As filed with the Securities and Exchange Commission on August 31, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
FIRST SOUTHERN BANCSHARES, INC.
-------------------------------
(Name of Issuer)
FIRST SOUTHERN BANCSHARES, INC.
-------------------------------
(Name of Person(s) Filing Statement)
Common Stock, $0.01 Par Value Per Share
---------------------------------------
(Title of Class of Securities)
33645 B 10
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(CUSIP Number of Class of Securities)
Charles L. Frederick, Jr.
President and Chief Executive Officer
First Southern Bancshares, Inc.
102 South Court Street
Florence, Alabama 35630
(205) 764-7131
--------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of
the Person(s) Filing Statement)
Copies to:
Paul M. Aguggia, Esq.
Victor L. Cangelosi, Esq.
MULDOON, MURPHY & FAUCETTE LLP
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
(202) 362-0840
August 31, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
<PAGE>
CALCULATION OF FILING FEE
Transaction Valuation(1) Amount of Filing Fee
$3,850,000 $770
- ---------------------
(1) Calculated solely for the purpose of determining the filing fee, based upon
the purchase of 275,000 shares at the maximum tender offer price of $14.00
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
Item 1. Security and Issuer.
(a) The issuer of the securities to which this Schedule 13E-4 relates
is First Southern Bancshares, Inc. ("Company"), a Delaware corporation. The
address of the Company's principal executive office is 102 South Court Street,
Florence, Alabama 35630.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase
up to 275,000 shares (or such lesser number of shares as are properly tendered)
of common stock, $0.01 par value per share , of the Company ("Shares"),
1,643,562 of which were outstanding as of August 27, 1999, at prices not in
excess of $14.00 nor less than $12.75 per Share in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated August 31,
1999 (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.
Employees, 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 intend to tender Shares pursuant to the Offer. The
Company also has been advised that the trustees 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 11, Interest of Directors and Executive 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 7, 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 10, Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
<PAGE>
(b) The Company has not borrowed, and is not expected to borrow, any
funds for the purpose of financing the repurchase of Shares pursuant to the
Offer.
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 10,
Source and Amount of Funds," "Section 8, Purpose of the Offer; Certain Effects
of the Offer," "Section 11, Interest of Directors and Officers; Transactions and
Arrangements Concerning Shares" and "Section 12, 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 11, Interest of Directors and
Officers; Transactions and Arrangements Concerning Shares."
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect to
the Issuer's Securities.
The information set forth in "Introduction" and "Section 10, Source and
Amount of Funds," "Section 8, Purpose of the Offer; Certain Effects of the
Offer," and "Section 11, 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 16, Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.
Item 7. Financial Information.
(a)-(b) The information set forth in "Section 9, 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 13, Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in "Section 12, 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.
<PAGE>
(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 August 31, 1999.
(2) Form of Letter of Transmittal (including Certification of
Taxpayer Identification Number on Form W-9).
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(including the Instruction Form).
(6) Form of Letter to Stockholders of the Company, dated August
31, 1999, from Charles L. Frederick, Jr., President and Chief
Executive Officer of the Company.
(7) Form of Question and Answer Brochure.
(8) Text of Press Release issued by the Company, dated August 31,
1999.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule 13E-4 is true, complete and
correct.
Date: August 31, 1999 FIRST SOUTHERN BANCSHARES, INC.
By: /s/ Charles L. Frederick, Jr.
-------------------------------------
Charles L. Frederick, Jr.
President and Chief Executive Officer
<PAGE>
EXHIBIT (a)(1)
FIRST SOUTHERN BANCSHARES, INC.
Offer to Purchase for Cash Up to 275,000 Shares of
Common Stock, Par Value $0.01 Per Share
At a Purchase Price Not Less Than $12.75
Nor in Excess of $14.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., EASTERN TIME, ON SEPTEMBER 30, 1999
UNLESS THE OFFER IS EXTENDED.
First Southern Bancshares, Inc., a Delaware corporation ("Company"),
invites its shareholders to tender up to 275,000 shares of its common stock, par
value $0.01 per share ("Shares"), at prices, net to the seller in cash, without
interest thereon, not less than $12.75 nor in excess of $14.00 per Share
specified by such tendering shareholders, 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 less than $12.75 nor in excess of $14.00 per Share) that it will pay
for the Shares validly tendered pursuant to the Offer and not withdrawn
("Purchase Price"), taking into consideration the number of Shares so tendered
and the prices specified by the tendering shareholders. The Company will select
the Purchase Price that will allow it to purchase 275,000 Shares (or such lesser
number of Shares as are validly tendered and not withdrawn at prices not less
than $12.75 nor in excess of $14.00 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 before 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 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 and Shares not purchased because of proration will be returned.
Shareholders 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.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE SECTION 6.
IMPORTANT
Any shareholder desiring to tender all or any portion of his or her
Shares should either (1) 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 Registrar
and Transfer Company ("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 (2) request his or her broker, dealer,
commercial bank, trust company or nominee to effect the transaction for him or
her. A shareholder whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or nominee must contact such entity if he or she
desires to tender such Shares.
SHAREHOLDERS WHO DESIRE TO TENDER SHARES AND WHOSE CERTIFICATES FOR SUCH SHARES
ARE NOT IMMEDIATELY AVAILABLE OR WHO CANNOT COMPLY WITH THE PROCEDURE FOR
BOOK-ENTRY TRANSFER BY THE EXPIRATION OF THE OFFER MUST TENDER SUCH SHARES BY
FOLLOWING THE PROCEDURES FOR GUARANTEED DELIVERY SET FORTH UNDER "SECTION
3--PROCEDURE FOR TENDERING SHARES."
SHAREHOLDERS MUST PROPERLY COMPLETE THE LETTER OF TRANSMITTAL, INCLUDING THE
SECTION OF THE LETTER OF TRANSMITTAL RELATING TO THE PRICE AT WHICH THEY ARE
TENDERING SHARES, IN ORDER TO EFFECT A VALID TENDER OF THEIR SHARES.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
TO TENDER AND AT WHAT PRICE. EMPLOYEES, DIRECTORS AND EXECUTIVE OFFICERS MAY
PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE COMPANY'S OTHER SHAREHOLDERS.
THE COMPANY HAS BEEN ADVISED THAT ONE OF ITS DIRECTORS INTEND TO TENDER SHARES
PURSUANT TO THE OFFER. THE COMPANY HAS 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 Dealer Manager/Information Agent for the Offer is:
TRIDENT SECURITIES
The date of this Offer to Purchase is August 31, 1999
<PAGE>
As of August 27, 1999, the Company had issued and outstanding 1,643,562
Shares, as well as 59,860 Shares subject to exercisable stock options. The
275,000 Shares that the Company is offering to purchase pursuant to the Offer
represents approximately 16.7% of the Shares issued and outstanding. The Shares
are quoted on the Nasdaq National Market under the symbol "FSTH." On August 25,
1999, the closing price of the Shares as reported on the Nasdaq National Market
was $11.75 per Share. Shareholders are urged to obtain current market quotations
for the Shares.
To tender Shares properly, shareholders must complete the section of
the Letter of Transmittal relating to the price at which they are tendering
Shares.
Questions or requests for assistance regarding this Offer to Purchase,
the Letter of Transmittal or other tender offer materials may be directed to the
Dealer Manager/Information Agent toll free at (800) 222-2618, Ext. 99.
Additional copies of these materials will be furnished promptly at the Company's
expense. Shareholders 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 SHAREHOLDERS 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.
<PAGE>
TABLE OF CONTENTS
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..................................4
4. WITHDRAWAL RIGHTS...............................................6
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT
FOR PURCHASE PRICE..............................................7
6. CERTAIN CONDITIONS OF THE OFFER.................................8
7. PRICE RANGE OF SHARES; DIVIDENDS................................9
8. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.............10
9. CERTAIN INFORMATION CONCERNING THE COMPANY.....................11
10. SOURCE AND AMOUNT OF FUNDS.....................................18
11. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS
AND ARRANGEMENTS CONCERNING SHARES.............................18
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION
UNDER THE EXCHANGE ACT.........................................20
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS....................20
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES........................20
15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS............24
16. FEES AND EXPENSES..............................................24
17. ADDITIONAL INFORMATION.........................................25
18. MISCELLANEOUS..................................................25
<PAGE>
To the Holders of Shares of Common Stock of First Southern Bancshares, Inc.:
INTRODUCTION
First Southern Bancshares, Inc., a Delaware corporation ("Company"),
invites its shareholders to tender up to 275,000 shares of its common stock, par
value $0.01 per share ("Shares"), at a price, net to the seller in cash, without
interest thereon, not less than $12.75 nor in excess of $14.00 per Share
specified by such tendering shareholders, 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 less than
$12.75 nor in excess of $14.00 per Share) that it will pay for the Shares
validly tendered pursuant to the Offer and not withdrawn ("Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the Purchase Price that will
allow it to purchase 275,00 shares (or such lesser number of Shares as is
validly tendered and not withdrawn at prices not less than $12.75 nor in excess
of $14.00 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 before 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 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 and Shares not purchased
because of proration 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 6.
If more than 275,000 shares have been validly tendered at or below the
Purchase Price and not withdrawn on or before the Expiration Date (as defined
below), the Company will purchase Shares first from shareholders who owned
beneficially as of the close of business on August 27, 1999, 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 shareholders who validly tender Shares at or
below the Purchase Price. See Sections 1 and 2. Tendering shareholders 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 Trident
Securities ("Dealer Manager/Information Agent") and Registrar and Transfer
Company ("Depositary") incurred in connection with the Offer. See Section 16.
ANY TENDERING SHAREHOLDER 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 SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE
SECTIONS 3 AND 14.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. NEITHER THE
COMPANY NOR ITS BOARD OF DIRECTORS, HOWEVER, MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER 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. EMPLOYEES, OFFICERS AND DIRECTORS OF THE
COMPANY MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE COMPANY'S OTHER
SHAREHOLDERS. THE COMPANY HAS BEEN ADVISED THAT ONE OF ITS DIRECTORS INTEND TO
TENDER SHARES PURSUANT TO THE OFFER. THE COMPANY HAS BEEN ADVISED THAT THE
TRUSTEE OF THE COMPANY'S EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP") DOES NOT INTEND
TO TENDER ANY SHARES PURSUANT TO THE OFFER.
1
<PAGE>
As of August 27, 1999, the Company had issued and outstanding 1,643,562
Shares, as well as 59,860 Shares subject to exercisable stock options. The
275,000 Shares that the Company is offering to purchase pursuant to the Offer
represent approximately 16.7% of the Shares outstanding. The Shares are quoted
on the Nasdaq National Market under the symbol "FSTH." On August 25, 1999 the
closing price of the Shares on the Nasdaq was $11.75 per Share. See Section 7.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
Questions and requests for assistance may be directed to the Dealer
Manager/Information Agent.
Trident Securities
4601 Six Forks Road
Raleigh, North Carolina 27609
Toll free: (800) 222-2618, Ext. 99
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 275,000 shares that
are validly tendered on or before 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 less than $12.75 nor in excess of $14.00 per
Share. The later of 5:00 p.m., Eastern Time, on September 30, 1999, or the
latest time and date to which the Offer is extended pursuant to Section 15, 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
before 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 shareholders. The Company will select the Purchase Price that will
allow it to purchase 275,000 shares (or such lesser number of Shares as is
validly tendered and not withdrawn at prices not less than $12.75 nor in excess
of $14.00 per Share) pursuant to the Offer. Subject to Section 15, the Company
reserves the right to purchase more than 275,000 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 6.
In accordance with Instruction 5 of the Letter of Transmittal, each
shareholder who wishes to tender Shares must specify the price (not less than
$12.75 nor in excess of $14.00 per Share) at which such shareholder is willing
to have the Company purchase such Shares or, if such shareholder does not wish
to specify a Purchase Price, he or she may check the box on the Letter of
Transmittal indicating that the Shares are being tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer. As promptly
as practicable following the Expiration Date, the Company will determine the
Purchase Price (not less than $12.75 nor in excess of $14.00 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 shareholders. 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, will be returned to the tendering
shareholders 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 275,000
or fewer Shares have been validly tendered at or below the Purchase Price and
not withdrawn on or before the Expiration Date, the Company will purchase all
such Shares. Upon the terms and subject to the conditions of the Offer, if more
than 275,000 shares have been validly tendered at or below the Purchase Price
and not withdrawn on or before the Expiration Date, the Company will purchase
Shares in the following order of priority:
2
<PAGE>
(a) first, all Shares validly tendered at or below the Purchase Price
and not withdrawn on or before the Expiration Date by or on behalf of any
shareholder who owned beneficially, as of the close of business on August 27,
1999 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
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, all other
Shares validly tendered at or below the Purchase Price and not withdrawn on or
before 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, and (ii) as a
result of the "odd lot" procedure described in Section 2, the Company does not
expect that it would be able to announce the final proration factor or to
commence payment for any Shares purchased pursuant to the Offer until
approximately seven (7) 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 also may obtain such
preliminary information from the Dealer Manager/Information Agent.
As described under "Section 14--Certain Federal Income Tax
Consequences," the number of Shares that the Company will purchase from a
shareholder may affect the federal income tax consequences to the shareholder of
such purchase and therefore may be relevant to a shareholder's decision whether
to tender Shares. Each shareholder should consult his or her own tax advisor as
to the particular federal income tax consequences to that shareholder of
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.
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 15. 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, Eastern 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 shareholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES
All Shares validly tendered at or below the Purchase Price and not
withdrawn on or before the Expiration Date by or on behalf of any shareholder
who owned beneficially, as of the close of business on August 27, 1999, 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 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 shareholder 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 August 27, 1999, there were approximately 636 holders of record
of Shares. Approximately 159 of these holders of record held individually fewer
than 100 Shares and held in the aggregate approximately 5,469 Shares. Because of
the relatively large number of Shares held in the names of brokers and nominees,
the Company is unable
3
<PAGE>
to determine the exact number of beneficial owners of fewer than 100 Shares or
the aggregate number of Shares they own. Any shareholder 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, (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), or (iii) the tendering shareholder must comply with the guaranteed
delivery procedure described below, in each case on or before the Expiration
Date.
IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, IN ORDER
TO TENDER SHARES PURSUANT TO THE OFFER, A SHAREHOLDER MUST INDICATE IN THE
SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING
TENDERED" ON THE LETTER OF TRANSMITTAL: (1) THE PRICE (IN MULTIPLES OF
TWENTY-FIVE CENTS) AT WHICH SUCH SHARES ARE BEING TENDERED; OR (2) THAT THE
SHARES ARE BEING TENDERED AT THE PURCHASE PRICE DETERMINED BY THE COMPANY IN
ACCORDANCE WITH THE TERMS OF THE OFFER.
Shareholders 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. FOR A
TENDER OF SHARES TO BE VALID, ONLY ONE PRICE BOX, OR THE BOX INDICATING THAT THE
SHARES ARE BEING TENDERED AT THE PURCHASE PRICE DETERMINED BY THE COMPANY MUST
BE CHECKED ON EACH LETTER OF TRANSMITTAL.
In addition, holder of fewer than 100 Shares who tender all such Shares
must complete the box captioned "Odd Lots" on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery, in order to qualify for the
preferential treatment available to them as described in Section 2.
The Depositary will establish an account with respect to the Shares at
the Depository Trust Company (hereinafter referred to as the "Book-Entry
Transfer Facility") 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 the Book-Entry Transfer Facility may make delivery
of Shares by causing the 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
before the Expiration Date. Delivery of required documents to the Book-Entry
Transfer Facility 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 the
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 the
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.
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
4
<PAGE>
"Eligible Institution"). Signatures on a Letter of Transmittal need not be
guaranteed if (a) the Letter of Transmittal is signed by the registered holder
of the Shares (which term, for the purposes of this Section, includes any
participant in the 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.
If a shareholder desires to tender Shares pursuant to the Offer and
such shareholder's certificates are not immediately available (or the procedures
for book-entry transfer cannot be completed on a timely basis) or time will not
permit all required documents to reach the Depositary by the Expiration Date,
such Shares may nevertheless be tendered provided that all of the following
conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail, telegram or facsimile
transmission), on or before the Expiration Date, a properly completed and duly
executed Notice of Guaranteed Delivery substantially in the form the Company has
provided with this Offer to Purchase (indicating the price at which the Shares
are being tendered) and includes a guarantee by an Eligible Institution in the
form set forth in such Notice; and
(c) the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by the Letter of Transmittal, are
received by the Depositary within three Nasdaq trading days after the date the
Depositary receives such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. 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 SHAREHOLDER
MUST PROVIDE THE DEPOSITARY WITH SUCH SHAREHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER AND CERTAIN OTHER INFORMATION BY PROPERLY COMPLETING THE
SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. FOREIGN SHAREHOLDERS
(AS DEFINED IN SECTION 14) 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
SHAREHOLDERS SUBJECT TO 30% (OR LOWER TREATY RATE) WITHHOLDING ON GROSS PAYMENTS
RECEIVED PURSUANT TO THE OFFER (AS DISCUSSED IN SECTION 14). FOR A DISCUSSION OF
CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO TENDERING SHAREHOLDERS, SEE SECTION
14. EACH SHAREHOLDER 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-4 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 shareholder's representation and
warranty that (i) such shareholder has a net long position in the Shares being
tendered
5
<PAGE>
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 shareholder 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
PROPERLY TENDERED.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer may be withdrawn at any
time before the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after 12:00 midnight, Eastern Time, September
30, 1999 unless previously accepted for payment by the Company as provided in
this Offer to Purchase. If 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.
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,
Eastern Time, September 30, 1999, unless accepted for payment by the Company as
provided in this Offer to Purchase. For a withdrawal to be effective before that
time, a shareholder of Shares held in physical form must provide a written,
telegraphic or facsimile transmission notice of withdrawal to the Depositary at
its 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 (including
the number of Shares being withdrawn); (C) the certificate numbers shown on the
particular certificates evidencing such Shares; (D) the signature of such
shareholder 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.
A shareholder of Shares held with the Book-Entry Transfer Facility must
call such shareholder's broker and instruct such broker to withdraw such tender
of Shares and instruct such broker to provide a written, telegraphic or
facsimile transmission notice of withdrawal to the Depositary on or before the
Expiration Date. A purported notice of withdrawal, which lacks any of the
applicable required information noted above, will not be an effective withdrawal
of a tender previously made.
6
<PAGE>
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 before 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 shareholders, announce the Purchase Price, and
(subject to the proration 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 before
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 the Book-Entry Transfer Facility), a properly completed and duly
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, Shares that are
validly tendered and not withdrawn as of and when it gives oral or written
notice to the Depositary of the Company's acceptance for payment of such Shares.
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 (7) 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 shareholders for the
purpose of receiving payment from the Company and transmitting payment to
tendering shareholders. Under no circumstances will interest be paid on amounts
to be paid to tendering shareholders, 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 and Shares not purchased
because of proration, will be returned (or, in the case of Shares tendered by
book-entry transfer, such Shares will be credited to an account maintained with
the Book-Entry Transfer Facility by the participant therein who so delivered
such Shares) as promptly as practicable following the Expiration Date without
expense to the tendering shareholder.
Payment for Shares may be delayed if there is 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 6.
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
7
<PAGE>
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted. See Instruction 7 to the Letter of Transmittal.
ANY TENDERING SHAREHOLDER 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 SHAREHOLDER OR
OTHER PAYEE PURSUANT TO THE OFFER SEE SECTION 3.
6. 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 August 27, 1999 and at or
before the Expiration Date, 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 reasonable judgment of the Company,
could materially and adversely affect the business, condition (financial or
other), income, operations or prospects of the Company and its subsidiary, taken
as a whole, or otherwise materially impair in any way the contemplated future
conduct of the business of the Company or its subsidiary 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 its
subsidiary, by any legislative body, court, authority, agency or tribunal which,
in the Company's reasonable 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 subsidiary, taken as a whole, or otherwise materially impair in
any way the contemplated future conduct of the business of the Company or its
subsidiary;
(c) there shall have occurred: (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market; (ii) 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, in the Company's reasonable judgment, could have a material adverse
effect on the Company's business, condition (financial or 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 reasonable 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 reasonable judgment, a material acceleration or worsening thereof;
(d) 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); or
8
<PAGE>
(e) there shall have occurred any event or events that has resulted, or
may in the reasonable 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
subsidiary; and, in the reasonable 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 such condition, 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 reasonable discretion. The failure by the Company
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time. Any determination by the Company
concerning the events described above will be final and binding on all parties.
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 shareholders of record, each owning 100 Shares or more, and the Shares
would remain listed for quotation on the Nasdaq National Market. This condition
may be waived.
The Exchange Act requires that all conditions to the Offer must be
satisfied or waived before the Expiration Date.
7. 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 Nasdaq National Market for
the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW DIVIDEND
---------------- ----------------- -----------------
<S> <C> <C> <C>
Fiscal 1997
1st Quarter................ $13.750 $12.000 $0.125
2nd Quarter................ 13.250 12.750 0.125
3rd Quarter................ 15.250 13.250 0.125
4th Quarter................ 16.250 14.375 0.125
Fiscal 1998
1st Quarter................ 16.500 14.750 0.425
2nd Quarter................ 18.375 15.500 0.125
3rd Quarter................ 17.375 14.750 0.125
4th Quarter................ 16.875 13.375 0.125
Fiscal 1999
1st Quarter................ 14.438 12.750 0.125
2nd Quarter................ 13.500 11.125 0.125
</TABLE>
On August 25, 1999, the closing price of the Shares on the Nasdaq
National Market was $11.75 per Share. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES.
9
<PAGE>
8. 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 shareholders
and is consistent with the Company's long-term goal of increasing shareholder
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 shareholder 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 objective of
increasing shareholder value.
Other actions previously employed, including an open market purchase of
Shares, and the declaration of a quarterly dividend, have enhanced shareholder
value, but capital remains at high levels. The Offer is designed to restructure
the Company's balance sheet in order to increase return on equity by reducing
the amount of equity 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 the Company and its wholly
owned subsidiary, First Southern Bank ("Bank"), will continue to maintain the
highest regulatory ranking 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. Furthermore, the Company
is aware of certain accounting rules applicable to a business combination. The
ability to enter into a transaction that may be accounted for as a "pooling of
interests" in the future pursuant to applicable accounting rules and standards
has also been considered by the Company as they consider alternative shareholder
enhancement vehicles.
The Offer will enable shareholders who are considering the sale of all
or a portion of their Shares the opportunity to determine the price or prices
(not less than $12.75 nor in excess of $14.00 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 shareholders the
opportunity to sell Shares at prices greater than market prices prevailing
before the announcement of the Offer. See Section 7. In addition, qualifying
shareholders 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.
Shareholders who do not tender their Shares pursuant to the Offer and
shareholders 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 shareholders will not
be subject to materially greater risk as a result of the reduction of the
capital base.
Shareholders 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. Finally, the Offer may prohibit the Company's
ability to qualify for pooling-of-interests accounting treatment for any merger
transaction for approximately the next two years.
If fewer than 275,000 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
10
<PAGE>
favorable to shareholders 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 and will be available for the
Company to issue without further shareholder action (except as required by
applicable law or the rules of the Nasdaq 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 SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER
MUST MAKE HIS OR HER DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER AND AT WHAT PRICE. EMPLOYEES, OFFICERS AND DIRECTORS OF THE
COMPANY MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE COMPANY'S OTHER
SHAREHOLDERS. THE COMPANY HAS BEEN ADVISED THAT ONE OF ITS DIRECTORS INTEND TO
TENDER SHARES PURSUANT TO THE OFFER. THE COMPANY HAS BEEN ADVISED THAT THE
TRUSTEE OF THE COMPANY'S ESOP DOES NOT INTEND TO TENDER ANY SHARES PURSUANT TO
THE OFFER.
9. CERTAIN INFORMATION CONCERNING THE COMPANY
General
First Southern Bancshares, Inc., a Delaware corporation, was organized
for the purpose of becoming the holding company for First Federal Savings and
Loan Association of Florence ("Association") upon the Association's conversion
from a federally chartered mutual savings and loan association to a federally
chartered capital stock savings and loan association ("Stock Conversion") and
then to an Alabama-chartered commercial bank ("Bank Conversion"). The Stock
Conversion was completed on April 13, 1995. The Bank Conversion was completed on
June 10, 1995, with the Association changing its name to "First Southern Bank."
At June 30, 1999, the Company had total assets of approximately $176.4 million,
total deposits of approximately $126.5 million and stockholders' equity of
approximately $18.0 million.
The Bank is an Alabama-chartered commercial bank regulated by the
Superintendent of Banks of the State of Alabama and its deposits are insured up
to applicable limits under the Savings Association Insurance Fund ("SAIF") of
the Federal Deposit Insurance Corporation ("FDIC"). The Bank also is a member of
the Federal Home Loan Bank ("FHLB") System.
The Bank is a community-oriented financial institution that serves
individuals and businesses located in Lauderdale and Colbert Counties, and the
surrounding counties located in Northwest Alabama, its primary market area. The
Bank's primary business consists of attracting deposits from the general public
to originate residential mortgage loans, commercial real estate loans,
multi-family mortgage loans and consumer loans.
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 audited consolidated financial statements of the Company. The
data should be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1998 and the unaudited consolidated
financial statements as reported in the Company's quarterly report on Form
10-QSB for the quarter ended June 30, 1999. In the opinion of management, the
unaudited financial statements for the
11
<PAGE>
quarters ended June 30, 1999 and 1998 reflect all adjustments, consisting only
of normal recurring entries, necessary for a fair statement of the results of
operations for the interim periods. However, the results of operations for any
interim period are not necessarily indicative of results for the full year.
Copies of these reports may be obtained as described in Section 17 of this
Offer.
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.
12
<PAGE>
<TABLE>
<CAPTION>
First Southern Bancshares, Inc.
Consolidated Statements of Financial Condition
At June 30, At December 31,
-------- ----------------------
1999 1998 1997
--------- --------- ---------
(Dollars in thousands)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents ............................. $ 8,909 $ 13,188 $ 6,420
Investment securities available for sale, at market ... 6,490 2,016 7,993
Mortgage-backed securities, held to maturity, at cost . 3,643 945 1,432
Loans held for sale, at cost, which approximates market 145 659 223
Loans receivable, net ................................. 148,126 152,594 159,535
Foreclosed real estate ................................ 1,200 710 100
Premises and equipment, net ........................... 3,754 3,852 3,509
Federal Home Loan Bank stock, at cost ................. 1,564 1,918 1,970
Accrued interest receivable ........................... 1,720 1,758 1,822
Deferred income taxes ................................. 443 397 165
Other assets .......................................... 437 338 504
--------- --------- ---------
TOTAL ASSETS .................................... $ 176,431 $ 178,375 $ 183,673
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits ........................................... $ 126,469 $ 127,550 $ 143,731
Advances from Federal Home Loan Bank ............... 31,241 31,316 18,468
Income taxes currently payable ..................... 137 356 115
Other liabilities .................................. 538 1,145 410
--------- --------- ---------
Total liabilities ............................... 158,385 160,367 162,724
--------- --------- ---------
<PAGE>
<CAPTION>
First Southern Bancshares, Inc.
Consolidated Statements of Financial Condition
At June 30, At December 31,
-------- ----------------------
1999 1998 1997
--------- --------- ---------
(Dollars in thousands)
<S> <C> <C> <C>
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 500,000 shares
authorized; none issued and outstanding ......... -- -- --
Common Stock, $.01 par value; 4,000,000 shares
authorized; 2,076,969 issued and outstanding .... 21 21 21
Additional paid-in capital ............................ 11,421 11,414 11,375
Retained earnings - substantially restricted .......... 13,609 13,340 13,199
Unearned employee compensation - ESOP ................. (141) (172) (280)
Unearned employee compensation - MRDP ................. (411) (550) (861)
Net unrealized loss on securities available for sale .. (58) 11 (2)
Treasury stock, at cost ............................... (6,395) (6,056) (2,503)
--------- --------- ---------
Total stockholders' equity ....................... 18,046 18,008 20,949
--------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............... $ 176,431 $ 178,375 $ 183,673
========= ========= =========
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
First Southern Bancshares, Inc.
Unaudited Pro Forma Consolidated Statements of Financial Condition
At June 30, 1999 At December 31, 1998
275,000 Shares Purchased 275,000 Shares Purchased
at at
--------------------------- ---------------------------
$12.75 $14.00 $12.75 $14.00
Per Share Per Share Per Share Per Share
--------- --------- --------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents ............................... $ 5,403 $ 5,059 $ 9,682 $ 9,338
Investment securities available for sale, at market ..... 6,490 6,490 2,016 2,016
Mortgage-backed securities, held to maturity, at cost ... 3,643 3,643 945 945
Loans held for sale, at cost, which approximates market . 145 145 659 659
Loans receivable, net ................................... 148,126 148,126 152,594 152,594
Foreclosed real estate .................................. 1,200 1,200 710 710
Premises and equipment, net ............................. 3,754 3,754 3,852 3,852
Federal Home Loan Bank stock, at cost ................... 1,564 1,564 1,918 1,918
Accrued interest receivable ............................. 1,631 1,622 1,546 1,525
Deferred income taxes ................................... 443 443 397 397
Other assets ............................................ 437 437 338 338
--------- --------- --------- ---------
Total assets ...................................... $ 172,836 $ 172,483 $ 174,657 $ 174,292
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits ............................................. $ 126,469 $ 126,469 $ 127,550 $ 127,550
Advances from Federal Home Loan Bank ................. 31,241 31,241 31,316 31,316
Income taxes currently payable ....................... 101 98 271 263
Other liabilities .................................... 538 538 1,145 1,145
--------- --------- --------- ---------
Total liabilities ................................. $ 158,349 $ 158,346 $ 160,282 $ 160,274
<PAGE>
<CAPTION>
First Southern Bancshares, Inc.
Unaudited Pro Forma Consolidated Statements of Financial Condition
At June 30, 1999 At December 31, 1998
275,000 Shares Purchased 275,000 Shares Purchased
at at
--------------------------- ---------------------------
$12.75 $14.00 $12.75 $14.00
Per Share Per Share Per Share Per Share
--------- --------- --------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 500,000 shares
authorized; none issued and outstanding ........... $ -- $ -- $ -- $ --
Common Stock, $.01 par value; 4,000,000 shares
authorized; 2,076,969 issued and outstanding ...... 21 21 21 21
Additional paid-in capital .............................. 11,421 11,421 11,414 11,414
Retained earnings - substantially restricted ............ 13,556 13,550 13,213 13,200
Unearned employee compensation - ESOP ................... (141) (141) (172) (172)
Unearned employee compensation - MRDP ................... (411) (411) (550) (550)
Net unrealized loss on securities available for sale .... (58) (58) 11 11
Treasury stock, at cost ................................. (9,901) (10,245) (9,562) (9,906)
--------- --------- --------- ---------
Total stockholders' equity ......................... 14,487 14,137 14,375 14,018
--------- --------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................. $ 172,836 $ 172,483 $ 174,657 $ 174,292
========= ========= ========= =========
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
First Southern Bancshares, Inc.
Historical Consolidated Statements of Income
Six Months Ended Year Ended
June 30, December 31,
------------------------- -------------------------
1999 1998 1998 1997
-------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans ...................................................... $6,482 $7,164 $ 14,345 $ 14,643
Mortgage-backed securities ................................. 49 53 96 137
Investment securities ...................................... 97 164 252 362
Other ...................................................... 284 222 484 304
-------- -------- -------- --------
Total interest income ................................... 6,912 7,603 15,177 15,446
-------- -------- -------- --------
INTEREST EXPENSE:
Deposits ...................................................... 2,656 3,276 6,203 6,892
Advances from Federal Home Loan Bank and other ................ 882 744 1,753 1,560
-------- -------- -------- --------
Total interest expense ........................................ 3,538 4,020 7,956 8,452
-------- -------- -------- --------
Net interest income ........................................... 3,374 3,583 7,221 6,994
Provision for loan losses ..................................... 343 121 605 242
-------- -------- -------- --------
Net interest income after provision for loan losses ........ 3,031 3,462 6,616 6,752
-------- -------- -------- --------
NON-INTEREST INCOME:
Loan fees and service charges .............................. 308 320 657 468
Net gains on sale of loans ................................. 138 126 263 258
Gains on real estate owned ................................. 4 2 2 2
Loss on sale of other assets ............................... -- -- -- (2)
Other ...................................................... 15 15 34 40
-------- -------- -------- --------
Total non-interest income ............................... 465 463 956 766
-------- -------- -------- --------
<PAGE>
<CAPTION>
First Southern Bancshares, Inc.
Historical Consolidated Statements of Income
Six Months Ended Year Ended
June 30, December 31,
------------------------- -------------------------
1999 1998 1998 1997
-------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
NON-INTEREST EXPENSE:
Compensation and employee benefits ......................... 1,444 1,552 3,001 3,218
Building and occupancy expense ............................. 293 280 630 559
Data processing expense .................................... 214 209 395 296
Advertising ................................................ 80 76 164 185
Insurance expense .......................................... 92 112 202 242
Other ...................................................... 306 321 668 676
-------- -------- -------- --------
Total non-interest expense .............................. 2,429 2,550 5,060 5,176
-------- -------- -------- --------
Income before income taxes .................................... 1,067 1,375 2,512 2,342
Income tax expense ............................................ 420 526 1,010 945
-------- -------- -------- --------
Net income ................................................. $ 647 $ 849 $ 1,502 $ 1,397
======== ======== ======== ========
Basic earnings per share ...................................... $ 0.39 $ 0.45 $ 0.83 $ 0.74
======== ======== ======== ========
Diluted earnings per share .................................... $ 0.39 $ 0.44 $ 0.82 $ 0.73
======== ======== ======== ========
DIVIDENDS PER SHARE:
Regular cash dividends ..................................... $ 0.25 $ 0.25 $ 0.50 $ 0.50
Special cash dividends ..................................... -- 0.30 0.30 --
-------- -------- -------- --------
Total dividends per share ............................... $ 0.25 $ 0.55 $ 0.80 $ 0.50
======== ======== ======== ========
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
First Southern Bancshares, Inc.
Pro Forma Consolidated Income Statement
Six Months Ended Year Ended
June 30, 1999 December 31, 1998
275,000 Shares Purchased 275,000 Shares Purchased
at at
-------------------------- --------------------------
$12.75 $14.00 $12.75 $14.00
Per Share Per Share Per Share Per Share
--------- --------- --------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans ....................................................... $ 6,482 $ 6,482 $14,345 $14,345
Mortgage-backed securities .................................. 49 49 96 96
Investment securities ....................................... 97 97 252 252
Other ....................................................... 195 186 272 251
------- ------- ------- -------
Total interest income .................................... 6,823 6,814 14,965 14,944
------- ------- ------- -------
INTEREST EXPENSE:
Deposits ....................................................... 2,656 2,656 6,203 6,203
Advances from Federal Home Loan Bank and other ................. 882 882 1,753 1,753
------- ------- ------- -------
Total interest expense ......................................... 3,538 3,538 7,956 7,956
------- ------- ------- -------
Net interest income ......................................... 3,285 3,276 7,009 6,988
Provision for loan losses ...................................... 343 343 605 605
------- ------- ------- -------
Net interest income after provision for loan losses ......... 2,942 2,933 6,404 6,383
------- ------- ------- -------
NON-INTEREST INCOME:
Loan fees and service charges ............................... 308 308 657 657
Net gains on sale of loans .................................. 138 138 263 263
Gains on real estate owned .................................. 4 4 2 2
Other ....................................................... 15 15 34 34
------- ------- ------- -------
Total non-interest income ................................ 465 465 956 956
------- ------- ------- -------
<PAGE>
<CAPTION>
First Southern Bancshares, Inc.
Pro Forma Consolidated Income Statement
Six Months Ended Year Ended
June 30, 1999 December 31, 1998
275,000 Shares Purchased 275,000 Shares Purchased
at at
-------------------------- --------------------------
$12.75 $14.00 $12.75 $14.00
Per Share Per Share Per Share Per Share
--------- --------- --------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
NON-INTEREST EXPENSE:
Compensation and employee benefits .......................... 1,444 1,444 3,001 3,001
Building and occupancy expense .............................. 293 293 630 630
Data processing expense ..................................... 214 214 395 395
Advertising ................................................. 80 80 164 164
Insurance expense ........................................... 92 92 202 202
Other ....................................................... 306 306 668 668
------- ------- ------- -------
Total non-interest expense ............................... 2,429 2,429 5,060 5,060
------- ------- ------- -------
Income before income taxes ..................................... 978 969 2,300 2,279
Income tax expense ............................................. 384 381 925 917
------- ------- ------- -------
Net income .................................................. $ 594 $ 588 $ 1,375 $ 1,362
======= ======= ======= =======
Basic earnings per share ....................................... $ 0.43 $ 0.43 $ 0.90 $ 0.90
======= ======= ======= =======
Diluted earnings per share ..................................... $ 0.43 $ 0.43 $ 0.88 $ 0.88
======= ======= ======= =======
DIVIDENDS PER SHARE:
Regular cash dividends ...................................... $ 0.25 $ 0.25 $ 0.50 $ 0.50
Special cash dividends ...................................... $ -- $ -- $ 0.30 $ 0.30
------- ------- ------- -------
Total dividends per share ................................ $ 0.25 $ 0.25 $ 0.80 $ 0.80
======= ======= ======= =======
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
First Southern Bancshares, Inc.
Selected Historical Financial Ratios
Six Months Ended June 30, Year Ended December 31,
---------------------------- ----------------------------
1999 1998 1998 1997
----------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Selected Ratios:
Financial Performance:
Return on average assets....................... 0.73% 0.92% 0.81% 0.75%
Return on average equity....................... 7.23% 8.21% 7.45% 6.74%
Capital:
Dividend payout ratio.......................... 64.10% 55.56% 60.24% 67.57%
Average stockholders' equity to average total
assets....................................... 10.06% 11.15% 10.89% 11.12%
Book value per share........................... $11.03 $11.24 $10.87 $11.24
Asset quality:
Allowance for loan losses as
a percent of loans.......................... 0.86% 0.98% 0.94% 0.99%
Allowance for loan losses as
a percent of nonperforming loans............ 45.30% 87.78% 35.41% 131.34%
Nonperforming loans to total loans............. 1.89% 1.12% 2.66% 0.75%
<PAGE>
<CAPTION>
First Southern Bancshares, Inc.
Unaudited Selected Pro Forma Financial Ratios
Six Months Ended Year Ended
June 30, 1999 December 31, 1998
--------------------------- ---------------------------
275,000 Shares Purchased At 275,000 Shares Purchased At
--------------------------- ---------------------------
$12.75 $14.00 $12.75 $14.00
Per Share Per Share Per Share Per Share
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Selected Ratios:
Financial Performance:
Return on average assets.............................................. 0.68% 0.68% 0.76% 0.75%
Return on average equity.............................................. 7.36% 7.38% 7.49% 7.50%
Capital:
Dividend payout ratio................................................. 57.50% 57.50% 55.54% 55.54%
Average stockholders' equity to average total assets.................. 9.24% 9.16% 10.10% 10.02%
Book value per share.................................................. $10.64 $10.38 $10.40 $10.14
Asset quality:
Allowance for loan losses as a percent of loans....................... 0.86% 0.86% 0.94% 0.94%
Allowance for loan losses as a percent of nonperforming loans......... 45.30% 45.30% 35.41% 35.41%
Nonperforming loans to total loans.................................... 1.89% 1.89% 2.66% 2.66%
</TABLE>
17
<PAGE>
First Southern Bancshares, Inc.
Notes to Unaudited Pro Forma Financial Information
(1) The pro forma financial information reflects the repurchase of
275,000 Shares at $12.75 per share and $14.00 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 gives 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
provided by cash and cash equivalents. The pro forma data assumes a rate of
interest of 6.05% on cash and cash equivalents for the year ended December 31,
1998 and 5.07% for the six months ended June 30, 1999, and a statutory tax rate
of 40.0% for both the year ended December 31, 1998 and the six months ended June
30, 1999.
(4) No effect has been given to the $75,000 in costs estimated to be
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 stock purchased.
10. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 275,000 Shares pursuant to the
Offer at a price of $14.00 per Share, the total amount required by the Company
to purchase such Shares will be approximately $3.9 million, exclusive of fees
and other expenses. The Company will fund such purchases with cash and cash
equivalents.
11. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS;
TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES
As of August 27, 1999, the Company had issued and outstanding 1,643,562
shares of common stock. The 275,000 Shares that the Company is offering to
purchase represent approximately 16.7% of the outstanding Shares. As of August
27, 1999, the Company's directors and executive officers as a group (9 persons)
beneficially owned an aggregate of 286,901 Shares representing approximately
17.2% of the outstanding Shares. As of June 30, 1999, the ESOP held 141,272
shares, representing approximately 8.6% of the shares outstanding.
Neither the Company, nor any subsidiary of the Company nor, to the best
of the Company's knowledge, any of the Company's directors or executive
officers, nor any affiliates of any of the foregoing, had any transactions
involving the Shares during the 40 business days before the date hereof.
Executive officers and directors of the Company may participate in the
Offer on the same basis as the Company's other shareholders. The Company has
been advised that Gary A. Gamble is the only director or executive officer that
intends to tender Shares pursuant to the Offer. Mr. Gamble intends to tender
101,605 shares at a yet-to-be- determined price. The trustees of the ESOP has
advised the Company that it does not intend to tender any Shares pursuant to the
Offer.
18
<PAGE>
The table below identifies each executive officer and director of the
Company and sets forth the number of Shares owned (including Shares held under
the ESOP and including any Shares that could in the future be acquired upon the
exercise of stock options) and the percent of Shares owned to the total number
of Shares outstanding as of August 27, 1999. Subject to the terms of the Offer,
all or a portion of such Shares could be tendered.
<TABLE>
<CAPTION>
Percent of Total
Shares Shares
Name Owned Outstanding
- ------- ---------------- ----------------
<S> <C> <C>
Directors and Executive Officers
Charles L. Frederick, Jr.
Chairman, President and Chief
Executive Officer.............. 71,018 4.3%
S. Greg Beadle
Director......................... 6,935 *
James E. Bishop
Director....................... 61,162 3.7%
Milka S. Duke
Director....................... 24,374 1.4%
Gary A. Gamble
Director....................... 103,035 6.2%
Steve McKinney
Director....................... 7,000 *
J. Acker Rogers
Director....................... 39,209 2.4%
Thomas N. Ward
Director, Executive Vice
President and Chief Operating
Officer........................ 79,698 4.8%
Kenneth A. William
Director....................... 22,824 1.3%
Total shares owned......... 415,255 25.3%
------- -----
Shares owned as a percent
of shares outstanding at
June 30, 1999................. 25.3% 25.3%
Shares owned as a percent of
shares outstanding assuming
tender and purchase of
275,000 shares................ 22.9% 22.9%
</TABLE>
- --------------
* Less than 1% of shares outstanding.
Except for outstanding options to purchase Shares granted to certain
employees (including executive officers) of the Company, 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.
19
<PAGE>
Except as disclosed in this Offer, the Company has no 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 its subsidiary; (c) a
sale or transfer of a material amount of assets of the Company or its
subsidiary; (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.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES;
REGISTRATION UNDER THE EXCHANGE ACT
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of shareholders. Nonetheless, the Company anticipates that there will be
a sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the Nasdaq, the Company believes that
following its purchase of Shares pursuant to the Offer, the Company's remaining
Shares will continue to qualify to be listed on the Nasdaq.
The Shares are currently "margin securities" under the rules of the
Board of Governors of the Federal Reserve System ("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 shareholders
and the U.S. Securities and Exchange Commission ("Commission") and comply with
the Commission's proxy rules in connection with meetings of the Company's
shareholders.
13. 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 6.
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General
The following is a discussion of the material United States federal
income tax consequences to shareholders 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"), U.S. Department of
Treasury regulations, Internal Revenue Service
20
<PAGE>
("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 shareholder in light of such shareholder'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 shareholders 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 shareholders. 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 SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE
PARTICULAR UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THAT SHAREHOLDER OF
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 shareholder to the Company pursuant to the
Offer will be a taxable transaction for United States federal income tax
purposes. The United States federal income tax consequences to a shareholder may
vary depending upon the shareholder's particular facts and circumstances. Under
Section 302 of the Code, the surrender of Shares by a shareholder 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 shareholder) if the
receipt of cash upon such surrender (i) is "substantially disproportionate" with
respect to the shareholder, (ii) results in a "complete redemption" of the
shareholder's interest in the Company, or (iii) is "not essentially equivalent
to a dividend" with respect to the shareholder (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 shareholder will recognize
gain or loss equal to the difference between the amount of cash received by the
shareholder and the shareholder'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
shareholder will be treated as having received a distribution by the Company
with respect to such shareholder's Shares in an amount equal to the cash
received by the shareholder 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 shareholder's tax basis in the
Shares, and then as gain from the sale or exchange of such Shares. If a
shareholder is treated as having received a distribution by the Company with
respect to his or her Shares, the shareholder's tax basis in his or her
remaining Shares will generally be adjusted to take into account the
shareholder's return of basis in the Shares tendered.
Constructive Ownership
In determining whether any of the three tests under Section 302 of the
Code is satisfied, shareholders must take into account not only the Shares that
are actually owned by the shareholder, but also Shares that are constructively
owned by the shareholder within the meaning of Section 318 of the Code. Under
Section 318 of the Code, a shareholder may constructively own Shares actually
owned, and in some cases constructively owned, by certain related individuals or
entities and Shares that the shareholder has the right to acquire by exercise of
an option or by conversion.
21
<PAGE>
Proration
Contemporaneous dispositions or acquisitions of Shares by a shareholder
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
shareholder should be aware that because proration may occur in the Offer, even
if all the Shares actually and constructively owned by a shareholder are
tendered pursuant to the Offer, fewer than all of such Shares may be purchased
by the Company. Thus, proration may affect whether the surrender by a
shareholder pursuant to the Offer will meet any of the three tests under Section
302 of the Code.
Section 302 Tests
The receipt of cash by a shareholder will be "substantially
disproportionate" if the percentage of the outstanding Shares in the Company
actually and constructively owned by the shareholder 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 such shareholder
immediately before the sale of Shares pursuant to the Offer. Shareholders 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 shareholder will be a "complete redemption" if
either (i) the shareholder owns no Shares in the Company either actually or
constructively immediately after the Shares are surrendered pursuant to the
Offer, or (ii) the shareholder 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 shareholder immediately after the
Offer, the shareholder is eligible to waive (and effectively waives)
constructive ownership of all such Shares under procedures described in Section
302(c) of the Code. A director, officer or employee of the Company is not
eligible to waive constructive ownership under the procedures described in
Section 302(c) of the Code.
Even if the receipt of cash by a shareholder fails to satisfy the
"substantially disproportionate test or the "complete redemption" test, a
shareholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test if the shareholder's surrender of Shares pursuant to the Offer
results in a "meaningful reduction" in the shareholder's interest in the
Company. Whether the receipt of cash by a shareholder will be "not essentially
equivalent to a dividend" will depend upon the individual shareholder's facts
and circumstances. The IRS has indicated in published rulings that even a small
reduction in the proportionate interest of a small minority shareholder in a
publicly held corporation who exercises no control over corporate affairs may
constitute such a "meaningful reduction. "Shareholders 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 Shareholder Dividend Treatment
If a sale of Shares by a corporate shareholder is treated as a
dividend, the corporate shareholder may be entitled to claim a deduction equal
to 70% of the dividend under Section 243 of the Code, subject to applicable
limitations. Corporate shareholders 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 shareholder 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 shareholder pursuant to
the Offer that are treated as a dividend may constitute an "extraordinary
dividend" under Section 1059 of the Code. The "extraordinary dividend" rules of
the Code are highly complicated. Accordingly, any corporate shareholder that
might have a dividend as a result of the sale of shares pursuant to the Offer
should review the "extraordinary dividend" rules to determine the applicability
and impact of such rules to it.
22
<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. Tax rates on
long-term capital gain for individual shareholders vary depending on the
shareholder's income and holding period for the Shares. In particular, reduced
tax rates apply to gains recognized by an individual from the sale of capital
assets held for more than one year (currently 20 percent or less).
Shareholders 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 Shareholders
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 shareholder 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 shareholder within the United
States. For this purpose, a foreign shareholder is any shareholder that is not
(i) a citizen or resident of the United States, (ii) a domestic corporation or
domestic partnership, (iii) an estate the income of which from sources without
the United States is effectively connected with the conduct of a trade or
business within the United States, or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust, and one or more United States persons have the authority to control all
substantial decisions of the trust. Without definite knowledge to the contrary,
the Company will determine whether a shareholder is a foreign shareholder by
reference to the shareholder's address. A foreign shareholder may be eligible to
file for a refund of such tax or a portion of such tax if such shareholder (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 shareholder within the
United States or that the foreign shareholder is entitled to the benefits of a
tax treaty, the foreign shareholder 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 shareholders 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 SHAREHOLDER.
NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN TAX
CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. SHAREHOLDERS 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.
23
<PAGE>
15. 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 6 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 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., Eastern
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 Dealer Manager/Information
Agents soliciting fee, or (b) increase (except for an increase not exceeding 2%
of the outstanding shares) or decrease the number of Shares it seeks.
16. FEES AND EXPENSES
Trident Securities will act as Dealer Manager/Information Agent for the
Company in connection with the Offer. For its services, the Company has agreed
to pay the Dealer Manager/Information Agent a financial advisory fee of $10,000,
consisting in part of a $5,000 non-refundable retainer. Upon acceptance for and
payment of Shares pursuant to the Offer, the Company has agreed to pay the
Dealer Manager/Information Agent a total of $0.08 per Share purchased by the
Company pursuant to the Offer, less the balance of the financial advisory fee.
The Dealer Manager/Information Agent may contact shareholders by mail,
telephone, facsimile, telex, telegraph, or other electronic means and personal
interviews, and may request brokers, dealers and other nominee shareholders to
forward materials relating to the Offer to beneficial owners. The Depositary and
the Dealer Manager/Information Agent will receive reasonable and customary
compensation for their services and will also be reimbursed for certain
out-of-pocket expenses. The Company has agreed to indemnify the Depositary and
the Dealer Manager/Information Agent against certain liabilities, including
certain liabilities under the federal securities laws, in connection with the
Offer. Neither the Dealer Manager/Information Agent nor the Depositary has been
retained to make solicitations or recommendations in connection with the Offer.
24
<PAGE>
The Company has retained Registrar and Transfer Company as Depositary.
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/Information Agent). 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.
17. ADDITIONAL INFORMATION
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. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W. , Washington,
D C. 20549 and at the Commission's regional offices at 7 World Trade Center,
13th Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material may also be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Such information may also be accessed electronically by means of the
Commission's home page on the Internet (http://www.sec.gov).
18. MISCELLANEOUS
Pursuant to Rule 13e-4 under the Exchange Act, the Company has filed
with the Commission an Issuer Tender Offer Statement on Schedule 13e-4 which
contains additional information with respect to the Offer. Such Schedule 13e- 4,
including the exhibits and any amendments thereto, may be examined, and copies
may be obtained, at the same places and in the same manner as is set forth in
Section 17 with respect to information concerning the Company.
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.
FIRST SOUTHERN BANCSHARES, INC.
Date: August 31, 1999
25
<PAGE>
The Dealer Manager/Information Agent for the Offer is:
TRIDENT SECURITIES
4601 Six Forks Road
Raleigh, North Carolina
Toll free: (800) 222-2618, Ext. 99
Any questions concerning the terms of the Offer, 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:
REGISTRAR AND TRANSFER COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
10 Commerce Drive 10 Commerce Drive c/o The Depository Trust Co.
Cranford, New Jersey 07016 Cranford, New Jersey 07016 Transfer Agent Drop
ATTN: Reorganization 55 Water Street, 1st Floor
Department New York, New York 10041
</TABLE>
Investor Relations
Telephone Number: (800) 368-5948
Facsimile Number: (908) 497-2312
August 31, 1999
<PAGE>
Exhibit (a)(2)
FIRST SOUTHERN BANCSHARES, INC.
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK OF
FIRST SOUTHERN BANCSHARES, INC.
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 31, 1999
EXCHANGE AGENT: REGISTRAR AND TRANSFER COMPANY
Telephone Number: (800) 368-5948 Facsimile Number: (908) 497-2312
By Mail & Overnight Delivery: By Hand:
Registrar and Transfer Company c/o The Depository Trust Co.
10 Commerce Drive Transfer Agent Drop
Cranford, New Jersey 07016 55 Water Street, 1st Floor
Attn:Reorganization Department New York, NY 10041-0099
<TABLE>
<CAPTION>
====================================================================================================================================
DESCRIPTION OF SHARES TENDERED (See Instructions 3 and 4)
- ------------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Owner(s) Shares Tendered
(Please Fill In Exactly as Name(s) Appear(s) onCertificate(s)) (Attach Additional List if Necessary)
- ------------------------------------------------------------------------------------------------------------------------------------
Number Certificate(s)* Tendered**
----------------------------------------------------
<S> <C>
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
Total Shares
====================================================================================================================================
</TABLE>
* Need not be completed by shareholders 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.
<PAGE>
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON SEPTEMBER 30, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
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.
Delivery of documents to First Southern Bancshares, Inc. or to the
Book-Entry Transfer Facility does not constitute a valid delivery. PLEASE DO NOT
MAIL OR DELIVER ANY SHARES TO FIRST SOUTHERN BANCSHARES, INC. DELIVERIES TO
FIRST SOUTHERN BANCSHARES, INC. WILL NOT BE FORWARDED TO THE DEPOSITARY AND
THEREFORE WILL NOT CONSTITUTE 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 THE DEPOSITORY TRUST COMPANY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution __________________________________________________
Account No. _________________________ Transaction Code No. _____________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
o CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT TO
A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Owner(s): ________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ____________________________
Name of Institution Which Guaranteed Delivery: _________________________________
Name of Tendering Institution __________________________________________________
Account No. _________________________ Transaction Code No. _____________________
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
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 August
27, 1999, 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 August 27, 1999, 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 August 27, 1999, 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). |_|
- --------------------------------------------------------------------------------
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED HEREON.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
The undersigned hereby tenders to First Southern Bancshares, Inc., a
Delaware corporation ("Company"), the above described shares of its Common
Stock, par value $0.01 per share ("Shares"), at a price per Share hereinafter
set forth, pursuant to the Company's offer to purchase up to 275,000 Shares,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated August 31, 1999 ("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 the Book
Transfer Facility, 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 pay-ment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
under-signed 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 less than $12.75 nor in excess of $14.00 per Share) net to the
seller in cash, without interest thereon ("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 the
tendering shareholders. The undersigned understands that the Company will select
the Purchase Price that will allow it to purchase up to 275,000 shares (or such
lesser number of Shares as are validly tendered and not withdrawn at prices not
less than $12.75 nor in excess of $14.00 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 provisions, and that the
Company will return all other Shares, including Shares tendered and not
withdrawn at prices greater than the Purchase Price and Shares not purchased
because of proration. The undersigned understands that tenders of Shares
pursuant to any 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 here-by 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). 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.
|_| $12.75 |_| $13.00 |_| $13.25
|_| $13.50 |_| $13.75 |_| $14.00
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 above). |_|
================================================================================
================================================================================
IMPORTANT
(Please Complete Substitute Form W-9 Included in this Letter of Transmittal)
________________________________________________________________________________
(SIGNATURE(S) OF OWNER(S))
________________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT NAME(S))
Dated _______________________, 1999
Capacity (full title)___________________________________________________________
Address ________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. ____________________________________________________
Tax Identification or
Social Security No. ____________________________________________________________
(see Substitute Form W-9)
(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.)
================================================================================
<PAGE>
================================================================================
GUARANTEE OF SIGNATURE(S) (See Instructions 1 and 6)
Authorized Signature(s) ___________________ Address ____________________________
Name and Title ____________________________ ____________________________________
(PLEASE PRINT)
Name of Firm ______________________________ ____________________________________
(INCLUDE ZIP CODE)
Area Code and Area Code and
Telephone Number ______________________ Telephone Number ______________________
================================================================================
================================================================================
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.)
IF SPECIAL PAYMENT INSTRUCTIONS ARE BEING GIVEN, PLEASE REMEMBER TO HAVE YOUR
SIGNATURE GUARANTEED.
================================================================================
<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)
IF SPECIAL DELIVERY INSTRUCTIONS ARE BEING GIVEN, PLEASE REMEMBER TO HAVE YOUR
SIGNATURE GUARANTEED.
================================================================================
<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 the
Book-Entry Transfer Facility 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 THE BOOK-ENTRY TRANSFER FACILITY 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
ITS ADDRESS AS SET FORTH ON THE FRONT PAGE OF THIS LETTER OF TRANSMITTAL ON OR
Before THE EXPIRATION DATE (as defined in the Offer to Purchase). The term
"Agent's Message" means a message transmitted by the 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 the Book-Entry Transfer Facility
tendering the Shares, that such participant has received and agrees to be bound
by the terms of the Offer to Purchase and 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
SHAREHOLDER, 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. DO NOT MAIL OR
DELIVER TO FIRST SOUTHERN BANCSHARES, INC.
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 shareholder 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 Shareholders 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 SHAREHOLDER MUST CHECK THE BOX INDICATING (1) THE PRICE
PER SHARE AT WHICH HE OR SHE IS TENDERING SHARES OR (2) THAT SUCH PERSON IS
TENDERING SHARES AT THE PURCHASE PRICE DETERMINED BY THE COMPANY PURSUANT TO THE
TERMS OF THE OFFER UNDER THE HEADING "PRICE (IN DOLLARS) PER SHARE AT WHICH
SHARES ARE BEING TENDERED" IN THIS LETTER OF TRANSMITTAL, EXCEPT THAT any
shareholder who owned beneficially as of the close of business on August 27,
1999, 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 shareholder 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, THERE IS NO VALID TENDER OF SHARES. A
shareholder 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 tendered 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 OR 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). 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. Shareholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such shareholder 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
before the Expiration Date are to be purchased, the Shares purchased first will
consist of all Shares tendered by any shareholder who owned beneficially as of
the close of business on August 27, 1999, and continues to own beneficially as
of the Expiration Date, an aggregate of fewer than 100 Shares and who validly
tendered all such Shares at or below the Purchase Price (including by not
designating a Purchase Price as described above). Partial 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.
10. Substitute Form W-9 and Form W-8. THE TENDERING SHAREHOLDER 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
SHAREHOLDER TO 31% FEDERAL INCOME TAX BACKUP WITHHOLDING ON THE PAYMENT OF THE
PURCHASE PRICE. The box in Part 3 of Substitute Form W-9 may be checked if the
tendering shareholder 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 3 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.
11. Requests for Assistance or Additional Copies. Any questions or
requests for assistance may be directed to the Dealer Manager/Information Agent
at its 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 Dealer Manager/Information Agent and such
copies will be furnished promptly at the Company's expense. Shareholders may
also contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
12. 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 Dealer Manager/Information Agent, 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) OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
DEPOSITARY, ON OR BEFORE THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
shareholder's correct TIN on Substitute Form W-9 below. If such shareholder 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-9,
the shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholder with respect to
Shares purchased pursuant to the Offer may be subject to backup withholding.
Certain shareholders (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
shareholder to qualify as an exempt recipient, that shareholder must complete
and sign a Form W-8, Certificate of Foreign Status, attesting to that
shareholder's exempt status. The Form W-8 can be obtained from the Depositary.
Exempt shareholders, other than noncorporate foreign shareholders, should
furnish their TIN in Part 1 and check the box in Part 4 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% on any payments made to the shareholder. 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.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder 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 shareholder 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
shareholder that he or she is no longer subject to federal income tax backup
withholding. Foreign shareholders 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 shareholders subject to 30% (or lower
treaty rate) withholding on gross payments received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder 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.
(See Instruction 10)
<PAGE>
================================================================================
PAYER'S NAME:
- --------------------------------------------------------------------------------
SUBSTITUTE
Form W-9
(See Instruction 10)
Please fill in your name and address below.
- ------------------------------------------
Name
- ------------------------------------------
Address (number and street)
- ------------------------------------------
City, State and Zip Code)
Department of the Treasury
Internal Revenue Service
Payer's Request for Taxpayer
Identification Number
- --------------------------------------------------------------------------------
Part 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT THE RIGHT AND CERTIFY BY SIGNING
AND DATING BELOW.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Social Security Number(s)
OR
- --------------------------------------------------------------------------------
Employer Identification Number(s)
- --------------------------------------------------------------------------------
Part 2 -- Certification -- Under Penalties of Perjury, I certify that:
(1) The number shown on the form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue
Service ("IRS") that I am subject to backup withholding as a result of
failure to report all interest or dividends or (c)the IRS has notified me
that I am no longer subject to backup withholding.
- --------------------------------------------------------------------------------
<PAGE>
Part 3 --
Awaiting TIN |_|
- --------------------------------------------------------------------------------
Part 4 -- For Payee Exempt from Backup Withholding
Exempt |_|
- --------------------------------------------------------------------------------
Certificate Instructions -- You must cross out Item (2) in Part 2 above if you
have been notified by the IRS that you are currently subject to backup
withholding because of under reporting interest or dividends on your tax return.
However, if after being notified by the IRS that you were subject to backup
withholding, you received another notification from the IRS stating that you are
no longer subject to backup withholding, do not cross out Item (2). If you are
exempt from backup withholding, check the box in Part 4 above.
SIGNATURE _________________________________________ DATE ________________, 1999
================================================================================
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 3 OF SUBSTITUTE FORM W-9
================================================================================
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number to you within 60 days, you are required
to withhold 31% of all reportable payments thereafter made to me until I provide
a number.
SIGNATURE _________________________________________ DATE ________________, 1999
================================================================================
The Dealer Manager/Information Agent:
TRIDENT SECURITIES
4601 Six Forks Road Raleigh, North Carolina 27609
Toll free: (800) 222-2618, Ext. 99
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.-- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
- --------------------------------------------------------------------------------
GIVE THE SOCIAL
SECURITY
FOR THIS TYPE OF ACCOUNT NUMBER OF
- --------------------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the account or, if
(joint account) combined funds, any one of the
individuals (1)
3. Husband and wife The actual owner of the
(joint account) account or, if joint funds,
either person(1)
4. Custodian account of The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor The adult or, if the minor
(joint account) only contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee incompetent person(3)
for a designated ward,
minor, or incompetent person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State law
8. Sole proprietorship The owner(4)
account
<PAGE>
- --------------------------------------------------------------------------------
GIVE THE SOCIAL
SECURITY
FOR THIS TYPE OF ACCOUNT NUMBER OF
- --------------------------------------------------------------------------------
9. The valid trust, estate, or The legal entity (do not
pension trust furnish the identifying number of the
personal representative or trustee
unless the legal entity itself is not
designated in the account title.) (5)
10. Corporate account The corporation
11. Religious, charitable, The organization
educational organization
account
12. Partnership account The partnership
the name of
the business
13. Association, club, or The organization
other tax-exempt
organization
14. The broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a State or local
government, school district,
or prison) that receives
agricultural program
payments
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know
your number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments
include the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an
individual retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign
government, or any agency or instrumentality thereof.
o An international organization or any agency, or instrumentality
thereof.
o A registered dealer in securities or commodities registered in the
U.S. or a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An exempt charitable remainder trust, or a non-exempt trust described
in section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of
1940.
o A foreign central bank of issue.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 3
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under section
1441.
o Payments to partnerships not engaged in a trade or business in the
U.S. and which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid
in money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding
include the following:
o Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
o Payments described in section 6049(b)(5) to nonresident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage
dividends, that are not subject to information reporting are also not subject to
backup withholding. For details, see the regulations under sections 6041,
6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE. - Section 6109 requires most recipients of
dividend, interest, or other payments to give taxpayer identification numbers to
payers who must report the payments to IRS. IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Effective January 1, 1993, payers
must generally withhold 31% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to a
payer. Certain penalties may also apply.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 4
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER - If
you fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS - If you
fail to include any portion of an includable payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING -
If you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
<PAGE>
Exhibit (a)(3)
NOT VALID UNLESS SIGNED BY AN ELIGIBLE INSTITUTION
FIRST SOUTHERN BANCSHARES, INC.
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
OFFER TO PURCHASE FOR CASH UP TO 275,000 SHARES
OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT LESS THAN
$12.75 NOR IN EXCESS OF $14.00 PER SHARE
This form or a facsimile copy of it must be used to accept the Offer
(as defined below) if:
(a) certificates for common stock, par value $0.01 per share (the
"Shares"), of First Southern Bancshares, Inc., a Delaware
corporation, are not immediately available; or
(b) the procedure for book-entry transfer cannot be completed on a
timely basis; or
(c) time will not permit the Letter of Transmittal or other
required documents to reach the Depositary before the
Expiration Date (as defined in Section 1 of the Offer to
Purchase, as defined below).
This form or a facsimile of it, signed and properly completed, may be
delivered by hand, mail, telegram or facsimile transmission to the Depositary by
the Expiration Date. See "Section 3--Procedure for Tendering Shares" in the
Offer to Purchase.
DEPOSITARY:
REGISTRAR AND TRANSFER COMPANY
BY MAIL: BY OVERNIGHT DELIVERY:
10 Commerce Drive 10 Commerce Drive
Cranford, New Jersey 07016 Cranford, New Jersey 07016
Attn: Reorganization Department
BY HAND:
c/o The Depository Trust Co.
Transfer Agent Drop
55 Water Street, 1st Floor
New York, New York 10041
Investor Relations Telephone Number: (800) 368-5948
Facsimile Number: (908) 497-2312
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OR INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THOSE LISTED ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to First Southern Bancshares, Inc., at
the price per Share indicated below, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated August
31, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together with the Offer to Purchase constitute the "Offer"), receipt of which is
hereby acknowledged, ___________ Shares of common stock, par value $0.01 per
share (the "Shares"), pursuant to the guaranteed delivery procedure set forth
under "Section 3 -- Procedure for Tendering Shares" in the Offer to Purchase.
PLEASE CALL THE DEALER MANAGER/INFORMATION AGENT FOR ASSISTANCE IN
COMPLETING THIS FORM TOLL FREE AT (800) 222-2618, Ext. 99.
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED.
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS OTHERWISE PROVIDED HEREIN), THERE IS NO
VALID TENDER OF SHARES.
By checking one of the price boxes below, the undersigned hereby tenders Shares
at the price checked. 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 price
determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per Share below). |_|
Price (in dollars) per Share at which Shares are being tendered:
|_| $12.75 |_| $13.00 |_| $13.25
|_| $13.50 |_| $13.75 |_| $14.00
- --------------------------------------------------------------------------------
IF YOU OWN FEWER THAN 100 SHARES:
Complete ONLY if Shares are being tendered by or on behalf of a person
owning beneficially, as of the close of business on August 27, 1999 and who
continues to own beneficially as of the Expiration Date, an aggregate of fewer
than 100 Shares.
The undersigned either (check one):
|_| was the beneficial owner(s), as of the close of business on August
27, 1999 of an aggregate of fewer than 100 Shares, all of which
are being tendered, or
|_| is a broker, dealer, commercial bank, trust company or other
nominee which
(a) is tendering, for the beneficial owner(s) thereof, Shares with
respect to which it is the record owner, and
(b) believes, based upon representations made to it by such
beneficial owner(s), that each such person was the beneficial
owner, as of the close of business on August 27, 1999, of an
aggregate of fewer than 100 Shares and is tendering all of
such Shares.
<PAGE>
Certificate Nos. (if available):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Name(s):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print)
Address(es):
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________ Zip Code:___________________
Area Code and
Telephone Number: ________________________________
Sign Here:
__________________________________________________
Date: _________________
If Shares will be tendered by book-entry transfer, check box below:
|_| The Depository Trust Co.
Account Number: ___________________________
<PAGE>
________________________________________________________________________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank, trust company, savings association or credit union having an office or
correspondent in the United States (each, an "Eligible Institution"), hereby (i)
represents that the undersigned has a net long position in Shares in or
equivalent securities within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, at least equal to the shares
tendered, (ii) represents that such tender of Shares complies with Rule 14e-4,
and (iii) guarantees that either the certificates representing the Shares
tendered hereby in proper form for transfer, or timely confirmation of the
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (pursuant to the procedures set forth under "Section
3--Procedure for Tendering Shares" in the Offer to Purchase), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantee and any other documents required
by the Letter of Transmittal, will be received by the Depositary at one of its
addresses set forth above within three trading days after the date of execution
hereof.
Name of Firm: _______________________ ________________________________________
Authorized Signature
Address: ____________________________ Name: __________________________________
_____________________________________ Title: _________________________________
_____________________ Zip Code: _____
Area Code and
Telephone Number: ___________________ Dated: _______________________, 1999
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE
SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT (a)(4)
TRIDENT SECURITIES
4601 SIX FORKS ROAD
RALEIGH, NORTH CAROLINA 27609
(800) 222-2618, Ext. 99
FIRST SOUTHERN BANCSHARES, INC.
OFFER TO PURCHASE FOR CASH UP TO
275,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT LESS THAN $12.75
NOR IN EXCESS OF $14.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., EASTERN TIME, ON SEPTEMBER 30, 1999,
UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
First Southern Bancshares, Inc., a Delaware corporation ("Company"),
has appointed us to act as Dealer Manager/Information Agent in connection with
its offer to purchase for cash up to 275,000 shares of its Common Stock, $0.01
par value per share ("Shares"), at prices not less than $12.75 nor in excess of
$14.00 per Share, specified by shareholders tendering their Shares, upon the
terms and subject to the conditions set forth in the Company's Offer to
Purchase, dated August 31, 1999, and in the related Letter of Transmittal (which
together constitute the "Offer").
The Company will determine the single per Share price, not less than
$12.75 nor in excess of $14.00 per Share, net to the seller in cash ("Purchase
Price"), that it will pay for Shares validly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the Purchase Price that will
allow it to buy 275,000 shares (or such lesser number of Shares as are properly
tendered at prices not less than $12.75 nor in excess of $14.00 per Share). All
Shares validly tendered at prices at or below the Purchase Price and not
withdrawn on or before 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 provisions. See Section 1 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 275,000 shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i) from
shareholders who owned beneficially as of the close of business on August 27,
1999, 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 (ii) then, on a pro rata basis, from all other shareholders
who properly tender their Shares at prices at or below the Purchase Price (and
do not withdraw them before the expiration of the Offer). See Sections 1 and 2
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 will be returned to the tendering
shareholders at the Company's expense as promptly as practicable following the
Expiration Date.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED PURSUANT TO THE OFFER. SEE SECTION 6 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 Manager/Information Agent 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
<PAGE>
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 an agent of the Company, including Trident Securities as "Dealer
Manager/Information Agent," and Registrar and Transfer Company as "Depositary,"
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 August 31, 1999;
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. The Notice of Guaranteed Delivery to be used to accept the Offer if
shares and all other required documents cannot be delivered to the Depositary by
the Expiration Date;
4. Letter, dated August 31, 1999 from Charles L. Frederick, Jr.,
President and Chief Executive Officer of the Company, to shareholders of the
Company;
5. Letter of Transmittal for your use and for the information of your
clients (together with substitute Form W-9); and
6. A return envelope addressed to Registrar and Transfer Company, 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., EASTERN TIME,
ON SEPTEMBER 30, 1999, 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 Dealer Manager/Information Agent at their
respective addresses and telephone numbers set forth on the back cover page of
the Offer to Purchase.
<PAGE>
Additional copies of the enclosed material may be obtained from the
Dealer Manager/Information Agent by calling, toll free: (800) 222-2618, Ext. 99.
Very truly yours,
TRIDENT SECURITIES
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
DEALER MANAGER/INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED HEREIN.
<PAGE>
EXHIBIT (a)(5)
FIRST SOUTHERN BANCSHARES, INC.
OFFER TO PURCHASE FOR CASH UP TO
275,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT LESS THAN $12.75
NOR IN EXCESS OF $14.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., EASTERN TIME, ON SEPTEMBER 30, 1999
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated August
31, 1999, and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the Offer by First Southern Bancshares, Inc. a
Delaware corporation ("Company"), to purchase up to 275,000 Shares of its Common
Stock, $0.01 par value per share ("Shares"), at prices not less than $12.75 nor
in excess of $14.00 per Share, as specified by tendering shareholders, upon the
terms and subject to the conditions set forth in the Offer.
The Company will determine the single per Share price, not less than
$12.75 nor in excess of $14.00 per Share, net to the seller in cash ("Purchase
Price"), that it will pay for Shares validly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the Purchase Price that will
allow it to buy up to 275,000 Shares (or such lesser number of Shares as are
validly tendered at prices not less than $12.75 nor in excess of $14.00 per
Share). All Shares properly tendered at prices at or below the Purchase Price
and not withdrawn on or before 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 provisions. See
Section 1 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 275,000 Shares are validly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares (i) from
shareholders who owned beneficially as of the close of business on August 27,
1999, 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
shareholders who properly tender at or below the Purchase Price (and do not
withdraw them before the expiration of the Offer). See Sections 1 and 2 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 will be returned to the tendering shareholders at
the Company's expense as promptly as practicable following the Expiration Date.
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 all or a portion of your Shares at prices not less
than $12.75 nor in excess of $14.00 per Share as indicated in the attached
Instruction Form, net to you in cash. If you do not wish to specify a Purchase
Price you may indicate that you have tendered your Shares at the Purchase Price
(not less than $12.75 nor in excess of $14.00 per Share) as determined by the
Company in accordance with the terms of the Offer.
2. The Offer is not conditioned on any minimum number of Shares being
tendered pursuant to the Offer.
3. The Offer, proration period and withdrawal rights will expire at
5:00 p.m., Eastern Time, on September 30, 1999, unless the Company extends the
Offer.
<PAGE>
4. The Offer is for up to 275,000 shares, constituting approximately
16.7% of the Shares outstanding as of August 27, 1999.
5. Tendering shareholders will not be obligated to pay any stock
transfer taxes on the Company's purchase of Shares pursuant to the Offer,
subject to Instruction 7 of the Letter of Transmittal.
6. If you beneficially held, as of the close of business on August 27,
1999, 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.
7. 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.,
EASTERN TIME, ON SEPTEMBER 30, 1999, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if more than
275,000 Shares have been validly tendered at prices at or below the Purchase
Price and not withdrawn on or before the Expiration Date (as defined in the
Offer to Purchase), the Company will purchase properly tendered Shares on the
basis set forth below:
(a) first, all Shares validly tendered and not withdrawn on or
before the Expiration Date by or on behalf of any shareholder
who owned beneficially, as of the close of business on August
27, 1999 and continues to own beneficially as of the
Expiration Date, an aggregate of fewer than 100 Shares who:
(1) validly tender all of such Shares at a price at or
below the Purchase Price (partial tenders will not
qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter
of Transmittal; and
(b) second, after purchase of all of the foregoing Shares, then
all other Shares validly tendered at or below the Purchase
Price and not withdrawn on or before 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.
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 Dealer Manager/Information
Agent or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
<PAGE>
INSTRUCTION FORM
FOR SHARES HELD BY BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES.
INSTRUCTIONS FOR TENDER OF SHARES OF FIRST SOUTHERN BANCSHARES, INC.
Please tender to First Southern Bancshares, Inc. ("Company"), on (our)
(my) behalf, the number of Shares indicated below, which are beneficially owned
by (us) (me) and registered in your name, upon terms and subject to the
conditions contained in the Offer to Purchase of the Company dated August 31,
1999, and the related Letter of Transmittal, the receipt of both of which is
acknowledged.
The undersigned hereby instruct(s) you to tender to the Company the
number of Shares indicated below, at the price per Share indicated below,
pursuant to the terms and subject to the conditions of the Offer.
Aggregate number of Shares to be tendered by you for us: ___________ Shares.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5 ON THE LETTER OF TRANSMITTAL)
By checking one of the price boxes below, the undersigned understands
that none of my Shares will be purchased if the Purchase Price is less than the
price checked. 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 below.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5 ON THE LETTER OF TRANSMITTAL):
|_| $12.75 |_| $13.00 |_| $13.25
|_| $13.50 |_| $13.75 |_| $14.00
ODD LOTS (SEE INSTRUCTION 9 ON THE LETTER OF TRANSMITTAL)
|_| Check here ONLY if I was the beneficial owner as of the close of
business on August 27, 1999, and continue to be the beneficial owner as
of the Expiration Date, of an aggregate of fewer than 100 Shares, all
of which are being tendered.
|_| The Odd Lot Shares are being tendered at the price per Share indicated
above in the box entitled "Price (In Dollars) Per Share At Which Shares
Are Being Tendered."
OR
|_| By checking this box INSTEAD OF ONE OF THE PRICE PURCHASE BOXES ABOVE,
I hereby tender Shares and I am willing to accept the Purchase Price
determined by the Company in accordance with the terms of the Offer.
This action will result in my receiving a price per Share of as low as
$12.75 or as high as $14.00.
<PAGE>
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF
THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS, HOWEVER, MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES.
EACH SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY TO TENDER AND AT WHAT PRICE. EMPLOYEES, OFFICERS AND
DIRECTORS OF THE COMPANY MAY PARTICIPATE IN THE OFFER ON THE SAME BASIS AS THE
COMPANY'S OTHER SHAREHOLDERS.
Signature(s): __________________________________________________________________
________________________________________________________________________________
Address: (Including Zip Code)
Name(s): _______________________________________________________________________
(Please Print) (Please Print)
________________________________________________________________________________
Area Code and Telephone Number
Date: ________________, 1999
________________________________________________________________________________
(Employer Identification or Social Security Number)
IMPORTANT: SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-9
WITH THEIR INSTRUCTION FORM.
<PAGE>
EXHIBIT (a)(6)
FIRST SOUTHERN BANCSHARES, INC.
August 31, 1999
Dear Shareholders:
Over time, the profitable operations of First Southern Bancshares, Inc.
("Company") and its subsidiary First Southern Bank ("Bank") have contributed to
the growth of a capital base that exceeds all applicable regulatory standards.
This exceptionally strong capital base exceeds 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 shareholders, 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 up to 275,000 shares of the
Company's common stock, or approximately 16.7% of our 1,643,562 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 less than $12.75 per share nor in excess of $14.00 per share.
Upon expiration of the offer, we will select the purchase price from those
shares tendered that will allow us to buy up to 275,000 shares. All shares
purchased in the offer will receive the same 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 275,000 shares are tendered.
We encourage each shareholder to read carefully the Offer to Purchase
and related materials. Neither First Southern Bancshares, Inc. nor its Board of
Directors makes any recommendation whether to tender shares to the Company. You
should make you decision independently after consulting with your advisors.
To assist us with this offer, we have engaged Trident Securities to
serve as Dealer Manager/Information Agent. If you need information or additional
forms, please call toll free the Dealer Manager/Information Agent at (800)
222-2618, Ext. 99 between 9:00 a.m. and 5:00 p.m., Eastern Time.
Unless otherwise extended, the offer will expire at 5:00 p.m. Eastern
Time, on September 30, 1999. We again encourage you to read carefully the
enclosed material.
As always, we appreciate your interest in First Southern Bancshares,
Inc.
Sincerely,
Charles L. Frederick, Jr.
President and Chief Executive Officer
<PAGE>
EXHIBIT (a)(7)
FIRST SOUTHERN BANCSHARES, INC.
QUESTIONS AND ANSWERS
ABOUT THE OFFER OF
FIRST SOUTHERN BANCSHARES, INC.
TO PURCHASE FOR CASH UP TO 275,000 SHARES
OF COMMON STOCK AT A PURCHASE PRICE OF
$12.75 PER SHARE TO $14.00 PER SHARE
August 31, 1999
<PAGE>
EXHIBIT (a)(7)
Questions and Answers About the Offer of
First Southern Bancshares, Inc. to
Purchase its Common Stock
The following information is designed to answer frequently asked
questions concerning the offer by First Southern Bancshares, Inc. (the
"Company") to its shareholders to purchase shares of its common stock ("Shares")
in a Modified Dutch Auction. Shareholders are referred to the Offer to Purchase
and Letter of Transmittal for a detailed description of the terms and conditions
of the offer.
1. Q. What is a Modified Dutch Auction?
A. In a Modified Dutch Auction a company makes a direct tender
offer to its own shareholders to purchase up to a specified
number of shares of its stock within a specified price range,
and pays the highest price at which it accepts shares to all
shareholders whose shares will be accepted. This process
allows each shareholder to elect whether to sell stock, and
the price the shareholder is willing to sell, within the given
price range, with no transaction cost. 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
will become the Purchase Price.
2. Q. What is the Offer to Purchase?
A. The Company is inviting all shareholders to tender their
shares of common stock at prices not less than $12.75 per
share nor in excess of $14.00 per share in cash, as specified
by shareholders tendering their shares. The Company will
determine the single per share price, within that range, that
it will pay for all shares validly tendered pursuant to the
offer, taking into account the number of shares tendered and
the prices specified. The Company will select the Purchase
Price that will allow it to buy up to 275,000 shares (or such
lesser number of shares as are properly tendered at prices
within the range).
3. Q. Why is the Company making this offer?
A. 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. So, in an effort to
more effectively utilize its capital base while maximizing
shareholder value, the Company's Board of Directors believes
that the repurchase of their own shares is the best use of
excess capital at this time. The repurchase of company stock
is designed to increase the Company's return on equity by
reducing the amount of equity outstanding.
4. 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 Purchase Price,
within the range that will allow it to buy up to 275,000
shares. All shareholders tendering at or below the purchase
will receive the same price per share. For example: if 137,500
shares are tendered at $12.75 per share, 137,500 shares are
tendered at $13.00 per share and 25,000 shares are tendered at
$13.25 per share, 275,000 shares will be purchased at $13.00
per share from the persons who tendered at $12.75 and $13.00
and the 25,000 shares tendered at $13.25 will not be purchased
and returned.
5. Q. What will happen if more than 275,000 shares are tendered
at or below the purchase price?
A. If more than 275,000 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 shareholder
who beneficially owned, at the termination of the Offer an
aggregate of fewer than 100 shares and (ii) then from all
other tendering shareholders at the purchase price subject to
proration.
6. Q. At what price may I tender my shares?
A. Shareholders may elect to tender their shares in increments of
$0.25 starting at$12.75 per share up to and including $14.00
per share. The election as to the number of shares and the
price a shareholder is willing to tender are to be indicated
on the Letter of Transmittal. If a shareholder does not wish
to specify a price, they may elect to tender at the Purchase
Price to be determined by the Company.
7. Q. What is the advantage of tendering my shares?
A. The shareholder is able to sell their shares at a single,
above market price without a commission. For small and odd lot
shareholders this is an advantage due to the higher
commissions usually charged for small trades.
8. 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 certificate for the shares being tendered to
the Depository, Registrar and Transfer Company, which must be
received by 5:00 p.m., Eastern Time, on September 30, 1999
(the "Expiration Date"). While your signature is required on
the Letter of Transmittal, your signature is not required on
your stock certificate.
9. Q. How do I tender my shares if they are held by my broker?
A. If your shares are registered in a street name with a broker,
dealer, commercial bank, trust company or other nominee, you
will need to contact them and instruct the nominee to tender
the shares for you. You can not tender such shares using the
Letter of Transmittal even though you may have received one.
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.
10. Q. What do I do if my certificates are lost, destroyed or stolen?
A. Call Registrar and Transfer Company at (800) 368-5948 for
tendering shares in such circumstances.
11. Q. Do I have to sell my stock to the Company?
A. No. A stockholder is not required to tender any stock.
12. Q. What happens if I do not tender my stock to the Company to
purchase?
A. Your shares will remain outstanding without change in the
terms or ownership rights. You will continue to own the same
number of shares without any adjustment, and you will continue
to receive the same dividends and voting rights. However,
since the Company will repurchase up to 275,000 shares, the
percentage of stock you own relative to shares outstanding
will increase since the number of outstanding shares will be
reduced.
13. Q. What if the terms of the Offer change?
A. If 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 for at least 5 to 10 business days
from such notice stockholders will be able to change or
withdraw their tender.
14. Q. Can I tender part of my stock at different prices?
A. Yes, you may 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 $12.75,
500 shares at $13.00, and keep the remaining 500 shares. Each
tender would be done on a separate Letter of Transmittal.
However, you can not tender the same stock at different
prices.
15. Q. Is there a brokerage commission?
A. No. The Company will purchase stock directly from each
shareholder at the purchase price. For example: a shareholder
selling 100 shares at the purchase price of $12.75 would
receive $1,275 proceeds from the sale.
16. Q. Can I change or cancel my tender?
A. You may increase, decrease, or cancel the number of shares
indicated on your Letter of Transmittal as long as a valid
withdrawal request is received by the September 30, 1999
deadline. Generally, after September 30, 1999 you can not
withdraw your tender.
17. Q. Can you summarize the process to tender shares?
A. Generally, if you hold the stock certificate, you must
complete the Letter of Transmittal as set forth below.
o List the certificates and the number of shares that you
are tendering in the box captioned "Description of Shares
Tendered."
o 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."
o If you want to give us special payment instructions,
complete the box captioned "Special Payment
Instructions."
o If you are an Odd Lot Holder (holder of fewer than 100
shares) who is tendering all your shares, complete the
box captioned "Odd Lots."
o Complete substitute W-9 to certify your tax
identification number.
o Sign the Letter of Transmittal in the box captioned
"Important" (in certain circumstances, signatures must be
guaranteed in this box).
B. For Shares held in street name.
o If your shares are being delivered by book-entry (you are
tendering shares as a nominee), complete the box
captioned "Box Below For Use By Eligible Institutions
Only."
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 Depository, Registrar and Transfer
Company, no later than 5:00 p.m., Eastern Time, on September 30, 1999.
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 tender shares for you. See Section 3 and the Letter of
Transmittal for more details.
18. Q. How can I get more information?
A. If you have a question, please call our Dealer
Manager/Information Agent, Trident Securities toll free at
(800) 222-2618, Ext. 99 from 9:00 a.m. to 5:00 p.m., Eastern
Time, Monday through Friday.
<PAGE>
EXHIBIT (a)(8)
Press Release
FOR IMMEDIATE RELEASE
- ---------------------
For More Information Contact:
Thomas N. Ward, Executive Vice President
and Chief Operating Officer
First Southern Bancshares, Inc.
Telephone: (256) 718-4202
FIRST SOUTHERN BANCSHARES, INC. ANNOUNCES
OFFER TO BUY UP TO 275,000 SHARES OF ITS COMMON STOCK
Florence, Alabama, August 31, 1999. - First Southern Bancshares, Inc.,
(NASDAQ: FSTH) the holding company for First Southern Bank, has announced that
its Board of Directors has authorized the repurchase of up to 275,000 shares of
its common stock, which represents approximately 16.7% of its 1,643,562 shares
outstanding as of August 27, 1999.
The repurchase will be made through a "Modified Dutch Auction Tender."
Under this procedure, First Southern Bancshares, Inc. shareholders will be given
the opportunity to sell part or all of their shares to the Corporation at a
price not less than $12.75 per share and not more than $14.00 per share. The
offer to purchase shares will commence on August 31, 1999 and will expire at
5:00 p.m., Eastern Time, on September 30, 1999, unless extended by First
Southern Bancshares, Inc.
In a Modified Dutch Auction Tender, shareholders may offer to sell all
or a portion of the shares they own within a price range not less than $12.75
per share and not in excess of $14.00 per share. Upon the expiration of the
offer First Southern Bancshares, Inc. will select the purchase price that will
allow it to buy up to 275,000 shares. All shares purchased in the offer will
receive the same price. If the number of shares tendered is equal to or less
than 275,000 shares, the purchase price will be the highest price specified by
tendering shareholders. 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
<PAGE>
the number of shares it seeks. First Southern Bancshares, Inc. has retained
Trident Securities as dealer manager/information agent and financial advisor for
this transaction.
Charles L. Frederick, Jr., Chairman, President and Chief Executive
Officer of First Southern Bancshares, stated, "First Southern Bancshares is
announcing this tender offer because the Board of Directors believes that the
purchase of shares pursuant to the offer should have beneficial effects on
shareholder value while maintaining a capital base to support the needs of
business and our customers. After studying a number of alternatives, we selected
the Modified Dutch Auction Tender because it has the potential for improving our
return on equity and earning per share."
At June 30, 1999 First Southern Bancshares had assets of $176.4 million
and stockholders equity of $18.0 million. First Southern Bank, a FDIC-insured
commercial bank, serves individuals and businesses located in Lauderdale and
Colbert Counties in Northwest Alabama.
