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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)
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Paul J. Duggan
and The Committee to Enhance Shareholder Value
Important Message to
Damen Financial Corporation Stockholders
February 4, 1999
To My Fellow Stockholders:
When I last wrote you on January 22, 1999, Damen Financial stock closed at
$14.75; today it closed at $14.00, down another 5.1%. The stock has fallen 26.3%
from its May 15, 1998 high of $19.00 per share. That is why a change is needed,
and why you should elect the three outside independent directors supported by
our committee.
By now, you have heard from management telling you that Damen had a successful
year and asking you to reelect the current slate of directors. But did they
explain to you why the stock price went down?
Our slate of directors is independent and highly qualified, and we can make a
difference. Our nominees have significant experience with financial institutions
and in financial management. Also, as independent directors--compared to the
current entrenched Board--we would represent a broader group of stockholders,
including you.
Let's take a careful look at our candidates.
Paul J. Duggan:
o Graduated from Loyola University with a major in accounting and passed
the CPA exam in 1974.
o Owned and operated a CPA firm for 23 years.
o Started a financial management firm in 1992 (now known as Jackson
Boulevard Capital Management). Manages a series of hedge funds, venture
capital funds, and real estate development partnerships, with assets of
more than $150,000,000 in 1998. The hedge funds specialize in
evaluating thrift and bank stocks like Damen Financial.
o Jackson Boulevard Equities, the flagship fund, was featured in BARRON'S
and recognized as the sixth best performing fund in 1997 out of over
300 hedge funds.
o A managed account (yielding over 100%) was rated #1 for 1997 in the
United States by the independent Money Managers Verified Rating
Service.
o Teaches courses and lectures in numerous seminars, including the
Practicing Law Institute.
Damen claims I am "ill-equipped to serve as a Director." You be the judge.
<PAGE>
Vincent Cainkar:
o Lawyer admitted to practice in the state of Illinois.
o Graduated from St. Louis University in 1971 with a major in chemistry
and biology.
o Attended St. Louis University Law School where he ranked second in his
class, and graduated from DePaul University College of Law with a J.D.,
with honors, in 1974.
o Licensed to practice law in the State of Illinois, the State of Florida
and before the federal courts, including the United States Supreme
Court.
o Law practice specializes in municipal corporations, municipal bonds,
and real estate developments.
o Over the past 20 years has acted as bond counsel and written bond
opinions on more than $200,000,000 of municipal bonds.
o General Partner in various real estate partnerships valued in excess of
$10,000,000.
o Advises various financial institutions and currently performs a legal
work for two different Chicago-area banks.
Damen claims Mr. Cainkar is "ill-equipped to serve as a director." You be the
judge.
J. Dennis Huffman:
o Graduate of Depauw University, 1963.
o Served five years as a Captain of the USAF including tours as a pilot
in the Southeast Asian conflict from 1963 through 1968.
o Spent 20 years in the private sector of banking rising to the level of
chief operating officer of Beverly Bank, the largest Bank in the
Beverly Bancorp group. Concurrently held the positions of Senior Vice
President of the Holding Company and a member of the Board of Directors
of the lead bank from 1968 through 1988.
o MBA from Northwestern University's Kellogg School of Management,
consistently one of the top five MBA programs in the nation.
o Joined the Chicago office of the Resolution Trust Corporation (RTC),
the organization created by Congress to resolve the savings and loan
crisis in 1990.
o Served on the staff of the $1.1 billion Olympic Federal Savings and
Loan.
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<PAGE>
o Transferred to Home Federal in Waukegan to serve as Managing Agent for
that Conservatorship ($400 million/5 branches). The Managing Agent
takes the place of the CEO and the Board of Directors, and under his
delegated authority takes all actions necessary to manage the
institution, establish control and oversight, and prepare the
institution and its assets for sale.
J. Dennis Huffman (continued):
o Served as Chicago Center Sales Coordinator and, in that capacity, was a
voting member for the Senior Credit Committee of the RTC, which
approved all major credits and settlements in the Chicago Region.
o Reconstructed, coordinated and negotiated the sale of United Savings, a
$480 million finance company, to a West Coast buyer.
o Managing Agent from intervention through takeover and sale of Republic
Savings.
o Beginning in 1994, served as Atlanta region SWAT (special workout asset
team) team leader, responsible for overseeing and negotiating
settlement workouts in the largest, most sensitive loan and lease
relationships. Individual SWAT teams carried $100 million in delegated
authority to facilitate settlements.
o In 1995, became an independent trader in the Treasury Bond Pit at the
Chicago Board of Trade. Simultaneously, he and two partners formed and
managed a company dedicated to construction, leasing and property
management.
Damen claims that "this dissident candidate has not been involved in banking for
over nine years." You be the judge.
Contrast our nominees' qualifications with theirs: funeral home director, cement
business operator, and former IRS agent.
It is clear that Management wants you to ignore the facts, and that they are
trying to confuse the issues with misrepresentations and half-truths about the
committee's director nominees. They are hiding their own poor results behind
this flurry of rhetoric.
But the one thing management cannot hide from--and cannot ignore--is the stock
price. Why is it so low? Why, after all the successful thrift conversions in
Chicago like Cragin, Amerifed, Bell Federal and Amity, has Damen done so poorly?
Your board tries to shine the light everywhere but on its own performance. It is
time for the current board to be called to task.
The current board says it has 122 years of experience in directing financial
institutions. Damen has over $228,000,000 in assets, and has been in business in
Chicago since 1916. Yet despite all that supposed talent and financial
institution experience, Damen has only $1,481,606 in commercial loans. It calls
itself a bank, but makes very few commercial loans.
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<PAGE>
Why? It is an indisputable fact that Mr. Huffman reviewed more commercial loans
in a single day at the RTC than Damen, with all its experience, has managed to
place in the last two years.
Why should we get your vote? It's the stock price! That's why.
This is the key question: Are you satisfied with the performance of your
investment in Damen? If your answer is NO, you owe it to yourself to support our
independent candidates and vote FOR: Paul J. Duggan, Vincent Cainkar and J.
Dennis Huffman.
If you wish to support our director nominees, please sign, date and return the
enclosed BLUE proxy today.
Please do not return management's white card, even if it is to vote against
their nominees.
If you have returned a white proxy card, but wish to support our nominees, you
MUST return a BLUE proxy. Even if you have already returned a white proxy, you
have the right to change your vote by returning a later dated BLUE proxy.
Thank you for your time and attention to this very important matter.
Very truly yours,
Paul J. Duggan and
The Committee to Enhance Shareholder Value
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A Special Message to Brokerage Firm Customers:
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If your shares are held in the name of a brokerage firm, please return your BLUE
proxy or contact your broker and direct him or her to vote for the Committee on
the BLUE proxy. If you have any questions you can reach Mr. Duggan toll free at
(888) 522-5332 or call The Altman Group collect at (212) 681-9600.
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