the state, local or foreign tax
consequences of the transaction contemplated by the Offer. Stockholders are
urged to consult their own tax advisors to determine the particular federal,
state, local and foreign tax consequences to them of tendering Shares pursuant
to the Offer and the effect of the stock ownership attribution rules described
above.
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion and at
any time or from time to time, 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. There can be no assurance,
however, that the Company will exercise its right to extend the Offer. During
any such extension, all Shares previously tendered will remain subject to the
Offer, except to the extent that such Shares may be withdrawn as set forth in
Section 4. The Company also expressly reserves the right, in its sole
discretion, (i) to terminate the Offer and not accept for payment any Shares not
previously accepted for payment or, subject to Rule 13e-4(f)(5) under the
Exchange Act, which requires the Company either to pay the consideration offered
or to return the Shares tendered promptly after the termination or withdrawal of
the Offer, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 7 hereof, by giving oral or written notice of
such termination to the Depositary and making a public announcement thereof and
(ii) at any time, or from time to time, to amend the Offer in any respect.
Amendments to the Offer may be effected by public announcement. Without limiting
the manner in which the Company may choose to make public announcement of any
extension, termination or amendment, the Company shall have no obligation
(except as otherwise required by applicable
22
<PAGE>
law) to publish, advertise or otherwise communicate any such public
announcement, other than by making a release to the Dow Jones News Service,
except in the case of an announcement of an extension of the Offer, in which
case the Company shall have no obligation to publish, advertise or otherwise
communicate such announcement other than by issuing a notice of such extension
by press release or other public announcement, which notice shall be issued no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. Material changes to information previously
provided to holders of the Shares in this Offer or in documents furnished
subsequent thereto will be disseminated to holders of Shares in compliance with
Rule 13e-4(e)(2) promulgated by the Commission under the Exchange Act.
If the Company materially changes the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) under the Exchange Act. Those rules require that the
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer (other than a
change in price, change in dealer's soliciting fee or change in percentage of
securities sought) will depend on the facts and circumstances, including the
relative materiality of such terms or information. In a published release, the
Commission has stated that in its view, an offer should remain open for a
minimum of five business days from the date that notice of such a material
change is first published, sent or given. The Offer will continue or be extended
for at least ten business days from the time the Company publishes, sends or
gives to holders of Shares a notice that it will (a) increase or decrease the
price it will pay for Shares or the amount of the Information Agents/Dealer
Manager's soliciting fee or (b) increase (except for an increase not exceeding
2% of the outstanding Shares) or decrease the number of Shares it seeks.
17. FEES AND EXPENSES
Keefe, Bruyette & Woods, Inc. will act as the Dealer Manager and
Information Agent for the Company in connection with the Offer. Keefe, Bruyette
& Woods, Inc., as Information Agent, may contact stockholders by mail,
telephone, facsimile, telex, telegraph, other electronic means and personal
interviews, and may request brokers, dealers and other nominee stockholders to
forward materials relating to the Offer to beneficial owners. The Company has
agreed to pay Keefe, Bruyette & Woods, Inc., upon acceptance for and payment of
Shares pursuant to the Offer, a total of $.08 per Share purchased by the Company
pursuant to the Offer. Keefe, Bruyette & Woods, Inc. will also be reimbursed for
certain out-of-pocket expenses. Charles Webb & Company will also be indemnified
against certain liabilities, including liabilities under the federal securities
laws, in connection with the Offer.
Keefe, Bruyette & Woods, Inc. has rendered, is currently rendering and
may continue to render various investment banking and other advisory services to
the Company. It has received, and may continue to receive, customary
compensation from the Company for such services.
The Company has retained Davidson Trust Co. as Depositary in connection
with the Offer. The Depositary will receive reasonable and customary
compensation for its services and will also be reimbursed for certain
out-of-pocket expenses. The Company has agreed to indemnify the Depositary
against certain liabilities, including certain liabilities under the federal
securities laws, in connection with the Offer. Neither the Information Agent nor
the Depositary has been retained to make solicitations or recommendations in
connection with the Offer.
The Company will not pay any fees or commissions to any broker, dealer
or other person for soliciting tenders of Shares pursuant to the Offer (other
than the fee of the Dealer Manager). The Company will, upon request, reimburse
brokers, dealers, commercial banks and trust companies for reasonable and
customary handling and mailing expenses incurred by them in forwarding materials
relating to the Offer to their customers.
18. MISCELLANEOUS
The Company is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Certain 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
23
<PAGE>
such persons in transactions with the Company is filed with the Commission. The
Company has also filed an Issuer Tender Offer Statement on Schedule 13E-4 with
the Commission, which includes certain additional information relating to the
Offer. Such reports, as well as such other material, may be inspected and copies
may be obtained at the Commission's public reference facilities at 450 Fifth
Street, N.W., Washington, D.C., and should also be available for inspection and
copying at the regional offices of the Commission located at 7 World Trade
Center, 13th Floor, New York, New York 10048, and Suite 1400, Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material may be obtained by mail, upon payment of the Commission's customary
fees, from the Commission's Public Reference Section at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Company's Schedule 13E-4 may not be available at the
Commission's regional offices.
The Offer is being made to all holders of Shares. The Company is not
aware of any state where the making of the Offer is prohibited by administrative
or judicial action pursuant to a valid state statute. If the Company becomes
aware of any valid state statute prohibiting the making of the Offer, the
Company will make a good faith effort to comply with such statute. If, after
such good faith effort, the Company cannot comply with such statute, the Offer
will not be made to, nor will tenders be accepted from or on behalf of, holders
of Shares in such state. In those jurisdictions whose securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of the Company by the Dealer
Manager/Information Agent or one or more registered brokers or dealers licensed
under the laws of such jurisdictions.
WESTERFED FINANCIAL CORPORATION
November 20, 1998
24
<PAGE>
SCHEDULE A
CERTAIN TRANSACTIONS INVOLVING SHARES
BY THE COMPANY OR ITS EXECUTIVE OFFICERS OR DIRECTORS
During the 40 business days prior to November 20, 1998, no transactions
were effected in the Shares by the Company, its executive officers or directors,
except for the exercise of options by Senior Vice President Dale W. Brevik. On
October 8, 1998, Mr. Brevik exercised his option, at an exercise price of $10.00
per Share, to purchase 5,500 Shares by paying an aggregate purchase price in
cash of $55,000. The fair market value of the Shares on October 8, 1998 was
$17.19 per share.
<PAGE>
The Dealer Manager and Information Agent for the Offer is:
KEEFE, BRUYETTE & WOODS, INC.
211 Bradenton Drive
Dublin, Ohio 43017-5034
Telephone: (877) 298-6520 (toll free)
Any questions concerning tender procedures or requests for additional
copies of this Offer to Purchase, the Letter of Transmittal or other tender
offer materials may be directed to the Dealer Manager/Information Agent.
The Depositary for the Offer is:
DAVIDSON TRUST CO.
By Mail, By Overnight Delivery or By Hand: Facsimile Transmission:
(For Eligible Institutions Only)
Davidson Trust Co. (406) 791-7464
9 Third Street North
Suite 200 Confirm by Telephone:
Great Falls, Montana 59401 (406) 791-7320
Any questions concerning tender procedures may be directed to the
Depositary at (406)791-7320.
November 20, 1998
<PAGE>
Exhibit (a)(2)
WESTERFED FINANCIAL CORPORATION
LETTER OF TRANSMITTAL
To Accompany Shares of Common Stock
of
WesterFed Financial Corporation
Tendered Pursuant to the Offer to Purchase
Dated November 20, 1998
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON MONDAY, DECEMBER 21, 1998, UNLESS THE OFFER IS EXTENDED.
To: DAVIDSON TRUST CO., Depositary
By Mail, By Hand or By Overnight Courier: By Facsimile:
Davidson Trust Co. (406) 791-7464
9 Third Street North (For Eligible Institutions Only)
Suite 200
Great Falls, Montana 59401 Confirm by Telephone:
(406) 791-7320
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
(See Instructions 3 and 4. For tender of Shares in the
WesterFed Financial Corporation
Dividend Reinvestment and Stock Purchase Plan, see Instruction 10.)
- ------------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Shares Tendered
(Please Fill in Exactly as Name(s) Appear(s) on Certificate(s) (Attach Additional List if Necessary)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Number
of Shares Number of
Certificate Represented by Shares
Number(s)* Certificate(s)* Tendered**
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3 of the Offer to Purchase (as defined
below), or if a tender of Shares held pursuant to the WesterFed Financial
Corporation Dividend Reinvestment Stock Purchase Plan is to be made.
Delivery of documents to the Company or to a Book-Entry Transfer
Facility does not constitute a valid delivery.
(BOX BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution ___________________________________
Check Applicable Box: [ ] DTC [ ] PDTC
Account No. _____________________________________________________
Transaction Code No. ____________________________________________
- --------------------------------------------------------------------------------
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to WesterFed Financial Corporation, a
Delaware corporation (the "Company"), the above-described shares of its Common
Stock, par value $0.01 per share (the "Shares"), at a price per Share
hereinafter set forth, pursuant to the Company's offer to purchase up to
1,100,000 Shares, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 20, 1998 (the "Offer to Purchase"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer").
Subject to, and effective upon, acceptance for payment of and payment
for the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of 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 the Shares that are being 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
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to (a) deliver certificates for such Shares, or
transfer ownership of such Shares on the account books maintained by any of the
Book-Entry Transfer Facilities, together, in any 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 books of the
Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and that, when and to the extent the same are accepted for
payment by the Company, the Company will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges,
encumbrances, conditional sales agreements or other obligations relating to the
sale or transfer thereof, and the same will not be subject to any adverse
claims. The undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Shares tendered hereby.
The undersigned hereby represents and warrants that the undersigned has
read and agrees to all of the terms of the Offer. All authority herein conferred
or agreed to be conferred shall not be affected by, and shall survive the death
or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one
of the procedures described in Section 2 or 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 the Shares
being tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (ii) the tender of such Shares complies
with Rule 14e-4. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Offer.
The undersigned understands that the Company will determine a single per
Share price (not greater than $20.00 nor less than $18.00 per Share) net to the
seller in cash, without interest thereon, (the "Purchase Price") that it will
pay for Shares validly tendered and not withdrawn pursuant to the Offer 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 that will enable it to purchase 1,100,000 Shares (or
such lesser number of Shares as are validly tendered and not withdrawn at prices
not greater than $20.00 nor less than $18.00 per Share) pursuant to the Offer.
The undersigned understands that all Shares properly 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, without interest thereon, upon the terms and
subject to the conditions of the Offer, including its proration and conditional
tender provisions, and that the Company will return all other Shares, including
Shares tendered and not withdrawn at prices greater than the Purchase Price,
Shares not purchased because of proration and Shares that were conditionally
tendered and not accepted. The undersigned understands that tenders of Shares
pursuant to any one of the procedures described in Section 2 or 3 of the Offer
to Purchase and in the instructions hereto will constitute an agreement between
the undersigned and the Company upon the terms and subject to the conditions of
the Offer.
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.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at the Book-Entry Transfer Facility designated above). Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price of any Shares purchased and/or any certificates for
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Payment Instructions" and "Special
Delivery Instructions" are completed, please issue the check for the purchase
price of any Shares purchased and/or return any Shares not tendered or not
purchased in the name(s) of, and mail said check and/or any certificates to, the
person(s) so indicated. The undersigned recognizes that the Company has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
Shares from the name of the registered holder(s) thereof if the Company does not
accept for payment any of the Shares so tendered.
<PAGE>
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5)
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX
IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW),
THERE IS NO VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
[ ] $18.000 [ ] $18.375 [ ] $18.750 [ ] $19.125 [ ] $19.500 [ ] $19.875
[ ] $18.125 [ ] $18.500 [ ] $18.875 [ ] $19.250 [ ] $19.625 [ ] $20.000
[ ] $18.250 [ ] $18.625 [ ] $19.000 [ ] $19.375 [ ] $19.750
- --------------------------------------------------------------------------------
ODD LOTS
(SEE INSTRUCTION 9)
- --------------------------------------------------------------------------------
This section is 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 November
13, 1998, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[ ] was the beneficial owner as of the close of business on November 13, 1998,
and continues 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 that
(i) is tendering, for the beneficial owners thereof, Shares with respect to
which it is the record owner, and (ii) believes, based upon representations
made to it by each such beneficial owner, that such beneficial owner owned
beneficially as of the close of business on November 13, 1998, and
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares, and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price determined
by the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per Share in the box entitled "Price (In
Dollars) Per Share At Which Shares Are Being Tendered" in this Letter of
Transmittal). [ ]
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 6, 7 AND 8)
To be completed ONLY if the check for the purchase price of Shares purchased
and/or certificates for Shares not tendered or not purchased are to be issued in
the name of someone other than the undersigned.
Issue [ ] check
and/or [ ] certificate(s) to:
Name ______________________________________________
____________________________________________________
____________________________________________________
(Please Print)
Address ___________________________________________
____________________________________________________
(Include Zip Code)
____________________________________________________
(Taxpayer Identification or Social Security No.)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 6, 7 AND 8)
To be completed ONLY if the check for the purchase price of Shares purchased
and/or certificates for Shares not tendered or not purchased are to be mailed to
someone other than the undersigned or to the undersigned at an address other
than that shown below the undersigned's signature(s).
Mail [ ] check
and/or [ ] certificate(s) to:
Name_________________________________________________
_____________________________________________________
_____________________________________________________
(Please Print)
Address______________________________________________
_____________________________________________________
(Include Zip Code)
- --------------------------------------------------------------------------------
CONDITIONAL TENDER
A tendering stockholder may condition his or her tender of Shares upon the
purchase by the Company of a specified minimum number of the Shares tendered
hereby, all as described in the Offer to Purchase, particularly in Section 6
thereof. Unless at least such minimum number of Shares is purchased by the
Company pursuant to the terms of the Offer, none of the Shares tendered hereby
will be purchased. It is the tendering stockholder's responsibility to calculate
such minimum number of Shares, and each stockholder is urged to consult his or
her own tax advisor. Unless this box has been completed and a minimum specified,
the tender will be deemed unconditional.
Minimum number of Shares that must be purchased, if any are purchased:
____________ Shares
- --------------------------------------------------------------------------------
THE FOLLOWING IS TO BE COMPLETED ONLY BY
PARTICIPANTS IN THE WESTERFED FINANCIAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
(SEE INSTRUCTION 10)
I hereby direct Davidson Trust Co., as Agent of the WesterFed Financial
Corporation Dividend Reinvestment and Stock Purchase Plan (the "DRIP") to tender
to WesterFed Financial Corporation, upon the terms and subject to the conditions
set forth in this Letter of Transmittal and in the related Offer to Purchase,
the indicated number of Shares in my DRIP Account. I AM A PARTICIPANT IN THE
DRIP AND I WISH TO TENDER THE NUMBER OF SHARES IN MY DRIP ACCOUNT SET FORTH
BELOW (CHECK ONLY ONE BOX):
| | Check here to tender all Shares in my DRIP account, including Shares
purchased with the dividend paid on November 24, 1998 (See Instruction 10);
| | Check here to tender the following number of Shares in my DRIP account:
____________________ Shares.
The Shares in my DRIP account are to be tendered at the price per Share
indicated in the box captioned, "Price (In Dollars) Per Share At Which Shares
Are Being Tendered."
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL)
- --------------------------------------------------------------------------------
________________________________________________________________________________
(Signature(s) of Owner(s)
- --------------------------------------------------------------------------------
Dated ____________________________, 1998
Name(s) ________________________________
- --------------------------------------------------------------------------------
Capacity (full title) __________________________________________________________
Address ________________________________________________________________________
(Include Zip Code)
Area Code and Telephone No. ____________________________________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm ___________________________________________________________________
Authorized Signature ___________________________________________________________
Dated _________________, 1998
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is a
member of a registered national securities exchange or the National Association
of Securities Dealers, Inc., or by a commercial bank, a trust company, a savings
bank, a savings and loan association or a credit union which has membership in
an approved Signature Guarantee Medallion Program (an "Eligible Institution").
Signatures on this Letter of Transmittal need not be guaranteed (a) if this
Letter of Transmittal is signed by the registered holder(s) of the Shares (which
term, for purposes of this document, shall include any participant in one of the
Book-Entry Transfer Facilities whose name appears on a security position listing
as the owner of Shares) tendered herewith and such holder(s) have not completed
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on this Letter of Transmittal or (b) if such Shares are
tendered for the account of an Eligible Institution. See Instruction 6.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal or, in the case of a book-entry transfer, an Agent's Message (as
defined below), is to be used either if certificates are to be forwarded
herewith or if delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth in Section 3 of the Offer to Purchase. Certificates
for all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at one of the Book-Entry Transfer Facilities of
all Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or manually signed copy thereof) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal on or prior to the Expiration Date (as defined in the Offer to
Purchase). The term "Agent's Message" means a message transmitted by a
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares, that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Company may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING
STOCKHOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Except as specifically permitted by Section 6 of the Offer to Purchase, no
alternative or contingent tenders will be accepted. See Section 1 of the Offer
to Purchase. By executing this Letter of Transmittal (or facsimile thereof), the
tendering stockholder waives any right to receive any notice of the acceptance
for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.
4. Partial Tenders (Not Applicable to Stockholders Who Tender By
Book-Entry Transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box entitled "Number of Shares
Tendered." In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the "Special Payment
Instructions" or "Special Delivery Instructions" boxes on this Letter of
Transmittal, as promptly as practicable following the expiration or termination
of the Offer. All Shares represented by certificates delivered to the Depositary
will be 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" in this Letter of Transmittal, except that
any stockholder who owned beneficially as of the close of business on November
13, 1998, and continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares, may check the box above in the section
entitled "Odd Lots" indicating that such stockholder is tendering all Shares at
the Purchase Price determined by the Company. Only one box may be checked. If
more than one box is checked or if no box is checked (except as provided in the
Odd Lots box and this Instruction 5), there is no valid tender of Shares. A
stockholder wishing to tender portions of his or her Share holdings at different
prices must complete a separate Letter of Transmittal for each price at which he
or she wishes to tender each such portion of his or her Shares. The same Shares
cannot be tendered (unless previously 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. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
hereby, the signature(s) must correspond with the name(s) as written on the face
of the certificates without alteration, enlargement or any change whatsoever.
If any of the Shares hereby are held of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s). Signatures on any such certificates or
stock powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing the
Shares tendered hereby 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 certificates for such Shares. Signature(s) on any
such certificates or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
7. Stock Transfer Taxes. The Company will pay or cause to be paid any
stock transfer taxes with respect to the sale and transfer of any Shares to it
or its order pursuant to the Offer. If, however, payment of the purchase price
is to be made to, or Shares not tendered or not purchased are to be registered
in the name of, any person other than the registered holder(s), or if tendered
Shares are registered in the name of any person other than the person(s) signing
this Letter of Transmittal, the amount of any stock transfer taxes (whether
imposed on the registered holder(s), such other person or otherwise) payable on
account of the transfer to such person will be deducted from the purchase price
unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted. See Section 5 of the Offer to Purchase. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
8. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal or if the check and/or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such stockholder at the Book-Entry Transfer Facility from which such transfer
was made.
9. Odd Lots. As described in the Offer to Purchase, if fewer than all
Shares validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date are to be purchased, the Shares purchased first
will consist of all Shares tendered by any stockholder who owned beneficially as
of the close of business on November 13, 1998, and continues to own beneficially
as of the Expiration Date, an aggregate of fewer than 100 Shares and who validly
and unconditionally tendered all such Shares at or below the Purchase Price
(including by not designating a Purchase Price as described above). Partial or
conditional tenders of Shares will not qualify for this preference, This
preference will not be available unless the box captioned "Odd Lots" in this
Letter of transmittal is completed.
<PAGE>
10. Dividend Reinvestment and Stock Purchase Plan. If the tendering
stockholder is a participant in the WesterFed Financial Corporation Dividend
Reinvestment and Stock Purchase Plan (the "DRIP") and wishes to have Davidson
Trust Co., as agent thereof (the "Agent"), tender all or part of the Shares in
such participant's account, the participant must so indicate by completing the
box captioned "The Following is to be Completed Only by Participants in the
WesterFed Financial Corporation Dividend Reinvestment and Stock Purchase Plan",
in addition to completing the other relevant sections of this Letter of
Transmittal and complying with the provisions of the Offer. Participants can
cause the Agent to tender all of the Shares in such DRIP account, including
Shares purchased with the dividend paid on November 24, 1998, or tender such
number of shares in such DRIP account as specified. Participants may determine
the approximate number of Shares allocated to their DRIP accounts after 4:00
p.m. New York City time on November 24, 1998, by computing the average of the
high and low trade prices of Shares on November 24, 1998 (which may be obtained
from the Information Agent or from brokers), taking into account that the
dividend per Share paid on November 24, 1998 (which was used to purchase Shares
under the DRIP for participants in that plan) was $0.135. Participants in the
DRIP may withdraw such Shares before 5:00 p.m. New York City time on the
Expiration Date, by following the procedure for withdrawal of Shares. Failure to
check any block in the box captioned "The Following is to be Completed Only by
Participants in the WesterFed Financial Corporation Dividend Reinvestment and
Stock Purchase Plan" will result in none of the participant's Shares in the DRIP
being tendered.
11. Substitute Form W-9 and Form W-8. The tendering stockholder is
required to provide the Depositary with either a correct Taxpayer Identification
Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax
Information" below, or a properly completed Form W-8. Failure to provide the
information on either Substitute Form W-9 or Form W-8 may subject the tendering
stockholder to 31% federal income tax backup withholding on the payment of the
purchase price. The box in Part 2 of Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a number or
intends to apply for a number in the near future. If the box in Part 2 is
checked and the Depositary is not provided with a TIN by the time of payment,
the Depositary will withhold 31% on all payments of the purchase price
thereafter until a TIN is provided to the Depositary.
12. Requests for Assistance or Additional Copies. Any questions or
requests for assistance may be directed to the Information Agent/Dealer Manager
at the telephone number and address listed below. Requests for additional copies
of the Offer to Purchase, this Letter of Transmittal or other tender offer
materials may be directed to the Information Agent/Dealer Manager and such
copies will be furnished promptly at the Company's expense. Stockholders may
also contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
13. Irregularities. All questions as to the Purchase Price, the form of
documents, and the validity, 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. The Company
reserves the absolute right to reject any or all tenders of Shares that it
determines are not in proper form or the acceptance for payment of or payment
for Shares that may, in the opinion of the Company's counsel, be unlawful.
Except as otherwise provided in the Offer to Purchase, the Company also reserves
the absolute right to waive any of the conditions to the Offer or any defect or
irregularity in any tender of Shares and the Company's interpretation of the
terms and conditions of the Offer (including these instructions) shall be final
and binding. 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 Information Agent/Dealer Manager, the Depositary, or any other
person shall be under any duty to give notice of any defect or irregularity in
tenders, nor shall any of them incur any liability for failure to give any such
notice. Tenders will not be deemed to have been made until all defects and
irregularities have been cured or waived.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED COPY THEREOF)
TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is his or her social security number. For businesses and
other entities, the number is the employer identification number. If the
Depositary is not provided with the correct TIN or properly completed Form W-8,
the stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such stockholder 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 and entities) are not subject to these backup
withholding and reporting requirements. In order for a noncorporate foreign
stockholder to qualify as an exempt recipient, that stockholder must complete
and sign a Form W-8, Certificate of Foreign Status, attesting to that
stockholder's exempt status. The Form W-8 can be obtained from the Depositary.
Exempt stockholders, other than noncorporate foreign stockholders, should
furnish their TIN, write "Exempt" on the face of the Substitute Form W-9 below
and sign, date and return the Substitute Form W-9 to the Depositary. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payments made to the stockholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
<PAGE>
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of his or her correct TIN by completing the
Substitute Form W-9 included in this Letter of Transmittal certifying that the
TIN provided on Substitute Form W-9 is correct and that (1) the stockholder has
not been notified by the Internal Revenue Service that he or she is subject to
federal income tax backup withholding as a result of failure to report all
interest or dividends or (2) the Internal Revenue Service has notified the
stockholder that he or she is no longer subject to federal income tax backup
withholding. Foreign stockholders must submit a properly completed Form W-8 in
order to avoid the applicable backup withholding; provided, however, that backup
withholding will not apply to foreign stockholders subject to 30% (or lower
treaty rate) withholding on gross payments received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the registered owner 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.
<TABLE>
<CAPTION>
PAYER'S NAME: DAVIDSON TRUST CO.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE TIN _______________________________
BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security Number
SUBSTITUTE DATING BELOW. or
Employer Identification Number
FORM W-9 _______________________________________ PART 2: For Payees exempt from
NAME (Please Print) backup withholding, see the
Important Tax Information above
DEPARTMENT OF THE _______________________________________ and Guidelines for Certification of
TREASURY INTERNAL Taxypayer Identification Number of
REVENUE SERVICE _______________________________________ Substitute Form W-9 enclosed
PAYOR'S REQUEST ADDRESS herewith and complete as
FOR TAXPAYER instructed herein.
IDENTIFICATION
NUMBER (TIN) AND _______________________________________
CERTIFICATION CITY STATE ZIP CODE Awaiting TIN [ ]
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PART 3 -- CERTIFICATION-UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT (1) the
number shown on this form is my correct taxpayer identification number (or a TIN
has not been issued to me but I have mailed or delivered an application to
receive a TIN or intend to do so in the near future), (2) I am not subject to
backup withholding either because I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a result
of a failure to report all interest or dividends or the IRS has notified me that
I am no longer subject to backup withholding, and (3) all other information
provided on this form is true, correct and complete.
SIGNATURE ______________________________ DATE ________________________
You must cross out item (2) above if you have been notified by the IRS that you
are currently subject to backup withholding because of underreporting interest
or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN 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.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 2 OF THE 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 (1) 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 (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments of the Purchase Price made to me thereafter will be withheld
until I provide a number.
Signature_________________________ Date _______________________
The Information Agent/Dealer Manager:
KEEFE, BRUYETTE & WOODS, INC.
211 Bradenton Drive
Dublin, Ohio 43017-5034
TOLL FREE:
(877) 298-6520
<PAGE>
Exhibit (a)(3)
Keefe, Bruyette & Woods, Inc.
211 Bradenton Drive
Dublin, Ohio 43017-5034
Telephone: (877) 298-6520 (toll free)
WESTERFED FINANCIAL CORPORATION
Offer To Purchase For Cash Up To
1,100,000 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $20.00
Nor Less Than $18.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 21, 1998,
UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
WesterFed Financial Corporation, a Delaware corporation (the
"Company"), has appointed us to act as Dealer Manager in connection with its
offer to purchase for cash up to 1,100,000 shares of its Common Stock, $0.01 par
value per share (the "Shares"), at prices not in excess of $20.00 nor less than
$18.00 per Share, specified by stockholders tendering their Shares, upon the
terms and subject to the conditions set forth in the Company's Offer to
Purchase, dated November 20, 1998, 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
$20.00 nor less than $18.00 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 stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 1,100,000 Shares (or such lesser number of Shares as are
properly tendered at prices not in excess of $20.00 nor less than $18.00 per
Share). All Shares validly tendered at prices at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) will be purchased at the Purchase Price, subject to the terms
and conditions of the Offer, including the proration and conditional tender
provisions. See Sections 1 and 16 of the Offer to Purchase.
Upon the terms and subject to the conditions of the Offer, if, at the
expiration of the Offer, more than 1,100,000 Shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i) from
stockholders who owned beneficially as of the close of business on November 13,
1998 and continue to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares who properly tender all their Shares at or below the
Purchase
<PAGE>
Price, and (ii) then, on a pro rata basis, from all other stockholders who
properly tender their Shares at prices at or below the Purchase Price (and do
not withdraw them prior to the expiration of the Offer), other than stockholders
who tender conditionally, and for whom the condition is not satisfied. See
Sections 1, 2 and 6 of the Offer to Purchase. All Shares not purchased pursuant
to the Offer, including Shares tendered at prices greater than the Purchase
Price and Shares not purchased because of proration or because they were
conditionally tendered and not accepted for purchases will be returned to the
tendering stockholders at the Company's expense as promptly as practicable
following the Expiration Date.
The Depositary for the Offer also acts as the agent for participants in
the Company's Dividend Reinvestment and Stock Purchase Plan (the "DRIP") and
will make available to the participants whose accounts are credited with Shares
under the DRIP all documents furnished to stockholders generally in connection
with the Offer. Certain participants in the DRIP will also receive additional
copies of such documents directly if they also hold Shares in nominee accounts
or in different names. Participants in the DRIP may use the Letter of
Transmittal to tender such participants' Shares in the Offer by completing the
box captioned "The Following is to be Completed Only by Participants in the
WesterFed Financial Corporation Dividend Reinvestment and Stock Purchase Plan"
on the Letter of Transmittal. Each participant may direct that all, some or none
of the Shares credited to the participant's account are to be tendered.
Stockholders who intend to tender Shares held in the DRIP in addition to Shares
which are not held in the DRIP may use one Letter of Transmittal to tender all
of such Shares if such participant wishes to tender all such Shares at the same
price (even if such stockholders have received more than one copy of the Offer).
Separate Letters of Transmittal must be used if a participant in the DRIP
intends to tender Shares at different prices. See Instruction 10 to the Letter
of Transmittal. Participants in the DRIP who do not wish to tender their shares
held in the DRIP do not need to take any action. Participants may complete the
box captioned "The Following is to be Completed Only by Participants in the
WesterFed Financial Corporation Dividend Reinvestment and Stock Purchase Plan"
on only one Letter of Transmittal submitted by such participant. If a
participant submits more than one Letter of Transmittal and completes such box
on more than one Letter of Transmittal, the participant will be deemed to have
elected to tender all Shares allocated to the stockholder's account under the
DRIP at the lowest of the prices specified in such Letters of Transmittal.
Participants in the DRIP who wish to tender the Shares that will be allocated to
their accounts under the DRIP on November 24, 1998 in connection with the
payment of the Company's quarterly dividend on November 24, 1998 should so
indicate on the Letter of Transmittal. Participants in the DRIP may confirm the
number of Shares allocated to them on November 24, 1998 under the DRIP after
4:00 P.M. New York City time on that day by reference to the average of the high
and low trade price of the Company's Shares on November 24, 1998 (which may be
obtained from the Information Agent or from brokers), taking into account that
the dividend per Share paid on November 24, 1998(which was used to purchase
Shares under the DRIP for participants in the DRIP) was $0.135. Participants in
the DRIP may withdraw such Shares by following the procedure for withdrawal of
Shares, before 5:00 P.M. New York City time on December 21, 1998. See Section 4
of the Offer to Purchase. Participants in the DRIP are urged to read the Letter
of Transmittal and related materials carefully.
2
<PAGE>
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED PURSUANT TO THE OFFER. SEE SECTION 7 OF THE OFFER TO PURCHASE.
No fees or commissions will be payable to brokers, dealers or any
person for soliciting tenders of Shares pursuant to the Offer other than fees
paid to the Dealer Managers as described in the Offer to Purchase. The Company
will, upon request, reimburse brokers and banks for reasonable and customary
handling and mailing expenses incurred by them in forwarding materials relating
to the Offer to their customers. The Company will pay all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 7 of the Letter of Transmittal.
No broker, dealer, bank, trust company or fiduciary shall be deemed to
be the agent of the Company, Davidson Trust Co. as "Depositary," or Keefe,
Bruyette & Woods, Inc. as the "Dealer Manager" and "Information Agent," for
purposes of the Offer.
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 November 20, 1998;
2. Letter to Clients which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name
of your nominee, with space provided for obtaining such clients'
instructions with regard to the Offer;
3. Letter, dated November 20, 1998, from Lyle R. Grimes, 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 Form W-9 and
guidelines); and
5. A return envelope addressed to Davidson Trust Corp., as
Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON DECEMBER 21, 1998, UNLESS THE OFFER IS EXTENDED.
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.
Any inquiries you may have with respect to the Offer should be
addressed to the Depositary or the Information Agent/Dealer Manager at their
respective addresses and telephone numbers set forth on the back cover page of
the Offer to Purchase.
3
<PAGE>
Additional copies of the enclosed material may be obtained from the
Information Agent/Dealer Manager, telephone: (877) 298-6520.
Very truly yours,
Keefe, Bruyette & Woods, 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/DEALER MANAGER OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED THEREIN.
4
<PAGE>
Exhibit (a)(4)
WESTERFED FINANCIAL CORPORATION
Offer To Purchase For Cash Up To
1,100,000 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $20.00
Nor Less Than $18.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 21, 1998,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated
November 20, 1998, and the related Letter of Transmittal (which together
constitute the "Offer") in connection with the Offer by WesterFed Financial
Corporation, a Delaware corporation (the "Company"), to purchase up to 1,100,000
shares of its Common Stock, $0.01 par value per share (the "Shares"), at prices
not in excess of $20.00 nor less than $18.00 per Share, as specified by
tendering stockholders, upon the terms and subject to the conditions set forth
in the Offer.
The Company will determine the single per Share price, not in excess of
$20.00 nor less than $18.00 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 stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 1,100,000 Shares (or such lesser number of Shares as are
validly tendered at prices not in excess of $20.00 nor less than $18.00 per
Share). All Shares properly tendered at prices at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase) will be purchased at the Purchase Price, subject to the
terms and conditions of the Offer, including the proration and conditional
tender provisions. See Sections 1 and 16 of the Offer to Purchase.
Upon the terms and subject to the conditions of the Offer, if, at the
expiration of the Offer, more than 1,100,000 Shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i) from
stockholders who owned beneficially as of the close of business on November 13,
1998, and continue to own beneficially as of the Expiration Date an aggregate of
fewer than 100 Shares who properly tender all their Shares at prices at or below
the Purchase Price, and (ii) then, on a pro rata basis, from all other
stockholders who properly tender at or below the Purchase Price (and do not
withdraw them prior to the expiration of the Offer), other than stockholders who
tender conditionally and for whom the condition is not satisfied. See Sections
1, 2 and 6 of the Offer to Purchase. All Shares not purchased pursuant to the
Offer, including Shares tendered at prices greater than the Purchase Price and
Shares not purchased because of proration or because they were conditionally
tendered and not accepted for purchase will be returned to the tendering
stockholders at the Company's expense as promptly as practicable following the
Expiration Date.
<PAGE>
The Depositary for the Offer also acts as the agent for participants in
the Company's Dividend Reinvestment and Stock Purchase Plan (the "DRIP") and
will make available to the participants whose accounts are credited with Shares
under the DRIP all documents furnished to stockholders generally in connection
with the Offer. Certain participants in the DRIP will also receive additional
copies of such documents directly if they also hold Shares in nominee accounts
or in different names. Participants in the DRIP may use the Letter of
Transmittal to tender such participants' Shares in the Offer by completing the
box captioned "The Following is to be Completed Only by Participants in the
WesterFed Financial Corporation Dividend Reinvestment and Stock Purchase Plan"
on the Letter of Transmittal. Each participant may direct that all, some or none
of the Shares credited to the participant's account are to be tendered.
Stockholders who intend to tender Shares held in the DRIP in addition to Shares
which are not held in the DRIP may use one Letter of Transmittal to tender all
of such Shares if such participant wishes to tender all such Shares at the same
price (even if such stockholders have received more than one copy of the Offer).
Separate Letters of Transmittal must be used if a participant in the DRIP
intends to tender Shares at different prices. See Instruction 10 to the Letter
of Transmittal. Participants in the DRIP who do not wish to tender their shares
held in the DRIP do not need take any action. Participants may complete the box
captioned "The Following is to be Completed Only by Participants in WesterFed
Financial Corporation Dividend Reinvestment and Stock Purchase Plan" on only one
Letter of Transmittal submitted by such participant. If a participant submits
more than one Letter of Transmittal and completes such box on more than one
Letter of Transmittal, the participant will be deemed to have elected to tender
all Shares allocated to the stockholder's account under the DRIP at the lowest
of the prices specified in such Letters of Transmittal. Participants in the DRIP
who wish to tender the Shares that will be allocated to their accounts under the
DRIP on November 24, 1998, in connection with the payment of the Company's
quarterly dividend on November 24, 1998, should so indicate on the Letter of
Transmittal. Participants in the DRIP may confirm the number os Shares allocated
to them on November 24, 1998 under the DRIP after 4:00 P.M. New York City time
on that day by reference to the average of the high and low trade price of the
Company's Shares on such date (which may be obtained from the Information Agent
or from brokers), taking into account that the dividend per Share paid on
November 24, 1998 (which was used to purchase Shares under the DRIP for
participants in the DRIP) was $0.135. Participants in the DRIP may withdraw such
Shares by following the procedure for withdrawal of Shares, before 5:00 P.M. New
York City time on December 21, 1998. See Section 4 of the Offer to Purchase.
Participants in the DRIP are urged to read the Letter of Transmittal and related
materials carefully.
We are the owner of record of Shares held for your account. As such, we
are the only ones who can tender your Shares, and then only pursuant to your
instructions. We are sending you the Letter of Transmittal for your information
only; you cannot use it to tender Shares we hold for your account.
Please instruct us as to whether you wish us to tender any or all of
the Shares we hold for your account on the terms and subject to the conditions
of the Offer.
We call your attention to the following:
1. You may tender Shares at prices not in excess of $20.00 nor less
than $18.00 per Share as indicated in the attached Instruction
Form, net to you in cash.
2
<PAGE>
2. You may tender your Shares conditioned upon the Company's
purchasing all or a minimum number of your Shares.
3. The Offer is not conditioned on any minimum number of Shares
being tendered pursuant to the Offer.
4. The Offer, proration period and withdrawal rights will expire at
5:00 p.m., New York City time, on December 21, 1998, unless the
Company extends the Offer.
5. The Offer is for 1,100,000 Shares, constituting approximately
19.7% of the Shares outstanding as of November 13, 1998.
6. 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.
7. If you beneficially held, as of the close of business on November
13, 1998, an aggregate of fewer than 100 Shares and you continue
to beneficially own as of the Expiration Date an aggregate of
fewer than 100 Shares, and you instruct us to tender on your
behalf all such Shares at or below the Purchase Price before the
Expiration Date (as defined in the Offer to Purchase) and
complete 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 validly
tendered at or below the Purchase Price.
8. If you wish to tender portions of your Shares at different
prices, you must complete a separate Instruction Form for each
price at which you wish to tender each such portion of your
Shares. We must submit separate Letters of Transmittal on your
behalf for each price you will accept.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is enclosed.
If you authorize us to tender your Shares, we will tender all such Shares unless
you specify otherwise on the attached Instruction Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT
US TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE
OFFER. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON DECEMBER 21, 1998, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if more than
1,100,000 Shares have been validly tendered at prices at or below the Purchase
Price and not withdrawn on or prior to the Expiration Date (as defined in the
Offer to Purchase), the Company will purchase properly tendered Shares on the
basis set forth below:
3
<PAGE>
(a) first, all Shares validly tendered and not withdrawn on or prior to
the Expiration Date by or on behalf of any stockholder who owned beneficially,
as of the close of business on November 13, 1998 and continues to own
beneficially as of the Expiration Date, an aggregate of fewer than 100 Shares
who:
(1) validly tenders all of such Shares at a price at or below the
Purchase Price (partial and conditional tenders will not qualify for
this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal; and
(b) second, after purchase of all of the forgoing Shares, all other
Shares validly and conditionally tendered at prices at or below the Purchase
Price in accordance with Section 6 of the Offer to Purchase for which the
condition was satisfied, and all other Shares validly and unconditionally
tendered at or below the Purchase Price and not withdrawn on or prior to the
Expiration Date on a pro rata basis (with appropriate adjustments to avoid
purchases of fractional Shares) as described in Section 1 of the Offer to
Purchase; and
(c) third, if necessary, Shares validly and conditionally tendered at
or below the Purchase Price and not withdrawn on or prior to the Expiration
Date, selected by lot in accordance with Section 6 of the Offer to Purchase.
You may condition your tender on the Company purchasing a minimum
number of your tendered Shares. In such case, if as a result of the proration
provisions in the Offer to Purchase the Company would purchase less than such
minimum number of your Shares, then the Company will not purchase any of your
Shares, except as provided in the next sentence. If so many conditional tenders
would be deemed withdrawn that the total number of such Shares to be purchased
falls below 1,100,000 Shares, then to the extent feasible, the Company will
select enough of such conditional tenders that would otherwise have been so
withdrawn to permit the Company to purchase 1,100,000 Shares. In selecting among
such conditional tenders, the Company will select by lot and will limit its
purchase in each case to the minimum number of Shares designated. See Sections 1
and 6 of the Offer to Purchase.
The Offer is being made to all holders of Shares. The Company is not
aware of any jurisdiction where the making of the Offer is not in compliance
with applicable law. If the Company becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in such jurisdiction. In any jurisdiction the securities or blue sky
laws of which require the Offer to be made by a licensed broker or dealer, the
Offer is being made on the Company's behalf by the Information Agent/Dealer
Manager or one or more regional brokers or dealers licensed under the laws of
such jurisdiction.
4
<PAGE>
Exhibit (a)(5)
WESTERFED FINANCIAL CORPORATION
November 20, 1998
Dear Stockholders of WesterFed Financial Corporation:
Over time, WesterFed Financial Corporation's profitable operations have
contributed to the growth of a capital base that exceeds all applicable
regulatory standards and the amount of capital needed to support the Company's
banking business. After evaluating a variety of alternatives to utilize this
strong capital base more effectively and to maximize value to our stockholders,
we have determined that a repurchase of our own shares is currently the best
alternative to accomplish those objectives. The Board of Directors has approved
a repurchase of 1,100,000 shares of the Company's common stock, or 19.7 percent
of our 5,594,361 million outstanding shares. A copy of the Offer to Purchase is
enclosed.
The Company is conducting the offer through a procedure referred to as
a "Modified Dutch Auction." This procedure allows you to select the price at
which you are willing to sell, or tender, all or part of your shares within a
price range of not more than $20.00 per share and not less than $18.00 per
share. Upon expiration of the offer, we will select the lowest purchase price
from those shares tendered that will allow us to buy 1,100,000 shares. All
shares purchased in the offer will receive the same purchase price, even those
shares that are tendered below the purchase price. In addition, if you own less
than 100 shares and tender all of your shares at or below the purchase price,
you will receive priority and have all of your shares purchased even if more
than 1,100,000 shares are tendered. No brokerage fees or commissions will be
charged to you if you tender your shares.
We encourage each stockholder to read carefully the Offer to Purchase
and related materials. Neither WesterFed Financial Corporation nor our Board of
Directors make any recommendation whether to tender shares to the Company. You
should make your decision independently after consulting with your advisors.
To assist us with this offer, we have engaged Keefe, Bruyette & Woods,
Inc. to serve as the Dealer Manager and Information Agent. Representatives from
this firm may contact you by phone to make sure you have received the Offer to
Purchase and related materials and to answer any questions you may have. If you
need information or additional forms, please call the Information Agent/Dealer
Manager toll free at (877) 298-6520.
<PAGE>
Unless otherwise extended, the offer will expire at 5:00 p.m. New York
City time on December 21, 1998. We again encourage you to read carefully the
enclosed material.
As always, we appreciate your interest in WesterFed Financial
Corporation.
Sincerely,
-------------------------------------
Lyle R. Grimes
President and Chief Executive Officer
2
<PAGE>
Exhibit (a)(6)
MEMO PLEASE CIRCULATE
DATE: November 20, 1998
TO: All Staff
FROM: Lyle R. Grimes, President and CEO
RE: Tender Offer for WesterFed Financial Corporation's Common Stock
- --------------------------------------------------------------------------------
At WesterFed Financial Corporation's Board of Directors Meeting
yesterday, November 19, 1998, the board approved the purchase of 1,100,000
shares of our common stock by means of what is termed a "Modified Dutch Auction
Tender." It is more fully described in the attached news release. We have made
every effort to communicate this action to members of the community as quickly
as possible. Below you will find the answers to some questions that are likely
to arise from our public announcement. We will provide further information if
additional questions come up.
Question: Why is WesterFed Financial Corporation offering to repurchase its
stock?
Answer: Over time, WesterFed Financial Corporation's profitable operations
have contributed to the growth of a capital base that exceeds all
applicable regulatory standards and the amount of capital needed to
support our banking business. After evaluating a variety of
alternatives to utilize more effectively our capital base and to
attempt to maximize stockholder value, WesterFed Financial
Corporation's management and its Board of Directors believe that the
purchase of its stock pursuant to the tender offer is a positive
action that is intended to improve returns to our stockholders. Our
financial projections indicate that the purchase of shares will
increase earnings per share and return on stockholders' equity.
Question: Who's idea was this?
Answer: With the assistance of Keefe, Bruyette & Woods, Inc., management has
conducted a detailed analysis of WesterFed Financial Corporation's
capital structure to determine how to maximize stockholder value by
improving return on stockholders' equity while maintaining a high
level of financial security and preserving future strategic options.
Based upon the results of a series of financial models developed by
Charles Webb, a purchase of shares appeared to be the best means to
accomplish the desired objectives. The Modified Dutch Auction Tender
method was determined to be the best way to acquire shares in the
shortest period of time.
<PAGE>
Question: How should I respond to questions?
Answer: WesterFed Financial Corporation has hired a special Information
Agent to handle all questions. The Information Agent is Keefe,
Bruyette & Woods, Inc. and their toll-free telephone number is (877)
298-6520. Because WesterFed Financial Corporation's the purchaser of
the shares, and because securities laws are involved, it is highly
important that all questions be referred to the Information Agent.
No member of WesterFed Financial Corporation's staff is allowed or
authorized to answer any questions or give any advice regarding the
tender offer. We are aware that many stockholders are customers of
the bank and have ties or relationships with staff members. You
should handle these situations as diplomatically as possible, but in
any event, all questions must be referred either to the Information
Agent or the holder's broker or investment advisor.
Question: What do I say if a stockholder asks, "Should I sell (tender) my
stock?"
Answer: Members of the WesterFed Financial Corporation staff must not give
any investment advice to stockholders. The stockholder must make his
or her own investment decision. You should not express an opinion as
to whether you think the tender offer is a "good deal" or a "bad
deal." While the stockholder may call Keefe, Bruyette & Woods, Inc.,
the Information Agent and Dealer Manager, they will not receive
investment advice from them. They should be directed to contact
their broker or investment advisor.
Question: What do I do if someone brings a Letter of Transmittal to me or my
office?
Answer: Because tenders must be received by the Depositary, Davidson Trust
Co., within a limited amount of time, we cannot take the
responsibility for having any stockholder's tender delivered.
Stockholders must send tenders directly to Davidson Trust Co. at the
address provided in the tender offer documents. That address is:
Davidson Trust Co.
9 Third Street North, Suite 200
Great Falls, Montana 59401
Question: May employees of WesterFed Financial Corporation tender shares in
the offer?
Answer: Yes. Employees who own shares of WesterFed Financial Corporation
common stock are eligible to tender their shares. You will receive a
complete copy of the same documents that are being provided to other
stockholders.
2
<PAGE>
Exhibit (a)(7)
WESTERFED FINANCIAL CORPORATION
QUESTIONS AND ANSWERS
ABOUT THE OFFER OF
WESTERFED FINANCIAL CORPORATION
TO PURCHASE FOR CASH UP TO 1,100,000 SHARES
OF COMMON STOCK AT A PURCHASE PRICE OF
$18.00 TO $20.00 PER SHARE
November 20, 1998
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE OFFER OF
WESTERFED FINANCIAL CORPORATION
TO PURCHASE ITS STOCK
The following information is designed to answer frequently asked questions about
the offer by WesterFed Financial Corporation to purchase shares of its common
stock. Stockholders 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. WesterFed Financial Corporation is inviting its stockholders to tender
shares of its common stock, $0.01 par value per share (the "Shares"), at
prices not in excess of $20.00 nor less than $18.00 per Share in cash, as
specified by stockholders tendering their Shares, upon the terms and
subject to the conditions set forth in its Offer to Purchase, dated
November 20, 1998, and in the enclosed Letter of Transmittal (which
together constitute the "Offer"). The Company will determine the single per
Share price, not in excess of $20.00 nor less than $18.00 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 stockholders. The
Company will select the lowest Purchase Price that will allow it to buy
1,100,000 Shares (or such lesser number of Shares as are number tendered at
prices not in excess of $20.00 nor less than $18.00 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 stockholders to purchase a specified number of
shares of its stock within a specified price range per share, and pays the
highest price at which it accepts shares to all stockholders whose shares
are accepted. In this case, WesterFed Financial Corporation is making a
direct offer to all of its stockholders to purchase in the aggregate
1,100,000 Shares of its common stock at a price not in excess of $20.00 nor
less than $18.00 per Share. This process allows each stockholder to elect
whether to sell stock, and the price the stockholder is willing to sell at
within the given price range. After receiving tenders of Shares, at the
termination of the Offer, the Company will choose the lowest price within
the specified range that will permit it to purchase the amount of
securities sought and this price will become the Purchase Price.
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 to buy
up to 1,100,000 Shares. All stockholders tendering at or below the Purchase
Price will receive the same price per share. For example, if 500,000 Shares
are tendered at $18.00 per Share, 600,000 Shares are tendered at $19.00 per
Share and 300,000 Shares are tendered at $20.00 per Share, 1,100,000 Shares
will be purchased at $19.00 per Share from the persons who tendered at
$18.00 and $19.00, and the 300,000 Shares tendered at $20.00 per Share will
be returned and not purchased.
Q. What Will Happen If More Than 1,100,000 Shares Are Tendered At Or Below The
Purchase Price?
<PAGE>
A. In the event more than 1,100,000 Shares are tendered at or below the
Purchase Price, Shares tendered at or below the Purchase Price will be
acquired by the Company (i) first from any stockholder who owned
beneficially, as of the close of business on November 13, 1998 and
continues to own beneficially as of the termination of the Offer, an
aggregate of fewer than 100 Shares and who validly tenders all of such
Shares, and (ii) then from all other tendering stockholder subject to
proration.
Q. At What Price May I Tender My Shares?
A. Stockholders may elect to tender their Shares in increments of 1/8th of a
dollar ($.125) starting at $18.00 per Share up to and including $20.00 per
Share. The election as to the number of Shares and the price a stockholder
is willing to tender are to be indicated on the Letter of Transmittal.
Q. How Do I Tender My Shares?
A. If you hold your Shares in certificate form, you must return a properly
completed Letter of Transmittal (the blue form) and any other documents
required by the Letter of Transmittal, together with the certificates for
the Shares being tendered, to the Depositary, Davidson Trust Co., which
must be received by them by 5:00 p.m. New York City time on December 21,
1998.
Q. How Do I Tender My Shares If My Shares Are Held By My Broker?
A. If your Shares are registered in street name with a broker, dealer,
commercial bank, trust company or other nominee, you will need to contact
your broker, bank or other nominee and instruct the nominee to make the
tender of your Shares for you. You cannot tender such Shares using the
Letter of Transmittal even though you may have received one for your
information.
If you are a broker and are tendering Shares in book-entry form for your
customers, you must comply with the Book-Entry Delivery procedure described
in Section 3 of the Offer to Purchase.
Q. What Do I Do If I Have Lost My Certificates, Or If They Have Been
Mutilated, Destroyed Or Stolen, But I Still Want To Tender Them?
A. Call the Depositary at (406) 791-7320 in Montana for instructions for
tendering Shares in such circumstances.
Q. Do I Have To Sell My Stock To The Company?
A. No. A stockholder is not required to tender any stock.
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
2
<PAGE>
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 1,100,000 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. What If The Terms Of The Offer Change?
A. In the event the Expiration Date is extended or if the terms of the Offer
are materially changed, the Company will generally give notice of the
change and at least 5 business days, and under certain circumstances at
least 10 business days, from such notice stockholders will be able to
change or withdraw their tender.
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 $18.00, 500 Shares at $19.00 and
keep the remaining 500 Shares. However, you cannot tender the same stock at
different prices. In the prior example, the stockholder owning 1,500 Shares
cannot tender 1,500 at $18.00 and 1,500 at $19.00. If you tender some
Shares at one price and other Shares at a different price, you must use a
separate Letter of Transmittal for each price.
Q. Is There Any Brokerage Commission?
A. No. The Company will purchase stock directly from each stockholder at the
Purchase Price without the use of a broker.
Q. What If I Am A Participant In The Company's Dividend Reinvestment And Stock
Purchase Plan?
A. If you are a participant in the Company's Dividend Reinvestment and Stock
Purchase Plan (the "DRIP"), you may instruct Davidson Trust Co., as Agent
of the DRIP, to tender Shares allocated to your account in such DRIP. You
will receive all documents furnished to stockholders generally in
connection with the Offer. Certain participants in the DRIP will also
receive additional copies of such documents directly, if they also hold
Shares in nominee accounts or in different names. You may use the Letter of
Transmittal to instruct the Agent to tender your Shares in the Offer by
completing the box captioned "The Following is to be Completed Only by
Participants in the WesterFed Financial Corporation Dividend Reinvestment
and Stock Purchase Plan" on the Letter of Transmittal. You may direct that
all, some, or none of the Shares credited to your DRIP account are to be
tendered.
Q. What If I Am A DRIP Participant And Wish To Tender Both DRIP And Non-DRIP
Shares?
A. If you intend to tender Shares held in the DRIP in addition to Shares which
are not held in the DRIP, you may use one Letter of Transmittal to tender
all of such Shares, if you wish to tender all such Shares at the same price
(even if you have received more than one copy of the Offer). Separate
Letters of Transmittal must be used if you intend to tender Shares held in
3
<PAGE>
the DRIP and Shares not held in the DRIP at different prices. See
Instruction 10 to the Letter of Transmittal.
Q. How Do I Tender DRIP Shares?
A. If you do not wish to tender your shares held in the DRIP, you do not need
to take any action. If you wish to tender DRIP Shares, you must complete
the box captioned "The Following is to be Completed Only by Participants in
the WesterFed Financial Corporation Dividend Reinvestment and Stock
Purchase Plan" on only one Letter of Transmittal submitted by you. If you
submit more than one Letter of Transmittal and complete such box on more
than one Letter of Transmittal, you will be deemed to have elected to
tender all Shares allocated to your account under the DRIP at the lowest of
the prices specified in such Letters of Transmittal. If you wish to tender
the Shares that were allocated to your DRIP account on November 24, 1998,
in connection with the payment of the Company's quarterly dividend on the
same date, you should so indicate on the Letter of Transmittal. You are
urged to read the Letter of Transmittal and related materials carefully.
Q. How Do I Determine How Many Shares I Have In My Dividend Reinvestment Plan
Account, And The Amount I Will Receive For Tendering Them?
A. You can determine how many Shares you have in your DRIP account, including
the Shares allocated to your account on November 24, 1998 in connection
with the payment of the Company's quarterly dividend on such date, by
reference to your most recent DRIP Statement and by computing the average
of the high and low trade prices of the Company's Shares on November 24,
1998 (which may be obtained from your broker or the Information Agent,
Keefe, Bruyette & Woods, Inc. after 4:00 P.M. New York City time on
November 24, 1998), taking into account that the dividend per Share payable
on November 24, 1998 was $0.135.
Q. Can I Change Or Cancel My Tender?
A. You may increase or decrease the number of Shares indicated in the Letter
of Transmittal or withdraw it entirely up until 5:00 p.m. on December 21,
1998. Generally after December 21, 1998, you cannot withdraw your tender.
If you desire to change or withdraw your tender, you are responsible to
make certain that a valid withdrawal is received by the December 21, 1998
deadline. Except as discussed in the Offer to Purchase, tenders are
irrevocable after the December 21, 1998 deadline.
Q. Can You Summarize The Process By Which Shares Are Validly Tendered?
A. Generally, for certificated Shares you must complete the Letter of
Transmittal (the [blue] form) as follows:
- List the certificates and the number of Shares that you are tendering
in the box captioned "Description of Shares Tendered".
- Check the box specifying the price at which you are tendering in the
box captioned "Price (in Dollars) Per Share at Which Shares are Being
Tendered".
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<PAGE>
- If you want to give us special payment instructions, complete the box
captioned "Special Payment Instructions".
- If you want to give us special delivery instructions, complete the box
captioned "Special Delivery Instructions".
- If you are an Odd Lot Holder who is tendering all your shares,
complete the box captioned "Odd Lots".
- If you are a participant in the Company's Dividend Reinvestment and
Stock Purchase Plan, complete the box captioned "The Following is to
be Completed Only by Participants in the WesterFed Financial
Corporation Dividend Reinvestment and Stock Purchase Plan."
- If you want to make a conditional tender of Shares, complete the box
captioned "Conditional Tenders".
- If your Shares are being delivered by book-entry, complete the box
captioned "Box Below for Use By Eligible Institutions Only".
- Complete substitute Form W-9 to certify your tax identification
number.
- Sign the Letter of Transmittal in the box captioned "Sign Here" (in
certain circumstances, signatures must be guaranteed in this Box).
You must deliver your Share certificates or comply with the book-entry
delivery requirements. See Section 3 of the Offer to Purchase. These
documents must be received by the Depositary, Davidson Trust Co., no
later than 5:00 p.m. on December 21, 1998. If you are tendering Shares
held by a broker, commercial bank, trust company or other nominee,
your instructions must be given to your nominee who will, on the basis
of your instructions, tender Shares for you. Please see Section 3 and
the Letter of Transmittal for more details about how to tender Shares.
Q. How Can I Get More Information?
A. If you have a question, please call our Information Agent/Dealer Manager,
Keefe, Bruyette & Woods, Inc. at (877) 298-6520, from 8:30 a.m. - 5:30
p.m., Eastern Time, Monday through Friday.
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 WesterFed Financial Corporation Offer to Purchase document dated November
20, 1998 and the accompanying Letter of Transmittal.
5
<PAGE>
Exhibit (a)(8)
CONTACTS: Lyle R. Grimes, President and CEO Patrica A. McJoynt
of WesterFed Financial Corporation Keefe, Bruyette &
(406) 721-5254 Woods, Inc.
(877) 298-6520
Immediate
November 20, 1998
WESTERFED FINANCIAL CORPORATION OFFERS TO BUY
UP TO 1.1 MILLION SHARES OF ITS COMMON STOCK
Missoula, Montana ..... WesterFed Financial Corporation(NASDAQ NMS:WSTR)
announced today that its Board of Directors has authorized the repurchase of up
to 1,100,000 shares of its common stock, which represents 19.7 percent of its
5,594,361 outstanding shares. The repurchase will be made through a "Modified
Dutch Auction Tender." Under this procedure, WesterFed Financial Corporation
stockholders will be given the opportunity to sell part or all of their shares
to the Corporation at a price of not less than $18.00 per share and not more
than $20.00 per share. This price range represents a 2.7 percent discount to a
8.1 percent premium to the November 19, 1998 closing price of $18.50 per share.
Based upon the minimum and maximum offering prices specified in the offer, the
aggregate purchase price, if 1,100,000 shares are purchased, would range from
$19.8 million to $22.0 million. The offer to purchase shares will expire at 5:00
p.m. New York City time on December 21, 1998 unless extended by the Corporation.
Under the procedures for a Modified Dutch Auction Tender, stockholders
may offer to sell all or a portion of the shares they own at a price not more
than the maximum price ($20.00) nor less than the minimum price ($18.00)
specified in the tender. Upon the expiration of the offer, WesterFed Financial
Corporation will select the lowest purchase price that will allow it to buy
1,100,000 shares. All shares purchased in the offer will receive the same price.
If the number of shares tendered is equal to or less than 1,100,000 shares, the
purchase price will be the highest price specified by tendering stockholders. If
the number of shares tendered is greater than the number sought, the Corporation
will select the lowest price that will allow it to buy the number of shares it
seeks.
Lyle R. Grimes, WesterFed's President and Chief Executive Officer,
stated, "WesterFed is making the tender offer because its Board of Directors
believes that the purchase of shares pursuant to the offer should have
beneficial effects on stockholder value while maintaining a strong capital base
to support the needs of our business and our customers. After studying a number
of alternatives, we selected the Modified Dutch Auction Tender because it is a
positive action that has the potential for improving stockholder returns in an
expeditious manner. Based upon pro forma financial analyses, the purchase of
shares should have the effect of increasing earnings per share and raising the
return on stockholders' equity."
<PAGE>
WesterFed Financial Corporation is a savings and loan holding company
based in Missoula, Montana and has approximately $1.0 billion in total assets.
Its subsidiary bank, Western Security Bank has 33 offices, located throughout 20
different Montana communities.
Keefe, Bruyette & Woods, Inc. & Co., Inc. will act as the dealer
manager and information agent for the offer, and Davidson Trust Co. will be the
depositary for the shares tendered. Questions or to requests for assistance may
be directed to Keefe, Bruyette & Woods, Inc., toll free at (877) 298-6520.
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell shares of WesterFed Financial Corporation common stock. The
offer is made solely by the Offer to Purchase dated November 20, 1998 and the
related Letter of Transmittal.
2
<PAGE>
Exhibit (a)(9)
This announcement is neither an Offer to Purchase nor a solicitation of an offer
to sell shares of WesterFed Financial Corporation common stock. The offer is
made solely by the Offer to Purchase, dated November 20, 1998, and the related
Letter of Transmittal, copies of which may be obtained from the Information
Agent.
WESTERFED FINANCIAL CORPORATION
Offers to
Purchase For Cash up to 1,100,000 Shares of its
Common Stock
At a Purchase Price Not Greater Than $20.00 Nor Less
Than $18.00 Per Share
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 21, 1998,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Information Agent and Dealer Manager for the Offer is:
KEEFE, BRUYETTE & WOODS, INC.
211 Bradenton Drive
Dublin, Ohio 43017-5034
(877) 298-6520 (toll free)
