KEEFE, BRUYETTE & WOODS, INC.
211 Bradenton Drive
Dublin, Ohio 43017-5034
Telephone: (877) 298-6520 (toll free)
HCB BANCSHARES, INC.
Offer To Purchase For Cash Up To
377,866 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $14.75
Nor Less Than $12.75 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON MARCH 1, 2002, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
HCB Bancshares, Inc., an Oklahoma corporation ("HCB Bancshares"), has
appointed us to act as Dealer Manager in connection with its Offer to Purchase
for cash up to 377,866 shares of its Common Stock, $0.01 par value per Share
(the "Shares"), at prices not in excess of $14.75 nor less than $12.75 per
Share, specified by stockholders tendering their Shares, upon the terms and
subject to the conditions set forth in HCB Bancshares' Offer to Purchase, dated
January 31, 2002, and in the related Letter of Transmittal, which together
constitute the "Offer."
HCB Bancshares will determine the single per Share price, not in excess of
$14.75 nor less than $12.75 per Share, net to the seller in cash, that it will
pay for Shares validly tendered pursuant to the Offer, taking into account the
number of Shares so tendered and the prices specified by tendering stockholders.
HCB Bancshares will select the lowest purchase price that will allow it to buy
377,866 Shares, or the lesser number of Shares that are properly tendered at
prices not in excess of $14.75 nor less than $12.75 per Share. All Shares
validly tendered at prices at or below the purchase price and not withdrawn on
or prior to the Expiration Date, as defined in Section 1 of the Offer to
Purchase, will be purchased at the purchase price, subject to the terms and
conditions of the Offer, including the proration and conditional tender
provisions. See Sections 1 and 16 of the Offer to Purchase.
Upon the terms and subject to the conditions of the Offer, if, at the
expiration of the Offer, more than 377,866 Shares are validly tendered at or
below the purchase price and not withdrawn, HCB Bancshares will buy Shares (i)
from stockholders who owned beneficially as of the close of business on January
25, 2002 and continue to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares who properly tender all their Shares at or
below the purchase price, and (ii) then, on a pro rata basis, from all other
stockholders who properly tender their Shares at prices at or below the purchase
price, and do not withdraw them prior to the expiration of the Offer, other than
stockholders who tender conditionally, and for whom the condition is not
satisfied. See Sections 1, 2 and 6 of the Offer to Purchase. All Shares not
purchased pursuant to the Offer, including Shares tendered at prices greater
than the purchase price and Shares not purchased because of proration or because
they were conditionally tendered and not accepted for purchases will be returned
to the tendering stockholders at HCB Bancshares' expense as promptly as
practicable following the Expiration Date.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED
PURSUANT TO THE OFFER. SEE SECTION 7 OF THE OFFER TO PURCHASE.
No fees or commissions will be payable to brokers, dealers or any person
for soliciting tenders of Shares pursuant to the Offer other than the fee paid
to the Dealer Manager as described in the Offer to Purchase. HCB Bancshares
will, upon request, reimburse brokers and banks for reasonable and customary
handling and mailing expenses incurred by them in forwarding materials relating
to the Offer to their customers. HCB Bancshares will pay all stock transfer
taxes applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 7 of the Letter of Transmittal.
No broker, dealer, bank, trust company or fiduciary shall be deemed to be
the agent of HCB Bancshares, other than Registrar and Transfer Company as
"Depositary," or Keefe, Bruyette & Woods, Inc. as the "Dealer Manager" and
"Information Agent," for purposes of the Offer.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase, dated January 31, 2002;
2. Letter to Clients which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining the clients' Instructions
with regard to the Offer;
3. The Notice of Guaranteed Delivery to be used to accept the Offer if
Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date;
4. Letter, dated January 31, 2002, from Cameron D. McKeel, President and
Chief Executive Officer of HCB Bancshares, to stockholders of HCB
Bancshares;
5. Letter of Transmittal for your use and for the information of your
clients, together with an accompanying Form W-9 and guidelines;
6. Question and Answer Brochure for your use and for the information of
your clients; and
7. A return envelope addressed to Registrar and Transfer Company, as
Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON March 1, 2002, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a stockholder must do either (1)
or (2) below before the Offer expires:
(1) A duly executed and properly completed Letter of Transmittal and any
other required documents should be sent to the Depositary with either
certificate(s) representing the tendered Shares or confirmation of
their book-entry transfer, all in accordance with the Instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
(2) Comply with the guaranteed delivery procedure set forth in Section 3
of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
the Depositary or the Information Agent/Dealer Manager at their respective
addresses and telephone numbers set forth on the back cover page of the Offer to
Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent/Dealer Manager, telephone: (877) 298-6520.
Very truly yours,
Keefe, Bruyette & Woods, Inc.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF HCB BANCSHARES OR ANY OF ITS AFFILIATES, THE
INFORMATION AGENT/DEALER MANAGER OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED THEREIN.
HCB BANCSHARES, INC.
Offer To Purchase For Cash Up To
377,866 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $14.75
Nor Less Than $12.75 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON MARCH 1, 2002, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated January
31, 2002, and the related Letter of Transmittal, which together constitute the
"Offer," in connection with the Offer by HCB Bancshares, Inc., an Oklahoma
corporation ("HCB Bancshares"), to purchase up to 377,866 Shares of its Common
Stock, $0.01 par value per Share, at prices not in excess of $14.75 nor less
than $12.75 per Share, as specified by tendering stockholders, upon the terms
and subject to the conditions set forth in the Offer.
HCB Bancshares will determine the single per Share price, not in excess of
$14.75 nor less than $12.75 per Share, net to the seller in cash, that it will
pay for Shares validly tendered pursuant to the Offer, taking into account the
number of Shares so tendered and the prices specified by tendering stockholders.
HCB Bancshares will select the lowest purchase price that will allow it to buy
377,866 Shares, or the lesser number of Shares that are validly tendered at
prices not in excess of $14.75 nor less than $12.75 per Share. All Shares
properly tendered at prices at or below the purchase price and not withdrawn on
or prior to the Expiration Date, as defined in Section 1 of the Offer to
Purchase, will be purchased at the purchase price, subject to the terms and
conditions of the Offer, including the proration and conditional tender
provisions. See Sections 1 and 16 of the Offer to Purchase.
Upon the terms and subject to the conditions of the Offer, if, at the
expiration of the Offer, more than 377,866 Shares are validly tendered at or
below the purchase price and not withdrawn, HCB Bancshares will buy Shares (i)
from stockholders who owned beneficially as of the close of business on January
25, 2002, and continue to own beneficially as of the Expiration Date an
aggregate of fewer than 100 Shares who properly tender all their Shares at
prices at or below the purchase price, and (ii) then, on a pro rata basis, from
all other stockholders who properly tender at or below the purchase price, and
do not withdraw them prior to the expiration of the Offer, other than
stockholders who tender conditionally and for whom the condition is not
satisfied. See Sections 1, 2 and 6 of the Offer to Purchase. All Shares not
purchased pursuant to the Offer, including Shares tendered at prices greater
than the purchase price and Shares not purchased because of proration or because
they were conditionally tendered and not accepted for purchase will be returned
to the tendering stockholders at HCB Bancshares' expense as promptly as
practicable following the Expiration Date.
We are the owner of record of Shares held for your account. Therefore, we
are the only ones who can tender your Shares, and then only pursuant to your
Instructions. We are sending you the Letter of Transmittal for your information
only; you cannot use it to tender Shares we hold for your account.
Please instruct us as to whether you wish us to tender any or all of the
Shares we hold for your account on the terms and subject to the conditions of
the Offer.
We call your attention to the following:
1. You may tender Shares at prices not in excess of $14.75 nor less than
$12.75 per Share as indicated in the attached Instruction Form, net to
you in cash. If you do not wish to specify a purchase price you may
indicate that you have tendered your Shares at the purchase price (not
in excess of $14.75 per Share and not less than $12.75 per Share) as
determined by HCB Bancshares in accordance with the terms of the
Offer.
2. You may tender your Shares conditioned upon HCB Bancshares purchasing
all or a minimum number of your Shares.
3. The Offer is not conditioned on any minimum number of Shares being
tendered pursuant to the Offer.
4. The Offer, proration period and withdrawal rights will expire at 5:00
p.m., New York City time, on March 1, 2002, unless HCB Bancshares
extends the Offer.
5. The Offer is for 377,866 Shares, constituting approximately 20% of the
Shares outstanding as of January 25, 2002.
6. Tendering stockholders will not be obligated to pay any brokerage
commissions, solicitation fees, or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes on HCB Bancshares'
purchase of Shares pursuant to the Offer.
7. If you beneficially held, as of the close of business on January 25,
2002, an aggregate of fewer than 100 Shares and you continue to
beneficially own as of the Expiration Date an aggregate of fewer than
100 Shares, and you instruct us to tender on your behalf all your
Shares at or below the purchase price before the Expiration Date, as
defined in the Offer to Purchase, and complete the box captioned "Odd
Lots" in the attached Instruction Form, HCB Bancshares, upon the terms
and subject to the conditions of the Offer, will accept all your
Shares for purchase before proration, if any, of the purchase of other
Shares validly tendered at or below the purchase price.
8. If you wish to tender portions of your Shares at different prices, you
must complete a separate Instruction Form for each price at which you
wish to tender each portion of your Shares. We must submit separate
Letters of Transmittal on your behalf for each price you will accept.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is enclosed.
If you authorize us to tender your Shares, we will tender all your Shares unless
you specify otherwise on the attached Instruction Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE OFFER.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON MARCH 1, 2002, UNLESS HCB BANCSHARES EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if more than 377,866
Shares have been validly tendered at prices at or below the purchase price and
not withdrawn on or prior to the Expiration Date, as defined in the Offer to
Purchase, HCB Bancshares will purchase properly tendered Shares on the basis set
forth below:
(a) first, all Shares validly tendered and not withdrawn on or prior to the
Expiration Date by or on behalf of any stockholder who owned beneficially, as of
the close of business on January 25, 2002 and continues to own beneficially as
of the Expiration Date, an aggregate of fewer than 100 Shares who:
(1) validly tenders all of the Shares at a price at or below the
purchase price (partial and conditional tenders will not qualify for this
preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal; and
(b) second, after purchase of all of the forgoing Shares, all other Shares
validly and conditionally tendered at prices at or below the purchase price in
accordance with Section 6 of the Offer to Purchase for which the condition was
satisfied, and all other Shares validly and unconditionally tendered at or below
the purchase price and not withdrawn on or prior to the Expiration Date on a pro
rata basis, with appropriate adjustments to avoid purchases of fractional
Shares, as described in Section 1 of the Offer to Purchase; and
(c) third, if necessary, Shares validly and conditionally tendered at or
below the purchase price and not withdrawn on or prior to the Expiration Date,
selected by lot in accordance with Section 6 of the Offer to Purchase.
You may condition your tender on HCB Bancshares purchasing a minimum number
of your tendered Shares. In such case, if as a result of the proration
provisions in the Offer to Purchase HCB Bancshares would purchase less than the
minimum number of your Shares, then HCB Bancshares will not purchase any of your
Shares, except as provided in the next sentence. If so many conditional tenders
would be deemed withdrawn that the total number of Shares to be purchased falls
below 377,866 Shares, then to the extent feasible, HCB Bancshares will select
enough of the conditional tenders that would otherwise have been so withdrawn to
permit HCB Bancshares to purchase 377,866 Shares. In selecting among the
conditional tenders, HCB Bancshares will select by lot and will limit its
purchase in each case to the minimum number of Shares designated. See Sections 1
and 6 of the Offer to Purchase.
The Offer is being made to all holders of Shares. HCB Bancshares is not
aware of any jurisdiction where the making of the Offer is not in compliance
with applicable law. If HCB Bancshares becomes aware of any jurisdiction where
the making of the Offer is not in compliance with any valid applicable law, HCB
Bancshares will make a good faith effort to comply with the law. If, after a
good faith effort, HCB Bancshares cannot comply with the law, the Offer will not
be made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in that jurisdiction. In any jurisdiction the securities or blue sky
laws of which require the Offer to be made by a licensed broker or dealer, the
Offer is being made on HCB Bancshares' behalf by the Information Agent/Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
that jurisdiction.
INSTRUCTION FORM
FOR SHARES HELD BY BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES.
INSTRUCTIONS FOR TENDER OF SHARES
OF HCB BANCSHARES, INC.
Please tender to HCB Bancshares, Inc. ("HCB Bancshares"), on (our) (my)
behalf, the number of Shares indicated below, which are beneficially owned by
(us) (me) and registered in your name, upon terms and subject to the conditions
contained in the Offer to Purchase of HCB Bancshares dated January 31, 2002, and
the related Letter of Transmittal, the receipt of both of which is acknowledged.
The undersigned hereby instruct(s) you to tender to HCB Bancshares the
number of Shares indicated below, at the price per Share indicated below,
pursuant to the terms and subject to the conditions of the Offer.
Aggregate number of Shares to be tendered by you for us:
____________________ Shares
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5 ON THE LETTER OF TRANSMITTAL)
By checking one of the price boxes below, the undersigned understands that none
of my Shares will be purchased if the purchase price is less than the price
checked. If you do not wish to specify a purchase price, check the following
box, in which case you will be deemed to have tendered at the purchase price
determined by HCB Bancshares in accordance with the terms of the Offer (persons
checking this box must not indicate the price per Share below.) [ ]
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED (SEE INSTRUCTION
5 ON THE LETTER OF TRANSMITTAL):
$12.75 [ ] $13.00 [ ] $13.25 [ ] $13.50 [ ] $13.75 [ ]
$14.00 [ ] $14.25 [ ] $14.50 [ ] $14.75 [ ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ODD LOTS
(SEE INSTRUCTION 9 ON THE LETTER OF TRANSMITTAL)
[ ] Check here ONLY if I was the beneficial owner as of the close of business
on January 25, 2002, and continue to be the beneficial owner as of the
Expiration Date, of an aggregate of fewer than 100 Shares, all of which are
being tendered.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONDITIONAL TENDER
You may condition the tender of your Shares upon the purchase by HCB
Bancshares of a specified minimum number of the Shares you tendered. See Section
6 in the Offer to Purchase. Unless at least the minimum number of Shares
tendered by you is purchased by HCB Bancshares, none of the Shares tendered
hereby will be purchased. It is your responsibility to calculate the minimum
number of Shares, and you are urged to consult your tax advisor. Unless this box
has been completed by specifying a minimum number of Shares, the tender will be
deemed unconditional.
Minimum number of Shares that must be purchased, if any are purchased:
____________ Shares
- --------------------------------------------------------------------------------
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE BOARD OF DIRECTORS OF HCB BANCSHARES HAS UNANIMOUSLY APPROVED THE
OFFER. NEITHER HCB BANCSHARES NOR ITS BOARD OF DIRECTORS, HOWEVER, MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES.
DIRECTORS, OFFICERS AND EMPLOYEES OF HCB BANCSHARES WHO OWN SHARES MAY
PARTICIPATE IN THIS OFFER ON THE SAME BASIS AS OUR OTHER STOCKHOLDERS. WE HAVE
BEEN ADVISED THAT ONE DIRECTOR AND ONE EXECUTIVE OFFICER INTENDS TO TENDER
SHARES PURSUANT TO THIS OFFER; THEIR TENDER OF SHARES IS NOT INTENDED TO BE A
REFLECTION OF THEIR VIEWS OF HCB BANCSHARES OR ITS LONG TERM PROSPECTS. WE HAVE
ALSO BEEN ADVISED THAT THE RESPECTIVE TRUSTEES OF THE HCB BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST, THE HCB BANCSHARES,
INC. 1998 STOCK OPTION PLAN TRUST, THE HCB BANCSHARES, INC. MANAGEMENT
RECOGNITION PLAN TRUST, THE HEARTLAND COMMUNITY BANK EXECUTIVE OFFICERS' GRANTOR
TRUST AND THE HEARTLAND COMMUNITY BANK NON-EMPLOYEE DIRECTORS' GRANTOR TRUST DO
NOT INTEND TO TENDER ANY SHARES PURSUANT TO THIS OFFER. EACH SHAREHOLDER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
TO TENDER AND AT WHAT PRICE.
Signature(s): __________________________________________________________________
________________________________________________________________________________
Address: (Including Zip Code)
Name(s):________________________________________________________________________
(Please Print) (Please Print)
________________________________________________________________________
Area Code and Telephone Number
Date:___________________, 2002
________________________________________________________________________________
(Employer Identification or Social Security Number)
IMPORTANT: SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-9 WITH
THEIR INSTRUCTION FORM.
HCB BANCSHARES, INC. LETTERHEAD
January 31, 2002
Dear Stockholders of HCB Bancshares, Inc.:
HCB Bancshares' current capital base exceeds all applicable regulatory
standards and the amount of capital needed to support our banking business.
After evaluating a variety of alternatives to utilize this strong capital base
more effectively and to maximize value to our stockholders, we have determined
that a repurchase of our own shares at this time would be in the best interests
of our stockholders. The Board of Directors has approved a repurchase of 377,866
shares of HCB Bancshares' Common Stock, $0.01 par value per share (the
"Shares"), or 20 percent of our 1,889,329 outstanding Shares. A copy of the
Offer to Purchase is enclosed.
We are conducting the offer through a procedure referred to as a "modified
dutch auction." This procedure allows you to select the price at which you are
willing to sell, or tender, all or part of your Shares within a price range of
not more than $14.75 per Share and not less than $12.75 per Share. Upon
expiration of the offer, we will select the lowest purchase price from those
Shares tendered that will allow us to buy 377,866 Shares. All Shares purchased
in the offer will receive the same purchase price, even those Shares that are
tendered below the purchase price. In addition, if you own less than 100 Shares
and tender all of your Shares at or below the purchase price, you will receive
priority and have all of your Shares purchased even if more than 377,866 Shares
are tendered. No brokerage fees or commissions will be charged to you if you
tender your Shares.
We encourage each stockholder to read carefully the Offer to Purchase and
related materials. Neither HCB Bancshares nor our Board of Directors make any
recommendation whether to tender Shares to us. You should make your decision
independently after consulting with your advisors.
To assist us with this offer, we have engaged Keefe, Bruyette & Woods, Inc.
to serve as the Dealer Manager and Information Agent. Representatives from this
firm may contact you by phone to make sure you have received the Offer to
Purchase and related materials and to answer any questions you may have. If you
need information or additional forms, please call the Information Agent/Dealer
Manager toll free at (877) 298-6520.
Unless otherwise extended, the Offer will expire at 5:00 p.m. New York City
time on March 1, 2002. We again encourage you to read carefully the enclosed
material.
As always, we appreciate your interest in HCB Bancshares, Inc.
Sincerely,
Cameron D. McKeel
President and Chief Executive Officer