<PAGE>
CUSIP No. 235906104 Page 1 of 55 Pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9)
DAMEN FINANCIAL CORPORATION
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
235906104
(CUSIP Number)
Paul J. Duggan
Jackson Boulevard Capital Management, Ltd.
53 W. Jackson
Chicago, Illinois 60604
(312) 294-6440
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 22, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
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CUSIP No. 235906104 Page 2 of 55 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Paul J. Duggan
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
400 shares
Number of
Shares 8 Shared Voting Power
Beneficially 266,200 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 400 shares
10 Shared Dispositive Power
266,200 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
266,600 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.5%
14 Type of Reporting Person
IN
<PAGE>
CUSIP No. 235906104 Page 3 of 55 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Jackson Boulevard Capital Management, Ltd.
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Illinois
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 92,200 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
92,200 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
92,200 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
3.3%
14 Type of Reporting Person
CO
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CUSIP No. 235906104 Page 4 of 55 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Jackson Boulevard Equities, L.P.
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Illinois
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 60,622 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
60,622 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
60,622 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
2.1%
14 Type of Reporting Person
PN
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CUSIP No. 235906104 Page 5 of 55 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Jackson Boulevard Investments, L.P.
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Illinois
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 31,578 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
31,578 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
31,578 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
1.1%
14 Type of Reporting Person
PN
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CUSIP No. 235906104 Page 6 of 55 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Jackson Offshore Fund, Ltd.
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Tortolla, British Virgin Islands
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 0 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
0 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
0.0%
14 Type of Reporting Person
CO
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CUSIP No. 235906104 Page 7 of 55 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Jackson Boulevard Partners
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Tortolla, British Virgin Islands
7 Sole Voting Power
174,000 shares
Number of
Shares 8 Shared Voting Power
Beneficially 0 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 174,000 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
174,000 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
6.2%
14 Type of Reporting Person
PN
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CUSIP No. 235906104 Page 8 of 55 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Vincent Cainkar
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: PF
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
100 shares
Number of
Shares 8 Shared Voting Power
Beneficially 4100 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 100 shares
10 Shared Dispositive Power
4100 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
4,200 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
0.1%
14 Type of Reporting Person
IN
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CUSIP No. 235906104 Page 9 of 55 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
J. Dennis Huffman
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: PF
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
3,000 shares
Number of
Shares 8 Shared Voting Power
Beneficially 0 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 3,000 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
3,000 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
0.1%
14 Type of Reporting Person
IN
<PAGE>
CUSIP No. 235906104 Page 10 of 55 Pages
This is Amendment No. 9 to the Schedule 13D filed jointly by Paul
J. Duggan, Jackson Boulevard Capital Management, Ltd. (formerly known as
Jackson Boulevard Fund, Ltd.) ("Jackson Capital"), Jackson Boulevard
Equities, L.P. ("Jackson Equities"), Jackson Boulevard Investments, L.P.
("Jackson Investments"), Jackson Offshore Fund, Ltd. ("Jackson Offshore") (as
of Amendment No. 6 to such Schedule 13D), Vincent Cainkar (as of Amendment
No. 7 to such Schedule 13D), and Jackson Boulevard Partners ("Jackson
Partners") and J. Dennis Huffman (as of Amendment No. 8 to such Schedule 13D)
(collectively, the "Group") on October 10, 1995 (as earlier amended, the
"Original 13D"), and relates to the common stock, $.01 par value (the "Common
Stock"), of Damen Financial Corporation (the "Issuer"). The following items
in the Original 13D are amended to read in their entirety as follows:
ITEM 1. SECURITY AND ISSUER
This Schedule 13D is being filed jointly by Paul J. Duggan, Vincent
Cainkar, J. Dennis Huffman, Jackson Capital, Jackson Equities, Jackson
Investments, Jackson Offshore and Jackson Partners and relates to the Common
Stock of the Issuer. The address of the principal executive offices of the
Issuer is 200 West Higgins Road, Schaumburg, Illinois 60195.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(c) Jackson Capital and Jackson Offshore are Illinois
corporations. Jackson Equities and Jackson Investments are Illinois limited
partnerships. Jackson Offshore is a Tortolla, British Virgin Islands,
corporation. Jackson Partners is an Illinois general partnership. The
address of the principal business and the principal office of Jackson
Capital, Jackson Equities, Jackson Partners and Jackson Investments is 53
West Jackson Boulevard, Suite 400, Chicago, Illinois 60604. The address of
the principal business and the principal office of Jackson Offshore is 31
Kildare Street, Dublin 2, Ireland.
The principal business of Jackson Capital is serving as the general
partner of Jackson Equities, Jackson Investments and other
investment-oriented limited partnerships. The principal business of Jackson
Equities, Jackson Investments, Jackson Partners and Jackson Offshore is buying
and selling securities for investments, including in particular securities
related to financial industries (including banks and thrifts).
Jackson Capital is the sole general partner of Jackson Equities and
Jackson Investments. Mr. Duggan is the sole stockholder, sole executive
officer and sole director of Jackson Capital. Mr. Duggan controls (through
Jackson Capital) all decisions regarding voting and investment of the shares
of the Issuer held by Jackson Offshore. Mr. Duggan, David Blair and Peter
Poole are the directors of Jackson Offshore; Mr. Blair is the managing
director of Jackson Offshore. The business address of Mr. Blair and Mr.
Poole is 31 Kildare Street, Dublin 2, Ireland. Mr. Blair's principal
occupation is that of certified public accountant. Mr. Poole's principal
occupation is that of money manager with Rathbone Management Services, a
British Virgin Islands corporation. Mr. Duggan's principal
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CUSIP No. 235906104 Page 11 of 55 Pages
occupation is money manager (through Jackson Capital) and his business
address is 53 West Jackson Boulevard, Suite 400, Chicago, Illinois 60604.
Jackson Capital has a 7.7% ownership interest in Jackson Equities
and a 5.1% ownership interest in Jackson Investments. Duggan is a limited
partner of both Jackson Equities and Jackson Investments.
The only partners of Jackson Partners are Paul J. Duggan and
Deborah Duggan, Paul J. Duggan's spouse, both of whom are general partners.
Deborah Duggan's principal occupation is serving as a general partner of
Jackson Partners and providing accounting, administrative and managerial
services for Jackson Partners. Deborah Duggan's business address is 53 West
Jackson Boulevard, Suite 400, Chicago, Illinois 60604.
Vincent Cainkar is an individual whose principal occupation is the
practice of law, particularly as bond counsel. Mr. Cainkar currently serves
as Attorney for the City of Burbank, Village of Evergreen Park, City of
Hickory Hills, Village of McCook, Stickney Township and other local
governmental entities. Mr. Cainkar's residential address is 8206 South
Mobile, Burbank, IL 60459. Mr. Cainkar does not have any ownership interest
in, nor does he serve as a partner, director or officer of Jackson Capital,
Jackson Equities, Jackson Investments, or Jackson Offshore.
J. Dennis Huffman is an individual whose principal occupation is
serving as a partner in DHK Development Corp., a developer and leasing agent
for commercial and residential real estate. Mr. Huffman also is a trader on
the floor of the Chicago Board of Trade, trading U.S. Treasury Bond
contracts. Mr. Huffman's residential address is 10549 South Talman Avenue,
Chicago, IL 60655. Mr. Huffman does not have any ownership interest in, nor
does he serve as a partner, director or officer of Jackson Capital, Jackson
Investments, or Jackson Offshore. Mr. Huffman has a non-voting limited
partnership interest in Jackson Equities.
The joint filing agreement of the members of the Group is filed
herewith as Exhibit 1.
(d)-(e) During the past five years, none of Mr. Duggan, Mr.
Cainkar, Mr. Huffman, Jackson Capital, Jackson Equities, Jackson Offshore
Jackson Partners or Jackson Investments has been convicted in a criminal
proceeding (excluding traffic violations), and none of Mr. Duggan, Mr.
Cainkar, Jackson Capital, Jackson Equities, Jackson Offshore, Jackson
Partners or Jackson Investments has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of
which any of them were or are subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Mr. Duggan and Mr. Cainkar are citizens of the United States.
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CUSIP No. 235906104 Page 12 of 55 Pages
ITEM 4. PURPOSE OF TRANSACTION
The Group's goal is to profit from appreciation in the market price
of the Common Stock. The Group expects to actively assert shareholder
rights, in the manner described below, with the purpose to influence the
policies of the Issuer, in particular with the intent of influencing a
business combination involving the Issuer.
By letter dated February 3, 1997, Mr. Duggan expressed to the
Issuer his disappointment with the Issuer's business situation and suggested
courses of action, including the addition of a specific individual as a
member of the Issuer's Board of Directors. A copy of that letter is attached
as Exhibit 2. By letter dated December 5, 1997, Mr. Duggan wrote to the
members of the Issuer's Board of Directors to advise the Issuer of his
continued disappointment with the financial performance of the Issuer. The
letter listed certain steps that the Issuer should implement. A copy of that
letter is attached as Exhibit 3.
By letter dated December 17, 1997, Mr. Duggan submitted a notice of
intent to introduce a stockholders' proposal at the 1998 annual meeting of
stockholders of the Issuer and to nominate two persons for election as
directors at that meeting. A copy of that letter is attached as Exhibit 4.
By letter dated December 23, 1997, the Issuer refused to allow Mr. Duggan to
present the stockholder's proposal or to nominate candidates for election to
the Board of Directors. A copy of that letter is attached as Exhibit 5.
By letter dated December 30, 1997, Mr. Duggan suggested an
alternative stockholders' proposal. A copy of that letter is attached as
Exhibit 6. Also by letter dated December 30, 1997, Mr. Duggan requested that
the Issuer provide him with a stockholder list and certain other related
materials. A copy of that letter is attached as Exhibit 7. After additional
discussion and correspondence, the Issuer provided Mr. Duggan with access to
stockholder list materials. Prior to the annual meeting of stockholders, Mr.
Duggan also corresponded and held discussions with the Issuer regarding the
inability of Mr. Duggan to vote shares held in excess of the 10% voting
limitation contained in the Issuer's Certificate of Incorporation.
By letter dated December 30, 1997, Mr. Duggan gave notice of his
intent to nominate two persons for election to the Board of Directors of the
Issuer. A copy of that letter is attached as Exhibit 8. By letter dated
January 2, 1998, the Issuer refused to permit the presentation of a
stockholder proposal by Mr. Duggan or the nomination of candidates for
election to the Board of Directors. A copy of that letter is attached as
Exhibit 9. By letter of his counsel dated January 5, 1998, Mr. Duggan
responded to the Issuer. A copy of that letter is attached as Exhibit 10.
By letter dated January 7, 1998, the Issuer responded to the letter of Mr.
Duggan's counsel. A copy of that letter is attached as Exhibit 11. The
Issuer, Mr. Duggan and the other individual Mr. Duggan intended to nominate
for election to the Board of Directors discussed circumstances under which
Mr. Duggan would withdraw his notice of intent to nominate. A copy of a
letter written by counsel to the Issuer regarding those discussions, dated
January 8, 1998, is attached as Exhibit 12.
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CUSIP No. 235906104 Page 13 of 55 Pages
By letter dated August 18, 1998, Mr. Duggan submitted a notice of
intent to introduce a stockholders' proposal at the 1999 annual meeting of
stockholders of the Issuer. A copy of that letter is attached as Exhibit 13.
By letter dated August 24, 1998, Mr. Duggan expressed to the Issuer his
disappointment with the Issuer's business situation and suggested courses of
action. A copy of that letter is attached as Exhibit 14.
By letter dated November 16, 1998, Mr. Duggan submitted a notice of
proposal to nominate Paul J. Duggan, Vincent Cainkar and J. Dennis Huffman
for election to the Board of Directors of the Issuer. A copy of the letter
and the supporting materials thereto is attached as Exhibit 15. Also by
letter dated November 23, 1998, Mr. Duggan requested, pursuant to Section 220
of the Delaware General Corporation Law, that the Issuer provide him with a
stockholder list and certain other related materials. A copy of that letter
is attached as Exhibit 16.
By letter dated November 27, 1998, the Issuer responded to Mr.
Duggan's notice of proposal to nominate directors, requesting certain
additional information from the nominees through a questionnaire prepared by
the Issuer. A copy of the letter is attached as Exhibit 17. On December 10,
1998, completed copies of the questionnaire where delivered by each of the
director nominees to the Issuer. Copies of these questionnaires are attached
as Exhibit 18.
By letter dated December 3, 1998, the Issuer responded to Mr.
Duggan's request for a stockholder list and additional information, asserting
that the request was governed by Rule 14a-7 under the Securities Exchange Act
of 1934 (the "Exchange Act") and requesting an affidavit from Mr. Duggan
pursuant to Rule 14a-7(c). A copy of the letter is attached as Exhibit 19.
By letter dated December 7, 1998, Mr. Duggan reiterated his demand for a
stockholder list and certain other information, pursuant to Section 220 of
the Delaware General Corporation Law and Rule 14a-7 under the Exchange Act;
attached to such letter was an affidavit from Mr. Duggan containing certain
representations pursuant to Rule 14a-7(c). A copy of the letter and
affidavit is attached as Exhibit 20.
By letter dated December 10, 1998, the Issuer responded to Mr.
Duggan's letter dated December 7, 1998, asserting that the Issuer would
advise Mr. Duggan on December 15, 1998 as to whether it provide the requested
materials at that time to Mr. Duggan or whether it would mail materials from
Mr. Duggan to stockholders. A copy of the letter is attached as Exhibit 21.
By letter dated December 11, 1998, Mr. Duggan responded to the Issuer's
letter dated December 10, 1998, asserting that pursuant to Section 220 of the
Delaware General Corporation Law, Mr. Duggan would be available on December
15, 1998 to receive the materials he requested in his letter dated December
7, 1998 and would submit to the Issuer at that time a check to cover the
Issuer's expenses in producing such material. A copy of this letter is
attached as Exhibit 22.
By facsimile correspondence dated December 14, 1998, the Issuer
responded to Mr. Duggan's December 11, 1998 letter, asserting that it would
provide Mr. Duggan with the
<PAGE>
CUSIP No. 235906104 Page 14 of 55 Pages
shareholder materials as required by Rule 14a-7(a)(2)(ii) on December 15,
1998. A copy of that letter is attached as Exhibit 23.
On December 22, 1998, Mr. Duggan and the Committee to Enhance
Shareholder Value (the "Committee"), whose members include Mr. Duggan,
Vincent Cainkar, J. Dennis Huffman, Jackson Partners, Jackson Equities,
Jackson Investments, Jackson Capital and Jackson Offshore, filed a
preliminary proxy statement on Schedule 14A with the U.S. Securities and
Exchange Commission ("SEC"). A copy of the preliminary proxy statement is
attached as Exhibit 24. By letter dated December 22, 1998, representatives
of Mr. Duggan and the Committee informed the Issuer of the filing of the
preliminary proxy statement. A copy of this letter is attached as Exhibit 25.
On December 23, 1998, Paul J. Duggan and the Committee prepared a
letter to the shareholders of the Issuer urging shareholders to refrain from
completing any proxy cards that may be sent to them by the Issuer until they
had reviewed the proxy statement to be sent to them by Mr. Duggan and the
Committee. This letter was filed with the SEC on December 24, 1998. This
letter has not yet been delivered to shareholders of the Issuer. A copy of
this letter is attached as Exhibit 26.
The Group intends to continue to evaluate the Issuer and its
business prospects and intends to consult with management of the Issuer,
other shareholders of the Common Stock or other persons to further its
objectives. The Group may make further purchases of shares of the Common
Stock or may dispose of any or all of its shares of the Common Stock at any
time. At present, and except as disclosed herein, the Group has no specific
plans or proposals that relate to, or could result in, any of the matters
referred to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule
13D. The Group intends to continue to explore the options available to it.
The Group may, at any time or from time to time, review or reconsider its
position with respect to the Issuer and may formulate plans with respect to
matters referred to in Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) By virtue of his control over the stock personally owned by
him and that owned by Jackson Capital, Jackson Equities, Jackson Investments
and Jackson Offshore, Mr. Duggan beneficially owns 266,600 of the 273,800
shares of the Common Stock owned by members of the Group, constituting
approximately 9.5% of the issued and outstanding shares of the Common Stock,
based on the number of outstanding shares (2,820,154) reported on the
Issuer's Annual Report on Form 10-K filed on December 30, 1998. Jackson
Capital beneficially owns only the 92,200 shares held in the names of Jackson
Equities and Jackson Investments, constituting approximately 3.3% of the
issued and outstanding shares of the Common Stock. Jackson Equities
beneficially owns only the 60,622 shares of the Common Stock it holds in its
own name, constituting approximately 2.1% of the issued and outstanding
shares of the Common Stock. Jackson Investments beneficially owns only the
31,578 shares of the Common Stock it holds in its own name, constituting
approximately 1.1% of the issued and
<PAGE>
CUSIP No. 235906104 Page 15 of 55 Pages
outstanding shares of the Common Stock. Jackson Partners beneficially owns
only the 174,000 shares of the Common Stock it holds in its own name,
constituting approximately 6.2% of the issued and outstanding shares of the
Common Stock. After the sale of 29,800 shares of the Common Stock on
December 2, 1998 (as reported in Item 5(c) below), Jackson Offshore no longer
beneficially owns any of the Common Stock. None of Mr. Duggan, Jackson
Capital, Jackson Equities, Jackson Investments or Jackson Offshore otherwise
beneficially owns any shares of the Common Stock. Vincent Cainkar
beneficially owns 4,200 shares of the Common Stock, including 100 shares of
Common Stock held in his own name and 4,100 shares of Common Stock held
jointly by him and Cathy M. Cainkar, constituting approximately 0.1% of the
issued and outstanding shares of Common Stock. J. Dennis Huffman
beneficially owns 3000 shares of Common Stock, all of which are held in his
own name, constituting approximately 0.1% of the issued and outstanding
shares of Common Stock.
(b) With respect to the shares described in (a) above, Mr. Duggan
has sole voting and investment power with regard to the 400 shares held by
Mr. Duggan. Mr. Duggan, Jackson Capital, Jackson Equities, and Jackson
Investments have shared voting and investment power with regard to the 92,200
shares held by Jackson Equities and Jackson Investments. Mr. Duggan and
Deborah Duggan, Mr. Duggan's spouse, have shared voting and investment power
with regard to the 174,000 shares held by Jackson Partners. Deborah Duggan's
principal occupation is serving as a general partner of Jackson Partners and
providing accounting, administrative and managerial services for Jackson
Partners. Deborah Duggan's business address is 53 West Jackson Boulevard,
Suite 400, Chicago, Illinois 60604. Mr. Cainkar has sole voting and
investment power with regard to the 100 shares held in his own name and has
shared voting and investment power with respect to the 4,100 shares held
jointly by him and Cathy M. Cainkar. Cathy M. Cainkar is an individual whose
residential address is 8206 South Mobile, Burbank, IL 60459. Mrs. Cainkar
does not have any ownership interest in, nor does she serve as a partner,
director or officer of Jackson Capital, Jackson Equities or Jackson Offshore.
Mrs. Cainkar has a non-voting limited partnership interest in Jackson
Investment. During the past five years, neither Mrs. Cainkar nor Mrs. Duggan
has been convicted in a criminal proceeding (excluding traffic violations),
or has been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which either of them were or
are subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
(c) The following purchases of the Common Stock are the only
transactions in the Common Stock made by J. Dennis Huffman during the past
sixty days, all of which were made in open market purchases on the Nasdaq
National Market System:
<TABLE>
<CAPTION>
DATE NUMBER OF SHARES COST PER SHARE
<S> <C> <C>
12/3/98 1,000 $14-3/4
12/3/98 1,000 $15
</TABLE>
<PAGE>
CUSIP No. 235906104 Page 16 of 55 Pages
The following purchase of the Common Stock is the only transactions
in the Common Stock made by Jackson Equities during the past sixty days,
which purchase was made from Jackson Offshore at a market-determined price:
<TABLE>
<CAPTION>
DATE NUMBER OF SHARES COST PER SHARE
<S> <C> <C>
12/2/98 4,000 $14-1/2
</TABLE>
The following purchase of the Common Stock is the only transactions
in the Common Stock made by Jackson Investments during the past sixty days,
which purchase was made from Jackson Offshore at a market-determined price:
<TABLE>
<CAPTION>
DATE NUMBER OF SHARES COST PER SHARE
<S> <C> <C>
12/2/98 4,000 $14-1/2
</TABLE>
The following sales of the Common Stock are the only transactions
in the Common Stock made by Jackson Offshore during the past sixty days:
DATE NUMBER OF SHARES COST PER SHARE
12/2/98 23,800 $14-1/2
12/2/98 4,000 $14-1/2
12/2/98 2,000 $14-1/2
The first of the transactions by Jackson Offshore listed above was
made in open market sales on the Nasdaq National Market System. The second
transaction listed above was a sale made to Jackson Equities at a
market-determined price. The third transaction listed above was a sale made
to Jackson Investments at a market-determined price.
Except as set forth below, the following sale of the Common Stock
is the only transaction in the Common Stock made by Paul J. Duggan during the
past sixty days, which sale was made in open market sales on the Nasdaq
National Market System:
<TABLE>
<CAPTION>
DATE NUMBER OF SHARES COST PER SHARE
<S> <C> <C>
12/2/98 72,000 $14-1/2
</TABLE>
Mr. Duggan also transferred 174,000 shares of the Common Stock held
in his own name to Jackson Partners on December 2, 1998. No consideration
was paid by Jackson Partners in this transaction.
<PAGE>
CUSIP No. 235906104 Page 17 of 55 Pages
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
No. Description
-- -----------
1. Joint Filing Agreement
2. Letter from Paul J. Duggan to Mary Beth Poronsky Stull, dated
February 3, 1997.*
3. Letter from Paul J . Duggan to the Board of Directors of the
Issuer, dated December 5, 1997.*
4. Letter from Paul J . Duggan to Janine M. Poronsky, dated December
17, 1997.*
5. Letter from Janine M. Poronsky to John M. Klimek, dated December
23, 1997.*
6. Letter from Paul J . Duggan to Janine M. Poronsky, dated December
30, 1997.*
7. Letter from Paul J . Duggan to Janine M. Poronsky, dated December
30, 1997.*
8. Letter from Paul J . Duggan to Janine M. Poronsky, dated December
30, 1997.*
9. Letter from Janine M. Poronsky to John M. Klimek, dated January
2, 1998.*
10. Letter from John M. Klimek to Janine M. Poronsky, dated January
5, 1998.*
11. Letter from Janine M. Poronsky to John M. Klimek, dated January
7, 1998.*
12. Letter from Kip A. Weissman, P.C. to Vincent Cainkar, dated
January 8, 1998.*
13. Letter from Paul J . Duggan to Janine M. Poronsky, dated August
18, 1998.*
14. Letter from Paul J . Duggan to Mary Beth Poronsky Stull, dated
August 24, 1998.*
15. Letter from Paul J. Duggan to Janine M. Poronsky, dated November
16, 1998.*
16. Letter from Paul J. Duggan to Janine M. Poronsky, dated November
23, 1998.*
17. Letter from Janine M. Poronsky to Paul J. Duggan, dated November
27, 1998.*
18. Completed Questionnaires from J. Dennis Huffman, Paul J. Duggan
and Vincent Cainkar, delivered to Damen Financial Corporation on
December 10, 1998.*
19. Letter from Janine M. Poronsky to Paul J. Duggan, dated December
3, 1998.*
20. Letter from Paul J. Duggan to Janine M. Poronsky, dated December
7, 1998.*
<PAGE>
CUSIP No. 235906104 Page 18 of 55 Pages
21. Letter from Janine M. Poronsky to Paul J. Duggan, dated December
10, 1998.*
22. Letter from Paul J. Duggan to Janine M. Poronsky, dated December
11, 1998.*
23. Correspondence by facsimile from Janine M. Poronsky to Paul J.
Duggan, dated December 14, 1998.
24. Preliminary Proxy Statement filed with the SEC on December 22,
1998 by Paul J. Duggan and the Committee to Enhance Shareholder
Value.
25. Letter to Mary Beth Poronsky-Stull, dated December 22, 1998.
26. Letter from Paul J. Duggan and the Committee to Enhance
Shareholder Value to the shareholders of the Issuer filed with
the SEC on December 24, 1998.
_________________
*Filed as part of the Original 13D.
<PAGE>
CUSIP No. 235906104 Page 19 of 55 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Date: December 30, 1998
/s/ Paul J. Duggan
Paul J. Duggan, an individual
Jackson Boulevard Capital Management, Ltd.
By: /s/ Paul J. Duggan
Paul J. Duggan, President
Jackson Boulevard Equities, L.P.
By: Jackson Boulevard Capital Management, Ltd.,
General Partner
By: /s/ Paul J. Duggan
Paul J. Duggan, President
Jackson Boulevard Investments, L.P.
By: Jackson Boulevard Capital Management, Ltd.,
General Partner
By: /s/ Paul J. Duggan
Paul J. Duggan, President
Jackson Offshore Fund, Ltd.
By: /s/ Paul J. Duggan
Paul J. Duggan
/s/ Vincent Cainkar
Vincent Cainkar, an individual
<PAGE>
CUSIP No. 235906104 Page 20 of 55 Pages
/s/ J. Dennis Huffman
J. Dennis Huffman, an individual
<PAGE>
CUSIP No. 235906104 Page 21 of 55 Pages
EXHIBIT 1
JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of 1934,
as amended, the undersigned hereby agree that the Schedule 13D to which this
Joint Filing Agreement is being filed as an exhibit shall be a joint
statement filed on behalf of each of the undersigned.
Date: December 12, 1998
/s/ Paul J. Duggan
Paul J. Duggan, an individual
Jackson Boulevard Capital Management, Ltd.
By: /s/ Paul J. Duggan
Paul J. Duggan, President
Jackson Boulevard Equities, L.P.
By: Jackson Boulevard Capital Management, Ltd.,
General Partner
By: /s/ Paul J. Duggan
Paul J. Duggan, President
Jackson Boulevard Investments, L.P.
By: Jackson Boulevard Capital Management, Ltd.,
General Partner
By: /s/ Paul J. Duggan
Paul J. Duggan, President
/s/ Vincent Cainkar
Vincent Cainkar, an individual
/s/ J. Dennis Huffman
J. Dennis Huffman, an individual
<PAGE>
CUSIP No. 235906104 Page 22 of 55 Pages
EXHIBIT 23
DAMEN FINANCIAL CORPORATION
200 WEST HIGGINS ROAD
SCHAUMBURG, IL 60195-3788
PHONE: 847-882-5320
******CONFIDENTIAL NOTICE******
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE
INDIVIDUAL/S TO WHOM IT IS ADDRESSED. IT MAY CONTAIN
INFORMATION THAT IS PRIVILEGED AND CONFIDENTIAL. IF THE
READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, YOU
ARE HEREBY NOTIFIED THAT ANY DISSEMINATION OR COPY OF THIS
COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED
THIS MESSAGE IN ERROR, PLEASE NOTIFY THE SENDER BY PHONE AND
RETURN THE ORIGINAL BY MAIL. THANK YOU.
FAX TO: Paul Duggan
COMPANY: Jackson Boulevard Capital Management
DATE: 12/14/98 FAX#: (312) 294-6449
NUMBER OF PAGES, INCLUDING THIS COVER SHEET: 1
FROM: Janine M. Poronsky FAX#: (847) 882-5830
COMMENTS:
As permitted by Rule 14a-7(a)(i) and Rule 14a-7(b)(2), Damen Financial
Corporation ("the Company") has elected to provide you with the shareholder
materials as required by Rule 14a-7(a)(2)(ii).
Thank you for your offer, stated in your letter of December 11, 1998, to
facilitate delivery of the materials by making arrangements for pick up by
messenger. The Company will not receive the materials from its transfer
agent until tomorrow, December 15. As a result, the materials will not be
available at the time you indicated, i.e. 12:00 p.m. on December 15, 1998, or
at the location you indicated, i.e., the Company's main office. The Company
expects to have the package of materials ready for pick up by 3:30 p.m. on
December 15 at its branch office at 4100 S. Damen Ave., Chicago, IL 60609.
If you would still like to arrange messenger service to pick up the
materials, please advise me of such by facsimile. If the package of
materials is ready for pick up prior to 3:30 p.m., we would be happy to call
you for an earlier pick up.
The Company's transfer agent has advised that the cost of the materials
prepared in response to your request is $1,500.
Thank you.
<PAGE>
Page 23 of 55 Pages
EXHIBIT 24
CUSIP No. 235906104
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
DAMEN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
Page 24 of 55 Pages
PRELIMINARY PROXY MATERIALS DATED DECEMBER 22, 1998
The information included herein is as it is expected to be when the
definitive proxy statement is mailed to stockholders of Damen Financial
Corporation. This proxy statement will be revised to reflect actual facts at
the time of the filing of the definitive proxy statement.
JANUARY 25, 1999
ANNUAL MEETING OF STOCKHOLDERS
OF
DAMEN FINANCIAL CORPORATION
PROXY STATEMENT OF
PAUL J. DUGGAN
AND THE COMMITTEE TO ENHANCE SHAREHOLDER VALUE
--------------
IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING
WHY YOU WERE SENT THIS PROXY STATEMENT
This Proxy Statement and the enclosed BLUE proxy card are furnished
to you by Paul J. Duggan and the Committee to Enhance Shareholder Value (the
"Committee") in connection with the solicitation of proxies for the Annual
Meeting of Stockholders of Damen Financial Corporation ("Damen" or the
"Company"), scheduled to be held on January 25, 1999 at 9:30 a.m. (local
time) at the Holiday Inn, located at 3405 Algonquin Road, Rolling Meadows,
Illinois, and any adjournment(s) or postponement(s) thereof (the "Annual
Meeting").
This Proxy Statement and accompanying proxy card are first being
sent to stockholders on or about January 1, 1999.
MR. DUGGAN AND THE COMMITTEE RECOMMEND A VOTE FOR PAUL J. DUGGAN,
VINCENT CAINKAR AND J. DENNIS HUFFMAN AS DIRECTORS AND A VOTE "FOR" THE
STOCKHOLDER PROPOSAL TO APPOINT AN INVESTMENT BANKER AND ESTABLISH A
COMMITTEE COMPOSED OF INDEPENDENT DIRECTORS TO EVALUATE PROPOSALS TO SELL OR
MERGE THE COMPANY.
<PAGE>
Page 25 of 55 Pages
Paul Duggan is a Damen stockholder and Manager of Jackson Boulevard
Partners ("Jackson Partners"), an investment consulting firm in Chicago,
Illinois, and President of Jackson Boulevard Equities, Ltd., ("Jackson
Equities"), an investment fund with an emphasis on securities of savings and
loans, banks and other companies in the banking field. The members of the
Committee are Paul Duggan, Vincent Cainkar, a Damen stockholder and bond
attorney who has represented many financial institutions, J. Dennis Huffman,
a Damen stockholder and a former chief operating officer of Beverly Bank, and
Jackson Partners, Jackson Equities, Jackson Boulevard Capital Management Ltd.
("Jackson Fund"), and Jackson Offshore Fund, Ltd. ("Jackson Offshore"), which
are investment funds of which Paul Duggan serves as Manager or President. The
members of the Committee have beneficial ownership of a total of 273,800
shares of Common Stock, par value $.01 per share, of the Company ("Damen
Common Stock"), representing approximately 9% of issued and outstanding Damen
Common Stock.
WHAT YOU ARE VOTING ON
At the annual meeting, among other things, the stockholders of the
Company will be asked to vote to:
- elect three directors;
- ratify of the appointment of Cobitz, VandenBerg & Fennessy as
the auditors of the Company for the fiscal year ending September 30,
1999; and
- approve a stockholder proposal directing the Board of Directors
of the Company to appoint an investment banker to pursue merger
or acquisition candidates for the Company and to establish a
committee consisting of all directors who are not current or
former officers or employees or relatives of current or former
officers or employees of the Company in order to consider and
recommend to the full Board of Directors for approval the best
available offer to acquire the Company by sale or merger.
WHO CAN VOTE AT THE ANNUAL MEETING
Stockholders who owned shares of Damen Common Stock at the close of
business on December 9, 1998 (the "Record Date") are entitled to vote at the
annual meeting. On June 30, 1998, according to the Company's report on Form
10-Q filed by the Company with the U.S. Securities and Exchange Commission
(the "SEC") on August 14, 1998, there were 2,967,154 issued and outstanding
shares of the Company's Common Stock. Each share of Damen Common Stock held
on the Record Date is entitled to one (1) vote at the Annual Meeting.
HOW TO VOTE BY PROXY
To elect Mr. Duggan's nominees to the Board, and to vote in favor of
the stockholder proposal set forth [in this Proxy Statement]
[in the Damen Board of Directors Proxy Statement dated December __, 1998],
promptly complete, sign, date and mail the enclosed BLUE proxy card in the
enclosed postage-paid envelope. Whether you plan to attend the annual or
meeting or not, we urge you to complete and return the enclosed BLUE proxy
card.
Properly executed proxies will be voted in accordance with the
directions indicated thereon. If you sign the BLUE proxy card but do not make
any specific choices, your proxy will vote your shares as follows:
-2-
<PAGE>
Page 26 of 55 Pages
- "FOR" the election of Mr. Duggan's three nominees to the Board of
Directors, Paul J. Duggan, Vincent Cainkar and J. Dennis Huffman.
- "FOR" the ratification of the appointment of Cobitz, VandenBerg &
Fennessy as the auditors of the Company for the fiscal year ending
September 30, 1999
- "FOR" the stockholder proposal directing the Board of Directors
of the Company to appoint an investment banker to pursue merger
or acquisition candidates for the Company and to establish a
committee consisting of all directors who are not current or
former officers or employees or relatives of current or former
officers of the Company in order to consider and recommend to the
full Board of Directors for approval the best available offer to
acquire the Company by sale or merger.
If any other matter is presented at the annual meeting, your proxy
will vote in accordance with his best judgment. At the time this Proxy
Statement was mailed, we knew of no matters which needed to be acted on at
the annual meeting, other than those discussed in this Proxy Statement.
If you hold your Damen Common Stock in the name of a brokerage firm,
your broker cannot vote your Damen Common Stock until he or she receives
specific instructions from you. Please contact the party at the brokerage
firm responsible for your account to make sure that a proxy is executed for
your Damen Common Stock on the BLUE proxy card.
HOW YOU CAN REVOKE A PROXY
IF YOU HAVE EXECUTED THE BOARD OF DIRECTORS' [COLOR] PROXY CARD
BEFORE RECEIVING MR. DUGGAN'S PROXY STATEMENT, YOU HAVE EVERY RIGHT TO CHANGE
YOUR VOTE BY COMPLETING, SIGNING, DATING AND RETURNING THE ENCLOSED BLUE
PROXY CARD. ONLY YOUR LATEST DATED PROXY WILL COUNT AT THE ANNUAL MEETING.
ANY PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY (i) SUBMITTING A
DULY EXECUTED PROXY CARD BEARING A LATER DATE TO THE SECRETARY OF THE COMPANY
OR TO MR. DUGGAN, (ii) FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN
REVOCATION, OR (iii) ATTENDING AND VOTING AT THE ANNUAL MEETING IN PERSON.
WHO YOU CAN CALL IF YOU HAVE QUESTIONS
If you have any questions concerning this Proxy Statement or need
assistance in voting your shares, please call Paul J. Duggan at (888) 522-5332
or Mr. Duggan's proxy solicitor:
THE ALTMAN GROUP, INC.
60 East 42nd Street,
Suite 1241
New York, NY 10165
(212) 681-9600
ANNUAL MEETING PROPOSALS
At the annual meeting, the Company's stockholders will be asked to
vote on the following matters: the election of three directors, the
ratification of the appointment of Cobitz, VandenBerg & Fennessy as the
auditors of the Company and a stockholder proposal directing the Company to
appoint an investment banker to pursue merger or acquisition candidates for
the Company and establish a committee composed of independent directors to
evaluate proposals to sell or merge the Company. As discussed in more detail
below, we believe that the current Board of Directors as a group have not
been acting in your best interests as stockholders of the Company. The
election of the directors nominated by Mr. Duggan and the approval of the
stockholder proposal is, in our opinion, in your best interest as
stockholders.
-3-
<PAGE>
Page 27 of 55 Pages
1. ELECTION OF THREE DIRECTORS
Damen's Board of Directors consists of seven directors, who serve
three-year terms. Three of the seven directors are being elected at this
year's Annual Meeting. Mr. Duggan and the Committee are proposing three
nominees for election as directors of Damen, Mr. Duggan himself, Vincent
Cainkar and J. Dennis Huffman.
We are asking you to elect the three directors nominated by Mr.
Duggan and supported by the Committee, instead of the directors nominated by
the Company. We believe it is in your best interest as stockholders to do so
because we believe that the performance of the current Board of Directors has
been inadequate in the areas of increasing stockholder value, increasing the
profitability of the Company and taking advantage of opportunities available
to the Company.
We believe that Mr. Duggan's nominees have superior experience in
the management and supervision of financial institutions and the successful
sales of financial institutions, are more independent and will be more
dedicated to enhancing stockholder value than the Company's nominees and the
current membership of the Company's Board of Directors.
In addition, Mr. Duggan and the Committee have concluded that Damen
should seriously explore whether it can be acquired or merged. Mr. Duggan's
three nominees for director, Mr. Duggan, Mr. Cainkar and Mr. Huffman, will
recommend that the Board engage an investment banker and aggressively pursue
the acquisition or merger of Damen as an alternative for increasing the value
of Damen to stockholders. In this respect, if elected, Mr. Duggan's nominees
will constitute only three of seven directors and therefore cannot compel the
Board to act and can only advise that Damen seriously consider proposals of
acquisition or merger.
HOW WE DISAGREE WITH CURRENT DIRECTORS ON OPERATION OF THE COMPANY - OUR
OBJECTIVES
We believe that the current management and Board of Directors of the
bank have failed to maximize stockholder value and the profitability of the
Company and that this is evident in the performance of the Company as
compared to other financial institutions in the following areas: stock price,
capital ratio, and efficiency ratio.
STOCK PRICE
Over the three years since Damen's Common Stock commenced trading on
the NASDAQ National Market System, the return on Damen's Common Stock has
underperformed each of the NASDAQ Bank Index (an index of U.S. banks stock
traded on NASDAQ published by NASDAQ), the SNL Thrift Index (an index of
savings and loans institutions published by SNL Securities) and the SNL
Bank & Thrift Index (an index of bank and thrift institutions published by
SNL Securities). A table comparing the returns of Damen's Common Stock to these
indices as well as to the Dow Jones Industrial Average and S&P 500 is set
forth below.
-4-
<PAGE>
Page 28 of 55 Pages
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name 10/02/95 12/16/98 % Change
- ------------------------------------------------------------------------------
DAMEN FINANCIAL CORPORATION (1) 11.500 13.750 19.57%
NASDAQ BANK INDEX 962.090 1,751.490 82.05%
SNL THRIFT INDEX 361.100 650.900 80.25%
SNL BANK & THRIFT INDEX 189.400 387.300 104.49%
DOW JONES INDUSTRIAL AVERAGE 4,749.700 8,790.600 85.08%
S&P 500 581.720 1,161.960 99.75%
ST. PAUL BANCORP 13.500 22.625 67.59%
- ------------------------------------------------------------------------------
</TABLE>
(1) Damen converted from a mutual to stock form of ownership in
1995. Damen issued its initial stock on October 2, 1995. The price shown for
Damen is its closing price on the first day of trading.
CAPITAL RATIO, DIVIDENDS AND STOCK BUYBACKS
The Company's capital ratio (tangible equity divided by assets) is
significantly higher than that of many other profitable financial
institutions. According to the April 17, 1998 issue of Sandler O'Neill Bank
Stock Monthly, the mean tangible equity to asset ratio for banks with assets
of less than $500 million was 10.46% as of December 31, 1997. Damen's equity
to asset ratio as of December 31, 1997, according to the same publication,
was 19.88%. Additionally, Damen's capital ratio is significantly higher than
the capital required by The Office of the Controller of the Currency ("OCC").
The OCC requires minimum capital ratios between 3 and 5% of adjusted total
assets (according to Damen's report on Form 10-Q for the quarter ended June
30, 1998 filed with the SEC on August 14, 1998 (the "Form 10-Q")). Despite
the lower OCC minimum, we believe that the optimum capital ratio for a
financial institution such as the Company is in the range of 8-10%.
According to the Form 10-Q, the Company's current Tier 1 Capital (as defined
in the Form 10-Q) is 17.8%. We believe that through more aggressive use of a
stock buyback program or declaration of dividends, the Company could decrease
its excess capital and enhance stockholder value.
Management contends they are addressing the problem of excess capital.
However, for the first nine months of fiscal year ended September 30,1998 the
Company earned $.51 per share and only distributed $.28 to shareholders. We
believe we can influence management through our Board of Directors'
participation to increase dividends. Given the high capital ratio the
Company enjoys currently, we believe that dividends can be raised immediately
to $1.00 per year or higher until such time as the excess capital ratio is
reduced to a figure closer to the industry average. This move not only would
help reduce the excess capital but also support the stock price of the
Company. A dividend of $1.00 would give the stockholders a current yield of
more than 7% based on the stock price of $13.75.
A formal, well-planned stock buyback program is an important cornerstone
in management of the Company's excess capital. We have been a consistent
proponent of stock buybacks. Although the Company had in place a stock
buyback program earlier this year, that program terminated in early August
and the Company did not immediately enact a new stock program. Throughout
much of the month of August, the stock price of the Company fell along with
the broad stock market. Because management did not have a formal stock
buyback plan in place, the Company could not take advantage of the falling
stock price to repurchase share at prices below book value. Members of the
Committee made repeated phone calls to members of the Company's management
and Board of Directors in an effort to initiate another stock buyback, and in
a letter to the Company dated August 24,1998, a copy of which is attached as
Exhibit 1, proposed a 20% stock buyback. Management failed to respond
promptly to our suggestion.
-5-
<PAGE>
Page 29 of 55 Pages
The Company's Board of Directors did not announce a new stock buyback
program until September 11, 1998. The action in the stock market in late
August had given the Company opportunities, but the failure of management and
the Company's Board of Directors to have a program in place cost the Company
and all its stockholders. The Company had missed an opportunity to support
the stock price, redeem shares at prices far below book value and make
effective use of the excess capital. During the period of time between the
Company's buybacks, over 200,000 shares of the Company's stock were traded.
Most shares traded below book value. The Committee believes it can help the
Company by implementing an open stock buyback program, which will reduce
excess capital issue and be accretive to book value and ultimately franchise
value.
The Board of Directors takes credit for seven buyback programs, yet did
not promptly put in place a program when the Company's stock was at 52 week
lows. Our director nominees will attempt to insure that stock buy backs are
handled more aggressively and are continually in place in order to reduce
excess capital. Ironically, the Company's management claimed they moved to an
OCC charter to take advantage of the buybacks allowed under OCC regulations,
yet when the market and the Company's stock suffered in late August, the
Company had no program in place.
In the Company's response to the stockholder proposal of Mr. Duggan that
is set forth below in this Proxy Statement, the Company asserts that "it is
unrealistic to expect the Company's stock price to be unaffected by a
turbulent stock market." While Mr. Duggan and the Committee acknowledge
that the stock price of the Company can be expected to be affected by the
broader market, we believe that given the Company's excess capital ratio, it
is clearly the responsibility of the Company's Board of Directors and
management to have in place an open stock buyback program to take advantage
of those instances when the Company's stock price does fall below its book
value.
EFFICIENCY RATIO AND LEVERAGE
We also believe that the salaries and other expenses paid by the
Company are excessive as evidenced by the Company's high efficiency ratio,
which measures the amount of capital expended by the Company to earn each
dollar of profit. The higher the efficiency ratio, the more money the Company
is expending per dollar of profit. Many financial institutions have a lower
efficiency ratio than Damen's. According to the April 17, 1998 edition of
issue of Sandler O'Neill Bank Stock Monthly, as of December 31, 1997, the
mean efficiency ratio for banks with assets of less than $500 million was
62.5%. According to the same publication, Damen's efficiency ratio as of
December 31, 1997 was 70.8%. Moreover, the Company's efficiency ratio is
increasing, not decreasing, from 61.11% for the fiscal year ended September
30, 1996 to 72.12% for the fiscal year ended September 30, 1998, and
increased again to 75.53% for the three months ended September 30, 1998. We
believe that we can reduce the Company's efficiency ratio by reducing
officers' salaries and other related compensation costs. The Company's
conversion from a thrift charter under the Office of Thrift Supervision to a
national bank charter under the OCC brings with it increased costs. A merger
or sale of the Company would save the Company and its stockholders from
experiencing a period of increasing costs as the Company tries to become a
bank. It should be noted that as of the last annual meeting and a year after
converting to a bank charter, the Company still was not open for business on
Wednesday and did not have a full-time commercial loan officer on its payroll.
-6-
<PAGE>
Page 30 of 55 Pages
The increased borrowings of the Company from the Federal Home Loan
Board (from $56,500,000 for the fiscal year ended September 30, 1997 to
$61,800,000 for the fiscal year ended September 30, 1998) also may pose a
danger to the Company if interest rates increase. The use of borrowings
(essentially a margin loan) allows the Company to leverage its investment
portfolio. We believe, in light of recent incidents in which other
financial institutions incurred substantial losses as a result of the use of
leverage in their investment portfolio, that most stockholders would not
favor the Company increasing its borrowings for speculation in the purchase
of a bond portfolio.
In addition, the Company does not have an adequate market strategy
because its three branches are not located within close proximity to each other.
For example, the Schaumburg branch is approximately 24 miles from Burbank branch
and 26 miles from the Chicago branch. The Committee supports sale of the
Schaumburg branch in order to maximize stockholder value and reduce expenses.
To maximize share values, Mr. Duggan and the Committee have
concluded that Damen should seriously explore the feasibility of being
acquired by or merging with another institution. If elected, our nominees
will recommend that the Board engage an investment banker and aggressively
pursue the acquisition of Damen as an alternative for increasing share
values, although these nominees will be open minded and will consider all
recommendations from other stockholders or directors. Mr. Duggan and the
Committee, therefore, support the stockholder proposal set forth in the
Damen Board of Directors Proxy Statement that recommends the appointment of
an investment banker. If you share this view, then you should vote for our
nominees. If elected, our nominees would constitute only three of seven
directors and could not compel action by the Board. However, by electing our
candidates, we believe you will be sending a message to the remaining Board
members that you wish them to focus on enhancing share values.
None of the members of the Committee know of any agreements or
understandings concerning the possible acquisition of Damen and there can be
no assurance that an acquisition can be effected at prices materially above
the current market value for Damen Common Stock.
WHY THE DIRECTORS NOMINATED BY PAUL DUGGAN WILL BETTER SERVE INVESTORS THAN
DAMEN'S NOMINEES
Mr. Duggan and the other members of the Committee have collectively
invested more than $3,000,000 in shares of Damen Common Stock, and as of
December 15, 1998, Mr. Duggan himself beneficially owned 266,600 shares of
Damen Common Stock. Mr. Duggan and the Committee believe that this
significant investment entitles Mr. Duggan to representation on the Board of
Directors and uniquely qualifies him to represent stockholders who are
concerned about enhancing stock values. All of the shares purchased by Mr.
Duggan and other members of the Committee have been purchased at market price
and not at favorable option prices, as is the case with many of the shares
held by the Directors supported by management. In our opinion, Mr. Duggan's
significant stockholdings in the Company more closely align his interests
with your interests as stockholders as compared to current members of the
Board of Directors.
Mr. Duggan has over 20 years of experience in investing in
securities of banks and financial institutions. Since 1993, Mr. Duggan has
served as Managing General Partner of Jackson Equities, which was organized
as a limited partnership for the purpose of investing in marketable
securities with an emphasis on securities of savings and loans, banks and
other companies in the banking field. Mr. Duggan is also President of Jackson
Fund, a hedge fund management firm. Jackson Fund offers money management and
venture capital activities in addition to managing hedge funds which
concentrate in investing in the thrift and small cap bank areas. In this
position, Mr. Duggan has invested in over 150 financial institutions,
including over 40 financial institutions that have been acquired or that have
merged with other financial institutions.
-7-
<PAGE>
Page 31 of 55 Pages
Vincent Cainkar is a nationally recognized bond counsel and has
rendered legal opinions on bond issues in excess of $200 million and has
rendered legal advice to several Chicago area banking institutions. Mr. Cainkar
is an independent investor and founder of several real estate entities that have
developed Chicago area commercial and residential projects, including the
172-unit Burbank Manors Senior Citizen Apartments.
J. Dennis Huffman spent 20 years in the banking business before
leaving the position of chief operating officer of Beverly Bank, the lead
bank for Beverly Bancorp, a $600 million institution with 5 branches. He was
a bank director and served as board liaison between the client banks. During
Mr. Huffman's term at Beverly, the bank merged with Matteson Richton Bank,
opened branches in Orland Park and West Beverly, as well as acquired a bank
in Wilmington, Illinois. Beverly Bancorp. recently merged with St. Paul
Bancorp.
Information with respect to these nominees is set forth under the
caption "Paul Duggan's Nominees".
[The director nominees proposed by the Damen Board of Directors include
Edward R. Tybor, who since 1951 has owned and operated the Kubina-Tybor funeral
home, Charles J. Caputo, who from 1947 until his retirement in 1996, owned
Caputo Southwest Cement, a construction company located in Orland Hills,
Illinois, and Janine M. Poronsky, the sister of Damen's President, Mary Beth
Poronksy Stull, who until joining Damen as a compliance officer in 1991 was
employed as an attorney for the United States Internal Revenue Service.]
The biographies for Messrs. Tybor and Caputo contained in the proxy
statement filed by Damen with the SEC on [January 13, 1998] do not describe the
existence of any experience in the operation or supervision of any financial
institutions other than such individuals' service on Damen's Board of Directors.
In addition, the biography for Ms. Poronsky does not describe the existence of
any experience with any other financial institution other than Damen.
PAUL DUGGAN'S NOMINEES
The table set forth below identifies our three nominees for election as
new directors of Damen and provides information concerning each of these
nominees.
<TABLE>
<CAPTION>
<S> <C> <C>
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------
Paul Duggan 48 Manager/Owner, Duggan & Associates; Manager, Jackson
(Nominee) Boulevard Partners; President, Jackson Boulevard
Capital Management, Ltd.
- --------------------------------------------------------------------------------
Vincent Cainkar 49 Attorney for the City of Burbank, Village of Evergreen
(Nominee) Park, City of Hickory Hills, Village of McCook, and
Stickney Township
- --------------------------------------------------------------------------------
J. Dennis Huffman 55 Partner, DHK Development Corp.; Trader, Chicago Board
(Nominee) of Trade; Senior Loan Workout Agent, Resolution Trust
Corporation
- --------------------------------------------------------------------------------
</TABLE>
-8-
<PAGE>
Page 32 of 55 Pages
Further biographical information about Paul Duggan's nominees is set
forth below:
PAUL J. DUGGAN, a life long resident of Chicago, is a licensed CPA
in the State of Illinois. Mr. Duggan owns and has managed a consulting firm,
Duggan and Associates, which specializes in litigation consulting, since
1976, and has managed Jackson Partners, an investment consulting firm in
Chicago, since 1991. Mr. Duggan has served as an expert witness in commercial
litigation issues, in damages analysis areas and has testified in federal and
state courts on issues concerning business valuation, intellectual property,
unjust enrichment, and various damages areas. Mr. Duggan is also President of
Jackson Fund, a hedge fund management firm. Jackson Fund offers money
management and venture capital activities in addition to managing hedge funds
which concentrate in investing in the thrift and small cap bank areas.
Mr. Duggan currently manages portfolios with investments in thrifts in excess
of $70 million as well as over $50 million in venture capital and private
real estate partnerships. Mr. Duggan serves on the Boards of Directors of
Marinette Marine Corporation in Marinette, Wisconsin (a manufacturer of ocean
going vessels for the U.S. Coast Guard, U.S. Navy, and commercial customers),
Marigold Services of Chicago, Illinois (a dry and liquid sugar storage
terminal) and Napleton St. Louis Honda in St. Peters, Missouri (a retail
Honda dealer). Mr. Duggan received his B.B.A. in business administration from
Loyola University of Chicago in 1974 and his CPA in the State of Illinois in
1975.
VINCENT CAINKAR, a life long resident of the Chicago area, is a
licensed attorney in the States of Illinois and Florida and a licensed real
estate broker in the State of Illinois. He has been in private legal practice
since 1974 and currently serves as an attorney for the City of Burbank, Village
of Evergreen Park, City of Hickory Hills, Village of McCook, Stickney Township
and other local governmental entities. He is a nationally recognized bond
counsel and rendered legal opinions on bond issues in excess of $200 million and
has rendered legal advice to several Chicago area banking institutions.
Mr. Cainkar is an independent investor and founder of several real estate
entities that have developed Chicago area commercial and residential
projects, including the 172-unit Burbank Manors Senior Citizen Apartments.
Mr. Cainkar received his B.A. in Chemistry from St. Louis University in 1971
and his J.D. from the DePaul University College of Law in 1974.
J. DENNIS HUFFMAN graduated from DePauw University and holds an MBA
from Northwestern University's Kellogg Graduate School of Management.
Mr. Huffman spent 20 years in the banking business before leaving the
position of chief operating officer of Beverly Bank, the lead bank for
Beverly Bancorp. He was a bank director and served as board laison between
the client banks. Mr. Huffman also served as a Senior Loan Workout Agent for
Resolution Trust Corporation. He is currently a partner in DHK Development
Corp, developer and leasing agent for commercial and residential real estate
and an active trader of U.S. Treasury Bond contracts on the floor of the
Chicago Board of Trade. DHK controls over $5,000,000 of commercial and
residential real estate.
There are no arrangements or understandings between Mr. Duggan's
nominees and any other person pursuant to which they were selected as
nominees, except that the nominees named above have consented to serve as
directors if elected. Mr. Duggan and the Committee do not expect that the
nominees will be unable to stand for election; but, in the event that any
nominee should be unable to stand for election, the Common Stock represented
by the enclosed BLUE proxy card will be voted for a substitute candidate
selected by Mr. Duggan.
-9-
<PAGE>
Page 33 of 55 Pages
COMPENSATION OF DIRECTOR NOMINEES
None of the persons nominated by Paul Duggan to serve as directors of
the Company is or has been a director or officer of the Company nor have any of
them received any compensation from the Company. No discussions have been held
and, except as indicated in the Proxy Statement, there are no understandings
with respect to any proposed remuneration from any source for these nominees in
connection with serving as a director of Damen if elected. However, if our
nominees are elected as directors of Damen, it is anticipated they will receive
the same compensation as other directors. According to the Proxy Statement filed
by the Company with the SEC dated on January 13, 1998, each member of the Board
of Directors of the Company is paid a fee of $500 per Board meeting.
2. STOCKHOLDER PROPOSAL TO APPOINT AN INVESTMENT BANKER
At the annual meeting, the stockholders will be asked to vote to
approve or disapprove a stockholder proposal directing the Company's Board of
Directors to appoint an investment banker and establishing a committee a
committee consisting of all directors who are not current or former officers
or employees or relatives of current or former officers or employees of the
Company in order to consider and recommend to the full Board of Directors for
approval the best available offer to acquire the Company by sale or merger.
The specific resolution reads as follows:
RESOLVED, that the stockholders of the Company,
believing that the value of their investment in the Company
can best be maximized through a sale or merger of the Company,
hereby request that the Board of Directors promptly proceed to
effect such a sale or merger by (i) retaining a leading
qualified investment banking firm for the specific purpose of
soliciting offers to acquire the Company by sale or merger and
(ii) establishing a committee of the Board of Directors
consisting of all directors, who are not current or former
officers or employees of the Company or related by blood or
marriage to a current or former officer or employee of the
Company, to consider and recommend to the full Board of
Directors for approval the best available offer to acquire the
Company by sale or merger.
Mr. Duggan and the Committee have concluded that Damen should
seriously explore whether it can be acquired or merged to take advantage of
opportunities current existing in the banking industry. Accordingly, on
numerous occasions, Mr. Duggan requested the Company to consider appointing
an investment banking firm for the purposes of evaluating and soliciting
offers to acquire the Company. See letters of Mr. Duggan dated August 24,
1998 and December 5, 1997, which are attached hereto as Exhibits 1 and 2.
On December 16, 1998, Damen announced that it engaged Keefe Bruyette
and Woods, Inc. to serve as its financial advisor to assist it in reviewing its
strategic options, including a possible sale of the Company.
We believe that although the appointment of Keefe Bruyette and Woods,
Inc. is a positive step, it does not constitute substantial implementation of
the stockholder proposal. Any investment banking firm appointed by the Company
should be directed not only to review its strategic options, but also to solicit
offers for the sale of the Company.
-10-
<PAGE>
Page 34 of 55 Pages
In addition, we believe the appointment of a committee of
independent directors, who are not current or former officers or employees of
the Company or related by blood or marriage to a current or former officer or
employee of the Company, to evaluate and recommend an offer is necessary to
ensure the selection of the best possible offer. While five of the Company's
seven directors are not officers of the Company, one director, Nicholas J.
Raino, has a greater than 10% equity interest in a firm (Dale Smith &
Associates, Inc.) that has long been utilized by the Company to provide
marketing, advertising and other services. During the Company's [1997] fiscal
year, this firm was paid [$89,225] by the Company for its services and
reimbursed [$326,451] for services and products provided by third party
sources according to the Company's Proxy Statement filed on [January 13, 1998].
In addition, three of the remaining outside directors, Carol A. Diver,
Charles J. Caputo and Edward R. Tybor have served on the board for 15, 22 and
31 years, respectively, and thus have extensive relationships with the
Company's management that extend prior to the Company's conversion into a
public company.
We also believe that the reluctance of such directors to appoint an
investment banker until less than 45 days prior to a stockholder vote
requiring such action, despite repeated stockholder requests to take such
action, is evidence of the influence of management over the Board of
Directors' and the insufficient responsiveness of the Board of Directors to
the concerns of stockholders.
For these reasons, we believe that it is necessary to appoint an
committee of independent directors to evaluate acquisition proposals, and to
direct the investment bank retained by the Company to solicit offers for the
purchase of the Company.
At the annual meeting of stockholders held on January 27, 1998 a
similar proposal was made. The majority of votes cast at the meeting were in
favor of hiring an investment banker. The vote count was 1,180,889 cast in
favor of the proposal and 1,168,000 votes against. However, the Company's
bylaws restrict voting of shares (by one individual or group) in excess of
10% of total votes outstanding. Accordingly, the number of votes for the
proposal was reduced by 51,672 shares. Such reduction allowed the proposal to
fail.
Although management knew that if not for the bylaw restriction
described above the stockholder proposal would have passed, the Company did
not announce the appointment of an investment banker until December 16, 1998.
Management of the Company now asks you to vote against the proposal to hire
an investment banker even though an investment banker has been hired. The
appointment of the investment banker does not make this issue moot, however,
nor does it lessen the need for passage of the stockholder proposal. The
current stockholder proposal directs the Board to appoint an investment
banking firm for the specific purpose of soliciting offers to acquire the
Company, not merely to evaluate its strategic options. Moreover, the current
stockholder proposal calls for the recommendations of the investment bankers
to be reviewed by only outside independent directors. This outside review
protects all stockholders, not just stockholder employees.
None of the members of the Committee have any agreement or
understanding concerning the possible acquisition of Damen and there can be
no assurance that an acquisition can be effected at prices materially above
the current market value of Damen Common Stock. We are not aware of any
proposals for acquisition of Damen.
-11-
<PAGE>
Page 35 of 55 Pages
REQUIRED VOTES AND OTHER MATTERS
By signing and returning the enclosed BLUE proxy card, you can vote to
elect Paul J. Duggan, Vincent Cainkar and J. Dennis Huffman as directors of
Damen and vote for the stockholder proposal included in the Board of Directors'
Proxy Statement.
Directors shall be elected by a plurality of the votes cast. The
ratification of the appointment of Cobitz, VanderBerg & Fennessy as auditors and
approval of the stockholder proposal each require the affirmative vote of a
majority of the votes cast on the matter. Proxies marked to abstain with respect
to a proposal have the same effect as votes against the proposal. Votes withheld
(for election of directors) and broker non-votes will have no effect on the
vote. One-third of the shares of the Common Stock, present in person or
represented by proxy, shall constitute a quorum for purposes of the annual
meeting. Abstentions and broker non-votes are counted for purposes of
determining a quorum.
OTHER INFORMATION
HOW PROXIES WILL BE SOLICITED
We may solicit proxies for the annual meeting by mail, advertisement,
telephone, telecopier or in person. The persons identified on Schedule 1 to this
Proxy Statement also may make solicitations. None of these persons will receive
additional compensation for participating in the solicitation. We have requested
banks, brokerage houses and other custodians, nominees and fiduciaries to
forward all of our solicitation materials to the beneficial owners of the Damen
Common Stock they hold.
IMPORTANT INSTRUCTIONS FOR "STREET NAME" STOCKHOLDERS
If any of your shares are held in the name of a brokerage firm, bank,
bank nominee or other institution on the record date, only that entity can vote
your shares and only upon its receipt of your specific instructions.
Accordingly, please contact the person responsible for your account at such
entity and instruct that person to execute and return the BLUE proxy card on
your behalf. You should also sign, date and mail the voting instruction form
your broker or banker sends you when you receive it. Please do this for each
account you maintain to ensure that all of your shares are voted.
INFORMATION ABOUT THE PROXY SOLICITOR
Mr. Duggan and the Committee have retained The Altman Group, Inc.
("Altman") to assist in the solicitation of proxies. Mr. Duggan and the
Committee have agreed to pay Altman a fee of $ _____________ and to reimburse
it for its reasonable out-of-pocket expenses. Approximately ______________
persons will be used by Altman in its solicitation efforts.
COSTS OF SOLICITING PROXIES
The entire expense of preparing, assembling, printing and mailing
this Proxy Statement and related materials and the cost of soliciting proxies
pursuant to this Proxy Statement will be borne by Mr. Duggan, Jackson
Equities and certain other members of the Committee. Mr. Duggan and the
Committee estimate that the total expenditures relating to the solicitation
of proxies will be approximately $______________. To date, approximately
$________________ of expenses have been incurred. Mr. Duggan, Jackson
Equities and certain other members of the Committee will pay the costs of
soliciting proxies. Mr. Duggan and the Committee intend to seek approval from
the Board of Directors for the reimburcement of the Committee's cost of
soliciting proxies.
-12-
<PAGE>
Page 36 of 55 Pages
INFORMATION ABOUT STOCKHOLDER PROPOSALS - NEXT ANNUAL MEETING
To be eligible for inclusion in the Company's proxy materials for
the next annual meeting of stockholders, any stockholder proposal to take
action at such annual meeting must be received at the Company's office
located at 200 West Higgins Road, Schaumburg, Illinois 60195, no later than
August [ ], 1999. Any such proposal shall be subject to the requirements of
the proxy rules adopted under the Exchange Act.
INFORMATION ABOUT PAUL J. DUGGAN AND THE COMMITTEE TO ENHANCE SHAREHOLDER VALUE
Certain information about persons who may participate in the
solicitation of proxies is set forth in Schedule 1 to this Proxy Statement.
Schedule 2 to this Proxy Statement sets forth certain information relating to
beneficial ownership of shares of Damen Common Stock by such persons
(including our nominees and persons involved in this solicitation known to us
to beneficially own more than five percent of Damen Common Stock), and
Schedule 3 lists all transactions in Damen Common Stock effected by such
persons in the two years prior to the date of this proxy statement.
MR. DUGGAN AND THE COMMITTEE STRONGLY RECOMMEND A VOTE FOR PAUL J.
DUGGAN, VINCENT CAINKAR AND J. DENNIS HUFFMAN AS DIRECTORS AND A VOTE "FOR"
THE STOCKHOLDER PROPOSAL TO APPOINT AN INVESTMENT BANKER AND APPOINT A
COMMITTEE COMPOSED OF INDEPENDENT DIRECTORS TO EVALUATE PROPOSALS TO SELL OR
MERGE THE COMPANY.
IT IS IMPORTANT THAT YOU RETURN YOUR PROXY PROMPTLY. PLEASE SIGN AND
DATE YOUR BLUE PROXY CARD PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE TO
AVOID UNNECESSARY EXPENSE AND DELAY. NO POSTAGE IS NECESSARY.
Sincerely,
Paul J. Duggan
Chairman, Committee to Enhance Shareholder Value
January 1, 1999
-13-
<PAGE>
Page 37 of 55 Pages
SCHEDULE 1
PARTICIPANTS IN THE SOLICITATION
The following table identifies and provides certain information as of
December 15, 1998 about individuals and entities that might be deemed
participants in this proxy solicitation within the meaning of Rule
14a-11(b) promulgated under the Securities Exchange Act of 1934,
as amended:
1. Paul J. Duggan
53 West Jackson Boulevard, Suite 400
Chicago, IL 60604
Paul Duggan, an individual, is Manager/Owner of Duggan & Associates,
a consulting firm specializing in litigation consulting, since 1976,
and has managed Jackson Partners, an investment consulting firm in
Chicago, since 1991. Mr. Duggan is also President of Jackson Fund, a
hedge fund management firm.
Mr. Duggan, together with reporting group members Jackson Boulevard
Capital Management, Ltd., Jackson Boulevard Equities, L.P., Jackson
Boulevard Investments, L.P., Jackson Offshore Fund, Ltd., Jackson
Boulevard Partners, Vincent Cainkar and J. Dennis Huffman, has filed a
Schedule 13D and will make amendments as required by law with respect
to beneficial ownership of Common Stock.
2. Jackson Boulevard Capital Management, Ltd.
53 West Jackson Boulevard, Suite 400
Chicago, IL 60604
Jackson Fund is an Illinois corporation and hedge fund management
firm. Jackson Fund offers money management and venture capital
activities in addition to managing hedge funds which concentrate in
investing in the thrift and small cap bank areas. Jackson Fund is
the sole General Partner of Jackson Equities and Jackson Investments.
3. Jackson Boulevard Equities, L.P.
53 West Jackson Boulevard, Suite 400
Chicago, IL 60604
Jackson Equities is an Illinois limited partnership. Jackson
Equities invests in marketable securities with an emphasis on
securities of savings & loans, banks and of other companies in the
banking field.
<PAGE>
Page 38 of 55 Pages
4. Jackson Boulevard Investments, L.P.
53 West Jackson Boulevard, Suite 400
Chicago, IL 60604
Jackson Investments is an Illinois limited partnership. Jackson
Investments specializes in buying and selling securities for
investments, particularly securities related to the financial
industry (including banks and thrifts).
5. Jackson Offshore Fund
31 Kildare Street
Dublin 2
IRELAND
Jackson Offshore is an Illinois corporation and Tortolla, British
Virgin Island corporation. Jackson Offshore specializes in buying and
selling securities for investments, particularly securities related to
the financial industry (including banks and thrifts).
6. Jackson Boulevard Partners
53 West Jackson Boulevard, Suite 400
Chicago, IL 60604
Jackson Partners is an Illinois general partnership and an
investment consulting firm.
7. Vincent Cainkar
6215 West 79th Street, Suite 2A
Burbank, IL 60459
Vincent Cainkar, an individual, is an attorney for the City of
Burbank, Village of Evergreen Park, City of Hickory Hills, Village
of McCook, and Stickney Township.
8. J. Dennis Huffman
10549 South Talman Avenue
Chicago, IL 60655
J. Dennis Huffman, an individual, is a Partner of DHK Development
Corp. and a trader with the Chicago Board of Trade.
Except as described in this Proxy Statement, none of the above-listed
participants in the solicitation is now, or was within the last two years, a
party to any contract, arrangement or understanding with any person with respect
to any securities of Damen, future employment by Damen or future transactions
involving Damen.
<PAGE>
Page 39 of 55 Pages
SCHEDULE 2
BENEFICIAL OWNERSHIP OF SHARES BY PARTICIPANTS IN THE SOLICITATION
The following table shows, as of December 15, 1998 (except as otherwise
noted), the shares of Damen Common Stock beneficially owned by the
participants in the solicitation of proxies pursuant to this Proxy Statement.
Unless otherwise indicated, each participant has sole voting and investment
power over the shares beneficially owned.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AT PERCENT
BENEFICIAL OWNER DECEMBER 15, 1998 OF CLASS
- ------------------------------ -------------------- --------
<S> <C> <C>
Paul J. Duggan(1) 266,600 9.0%
Jackson Boulevard Capital Management, Ltd.(2) 92,200 3.1%
Jackson Boulevard Equities, L.P. 60,622 2.0%
Jackson Boulevard Investment, L.P. 31,578 1.1%
Jackson Offshore Funds 0 0%
Jackson Boulevard Partners 174,000 5.9%
Vincent Cainkar(3) 4,200 *
J. Dennis Huffman 3,000 *
*Less than 0.1%
</TABLE>
- ----------
1 Includes 400 shares held in Mr. Duggan's own name, 174,000 shares held
by Jackson Partners, 60,622 shares held by Jackson Equities and 31,578 shares
held by Jackson Investments. Mr. Duggan is one of two general partners of
Jackson Partners and shares voting and investment power concerning the shares
held by Jackson Partners with Deborah Duggan, Mr. Duggan's spouse. Mr. Duggan
is the sole stockholder and a director and officer of Jackson Boulevard
Capital Management, Ltd. which is the sole general partner of Jackson
Equities and Jackson Investments. Mr. Duggan, Jackson Capital, Jackson
Equities, and Jackson Investments have shared voting and investment power
with regard to the 92,200 shares held by Jackson Equities and Jackson
Investments.
2 All 92,000 shares are beneficially owned as sole General Partner of
Jackson Equities and Jackson Investments.
3 Mr. Cainkar has sole voting and investment power with regard to
100 shares held in his own name and has shared voting and investment power with
respect to THE 4,100 shares held jointly by him and Cathy Cainkar,
Mr. Cainkar's wife.
<PAGE>
Page 40 of 55 Pages
SCHEDULE 3
The following table sets forth all shares of Damen Common Stock purchased or
sold during the two years ended December 31, 1998 by participants in the
solicitations of proxies pursuant to this Proxy Statement.
<TABLE>
<CAPTION>
SHARES
PURCHASED /
DATE (SOLD)
- ------------------------------------------------------------------------------
<S> <C> <C>
JACKSON BOULEVARD EQUITIES, L.P.
01/01/98 transferred (1) (12,749)
01/01/98 transferred (1) (5,100)
01/01/98 transferred (1) (1,351)
01/01/98 transferred (1) (5,278)
01/01/98 transferred (1) (5,100)
08/01/98 distribution (2) (5,529)
08/01/98 distribution (2) (4,014)
08/01/98 distribution (2) (5,529)
08/01/98 distribution (2) (4,014)
08/01/98 distribution (2) (5,357)
08/01/98 distribution (2) (5,357)
10/12/98 6,100
10/30/98 (6,100)
12/02/98 4,000
(1) Transferred to Jackson Boulevard Investments, L.P. pursuant to
partnership reorganization.
(2) Certain Jackson Boulevard Equities, L.P. investors received stock in
lieu of cash for a distribution of their interests.
JACKSON BOULEVARD INVESTMENTS, L.P.
01/01/98 transferred (1) 12,749
01/01/98 transferred (1) 5,100
01/01/98 transferred (1) 1,351
01/01/98 transferred (1) 5,278
01/01/98 transferred (1) 5,100
10/12/98 500
10/30/98 (500)
12/02/98 2,000
(1) Transferred from Jackson Boulevard Equities, L.P. pursuant to
partnership reorganization.
JACKSON OFFSHORE FUND, LTD.
08/01/98 distribution (1) 5,529
08/01/98 distribution (1) 4,014
08/01/98 distribution (1) 5,529
08/01/98 distribution (1) 4,014
08/01/98 distribution (1) 5,357
08/01/98 distribution (1) 5,357
12/02/98 (2,000)
12/02/98 (4,000)
12/02/98 (23,800)
(1) Certain Jackson Offshore Fund, Ltd. investors received stock in lieu of
cash for a distribution from Jackson Boulevard Equities, L.P. of their
interests.
</TABLE>
<PAGE>
Page 41 of 55 Pages
<TABLE>
<CAPTION>
SHARES
PURCHASED /
DATE (SOLD)
- ------------------------------------------------------------------------------
<S> <C> <C>
JACKSON BOULEVARD PARTNERS, L.P.
01/30/97 (300)
01/30/97 (1,700)
02/18/97 (1,000)
02/19/97 (3,400)
08/01/97 transfer (1) (246,400)
12/02/98 transfer (2) 174,000
(1) Transferred into Paul J. Duggan personal stock account.
(2) Transferred into partnership from a partner of Jackson Boulevard
Partners, L.P.
VINCENT CAINKAR
10/27/97 5,000
10/28/97 5,000
12/12/97 (1,800)
01/27/98 (3,000)
02/06/98 (3,000)
08/21/98 2,000
DENNIS HUFFMAN
01/24/97 (1,000)
02/05/97 (2,000)
05/22/97 (400)
07/24/97 (300)
08/20/97 (300)
09/18/97 (1,000)
09/03/98 1,000
12/03/98 1,000
12/03/98 1,000
PAUL J. DUGGAN
08/01/97 transfer (1) 246,400
12/02/98 (72,000)
12/02/98 transfer (2) (174,000)
(1) Transferred to Paul J. Duggan stock account from Jackson Boulevard
Investments, L.P.
(2) Transferred into Jackson Boulevard Investments, L.P.
</TABLE>
<PAGE>
Page 42 of 55 Pages
EXHIBIT 1
PAUL DUGGAN
53 W. JACKSON BLVD-SUITE 400
CHICAGO, ILLINOIS 60604
(312) 294-6440
(312) 294-6449 FAX
August 24, 1998
Ms. Mary Beth Poronsky-Stull
Damen Financial Corp.
200 West Higgins Road
Schaumburg, IL 60195-3780
Dear Mary Beth:
You should be in receipt of my shareholder proposal. In recent weeks, the
market price of stock at Damen Financial (Damen) has gone down dramatically.
It currently trades at $15 per share, which is down from its 52 week high of
19 1/4 and near its 52 week low of $14.
I am in receipt of management's letter to shareholders (accompanying the
dividend check) which discusses how well things are going. The market
obviously sees the performance of Damen's stock in a fashion other than the
way you and management look at it. If the market was excited, this stock
would be setting new highs not nearing new lows. The stock has been down
since the annual meeting and now trades at around book value.
I believe the time has come to sell the company. There are a number of
things that can be done to add value now while you market the company for
sale. I offer the following outline as a possible way for you to enhance the
price of your stock and the ultimate sellout value of the company.
1. Initiate a new buyback program. Approve and announce a buyback program
for up to 20% of the stock of Damen Financial. Indicate that the program
will be in place over the next year. This approach, which would be
consistent with your change to a national bank charter (the benefits of which
you have not availed yourself of) would have the following advantages.
<PAGE>
Page 43 of 55 Pages
a. For every share of stock Damen purchased, Damen would not have to
pay a 48 cent annual dividend on those shares.
b. With the stock currently trading at/or below book value, stock
purchases in this range would be accretive to earnings per share
and to book value.
c. All stock repurchases would help your excess capital problems.
d. Rather than having Mr. Gartner handle this buyback, I would use the
services of Sandler O'Neill & Partners or Robert Baird & Company.
I think an outside advisor would be helpful.
When looking at buybacks, Damen should assess the impact on earnings. Net
interest margin is only 2.95% (pre-tax). This would be about 1.77% after
tax. Dividends currently cost 48 cents per year with after-tax money. This
is a 3.2% cost (after tax) on a $15 buyback. It clearly is cheaper to use
excess capital to do buybacks than to invest in marginal investments with a
1.77% after tax yield.
2. Dividend Increase. Your current dividend is 12 cents per quarter or 48
cents per year. Consider an instant increase of 25% to 15 cents per quarter
and 60 cents per year based on the following thoughts:
a. A 60 cent dividend would infer a 4% yield on a $15 stock price (a
strong support for the stock).
b. A dividend in excess of current earnings would help reduce your
excess capital.
c. There is no reason a dividend cannot exceed earnings per share. I
refer you to the recently sold Southwest Financial (SWBI). SWBI
paid 25 cents per quarter in dividends as a way to reduce their
excess capital.
d. You can pay a 60 cent per share dividend on 80% of current shares
with the same amount of money as a 48 cent dividend on 100% of
shares. Current shares outstanding are 2,967,154, with an inferred
annual dividend cost of $1,424,234. If 20% of the shares are
repurchased before the next dividend, you could go to a 60 cent
annual rate and have the same annual dividend cost.
3. Reconfigure your Board of Directors. You currently have 3 directors up
for re-election at the next annual meeting. Why not have your two senior
directors retire early and appoint two outside directors now. This would
have a number of advantages.
a. Adding Board of Directors with financial expertise would assist you
in considering strategies such as dividend increases and buybacks.
b. A change in the Board would be a signal to outside investors that
you are making a move forward.
<PAGE>
Page 44 of 55 Pages
c. In conjunction with the appointment of Mr. Baldermann, you would
have added strong financial advisors to your core group. I could
give you a list of quality advisors with banking, lending, and
financial experience. I think you and your board should be
receiving better advice.
4. Consider changing your option programs. Does your current option
program provide for acceleration of vesting upon change in control? Does
your current option program call for a reduction of the option strike prices
in the event the special dividend is paid? If your current plan does not
have these provisions, you should add them to the agenda for your annual
meeting and you should question the legal advice that you are currently
receiving.
I think you have a tremendous opportunity to enhance shareholder value,
retire shares at book value or a discount to book value and increase short
term and long term shareholder value. You must take advantage of these
market conditions. You must move quickly to do so.
Please feel free to call me at (312) 294-6440 if you wish to discuss the
issues outlined in this letter.
Very truly yours,
/s/ Paul J. Duggan
Paul J. Duggan, an individual shareholder
53 West Jackson Boulevard, Suite 400
Chicago, IL 60604
<PAGE>
Page 45 of 55 Pages
EXHIBIT 2
[ON JACKSON BOULEVARD FUND, LTD. LETTERHEAD]
December 5, 1997
The Board of Directors
Damen Financial Corp.
200 West Higgins Road
Schaumburg, IL 60195-3780
To the Board:
I am in receipt of your press release of October 23, 1997 regarding
Damen Financial Corporation. My attitude is one of continued disappointment.
I have recently been approached by several southside banks who are
interested in acquiring Damen. I have also had corporate activists and other
funds inquire about my shares. I have resisted all overtures to date in an
effort to let Damen find it's own style and/or niche in the public market.
Damen recently became a two-year-old public institution. Jackson
Boulevard Fund has been very patient with its investment and given Damen
adequate time to find its own style. However at this point we have lost
patience with management and its Board of Directors.
I have gone through the exercises of comparing Damen to many of its
contemporaries in the Chicago area. My simple analysis is as follows: When
compared to the competition at Hemlock, Preferred, and Park Federal, Damen
has the highest efficiency ratio, the lowest interest margin, the lowest
return on equity, the lowest return on assets and the lowest percentage price
increase during 1997. As they say, ""the proof is in the pudding'', Damen
Financial's Management and it's Board of Directors has failed terribly.
It appears to me that the company is clearly going backwards. Net
earnings per share (exclusive of the SAIF special assessment) were 17 cents
per share for the quarter ended September 30, 1996 and now, a year later, are
only 16 cents per share.
The efficiency ratio for the twelve months ended September 1997 has gone
to 70.84% up from the previous years 61.11%.
The Modified Dutch Auction obviously was not the answer. The investing
community is amazed that Damen would have turned down an opportunity to
repurchase shares in price ranges from $11.50 to $12.00 a share so they could
later convert to a national bank and buy shares back at $14.75. This makes
no sense at all, upsets the investment community, and is indicative of poor
financial advice and management.
<PAGE>
Page 46 of 55 Pages
Damen has now admitted what I have understood to be a fact all along,
i.e. Damen will not be granted the right to pay a one time special return of
capital (tax free dividend). The IRS has failed to approve Damen's
application because Damen filed consolidated tax returns.
I remind you of our first meeting in the Fall of 1995. I asked Mr.
Gartner not to file a consolidated return, but to file an extension and seek
advice on that issue. Mr. Gartner indicated at that time that he was anxious
to file a tax return. Apparently, he did so without seeking advice of
competent counsel and, accordingly, has caused Damen to lose an opportunity
to deal with its excess capital.
This single act has caused Damen to lose its best chance to reduce
capital and enhance shareholder value. Who is responsible? Mr. Gartner?
Your CPA firm? Your law firm?
I have previously requested that Damen add two seats to its board in
order to add people with sophisticated financial backgrounds. Management and
Damen's Board of Directors has ignored the suggestion to add two seats. I
feel Damen currently suffers from an excess of outside advice from lawyers
and poor inside advice from directors and management.
Ultimately, the Board of Directors is responsible and liable for the
actions of its elected officers. The Board is also compensated in part with
options which are tied to the price of the stock. The advice offered by
Jackson Boulevard Fund, e.g. re: buybacks and dividends, would have helped
the share price and enhanced the value of management's and directors stock
and stock options as well as all outside shareholders. All the advice to
date has been ignored to the detriment of all shareholders.
I feel Damen's stock should trade at 130% of book value or $19.00 or
more per share. This would put Damen at parity with its peer group (over
capitalized thrifts with 16 to 20% capital). This valuation change will only
come with drastic changes.
Based on the continuing poor operating results, poor return on equity,
and failure to increase the shareholder's value using any yardstick, I think
it is now time for Damen to take drastic measures.
I feel the Board of Directors should implement or instruct management to
take the following steps:
1) Immediate reduction in all management salaries.
2) Consideration of an immediate decision to hire an investment banker
to market the company for sale.
3) Look to find an immediate merger partner among Chicago area thrifts
such as Alliance or Park Federal.
4) Consider selling out to a local or regional bank in a stock
transaction.
5) Pay a one-time dividend of $1.00. This should be a substantially
tax-free return of capital.
6) Increase the dividend to 20 cents per quarter (as a method to deal
with excess capital).
<PAGE>
Page 47 of 55 Pages
7) Move for immediate sale of the Schaumburg facility.
8) Sell the original Damen branch.
9) Obtain competent advice to manage a stock buy back program. The
stock buy back program continues to be a dismal failure.
10) Streamline operations to bring Damen efficiency ratio in line with
its competitors.
11) Increase the Board of Directors by 2 or more individuals to add
financial sophistication.
I look forward to meeting with you to discuss these issues.
Very truly yours,
/s/ Paul J. Duggan
Paul J. Duggan, President
Jackson Boulevard Fund, Ltd.
PJD/sr
cc: Ms. Mary Beth Stull
Ms. Carol Diver
Mr. Nick Raino
Mr. Edward Tybor
Ms. Janine Poronsky
Mr. Charles Caputo
Mr. Gerald Gartner
<PAGE>
Page 48 of 55 Pages
[Face of Proxy Card]
PROXY
DAMEN FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 25, 1999
The undersigned appoints Paul J. Duggan and Vincent Cainkar, and each of
them, each with full power to act without the other, and each with full power of
substitution, proxies for the undersigned, to represent and vote, as designated
below, all shares of Common Stock of Damen Financial Corporation (the "Company")
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
of the Company to be held as scheduled to be held on January 25, 1999 at 9:30
a.m. (local time) at the Holiday Inn, located at 3405 Algonquin Road, Rolling
Meadows, Illinois.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF PAUL J. DUGGAN, VINCENT CAINKAR AND J. DENNIS
HUFFMAN AS DIRECTORS OF THE COMPANY, FOR THE RATIFICATION OF THE APPOINTMENT
OF COBITZ, VANDENBERG & FENNESSY AS THE AUDITORS OF THE COMPANY FOR THE
FISCAL YEAR ENDING SEPTEMBER 30, 1999, AND FOR THE STOCKHOLDER PROPOSAL
DIRECTING THE BOARD OF DIRECTORS TO APPOINT AN INVESTMENT BANKER TO PURSUE
MERGER OR ACQUISITION CANDIDATES FOR THE COMPANY AND TO ESTABLISH A COMMITTEE
CONSISTING OF ALL DIRECTORS WHO ARE NOT CURRENT OR FORMER OFFICERS OR
EMPLOYEES OR RELATIVES OF SUCH PERSONS IN ORDER TO RECOMMEND TO THE BOARD OF
DIRECTORS THE BEST AVAILABLE OFFER TO ACQUIRE THE COMPANY.
THIS PROXY IS SOLICITED ON BEHALF OF PAUL J. DUGGAN AND THE COMMITTEE TO
ENHANCE SHAREHOLDER VALUE.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
[Reverse of Proxy Card]
THE COMMITTEE TO ENHANCE SHAREHOLDER VALUE RECOMMENDS THAT YOU VOTE FOR
THE ELECTION OF PAUL J. DUGGAN, VINCENT CAINKAR AND J. DENNIS HUFFMAN AS
DIRECTORS OF THE COMPANY, FOR THE RATIFICATION OF THE APPOINTMENT OF COBITZ,
VANDENBERG & FENNESSY AS THE AUDITORS OF THE COMPANY FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 1999, AND FOR THE STOCKHOLDER PROPOSAL DIRECTING THE
BOARD OF DIRECTORS TO APPOINT AN INVESTMENT BANKER TO PURSUE MERGER OR
ACQUISITION CANDIDATES FOR THE COMPANY AND TO ESTABLISH A COMMITTEE
CONSISTING OF ALL DIRECTORS WHO ARE NOT CURRENT OR FORMER OFFICERS OR
EMPLOYEES OR RELATIVES OF SUCH PERSONS IN ORDER TO RECOMMEND TO THE BOARD OF
DIRECTORS THE BEST AVAILABLE OFFER TO ACQUIRE THE COMPANY.
1. To elect three nominees as directors of the Company.
/ / FOR all nominees listed below / / WITHHOLD authority to vote
(except as marked to the contrary for all nominees listed
below) below
PAUL J. DUGGAN, VINCENT CAINKAR AND J. DENNIS HUFFMAN
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW.)
____________________________________________
2. To ratify the appointment of Cobitz, VandenBerg & Fennessy as the auditors
of the Company for the fiscal year ending September 30, 1999.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE>
Page 49 of 55 Pages
3. To approve the stockholder proposal directing the Board of Directors to
appoint an investment banker to pursue merger or acquisition candidates
for the Company and to establish a committee consisting of all directors
who are not current or former officers or employees or relatives of such
persons in order to recommend to the Board of Directors the best available
offer to acquire the Company.
/ / FOR / / AGAINST / / ABSTAIN
Please sign your name exactly as it appears on
this card. If you are a joint owner, each owner
should sign. When signing as executor,
administrator, attorney, trustee, or guardian, or
as custodian for a minor, please give your full
title as such. If you are signing for a
corporation, please sign the full corporate name
and indicate the signer's office. If you are a
partner, sign in the partnership name.
-------------------------------------------------
Shareholder sign here Date
-------------------------------------------------
Co-owner sign here Date
If you need assistance in voting your shares, please call Paul J. Duggan at
(888) 522-5322 or The Altman Group, Inc., which is assisting the Committee in
its solicitation of your proxy for the annual meeting, at (212) 681-9600.
<PAGE>
Page 50 of 55 Pages
EXHIBIT 25
CUSIP No. 235906104
[ON FOLEY & LARDNER LETTERHEAD]
December 22, 1998
VIA FACSIMILE
- -------------
Mary Beth Poronsky-Stull
President
Damen Financial Corporation
200 West Higgins Road
Schaumburg, Illinois 60195-3780
Re: Preliminary Proxy Statement of Paul J. Duggan and the Committee to
Enhance Shareholder Value for the Annual Meeting of Damen Financial
Corporation ("Damen" or the "Company") to be held January 25, 1999
Dear Ms. Poronsky-Stull:
We wanted to inform you that this morning, on behalf of our client,
Paul J. Duggan and the Committee to Enhance Shareholder Value (the
"Committee"), we have filed by EDGAR a preliminary proxy statement in
connection with the solicitation of proxies with respect to Mr. Duggan's
nominees to the Board of Directors and the Stockholder Proposal.
We have been informed by a representative of Damen that the Company
plans to send out on December 23, 1998 materials to stockholders concerning
its annual meeting. However, according to our review of the EDGAR database,
Damen has not filed its preliminary proxy statement with the Securities and
Exchange Commission ("SEC").
We direct you to Rule 14a-9 and 14a-6 under the Securities Exchange
Act of 1934. These rules clearly require Damen to (1) insert all material
facts with respect to any stockholder proposal and the Annual Meeting, which
would require referring to Mr. Duggan's and the Committee's solicitation in
opposition; and (2) file a preliminary proxy statement with the SEC ten (10)
days prior to mailing its proxy statement to stockholders, if your statement
comments on or refers to a solicitation in opposition. Accordingly, Damen
must file a preliminary proxy statement.
<PAGE>
Page 51 of 55 Pages
CUSIP No. 235906104
Mary Beth Poronsky-Stull
December 22, 1998
Page 26
We presume that Damen will be filing such preliminary proxy
statement with the SEC in the next few days and that it will be delaying the
mailing of its proxy materials until 10 days after the date of such filing.
If you wish to discuss this further, please call me at
(312) 755-2579.
Sincerely,
/s/ Russell W. Hahn
Russell W. Hahn
cc: Paul J. Duggan
John K. Wilson, Esq.
<PAGE>
Page 52 of 55 Pages
EXHIBIT 26
CUSIP No. 235906104
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/X/ Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
DAMEN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
PAUL J. DUGGAN AND THE COMMITTEE TO ENHANCE SHAREHOLDER VALUE
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
Page 53 of 55 Pages
PAUL J. DUGGAN
AND THE COMMITTEE TO ENHANCE SHAREHOLDER VALUE
53 West Jackson Boulevard
Chicago, IL 60604
(312) 294-6440
Materials in Opposition to Management and the Board of Directors of
Damen Financial Corporation and in Support of Shareholder
Proposition to Sell or Merge the Company
RE: ANNUAL MEETING OF SHAREHOLDERS - JANUARY 25, 1999
December 23, 1998
Dear Fellow Shareholder:
The Damen Financial Corporation Committee to Enhance Shareholder Value
(comprising of Paul J. Duggan, Vincent Cainkar, J. Dennis Huffman, Jackson
Boulevard Equities, L.P. and Jackson Boulevard Investments, L.P., Jackson
Boulevard Capital Management, Inc., and Jackson Boulevard Partners) has filed
proxy materials with the Securities and Exchange Commission concerning the
upcoming Damen Financial Corporation (the "Company") annual meeting. We intend
to use those materials to solicit proxies to elect Paul J. Duggan, Vincent
Cainkar, and J. Dennis Huffman as directors of the Company and to support the
shareholder proposition concerning the sale or merger of the Company.
It is likely you will receive an annual report, proxy statement and proxy card
from the Company's management and Board before our materials arrive, and you
will be asked to return the Company's proxy card.
We encourage you NOT to vote your shares until you receive and review our proxy
materials. Thank you for your consideration.
Sincerely,
PAUL J. DUGGAN
Paul J. Duggan
THIS LETTER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
DAMEN FINANCIAL CORPORATION'S STOCKHOLDERS. ANY SUCH SOLICITATION WILL BE MADE
ONLY PURSUANT TO PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION
14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND
REGULATIONS THEREUNDER.
<PAGE>
Page 54 of 55 Pages
BENEFICIAL OWNERSHIP OF SHARES BY PARTICIPANTS IN THE SOLICITATION
The following table shows, as of December 15, 1998 (except as otherwise
noted), the shares of Damen Common Stock beneficially owned by the participants
in the solicitation of proxies pursuant to this Proxy Statement. Unless
otherwise indicated, each participant has sole voting and investment power over
the shares beneficially owned.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AT PERCENT
BENEFICIAL OWNER DECEMBER 15, 1998 OF CLASS
- ---------------- ------------------- --------
<S> <C> <C>
Paul J. Duggan(1) 266,600 9.0%
Jackson Boulevard Capital Management, Ltd.(2) 92,200 3.1%
Jackson Boulevard Equities, L.P. 60,622 2.0%
Jackson Boulevard Investment, L.P. 31,578 1.1%
Jackson Offshore Funds 0 0%
Jackson Boulevard Partners 174,000 5.9%
Vincent Cainkar(3) 4,200 *
J. Dennis Huffman 3,000 *
</TABLE>
*Less than 0.1%.
- --------
1 Includes 400 shares held in Mr. Duggan's own name, 174,000
shares held by Jackson Partners, 60,622 shares held by Jackson Equities and
31,578 shares held by Jackson Investments. Mr. Duggan is one of two general
partners of Jackson Partners and shares voting and investment power
concerning the shares held by Jackson Partners with Deborah Duggan, Mr.
Duggan's spouse. Mr. Duggan is the sole stockholder and a director and
officer of Jackson Boulevard Capital Management, Ltd. which is the sole
general partner of Jackson Equities and Jackson Investments. Mr. Duggan,
Jackson Capital, Jackson Equities, and Jackson Investments have shared voting
and investment power with regard to the 92,200 shares held by Jackson
Equities and Jackson Investments.
2 All 92,000 shares are beneficially owned as sole general partner
of Jackson Equities and Jackson Investments.
3 Mr. Cainkar has sole voting and investment power with regard to 100
shares held in his own name and has shared voting and investment power with
respect to the 4,100 shares held jointly by him and Cathy Cainkar, Mr. Cainkar's
wife.
<PAGE>
Page 55 of 55 Pages
PAUL J. DUGGAN
AND THE COMMITTEE TO ENHANCE SHAREHOLDER VALUE
53 WEST JACKSON BOULEVARD
CHICAGO, IL 60604
(312) 294-6440
SINCE YOU HOLD YOUR SHARES THROUGH A BROKERAGE FIRM OR BANK, YOUR PROXY
MATERIALS WILL BE FORWARDED DIRECTLY TO YOU BY YOUR BANK OR BROKERAGE FIRM.
TO HELP US COMMUNICATE WITH YOU, WE WOULD APPRECIATE IT IF YOU WOULD
TAKE A FEW MINUTES TO FILL OUT THE INFORMATION REQUESTED BELOW.
AT YOUR REQUEST, WE WOULD ALSO BE PLEASED TO FORWARD COPIES OF OUR
MATERIALS TO YOUR PERSONAL STOCK BROKER OR FINANCIAL ADVISOR.
THANK YOU FOR YOUR TIME AND COOPERATION.
SHAREHOLDER INFORMATION
NAME: ___________________________________________________________________
ADDRESS: _________________________________________________________________
CITY: _________________________ STATE: ______________ ZIP: ___________
PHONE: ______________________________ FAX: ____________________________
I HOLD MY DAMEN FINANCIAL SHARES THROUGH: _______________________________
(NAME OF BROKERAGE FIRM OR BANK)
NUMBER OF SHARES OWNED: ____________________________________
STOCK BROKER OR FINANCIAL ADVISOR INFORMATION
NAME: ___________________________________________________________________
FIRM: ___________________________________________________________________
ADDRESS: _________________________________________________________________
CITY: _________________________ STATE: ______________ ZIP: _________
PHONE: ______________________________ FAX: ____________________________
PLEASE RETURN THIS FORM TO OUR ATTENTION AT THE ADDRESS INDICATED
ABOVE. IF YOU PREFER, YOU MAY FAX IT TO OUR OFFICES AT (312) 294-6449.
