UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)
PERMANENT BANCORP, INC.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
714197100
(CUSIP Number)
Charles R. Haywood
Foley & Lardner
One IBM Plaza
330 North Wabash Avenue
Suite 3300
Chicago, Illinois 60611
(312) 755-1900
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 2, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
<PAGE>
CUSIP No. 714197100
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
LaSalle Financial Partners, Limited Partnership
(formerly known as LaSalle/Kross Partners, Limited
Partnership)
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [X]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 142,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
142,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
142,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
6.8%
14 Type of Reporting Person
PN
<PAGE>
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Richard J. Nelson
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: Not Applicable
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [X]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 142,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
142,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
142,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
6.8%
14 Type of Reporting Person
IN
<PAGE>
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Peter T. Kross
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: Not Applicable
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [X]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 142,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
142,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
142,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
6.8%
14 Type of Reporting Person
IN
<PAGE>
This Amendment No. 5 to Schedule 13D is filed jointly by LaSalle
Financial Partners, Limited Partnership (the "Partnership"), Richard J.
Nelson, and Peter T. Kross (the "Group"), and relates to the common stock,
$.01 par value (the "Common Stock"), of Permanent Bancorp, Inc. (the
"Issuer"). The Partnership was formerly known as LaSalle/Kross Partners,
Limited Partnership; its name was changed effective June 20, 1997. This
Amendment No. 5 amends the Schedule 13D initially filed on April 21, 1997,
as amended by Amendment No. 1 thereto filed on April 25, 1997, by
Amendment No. 2 thereto filed on May 19, 1997, by Amendment No. 3 thereto
filed on June 4, 1997, and by Amendment No. 4 thereto filed on June 13,
1997. The amended joint filing agreement of the members of the Group is
attached as Exhibit 1. The following items in the Schedule 13D are
amended to read in their entirety as follows:
Item 2. Identity and Background
(a)-(c) The Partnership is a Delaware limited partnership. The
address of the Partnership's principal business and its principal office
is 350 East Michigan, Suite 500, Kalamazoo, Michigan 49007. The principal
business of the Partnership is that of investing in equity-oriented
securities issued by publicly traded companies, with emphasis on
investments in banks, thrifts and savings banks.
The general partners of the Partnership (the "General Partners") are
LaSalle Capital Management, Inc., a Michigan corporation owned by Richard
J. Nelson and his wife, Florence Nelson, and Talman Financial, Inc., a
Michigan corporation owned by Peter T. Kross. The executive officers and
directors of LaSalle Capital Management, Inc., are Mr. Nelson, who serves
as President and a director, and his wife Florence Nelson, who serves as
Secretary, Treasurer and a director. Mr. Nelson is self-employed as a
banking consultant, and his business address is 350 East Michigan, Suite
500, Kalamazoo, Michigan 49007. Mrs. Nelson is a homemaker and is not
otherwise employed. Mr. Kross is the sole director and the sole executive
officer of Talman Financial, Inc. Mr. Kross is employed as a securities
broker and is employed as a Senior Vice President of EVEREN Securities,
Inc. Mr. Kross's residence address is 248 Grosse Pointe Boulevard, Grosse
Pointe Farms, Michigan 48236.
(d)-(e) During the past five years, none of the Partnership, the
General Partners, Mr. Nelson, Mrs. Nelson or Mr. Kross has been convicted
in a criminal proceeding (excluding traffic violations).
On December 9, 1996, Standard Financial, Inc. filed a civil lawsuit
(case No. 96-C-8037) in the United States District Court for the Northern
District of Illinois (the "Court") naming as defendants the Partnership,
the General Partners, Mr. Kross and Mr. Nelson (collectively, the
"defendants"). The lawsuit requested injunctive relief and claimed that
the defendants had made a false and misleading Schedule 13D filing with
respect to beneficial ownership of Standard Financial, Inc.'s common
stock. On February 11, 1997, the Court entered a Memorandum Opinion and
Order granting in part and denying in part Standard Financial's request
for injunctive relief. On March 19, 1997, the Court modified that order.
The Court ordered, among other things, that (1) the defendants amend their
Schedule 13D with respect to Standard Financial to reflect their "purpose
to acquire control over and influence the policies of Standard by electing
the Partnership's own nominees to Standard's board of directors"; (2)
"Defendants are temporarily enjoined from purchasing or selling any
shares, in their individual capacities or on behalf of the Section 13(d)
group, but not in a licensed or registered capacity, or otherwise seeking
control of Standard until seven days after they have filed [an] amended
Schedule 13D" in compliance with the Court's order; and (3) "Defendants
are temporarily enjoined from violating Section 13(d) and ordered to amend
Schedule 13D with regard to Standard from time to time as necessary to
comply with federal law." Thereafter, the defendants promptly complied
with the Court's order and filed an amended Schedule 13D.
During the past five years, Mrs. Nelson has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in such person being subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Mr. Nelson, Mrs. Nelson, and Mr. Kross are citizens of the
United States.
Item 4. Purpose of Transaction
The Group's goal is to profit from appreciation in the market price
of the Common Stock. The Group expects to actively assert shareholder
rights, in the manner described below, with the purpose to acquire control
over and influence the policies of the Issuer, with the intent of
influencing a business combination involving the Issuer.
The Partnership's stated purpose is to emphasize investments in the
stocks of selected thrifts, banks and savings banks which the General
Partners of the Partnership believe to be undervalued or that they believe
to represent "special situation" investment opportunities. The
Partnership has further described its purpose, in its private placement
memorandum, as follows:
Considering the current opportunity to purchase shares of
selected thrifts and savings banks at substantial discounts to
intrinsic value as determined by the General Partners, with
significant appreciation potential available due to merger and
acquisition activity in the banking industry, the Partnership
currently intends to concentrate its investments in thrifts,
banks and savings banks which, in the opinion of the General
Partners, possess certain buyout characteristics. Concentrated
investments may be made in companies to allow the partnership to
influence or to effect control over management's decisions in
order to achieve Partnership objectives.
The Partnership believes that its acquisition of the Common Stock is in
accordance with these stated purposes.
By letter dated April 11, 1997 the Group disclosed its holdings as of
that date to the management of the Issuer and that it was contemplating
the submission of proposed nominees for election at the Issuer's 1997
annual meeting. Prior to making such submission, the Group proposed a
meeting with management of the Issuer to discuss management's slate of
directors. On April 15, 1997, the Issuer contacted representatives of the
Group to discuss the Group's request. In connection with this discussion,
the Issuer informed the Group that it would consider the Group's request
to include a representative of the Group on management's slate of nominees
for the 1997 annual meeting. By letter dated April 15, 1997, the Group
proposed Wallace Riley for consideration by the Issuer as a management
nominee. Thereafter, by letter received on April 16, 1997, the Issuer
informed the Group that it would not nominate Mr. Riley and further
informed the Group that Mr. Riley did not satisfy a director qualification
requirement that had been adopted by the Issuer's Board of Directors on
January 21, 1997. The qualification requirement mandates that "[a] member
of the Board of Directors shall, in order to qualify as such, be domiciled
in or have his or her primary place of business located in any county, a
portion of which is within a fifty mile radius of any office of the
[Issuer's] subsidiary bank in the state of Indiana." To the best of the
Group's knowledge, this requirement had not previously been disclosed
publicly by the Issuer.
On April 22, 1997, the Partnership delivered to the Issuer a notice
of intention to nominate two persons for election as directors of the
Issuer at its 1997 annual meeting. Such notice was made in accordance
with the time requirements of the By-Laws of the Issuer. The two persons
that the Partnership proposed were Wallace D. Riley and Robert C. Lucas.
A copy of such notice of intent to nominate directors, which contains
biographical and other information required by the By-Laws of the Issuer,
is attached hereto as Exhibit 6. The Partnership requested that the
Issuer waive the residency qualification requirement for directors, given
the timing of the By-Law amendment.
On April 22, 1997, the Partnership also made demand upon the Issuer
to inspect and copy the stock records, including a current stockholder
list of names and addresses, of the Issuer, in accordance with applicable
provisions of Delaware law. A copy of that letter is attached hereto as
Exhibit 7.
By letter dated April 28, 1997, the Issuer responded to the
Partnership's notice of intent to nominate directors. The Issuer stated
that it would not waive the geographic qualification requirement for
directors added to the Issuer's By-Laws in January, 1997. The Issuer
stated that the Issuer's Board of Directors had extended the deadline for
the nomination of directors by stockholders for the 1997 annual meeting to
June 17, 1997. A copy of that letter is attached as Exhibit 8.
On April 30, 1997, the Issuer filed a Form 8-K with the Securities
and Exchange Commission disclosing its By-Law amendment adding the
qualification requirement described above. The Form 8-K also disclosed
that the Board of Directors of the Issuer had extended the deadline for
shareholder nominations to the Board of Directors from April 25, 1997 to
June 17, 1997.
By letter dated May 19, 1997, Ronald G. Hollander was proposed for
consideration by the Issuer as a management nominee. A copy of that
letter is attached as Exhibit 9. By letter dated May 23, 1997, sent by
regular United States mail, the Issuer replied to Mr. Nelson's letter of
May 19, 1997. A copy of that letter is attached as Exhibit 10. By letter
dated May 28, 1997, Mr. Hollander advised the Group of his withdrawal from
consideration as a board nominee of the Group. A copy of that letter is
attached as Exhibit 11.
By letter dated June 4, 1997, Terry G. Johnston was proposed for
consideration by the Issuer as a management nominee. A copy of that
letter is attached as Exhibit 12. In a telephone conversation on June 9,
1997, between Richard Nelson and Donald Weinzapfel, President of the
Issuer, Mr. Weinzapfel informed Mr. Nelson that consideration by the
Issuer's Board of Directors of Mr. Johnston as a management nominee would
be delayed until the next meeting of the Board of Directors, on June 17,
1997.
By letter dated June 11, 1997, the Partnership informed the Issuer
that it had only partially responded to the Partnership's request to
review and copy the Issuer's stockholder list. The Partnership reiterated
its demand for certain items. A copy of that letter is attached hereto as
Exhibit 13.
On June 13, 1997, the Partnership sent to the Issuer a notice of
intention to nominate Terry G. Johnston as a director of the Issuer at its
1997 annual meeting. Such notice was made in accordance with the time
requirements of the By-Laws of the Issuer. The letter containing the
notice of intent to nominate also withdrew the notice of intent to
nominate Wallace D. Riley and Robert C. Lucas, made on April 22, 1997. A
copy of such notice of intent to nominate Mr. Johnston, which contains
biographical and other information required by the By-Laws of the Issuer,
is attached hereto as Exhibit 14.
By letter dated June 16, 1997, the Issuer responded to the
Partnership's letter of June 11. A copy of that letter is attached hereto
as Exhibit 15.
By letter dated June 17, 1997, Mr. Johnston responded to certain
issues raised by Mr. Weinzapfel in a telephone conversation. A copy of
that letter is attached hereto as Exhibit 16.
By letter dated June 18, 1997, the Issuer informed the Partnership
that at the meeting of the Issuer's Board of Directors on June 17, 1997,
the Board had determined not to nominate Mr. Johnston for election to the
Board of Directors. A copy of that letter is attached hereto as Exhibit
17. Mr. Weinzapfel and Mr. Nelson discussed the letter in a telephone
conversation on June 18, 1997.
By letter dated June 23, 1997, the Partnership (through its counsel)
requested additional information related to the stockholder list. A copy
of that letter is attached as Exhibit 18.
On July 2, 1997, the Partnership sent to the Issuer a letter
withdrawing the Partnership's notice of intent to nominate Mr. Johnston as
a director of the Issuer. A copy of that letter is attached hereto as
Exhibit 19. As a result of this action, Mr. Johnston is no longer a
member of the Group.
On July 2, 1997, the Partnership sent a letter to Mr. Weinzapfel
discussing certain concerns and suggestions of the Partnership with regard
to the Issuer. A copy of that letter is attached hereto as Exhibit 20.
The Partnership may send a copy of this letter to stockholders, with or
without additional information.
The Group's purpose in communicating with the Issuer (and in possibly
communicating directly with stockholders) is primarily to attempt to
influence the Board of Directors to consider all possible strategic
alternatives available to the Issuer in order to increase the market price
of the Common Stock. One way of achieving this goal is to seek out
another financial institution and attempt to implement a business
combination. The Group is interested in influencing the Issuer's Board of
Directors to explore seriously, in consultation with independent financial
advisors, this and other possible means of improving the market price of
the Common Stock, to the extent such options may not have already been
fully explored. To the extent such influence may be deemed to constitute
a "control purpose" with respect to the Securities Exchange Act of 1934,
as amended, and the regulations thereunder, the Group has such a purpose.
The above-stated purpose to control is unrelated to the Office of
Thrift Supervision ("OTS") regulations. Specifically, the Group is aware
that regulations promulgated by the OTS contain separate standards with
regard to acquisition of "control" of a federally chartered savings
institution, such as the Issuer's subsidiary bank. Those regulations
require OTS approval for acquisition of control under certain conditions.
Some of the provisions are based in part on numerical criteria. One of
the provisions creates a rebuttable presumption of control where a person
acquires more than 10 percent of the voting stock of a savings association
and other conditions are met. Another provision creates a rebuttable
presumption of control where a person acquires proxies to elect one-third
or more of the savings association's board of directors and other
conditions are met. The Group has no present plans to cross these
numerical thresholds.
The Group intends to continue to evaluate the Issuer and its business
prospects and intends to consult with management of the Issuer, other
holders of the Common Stock or other persons to further its objectives.
The Group may make further purchases of shares of the Common Stock or may
dispose of any or all of its shares of the Common Stock at any time. At
present, and except as disclosed herein, the Group has no specific plans
or proposals that relate to, or could result in, any of the matters
referred to in paragraphs (a) through (j), inclusive, of Item 4 of
Schedule 13D. The Group intends to continue to explore the options
available to it. The Group may, at any time or from time to time, review
or reconsider its position with respect to the Issuer and may formulate
plans with respect to matters referred to in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) By virtue of their separate ownership and control over the
General Partners, Mr. Nelson and Mr. Kross are each deemed to own
beneficially all of the 142,900 shares of the Common Stock that the
Partnership owns, constituting approximately 6.7% of the issued and
outstanding shares of the Common Stock, based on the number of outstanding
shares reported on the Issuer's Annual Report on Form 10-K for the period
ended March 31, 1997. None of Mr. Nelson, Mrs. Nelson, Mr. Kross or the
General Partners beneficially owns any shares of the Common Stock
personally or otherwise, except for the shares owned by the Partnership
itself.
(b) With respect to the shares described in (a) above, all decisions
regarding voting and disposition of the Partnership's 142,900 shares are
made jointly by the chief executive officers of the General Partners (i.e,
Messrs. Nelson and Kross). As such, they share voting and investment
power with respect to those shares.
(c) The following transactions are the only purchases of the Common
Stock made by the Partnership in the past 60 days, all of which were made
in open market purchases on the Nasdaq National Market System:
Date Number of Shares Cost Per Share
5/2/97 16,000 $23.25
5/15/97 5,000 $23.625
5/16/97 700 $23.50
Item 7. Material to be Filed as Exhibits
No. Description
1 Amended Joint Filing Agreement.
2 Professional Account Agreement, dated March 6, 1996,
between the Partnership and each of the subsidiaries of The
Bear Stearns Companies Inc.*
3 Letter from Richard J. Nelson to Donald P. Weinzapfel,
dated April 11, 1997.*
4 Letter from Richard J. Nelson to Donald P. Weinzapfel,
dated April 15, 1997.*
5 Letter from Donald P. Weinzapfel to Richard J. Nelson,
dated April 15, 1997.*
6 Letter from LaSalle/Kross Partners, L.P. to Carl E. Root,
dated April 21, 1997.*
7 Letter from LaSalle/Kross Partners, L.P. to Carl E. Root,
dated April 21, 1997.*
8 Letter from Carl E. Root to Peter T. Kross, dated April 28,
1997.*
9 Letter from Richard J. Nelson to Donald P. Weinzapfel,
dated May 19, 1997.*
10 Letter from Donald P. Weinzapfel to Ronald G. Hollander,
dated May 23, 1997.*
11 Letter from Ronald G. Hollander to Richard J. Nelson, dated
May 28, 1997.*
12 Letter from Richard J. Nelson to Donald P. Weinzapfel,
dated June 4, 1997.*
13 Letter from Peter T. Kross to Carl E. Root, dated June 11,
1997.*
14 Letter from Richard J. Nelson to Donald P. Weinzapfel,
dated June 13, 1997.*
15 Letter from Carl E. Root to Phillip M. Goldberg, dated June
16, 1997.
16 Letter from Terry G. Johnston to Donald P. Weinzapfel,
dated June 17, 1997.
17 Letter from Donald P. Weinzapfel to Richard J. Nelson,
dated June 18, 1997.
18 Letter from Phillip M. Goldberg to David M. Muchnikoff,
dated June 23, 1997.
19 Letter from Richard J. Nelson to Carl E. Root, dated July
2, 1997.
20 Letter from Richard J. Nelson to Donald P. Weinzapfel,
dated July 2, 1997.
*Previously filed with the Securities and Exchange Commission as exhibits
to the Schedule 13D, as amended.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement, as amended, is
true, complete and correct.
Date: July 2, 1997
LaSALLE FINANCIAL PARTNERS, LIMITED PARTNERSHIP
By: LaSALLE CAPITAL MANAGEMENT, INC.
a General Partner
By: /s/ Richard J. Nelson
Richard J. Nelson, President
/s/ Richard J. Nelson
Richard J. Nelson
/s/ Peter T. Kross
Peter T. Kross
EXHIBIT 1
JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of
1934, as amended, the undersigned hereby agree that the Schedule 13D to
which this Joint Filing Agreement is being filed as an exhibit shall be a
joint statement filed on behalf of each of the undersigned.
Date: July 2, 1997
LaSALLE FINANCIAL PARTNERS, LIMITED PARTNERSHIP
By: LaSALLE CAPITAL MANAGEMENT, INC.
a General Partner
By: /s/ Richard J. Nelson
Richard J. Nelson, President
/s/ Richard J. Nelson
Richard J. Nelson
/s/ Peter T. Kross
Peter T. Kross
EXHIBIT 15
Permanent Bancorp, Inc., Holding Company for Permanent Federal Savings
Bank
June 16, 1997
Mr. Phillip M. Goldberg
Foley & Lardner
320 N. Wabash Avenue
Chicago, Illinois 60611
Dear Mr. Goldberg:
Enclosed with this letter is a copy of a Security Position Listing
report dated June 6, 1997 and provided to our Company by the Depository
Trust Company. This listing is being provided to you pursuant to a
request letter dated June 11, 1997 to Permanent Bancorp, Inc. from Mr.
Peter T. Kross of LaSalle/Kross Partners, L.P. The request letter from
Mr. Kross also demanded a list of names, addresses and securities
positions of non-objecting beneficial owners and acquiescing beneficial
owners. The Company does not have such a list in its possession nor has
the Company requested such a listing. In the event the Company should
obtain such a list, we will provide a copy to you at that time.
I believe that the information provided with this letter satisfies
those requests made by Mr. Kross. Please direct any questions concerning
this response to the Company's counsel Silver, Freedman and Taff, L.L.P.
in care of Mr. Jeffrey Werthan or Mr. David M. Muchnikoff at (202) 414-
6100.
Sincerely,
/s/ Carl E. Root
Carl E. Root
Vice President and Secretary
CER:sb
Encl.
101 Southeast Third Street P.O. Box 1227 Evansville, Indiana 47706-1227
812/428-6800
EXHIBIT 16
Equity+
Investments, Financial Services & More
June 17, 1997
VIA FACSIMILE
Mr. Donald P. Weinzapfel
Chairman of the Board, President
and Chief Executive Officer
Permanent Bancorp, Inc.
101 Southeast Third Street
Evansville, In. 47708
Dear Mr. Weinzapfel:
As you are aware, on Friday, June 13, 1997, LaSalle/Kross Partners,
L.P. forwarded to you a notice of intent to nominate me as a Director of
Permanent Bancorp, Inc. at the 1997 annual meeting of stockholders
scheduled to be held on July 22, 1997. Presumably in response, you
contacted me at my office on Monday, June 16th, raising certain questions
concerning my nomination. In order for the Board of Directors of
Permanent to be in the best position possible to evaluate my nomination at
the Board Meeting scheduled for tomorrow, I wanted to clarify certain
issues.
You questioned me concerning my relationship with Tracy Bancshares, a
California financial institution. I do not believe that my serving on the
Board of Permanent would raise any conflict of interest in connection with
my part ownership of that financial institution. I am one of 35 owners of
Tracy and am not a member of its Board of Directors. Further, given that
Tracy Bancshares is located in California, an entirely different market
than Permanent, dispels any concern of a possible conflict of interest.
You also raised a question concerning any payment I would be
receiving from LaSalle/Kross for sitting on Permanent's Board of
Directors. You pointed to the language in the June 13, 1997 Notice of
Intent to Nominate, where it states that "the Partnership has agreed to
reimburse Mr. Johnston for any out-of-pocket expenses that he incurs in
connection with the partnership's intended solicitation of proxies for use
at the 1997 Annual Meeting of Stockholders of the Corporation.." for the
proposition that I would be paid by LaSalle/Kross Partners for my
representation on Permanent's Board. I clarified for you that is not the
case. In fact, the June 13th letter goes on to clarify that there are "no
other arrangements or understandings with Mr. Johnston."
Hopefully, the foregoing will clarify any questions you have
concerning my nomination to Permanent's Board. Please provide copies of
this letter to all members of the Board of Directors at your meeting
tomorrow for their consideration. While LaSalle/Kross Partners has
formally nominated me to the Board of Directors, I am still optimistic and
hopeful that your current Board of Directors will consider my nomination
and choose to place me on management's slate at the upcoming shareholders
meeting. I am not only qualified but am extremely enthusiastic about
serving with you and the rest of the members of Permanent's Board of
Directors.
Sincerely,
/s/ Terry G. Johnston
Terry G. Johnston
P.O. Box 368 Newburgh, In. 47629 Telephone (812) 858-0058
EXHIBIT 17
Permanent Bancorp, Inc., Holding Company for Permanent Federal Savings
Bank
June 18, 1997
LaSalle/Kross Partners, L.P.
350 E. Michigan Avenue, Suite 500
Kalamazoo, Michigan 49007
Attn: Richard J. Nelson
Dear Mr. Nelson:
I have reviewed your letter of June 13, 1997 with the Company's Board
of Directors in which you provided detailed information regarding the
credentials of Mr. Terry G. Johnston. At its meeting held on June 17,
1997, the Board determined not to take action with regard to expanding the
size of the board and nominating Mr. Johnston to the Board of Directors of
Permanent Bancorp, Inc.
Thank you for your interest in Permanent Bancorp, Inc.
Very truly yours,
/s/ Donald P. Weinzapfel
Donald P. Weinzapfel
Chairman of the Board and
President
DPW/jp
101 Southeast Third Street P.O. Box 1227 Evansville, Indiana 47706-1227
812/428-6800
EXHIBIT 18
FOLEY & LARDNER
ATTORNEYS AT LAW
ONE IBM PLAZA
SUITE 3300
330 NORTH WABASH AVENUE
CHICAGO, ILLINOIS 60611-3608
TELEPHONE (312) 745-1900
FACSIMILE (312) 755-1925
VIA FACSIMILE
David M. Muchnikoff, Esq.
Silver Freedman & Taff
1100 New York Avenue, N.W.
Suite 700
Washington, D.C. 20005-3934
Dear Mr. Muchnikoff:
This will confirm our telephone conversation of today wherein I
requested on behalf of LaSalle/Kross Partners, L.P. that a copy of the
stockholder of record list be provided to us immediately through the
record date June 6, 1997. You confirmed that while your client did not
have a copy of the list in its possession, that you would instruct the
transfer agent to overnight the list to us for our review. In addition to
the stockholder list, please provide the following materials, all of which
should be in the possession of Permanent or one of its agents:
1. The Pershing/DLJ omnibus proxy list;
2. The Philadep omnibus proxy list;
3. Any other omnibus proxies produced by ADP for client banks or
brokers, listing among other things any respondent positions;
4. Any omnibus proxy produced by Bank of New York, or any other
bank or broker, listing among other things any respondent
positions; and
5. Any record date information provided by ADP relative to the
shares held for their clients, and the number of holders at each
of their client firms holding Permanent Bancorp shares.
Please express mail the above information to the attention of Richard
J. Nelson, LaSalle/Kross Partners, L.P., Suite 500, 350 E. Michigan
Avenue, Kalamazoo, Michigan, 49007, for delivery June 24, 1997.
Sincerely,
/s/ Phillip M. Goldberg
Philip M. Goldberg
PMB/acb
cc: Richard J. Nelson, via fax
EXHIBIT 19
LASALLE FINANCIAL PARTNERS, L.P.
Suite 500
350 E. Michigan Avenue
Kalamazoo, Michigan 49007
__________________
Telephone (616) 344-4993
July 2, 1997
Mr. Carl E. Root
Vice President and Secretary
Permanent Bancorp, Inc.
101 Southeast Third Street
Evansville, IN 47708
Dear Mr. Root:
On behalf of LaSalle Financial Partners, Limited Partnership (the
"Partnership") (formerly known as LaSalle/Kross Partners, Limited
Partnership), please be advised that the Partnership hereby withdraws its
notice of intent to nominate Terry G. Johnston for election to the Board
of Directors of Permanent Bancorp, Inc.
Very truly yours,
LASALLE FINANCIAL PARTNERS, L.P.
By: LaSalle Capital Management, Inc.
By: /s/ Richard J. Nelson
Richard J. Nelson, President
EXHIBIT 20
LASALLE FINANCIAL PARTNERS, L.P.
Suite 500
350 E. Michigan Avenue
Kalamazoo, Michigan 49007
__________________
Telephone (616) 344-4993
July 2, 1997
Mr. Donald P. Weinzapfel
President and Chairman of the Board
Permanent Bancorp, Inc.
101 Southeast Third Street
Evansville, IN 47708
Dear Mr. Weinzapfel:
LaSalle Financial Partners (the "Partnership") writes this letter to
set out our position regarding certain matters crucial to the future of
Permanent Bancorp, Inc. ("Permanent"). We request that this letter be
delivered immediately to each member of the Board of Directors.
Historical Background
As you know, for the past few months the Partnership has become
increasingly active with regard to the management and direction of
Permanent. Initially, on April 11, 1997, we proposed a meeting with
management of Permanent to discuss management's slate of directors and
noted that we were considering making nominations to the Board of
Directors. On April 15, 1997, Permanent contacted us to discuss our
request. In connection with the resulting discussion, Permanent stated
that it would consider the Partnership's request to include a
representative of the Group on management's slate of nominees for the 1997
annual meeting.
By letter dated April 15, 1997, the Partnership formally proposed
Wallace Riley for consideration by Permanent as a management nominee.
However, Permanent responded by informing the Partnership that it would
not nominate Mr. Riley.
On April 22, 1997, the Partnership delivered to Permanent a notice of
intention to nominate two persons for election as directors of Permanent
at its 1997 annual meeting. The two persons that the Partnership proposed
were Wallace D. Riley and Robert C. Lucas.
We continued to attempt to work with management to find Board
nominees acceptable to the Board. After first proposing another
individual for management consideration, we proposed Terry G. Johnston for
consideration by Permanent as a management nominee. You informed the
Partnership that consideration by the Board of Directors of Mr. Johnston
as a management nominee would be delayed until the next meeting of the
Board, on June 17, 1997.
The Partnership thereupon sent to Permanent a notice of intention to
nominate Mr. Johnston as a director of Permanent at its 1997 annual
meeting. (The letter containing the notice of intent to nominate also
withdrew the notice of intent to nominate Wallace D. Riley and Robert C.
Lucas).
By letter dated June 18, 1997, the Board of Directors informed the
Partnership that at the meeting of Board on June 17, 1997, the Board had
determined not to nominate Mr. Johnston for election to the Board of
Directors. Because the Partnership is unwilling to pursue a proxy contest
in the face of continued resistance by the Board, we have withdrawn our
notice of intent to nomine Mr. Johnston.
Discussion and Recommendations
1. Rejection of Candidates Suggested by LaSalle Financial Partners
We have found the actions of the Board of Directors to be contrary to
the interests of Permanent's stockholders. The Board has given no serious
consideration to any of the candidates we have proposed for the Board. In
fact, in a telephone conversation you indicated to us that the "Board was
where it wanted to be," and therefore would not only not nominate the
candidate under discussion, but would not find acceptable any candidate
proposed by us.
We contend that the entrenched position of the Board is contrary to
maintaining an open, independent Board of Directors and is not in the best
interests of the stockholders whom the Board represents.
2. Business Strategy of the Board
The Partnership is very concerned about certain business strategies
recently adopted by the Board. Most importantly, the Partnership opposes
the formation of a commercial lending department earlier this year.
History has shown that competing against established, experienced banks
for commercial loans is a difficult, and very often unsuccessful, strategy
for thrift institutions. Permanent has experienced significant asset
quality problems in the past, and now, even as it enters the more risky
area of commercial lending, Permanent finds its allowance for loan losses
as a ratio to total loans at a level less than that of one year ago.
Permanent's low level of earnings, combined with its stretching of
business lines to obtain higher margin, riskier lending, should be of deep
concern to all stockholders and to the community as a whole. Other
concerns regarding the Board's business strategy will be addressed in
future communications.
3. Future Actions of LaSalle Financial Partners
LaSalle Financial Partners believes that the franchise value of
Permanent Bancorp remains high, at least for now. We believe that there
is considerable risk in the course of action approved by the current Board
of Directors. Therefore, we intend to continue to communicate our
concerns to the Board and, as necessary, to the stockholders.
In the short term, LaSalle Financial Partners believes that Permanent
should expeditiously retain an independent expert to evaluate Permanent's
business plan and projected results, and to compare the current business
plan with the option of merging Permanent with a larger, more profitable
financial institution. Such an evaluation is essential to ensure that
stockholder value is maximized.
We look forward to continuing to work with the management of
Permanent. We hope that our future relationship can be one of mutual
assistance in furthering the interests of Permanent's stockholders.
Very truly yours,
LASALLE FINANCIAL PARTNERS, L.P.
/s/ Richard J. Nelson
Richard J. Nelson
RJN:jks
