As filed with the Securities and Exchange Commission on March 1, 2000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule TO
Tender Offer Statement under Section 14(d)(1) or
Section 13(e)(1) of the Securities Exchange Act of 1934
PS FINANCIAL, INC.
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(Name of Subject Company (issuer))
PS FINANCIAL, INC. - ISSUER
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Names of Filing Persons (identifying status as offeror, issuer or other person)
Common Stock, $0.01 Par Value Per Share
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(Title of Class of Securities)
74437V109
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(CUSIP Number of Class of Securities)
Kimberly P. Rooney
PS Financial, Inc.
4800 South Pulaski Road
Chicago, Illinois 60632
(312) 376-3800
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(Name, address, and telephone numbers of person
authorized to receive notices and communications on
behalf of filing persons)
Copies to:
Martin L. Meyrowitz, P.C.
Beth A. Freedman
Silver, Freedman & Taff, L.L.P.
1100 New York Avenue, N.W.
Washington, D.C. 20005
(202) 414-6100
March 1, 2000
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(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
Transaction valuation* Amount of filing fee
- ------------------------------ -----------------------------------------------
$4,840,941 $969
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* Calculated solely for the purpose of determining the filing fee, based upon
the purchase of 333,858 shares at the maximum tender offer price of $14.50 per
share.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
[ ] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
Item 1. Summary Term Sheet
The information set forth in "Summary" of the Offer to Purchase is
incorporated herein by reference.
Item 2. Subject Company Information
(a) The issuer of the securities to which this Schedule TO relates is
PS Financial, Inc., a Delaware corporation, and the address of its principal
executive office, and its mailing address, is 4800 South Pulaski Road, Chicago,
Illinois 60632.
(b) This Schedule TO relates to the offer by PS Financial to purchase
up to 333,858 shares, or such lesser number of shares as are properly tendered,
of its common stock, $0.01 par value per share, 1,669,290 of which shares were
outstanding as of February 23, 2000.
(c) The information set forth in "Summary " and "Section 8, Price Range
of Shares; Dividends" of the Offer to Purchase is incorporated herein by
reference.
Item 3. Identity and Background of Filing Person.
(a) The Filing Person for which this schedule TO relates is the Subject
Company. For information regarding the Subject Company, see Item 2(a) above.
Item 4. Terms of the Transaction
(a) The information set forth in "Introduction" and "Section 11, Source
and Amount of Funds," "Section 9, Purpose of the Offer; Certain Effects of the
Offer," "Section 12, Interest of Directors and Officers; Transactions and
Arrangements Concerning Shares" and "Section 13, Effects of the Offer on the
Market for Shares; Registration under the Exchange Act" of the Offer to Purchase
is incorporated herein by reference.
(b) Securities will not be purchased from any officer, director or
affiliate of the Subject Company.
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
(a) Not applicable.
(b) Not applicable.
Item 6. Purposes of the Transaction and Plans and Proposals.
(a)-(c) The information set forth in "Introduction" and "Section 11,
Source and Amount of Funds," "Section 9, Purpose of the Offer; Certain Effects
of the Offer," and "Section 12, Interest of Directors and Officers; Transactions
and Arrangements Concerning Shares" of the Offer to Purchase is incorporated
herein by reference.
Item 7. Source and amount of Funds or Other Consideration.
(a) The information set forth in "Section 11, Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
Item 8. Interest in Securities of the Subject Company.
(a) Not applicable.
(b) Not applicable.
Item 9. Persons/Assets, Retained, Employed, Compensated, or Used.
The information set forth in "Introduction" and "Section 17,
Solicitation Fees and Expenses" of the Offer to Purchase is incorporated herein
by reference.
Item 10. Financial Statements.
(a)-(b) Not applicable.
Item 11. Additional Information.
(a) Not applicable.
(b) Not applicable.
Item 12. Exhibits.
(a) (1) Form of Offer to Purchase, dated March 1, 2000 and form of
Letter of Transmittal, including the Certification of Taxpayer
Identification Number on Form W-9.
(2) Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees; form of Letter to Clients
for Use by Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees, including the Instruction Form; form of
Letter to Stockholders of the Company, dated March 1, 2000,
from Kimberly P. Rooney, President and Chief Executive Officer
of the Company; form of Memorandum, dated March 1, 2000, to
the Company's employees; form of Question and Answer Brochure;
text of Press Release issued by the Company, dated March 1,
2000; and text of Press Announcement to be published in local
and regional newspapers on or after March 1, 2000.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule TO is true, complete and
correct.
March 1, 2000 PS FINANCIAL, INC.
By: /s/ Kimberly P. Rooney
-----------------------------------
Kimberly P. Rooney
President and Chief Executive Officer
EXHIBIT (A)(1)-1
PS FINANCIAL, INC.
4800 South Pulaski Road
Chicago, Illinois 60632
(773) 376-3800
Offer to Purchase for Cash
Up to 333,858 Shares of its
Common Stock, Par Value $0.01 Per Share
At a Purchase Price Not Greater Than $14.50
Nor Less Than $12.00 Per Share
--------------------
THE OFFER TO PURCHASE, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON WEDNESDAY, MARCH 29, 2000,
UNLESS THE OFFER TO PURCHASE IS EXTENDED
-------------------
Questions or requests for assistance or for additional copies of this
offer to purchase, the letter of transmittal or other tender offer materials may
be directed to the information agent/ dealer manager at the address and
telephone number set forth on the back cover of this offer to purchase, and such
copies will be furnished promptly at PS Financial's expense. Stockholders may
also contact their local broker, dealer, commercial bank or trust company for
assistance concerning the offer.
No person has been authorized to make any recommendation on behalf of
PS Financial as to whether stockholders should tender shares pursuant to the
offer. No person has been authorized to give any information or to make any
representations in connection with the offer other than those contained herein
or in the related letter of transmittal. If given or made, the recommendation
and the other information and representations must not be relied upon as having
been authorized by PS Financial.
The dealer manager and information agent for the offer is:
Keefe, Bruyette & Woods, Inc.
The date of this offer to purchase is March 1, 2000
TABLE OF CONTENTS
Section Page
SUMMARY ....................................................................1
1. NUMBER OF SHARES; PRORATION..............................................2
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES..............................3
3. PROCEDURE FOR TENDERING SHARES...........................................3
4. WITHDRAWAL RIGHTS........................................................5
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE...........6
6. CONDITIONAL TENDER OF SHARES.............................................7
7. CONDITIONS OF THE OFFER..................................................7
8. PRICE RANGE OF SHARES; DIVIDENDS.........................................9
9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.......................9
10. INFORMATION CONCERNING PS FINANCIAL....................................11
11. SOURCE AND AMOUNT OF FUNDS.............................................16
12. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS
AND ARRANGEMENTS CONCERNING SHARES.................................16
13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES;
REGISTRATION UNDER THE EXCHANGE ACT................................17
14. LEGAL MATTERS; REGULATORY APPROVALS....................................17
15. FEDERAL INCOME TAX CONSEQUENCES........................................17
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS....................20
17. SOLICITATION FEES AND EXPENSES.........................................21
18. WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION............................21
i
To the Holders of Shares of Common Stock of
PS Financial, Inc.
SUMMARY
PS Financial, Inc. is inviting its stockholders to sell shares of its
common stock back to PS Financial for cash. Set forth below are the material
terms of this offer:
o PS Financial will agree to purchase up to 333,858 shares of
its common stock. See "Number of Shares; Proration" on page 2
in this offer to purchase.
o PS Financial will purchase these shares within a price range
of $12.00 to $14.50 per share as determined by tendering
stockholders. See "Number of Shares; Proration" on page 2 in
this offer to purchase.
o Each stockholder must determine whether to sell stock, how
much to sell, and at what price the stockholder is willing to
sell. See "Number of Shares; Proration" on page 2 and
"Procedures for Tendering Shares" on page 3 of this offer to
purchase.
o All shares will be acquired at the same purchase price. See
"Number of Shares; Proration" on page 2 of this offer to
purchase.
o If more than 333,858 shares are tendered at or below the
purchase price PS Financial will first acquire shares held by
persons who own less than 100 shares and then will acquire
shares from other tendering stockholders on a pro rata basis.
See "Number of Shares; Proration" on page 2 and "Tenders by
Holders of Fewer Than 100 Shares" on page 3 of this offer to
purchase.
o The offer is not conditioned upon any minimum number of shares
being tendered. The offer is, however, subject to other
conditions. See "Conditions of the Offer" on page 7 of this
offer to purchase.
o You must properly complete and execute the letter of
transmittal by 5:00 p.m. on Wednesday, March 29, 2000 in order
to sell your shares to us in this offer. See "Procedure for
Tendering Shares" on page 3 of this offer to purchase.
o This offer is scheduled to expire at 5:00 p.m. on Wednesday,
March 29, 2000. See "Number of Shares; Proration" on page 2 of
this offer to purchase.
o The offering period may be extended by PS Financial making a
public announcement. See "Extension of Tender Period;
Termination; Amendments" on page 19 of this offer to purchase.
o Stockholders may withdraw tendered shares at any time prior to
the expiration of the offering, which is currently scheduled
on March 29, 2000. Tenders will then be irrevocable until
April 26, 2000, when they may be withdrawn by stockholders if
they have not been accepted for payment by PS Financial. See
"Withdrawal Rights" on page 5 of this offer to purchase.
o Written notice of a withdrawal must be provided to the
depositary. The information required and method of
notification is different if you hold your shares directly or
through a broker. See "Withdrawal Rights" on page 6 of this
offer to purchase.
o Once the price is set, conditional tenders and prorations will
be considered. Then checks for all accepted tenders will be
issued by the depositary. See "Acceptance for Payment of
Shares and Payment of Purchase Price" on page 5 of this offer
to purchase.
1
o PS Financial expects to announce final results on any
proration within seven trading days of the expiration date.
See "Acceptance for Payment of Shares and Payment of Purchase
Price" on page 6 of this offer to purchase.
o Stockholders who don't tender will increase their percentage
ownership in PS Financial. This will include the executive
officers and directors of PS Financial and the trustee for PS
Financial's employee stock ownership plan who do not intend to
tender any of their shares. See "Purpose of the Offer; Certain
Effects of the Offer" on page 9 and "Interest of Directors and
Officers; Transaction and Arrangements Concerning Shares" on
page 16 of this offer to purchase.
o Generally, stockholders will be expected to recognize gain or
loss on the tendered shares equal to the difference between
the cash paid by PS Financial and the stockholder's basis. See
"Federal Income Tax Consequences" on page 17 of this offer to
purchase.
1. NUMBER OF SHARES; PRORATION
Upon the terms and subject to the conditions described herein and in
the letter of transmittal, we will purchase up to 333,858 shares that are
validly tendered on or prior to the expiration date of the offer, and not
properly withdrawn in accordance with section 4, at a price, determined in the
manner set forth below, not greater than $14.50 nor less than $12.00 per share.
The later of 5:00 p.m., New York City time, on Wednesday, March 29, 2000, or the
latest time and date to which the offer is extended pursuant to section 16, is
referred to herein as the "expiration date." If this offer is oversubscribed as
described below, only shares tendered at or below the purchase price on or prior
to the expiration date will be eligible for proration. The proration period also
expires on the expiration date.
PS Financial will determine the purchase price taking into
consideration the number of shares so tendered and the prices specified by
tendering stockholders. We will select the lowest purchase price that will
enable us to purchase 333,858 shares, or such lesser number of shares as is
validly tendered and not withdrawn at prices not greater than $14.50 nor less
than $12.00 per share, pursuant to this offer. Subject to section 16, we reserve
the right to purchase more than 333,858 shares pursuant to this offer, but do
not currently plan to do so. This offer is not conditioned on any minimum number
of shares being tendered. The offer is, however, subject to certain other
conditions. See section 7.
In accordance with instruction 5 of the letter of transmittal, each
stockholder who wishes to tender shares must specify the price, not greater than
$14.50 nor less than $12.00 per share, at which the stockholder is willing to
have us purchase the shares. As promptly as practicable following the expiration
date, we will determine the purchase price, not greater than $14.50 nor less
than $12.00 per share, that we will pay for shares validly tendered and not
withdrawn pursuant to this offer, taking into account the number of shares so
tendered and the prices specified by tendering stockholders. All shares
purchased pursuant to this offer will be purchased at the purchase price. All
shares not purchased pursuant to this 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 our expense as promptly as practicable
following the expiration date.
Upon the terms and subject to the conditions of this offer, if 333,858
or fewer shares have been validly tendered at or below the purchase price and
not withdrawn on or prior to the expiration date, we will purchase all the
shares. Upon the terms and subject to the conditions of this offer, if more than
333,858 shares have been validly tendered at or below the purchase price and not
withdrawn on or prior to the expiration date, we will purchase shares in the
following order of priority:
(a) first, all shares validly tendered at or below the
purchase price 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 February 23, 2000 and continues to own beneficially as
of the expiration date, an aggregate of fewer than 100 shares and who
validly tenders all of such shares, partial and conditional tenders
will not qualify for this preference, and completes the box captioned
"Odd Lots" on the letter of transmittal; and
2
(b) then, after purchase of all of the foregoing shares,
subject to the conditional tender provisions described in section 6,
all other shares validly tendered at or below the purchase price and
not withdrawn on or prior to the expiration date on a pro rata basis,
if necessary, with appropriate adjustments to avoid purchases of
fractional shares.
If proration of tendered shares is required, (i) because of the
difficulty in determining the number of shares validly tendered, (ii) as a
result of the "odd lot" procedure described in Section 2, and (iii) as a result
of the conditional tender procedure described in section 6, we do not expect
that we will be able to announce the final proration factor or to commence
payment for any shares purchased pursuant to this offer until approximately
seven Nasdaq National Market trading days after the expiration date. Preliminary
results of proration will be announced by press release as promptly as
practicable after the expiration date. Holders of shares may obtain such
preliminary information from the dealer manager/information agent.
We expressly reserve the right, in our sole discretion, at any time or
from time to time, to extend the period of time during which the offer is open
by giving oral or written notice of such extension to the depositary and making
a public announcement thereof. See section 16. There can be no assurance,
however, that we will exercise our right to extend the offer.
For purposes of the offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
Copies of this offer to purchase and the related letter of transmittal
are being mailed to record holders of shares and will be furnished to brokers,
banks and similar persons whose names, or the names of whose nominees, appear on
our stockholder list or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of shares.
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES
Except to the extent that our purchase would result in the delisting of
the shares on the Nasdaq National Market, all shares validly tendered at or
below the purchase price 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 February 23, 2000, and continues to own beneficially as of the
expiration date, an aggregate of fewer than 100 shares, will be accepted for
purchase before proration, if any, of other tendered shares. Partial or
conditional tenders will not qualify for this preference, and it is not
available to beneficial holders of 100 or more shares, even if the holders have
separate stock certificates for fewer than 100 shares. By accepting this offer,
a stockholder owning beneficially fewer than 100 shares will avoid the payment
of brokerage commissions and the applicable odd lot discount payable in a sale
of such shares in a transaction effected on a securities exchange.
As of February 23, 2000, there were approximately 143 holders of record
of shares. Approximately 22 of these holders of record held individually fewer
than 100 shares and held in the aggregate approximately 867 shares. Because of
the large number of shares held in the names of brokers and nominees, we are
unable to estimate the number of beneficial owners of fewer than 100 shares or
the aggregate number of shares they own. Any stockholder wishing to tender all
of his or her shares pursuant to this section should complete the box captioned
"Odd Lots" on the letter of transmittal.
3. PROCEDURE FOR TENDERING SHARES
To tender shares validly pursuant to the offer, a properly completed
and duly executed letter of transmittal or facsimile thereof, together with any
required signature guarantees and any other documents required by the letter of
transmittal, must be received by the depositary at its address set forth on the
back cover of this offer to purchase and either (i) certificates for the shares
to be tendered must be received by the depositary at such address or (ii) the
shares must be delivered pursuant to the procedures for book-entry transfer
described below, and a confirmation of the delivery received by the depositary,
in each case on or prior to the expiration date.
3
In accordance with instruction 5 of the letter of transmittal, in order
to tender shares pursuant to this offer, a stockholder must indicate in the
section captioned "Price (In Dollars) Per Share At Which Shares Are Being
Tendered" on the letter of transmittal either (i) the price, in multiples of
$0.25, at which the shares are being tendered, or (ii) that the shares are being
tendered at the purchase price determined by PS Financial in accordance with the
terms of this offer. For a tender of shares to be valid, a price box, but only
one price box, on each letter of transmittal must be checked.
Stockholders wishing to tender shares at more than one price must
complete separate letters of transmittal for each price at which shares are
being tendered. The same shares cannot be tendered at more than one price.
The depositary will establish an account with respect to the shares at
The Depository Trust Company, which is a book-entry transfer facility, for
purposes of the offer within two business days after the date of this offer, and
any financial institution that is a participant in the system of the book-entry
transfer facility may make delivery of shares by causing the book-entry transfer
facility to transfer such shares into the depositary's account in accordance
with the procedures of the book-entry transfer facility. Although delivery of
shares may be effected through book-entry transfer, a properly completed and
duly executed letter of transmittal or a manually signed copy thereof, or an
agent's message, as defined below, together with any required signature
guarantees and any other required documents, must, in any case, be transmitted
to and received by the depositary at its address set forth on the back cover of
this offer on or prior to the expiration date. Delivery of required documents to
the book-entry transfer facility in accordance with its procedures does not
constitute delivery to the depositary and will not constitute a valid tender.
The term "agent's message" means a message transmitted by the
book-entry transfer facility to, and received by, the depositary and forming a
part of a book-entry confirmation, which states that the book-entry transfer
facility has received an express acknowledgment from the participant in the
book-entry transfer facility tendering the shares, that the participant has
received and agrees to be bound by the terms of the letter of transmittal and
that we may enforce the agreement against the participant.
Except as set forth below, all signatures on a letter of transmittal
must be guaranteed by a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc., or
by a commercial bank, a trust company, a savings bank, a savings and loan
association or a credit union which has membership in an approved signature
guarantee medallion program, each of the foregoing being referred to as an
"eligible institution". Signatures on a letter of transmittal need not be
guaranteed if (a) the letter of transmittal is signed by the registered holder
of the shares, which term, for the purposes of this section, includes a
participant in the book-entry transfer facility whose name appears on a security
position listing as the holder of the shares, tendered therewith and the holder
has not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the letter of transmittal or (b) the
shares are tendered for the account of an eligible institution. See instructions
1 and 6 of the letter of transmittal.
The method of delivery of shares and all other required documents is at
the option and risk of the tendering stockholder. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended.
In all cases sufficient time should be allowed to assure timely delivery.
To prevent United States federal income tax backup withholding equal to
31% of the gross payments made pursuant to the offer, each tendering stockholder
must provide the depositary with the stockholder's correct taxpayer
identification number and certain other information by properly completing the
substitute Form W-9 included in the letter of transmittal. Foreign stockholders,
as defined in section 15, must submit a properly completed Form W-8, which may
be obtained from the depositary, in order to prevent backup withholding. In
general, backup withholding does not apply to corporations or to foreign
stockholders subject to 30%, or lower treaty rate, withholding on gross payments
received pursuant to the offer, as discussed in section 15. For a discussion of
certain federal income tax consequences to tendering stockholders, see section
15. Each stockholder is urged to consult with his or her own tax advisor
regarding his, her or its qualification for exemption from backup withholding
and the procedure for obtaining any applicable exemption.
4
It is a violation of Rule 14e promulgated under the Securities Exchange
Act of 1934, as amended, for a person to tender shares for his or her own
account unless the person so tendering (i) has a net long position equal to or
greater than the amount of (x) shares tendered or (y) other securities
immediately convertible into, exercisable or exchangeable for the amount of
shares tendered and will acquire such shares for tender by conversion, exercise
or exchange of such other securities and (ii) will cause such shares to be
delivered in accordance with the terms of the offer. Rule 14e-4 provides a
similar restriction applicable to the tender on behalf of another person. The
tender of shares pursuant to any one of the procedures described above will
constitute the tendering stockholder's representation and warranty that (i) the
stockholder has a net long position in the shares being tendered within the
meaning of Rule 14e-4 promulgated under the Exchange Act, and (ii) the tender of
such shares complies with Rule 14e-4. Our acceptance for payment of shares
tendered pursuant to the offer will constitute a binding agreement between the
tendering stockholder and us upon the terms and subject to the conditions of the
offer.
All questions as to the purchase price, the form of documents, the
number of shares to be accepted and the validity, eligibility, including time of
receipt, and acceptance for payment of any tender of shares will be determined
by us, in our sole discretion, which determination shall be final and binding on
all parties. We reserve the absolute right to reject any or all tenders of
shares that we determine are not in proper form or the acceptance for payment of
or payment for shares that may, in the opinion of our counsel, be unlawful. We
also reserve the absolute right to waive any defect or irregularity in any
tender of any particular shares. None of PS Financial, the dealer
manager/information agent, the depositary or any other person is or will be
under any duty to give notice of any defect or irregularity in tenders, nor
shall any of them incur any liability for failure to give any such notice.
Certificates for shares, together with a properly completed letter of
transmittal, or, in the case of a book-entry transfer, an agent's message, and
any other documents required by the letter of transmittal, must be delivered to
the depositary and not to PS Financial. Any such documents delivered to us will
not be forwarded to the depositary and therefore will not be deemed to be
properly tendered.
4. WITHDRAWAL RIGHTS
Tenders of shares made pursuant to the offer may be withdrawn at any
time prior to the expiration date. Thereafter, tenders are irrevocable, except
that they may be withdrawn after 12:00 midnight, New York City time, April 26,
2000 unless previously accepted for payment by us as provided in this offer to
purchase. If we extend the period of time during which the offer is open, are
delayed in purchasing shares or are unable to purchase shares pursuant to the
offer for any reason, then, without prejudice to our rights under the offer, the
depositary may, on behalf of us, retain all shares tendered, and the shares may
not be withdrawn except as otherwise provided in this section 4, subject to Rule
13e-4(f)(5) under the Exchange Act, which provides that the issuer making the
tender offer shall either pay the consideration offered, or return the tendered
securities promptly after the termination or withdrawal of the tender offer.
Withdrawal of Shares Held in Physical Form. Tenders of shares made
pursuant to the offer may not be withdrawn after the expiration date, except
that they may be withdrawn after 12:00 midnight, New York City time, April 26,
2000 unless accepted for payment by us as provided in this offer. For a
withdrawal to be effective prior to that time, a stockholder of shares held in
physical form must provide a written, telegraphic or facsimile transmission
notice of withdrawal to the depositary at its address set forth on the back
cover page of this offer before the expiration date, which notice must contain:
(A) the name of the person who tendered the shares; (B) a description of the
shares to be withdrawn; (C) the certificate numbers shown on the particular
certificates evidencing the shares; (D) the signature of the stockholder
executed in the same manner as the original signature on the letter of
transmittal, including any signature guarantee, if such original signature was
guaranteed; and (E) if the shares are held by a new beneficial owner, evidence
satisfactory to PS Financial that the person withdrawing the tender has
succeeded to the beneficial ownership of the shares. A purported notice of
withdrawal which lacks any of the required information will not be an effective
withdrawal of a tender previously made.
Withdrawal of Shares Held with the Book-Entry Transfer Facility.
Tenders of shares made pursuant to the offer may not be withdrawn after the
expiration date, except that they may be withdrawn after 12:00 midnight, New
York City time, April 26, 2000 unless accepted for payment by PS Financial as
provided in this offer. For a withdrawal to be effective prior to that time, a
stockholder of shares held with the book-entry transfer facility must (i) call
his or her
5
broker and instruct the broker to withdraw the tender of shares by debiting the
depositary's account at the book-entry transfer facility for all shares to be
withdrawn; and (ii) instruct the broker to provide a written, telegraphic or
facsimile transmission notice of withdrawal to the depositary on or before the
expiration date. The notice of withdrawal shall contain (A) the name of the
person who tendered the shares; (B) a description of the shares to be withdrawn;
and (C) if the shares are held by a new beneficial owner, evidence satisfactory
to us that the person withdrawing the tender has succeeded to the beneficial
ownership of the shares. A purported notice of withdrawal which lacks any of the
required information will not be an effective withdrawal of a tender previously
made.
Any permitted withdrawals of tenders of shares may not be rescinded,
and any shares so withdrawn will thereafter be deemed not validly tendered for
purposes of the offer; provided, however, that withdrawn shares may be
re-tendered by following the procedures for tendering prior to the expiration
date.
All questions as to the form and validity, including time of receipt,
of any notice of withdrawal will be determined by us, in our sole discretion,
which determination shall be final and binding on all parties. None of PS
Financial, the dealer manager/information agent, the depositary or any other
person is or will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the offer and as
promptly as practicable after the expiration date, we will determine the
purchase price, taking into consideration the number of shares tendered and the
prices specified by tendering stockholders, announce the purchase price, and,
subject to the proration and conditional tender provisions of the offer, accept
for payment and pay the purchase price for shares validly tendered and not
withdrawn at or below the purchase price. Thereafter, payment for all shares
validly tendered on or prior to the expiration date and accepted for payment
pursuant to the offer will be made by the depositary by check as promptly as
practicable. In all cases, payment for shares accepted for payment pursuant to
the offer will be made only after timely receipt by the depositary of
certificates for such shares, or of a timely confirmation of a book-entry
transfer of such shares into the depositary's account at the book-entry transfer
facility, a properly completed and duly executed letter of transmittal or a
manually signed copy thereof, with any required signature guarantees, or in the
case of a book-entry delivery an agent's message, and any other required
documents.
For purposes of the offer, we shall be deemed to have accepted for
payment, and thereby purchased, subject to proration and conditional tenders,
shares that are validly tendered and not withdrawn as, if and when we give oral
or written notice to the depositary of our acceptance for payment of the shares.
In the event of proration, we will determine the proration factor and pay for
those tendered shares accepted for payment as soon as practicable after the
expiration date. However, we do not expect to be able to announce the final
results of any such proration until approximately seven Nasdaq National Market
trading days after the expiration date. We will pay for shares that we have
purchased pursuant to the offer by depositing the aggregate purchase price
therefor with the depositary. The depositary will act as agent for tendering
stockholders for the purpose of receiving payment from us and transmitting
payment to tendering stockholders. Under no circumstances will interest be paid
on amounts to be paid to tendering stockholders, regardless of any delay in
making such payment.
Certificates for all shares not purchased, including all shares
tendered at prices greater than the purchase price, shares not purchased because
of proration and shares that were conditionally tendered and not accepted, will
be returned, or, in the case of shares tendered by book-entry transfer, the
shares will be credited to an account maintained with the book-entry transfer
facility by the participant therein who so delivered the shares, as promptly as
practicable following the expiration date without expense to the tendering
stockholder.
Payment for shares may be delayed in the event of difficulty in
determining the number of shares properly tendered or if proration is required.
See section 1. In addition, if certain events occur, we may not be obligated to
purchase shares pursuant to the offer. See section 7.
6
We will pay or cause to be paid any stock transfer taxes with respect
to the sale and transfer of any shares to us or our order pursuant to the offer.
If, however, payment of the purchase price is to be made to, or a portion of the
shares delivered, whether in certificated form or by book entry, but not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder, or if tendered shares are registered in the name of
any person other than the person signing the letter of transmittal, unless the
person is signing in a representative or fiduciary capacity, the amount of any
stock transfer taxes, whether imposed on the registered holder, such other
person or otherwise, payable on account of the transfer to the person will be
deducted from the purchase price unless satisfactory evidence of the payment of
such taxes, or exemption therefrom, is submitted. See instruction 7 to the
letter of transmittal.
Any tendering stockholder or other payee who fails to complete fully
and sign the substitute Form W-9 included in the letter of transmittal, or, in
the case of a foreign individual, a Form W-8, may be subject to required federal
income tax withholding of 31% of the gross proceeds paid to such stockholder or
other payee pursuant to the offer. See section 3.
6. CONDITIONAL TENDER OF SHARES
Under certain circumstances and subject to the exceptions set forth in
section 1, we may prorate the number of shares purchased pursuant to the offer.
As discussed in section 15, the number of shares to be purchased from a
particular stockholder might affect the tax treatment of the purchase for the
stockholder and the stockholder's decision whether to tender. Each stockholder
is urged to consult with his or her own tax advisor. Accordingly, a stockholder
may tender shares subject to the condition that a specified minimum number of
the stockholder's shares tendered pursuant to a letter of transmittal must be
purchased if any shares so tendered are purchased. Any stockholder desiring to
make a conditional tender must so indicate in the box captioned "Conditional
Tender" in the letter of transmittal.
Any tendering stockholders wishing to make a conditional tender must
calculate and appropriately indicate the minimum number of shares to be
tendered. If the effect of accepting tenders on a pro rata basis would be to
reduce the number of shares to be purchased from any stockholder, tendered
pursuant to a letter of transmittal, below the minimum number so specified, the
tender will automatically be regarded as withdrawn, except as provided in the
next paragraph, and all shares tendered by the stockholder pursuant to the
applicable letter of transmittal will be returned as promptly as practicable
thereafter.
If conditional tenders, that would otherwise be so regarded as
withdrawn, would cause the total number of shares to be purchased to fall below
333,858, then, to the extent feasible, we will select enough conditional tenders
that would otherwise have been so withdrawn to permit us to purchase 333,858
shares. In selecting among these conditional tenders, we will select by lot and
will limit our purchase in each case to the minimum number of shares designated
by the stockholder in the applicable letter of transmittal as a condition to his
or her tender.
7. CONDITIONS OF THE OFFER
Notwithstanding any other provision of the offer, we will not be
required to accept for payment or pay for any shares tendered, and may terminate
or amend and may postpone, subject to the requirements of the Exchange Act for
prompt payment for or return of shares tendered, the acceptance for payment of
shares tendered, if at any time after March 1, 2000 and at or before any of the
following shall have occurred:
(a) there shall have been threatened, instituted or pending
any action or proceeding by any government or governmental, regulatory
or administrative agency or authority or tribunal or any other person,
domestic or foreign, or before any court, authority, agency or tribunal
that (i) challenges the acquisition of shares pursuant to the offer or
otherwise in any manner relates to or affects the offer or (ii) in the
reasonable judgment of PS Financial, could materially and adversely
affect the business, condition, financial or other, income, operations
or prospects of PS Financial and our subsidiaries, taken as a whole, or
otherwise materially impair in any way the contemplated future conduct
of the business of PS Financial or any of our subsidiaries or
materially impair the offer's contemplated benefits to us;
7
(b) there shall have been any action threatened, pending or
taken, or approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the offer or PS Financial or any of our subsidiaries, by
any legislative body, court, authority, agency or tribunal which, in
our sole judgment, would or might directly or indirectly (i) make the
acceptance for payment of, or payment for, some or all of the shares
illegal or otherwise restrict or prohibit consummation of the offer,
(ii) delay or restrict the ability of PS Financial, or render us
unable, to accept for payment or pay for some or all of the shares,
(iii) materially impair the contemplated benefits of the offer to us or
(iv) materially affect the business, condition, financial or other,
income, operations or prospects of PS Financial and our subsidiaries,
taken as a whole, or otherwise materially impair in any way the
contemplated future conduct of the business of PS Financial or any of
our subsidiaries;
(c) it shall have been publicly disclosed or we shall have
learned that (i) any person or "group," within the meaning of Section
13(d)(3) of the Exchange Act, has acquired or proposes to acquire
beneficial ownership of more than 5% of the outstanding shares whether
through the acquisition of stock, the formation of a group, the grant
of any option or right, or otherwise, other than as disclosed in a
Schedule 13D or 13G on file with the SEC on March 1, 2000, or (ii) any
person or group that on or prior to March 1, 2000 had filed a Schedule
13D or 13G with the SEC thereafter shall have acquired or shall propose
to acquire, whether through the acquisition of stock, the formation of
a group, the grant of any option or right, or otherwise, beneficial
ownership of additional shares representing 2% or more of the
outstanding shares;
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, (ii) any
significant decline in the market price of the shares or in the general
level of market prices of equity securities in the United States or
abroad, (iii) any change in the general political, market, economic or
financial condition in the United States or abroad that could have a
material adverse effect on our business, condition, financial or
otherwise , income, operations, prospects or ability to obtain
financing generally or the trading in the shares, (iv) the declaration
of a banking moratorium or any suspension of payments in respect of
banks in the United States or any limitation on, or any event which, in
our reasonable judgment, might affect the extension of credit by
lending institutions in the United States, (v) the commencement of a
war, armed hostilities or other international or national calamity
directly or indirectly involving the United States or (vi) in the case
of any of the foregoing existing at the time of the commencement of the
offer, in our reasonable judgment, a material acceleration or worsening
thereof;
(e) a tender or exchange offer with respect to some or all of
the shares, other than the offer, or a merger, acquisition or other
business combination proposal for PS Financial, shall have been
proposed, announced or made by another person or group, within the
meaning of Section 13(d) (3) of the Exchange Act;
(f ) there shall have occurred any event or events that has
resulted, or may in the reasonable judgment of PS Financial result,
directly or indirectly, in an actual or threatened change in the
business, condition, financial or other, income, operations, stock
ownership or prospects of PS Financial and our subsidiaries;
and, in the reasonable judgment of PS Financial, such event or events make it
undesirable or inadvisable to proceed with the offer or with such acceptance for
payment.
The foregoing conditions are for the reasonable benefit of PS Financial
and may be asserted by us regardless of the circumstances, including any action
or inaction by us, giving rise to any of these conditions, and any such
condition may be waived by us, in whole or in part, at any time and from time to
time in our reasonable discretion. The failure by at any time to exercise any of
the foregoing rights shall not be deemed a waiver of the right and each of these
rights shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by us concerning the events described above
will be final and binding on all parties.
Acceptance of shares validly tendered in the offer is subject to the
condition that, as of the expiration date, and after giving pro forma effect to
the acceptance of shares validly tendered, PS Financial would continue to have
at least
8
400 stockholders and the shares would remain listed for quotation on the Nasdaq
National Market. This condition may not be waived.
The Exchange Act requires that all conditions to the offer must be
satisfied or waived before the expiration date.
8. PRICE RANGE OF SHARES; DIVIDENDS
The following table sets forth the high and low sales prices, and
dividends declared, for the shares as reported on the Nasdaq National Market for
the periods indicated. Our fiscal year end is December 31.
Dividends
High Low Declared
Fiscal 1998
1st Quarter $23.00 $13.50 $4.12*
2nd Quarter 14.88 12.75 0.12
3rd Quarter 13.50 10.75 0.12
4th Quarter 12.00 8.50 0.13
Fiscal 1999
1st Quarter $10.38 $ 9.50 $0.13
2nd Quarter 11.38 9.75 0.13
3rd Quarter 11.50 10.50 0.14
4th Quarter 13.13 10.19 0.14
Fiscal 2000
1st Quarter (through February 25, 2000) $12.13 $10.75 $0.14
* Includes a special dividend of $4.00 per share declared on December 30, 1997
and paid on January 30, 1998.
On February 25, 2000, the closing price of the shares on the Nasdaq
National Market was $11.13 per share. Stockholders are urged to obtain current
market quotations for the shares.
9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
We believe that the purchase of shares is an attractive use of a
portion of PS Financial's available capital on behalf of our stockholders and is
consistent with our long-term goal of increasing stockholder value. We believe
we have adequate sources of capital to complete the share repurchase and pursue
business opportunities.
Over time, our profitable operations have contributed to the growth of
a capital base that exceeds all applicable regulatory standards and the amount
of capital needed to support the our banking business. After evaluating a
variety of alternatives to utilize more effectively our capital base and to
attempt to maximize stockholder value, our management and board of directors
believe that the purchase of shares pursuant to the offer is a positive action
that is intended to accomplish the desired objectives. Other actions previously
employed, including periodic open market purchases of shares, quarterly cash
dividends and the special dividend in 1998, have enhanced stockholder value, but
capital remains at high levels, and this affects our ability to produce desired
returns for stockholders.
The offer is designed to restructure our balance sheet in order to
increase return on equity and earnings per share by reducing the amount of
equity and shares outstanding. Based upon the current market price of our
shares, we believe that the purchase of shares is an attractive use of funds.
Following the purchase of the shares, we believe funds provided by earnings,
combined with other sources of liquidity, will be fully adequate to meet our
funding needs for the foreseeable future. Upon completion of the offer, we
expect that PS Financial and our wholly owned subsidiary bank, Preferred Savings
Bank, FSB, will continue to maintain the highest regulatory standards for
capital, which is designated as "well capitalized" under the prompt corrective
action scheme enacted by the Federal Deposit Insurance Corporation Improvement
Act of 1991.
9
The offer will enable stockholders who are considering the sale of all
or a portion of their shares the opportunity to determine the price or prices,
not greater than $14.50 nor less than $12.00 per share, at which they are
willing to sell their shares, and, if any shares are sold pursuant to the offer,
to sell those shares for cash without the usual transaction costs associated
with open-market sales. The offer may also give stockholders the opportunity to
sell shares at prices greater than market prices prevailing prior to the
announcement of the offer. See section 8. In addition, qualifying stockholders
owning beneficially fewer than 100 shares, whose shares are purchased pursuant
to the offer, not only will avoid the payment of brokerage commissions but will
also avoid any applicable odd lot discounts to the market price typically
charged by brokers for executing odd lot trades.
Stockholders who do not tender their shares pursuant to the offer and
stockholders who otherwise retain an equity interest in PS Financial as a result
of a partial tender of shares or a proration pursuant to section 1 of the offer
to purchase will continue to be owners of PS Financial with the attendant risks
and rewards associated with owning the equity securities of PS Financial. As
noted above, PS Financial, following completion of the offer, will maintain the
highest regulatory capital ranking. Consequently, we believe that stockholders
will not be subject to materially greater risk as a result of the reduction of
the capital base.
Stockholders who determine not to accept the offer will realize a
proportionate increase in their relative equity interest in PS Financial and,
thus, in PS Financial's earnings and assets, subject to any risks resulting from
our purchase of shares and our ability to issue additional equity securities in
the future. In addition, to the extent the purchase of shares pursuant to the
offer results in a reduction of the number of stockholders of record, our costs
for services to stockholders may be reduced. Finally, the offer may affect our
ability to qualify for pooling-of-interests accounting treatment for any merger
transaction for approximately the next two years, which could limit alternative
stockholder enhancement vehicles during this period.
If fewer than 333,858 shares are purchased pursuant to the offer, we
may repurchase the remainder of the shares on the open market, in privately
negotiated transactions or otherwise. In the future, we may determine to
purchase additional shares on the open market, in privately negotiated
transactions, through one or more tender offers or otherwise. Any purchases may
be on the same terms as, or on terms which are more or less favorable to
stockholders than, the terms of the offer. However, Rule 13e-4 under the
Exchange Act prohibits us and our affiliates from purchasing any shares, other
than pursuant to the offer, until at least ten business days after the
expiration date. Any future purchases of shares by PS Financial would depend on
many factors, including the market price of the shares, our business and
financial position, and general economic and market conditions.
Shares we acquire pursuant to the offer will be restored to the status
of authorized and unissued shares, or placed in PS Financial's treasury, and
will be available for us to issue without further stockholder action, except as
required by applicable law or the rules of the Nasdaq National Market or any
other securities exchange on which the shares are listed, for purposes
including, but not limited to, the acquisition of other businesses, the raising
of additional capital for use in our business and the satisfaction of
obligations under existing or future employee benefit plans. We have no current
plans for reissuance of the shares repurchased pursuant to the offer.
Neither PS Financial nor our board of directors makes any
recommendation to any stockholder as to whether to tender all or any shares.
Each stockholder must make his or her own decision whether to tender shares and,
if so, how many shares to tender and at what price. Directors, officers and
employees of PS Financial who own shares may participate in the offer on the
same basis as our other stockholders. We have been advised that none of the
directors or officers of PS Financial intend to tender shares pursuant to the
offer. We have also been advised that the trustee of the ESOP does not intend to
tender any shares pursuant to the offer.
10
10. INFORMATION CONCERNING PS FINANCIAL
General
PS Financial, a Delaware corporation, is a unitary savings and loan
holding company which was organized in November, 1996 at the direction of
Preferred Savings for the purpose of owning all of the outstanding stock of
Preferred Savings to be issued in connection with Preferred Savings' conversion
from mutual to stock form. Preferred Savings, founded in 1891, is a federally
chartered savings bank. Preferred Savings is an independent, community-oriented
financial institution. The main office of PS Financial and Preferred Savings is
located at 4800 South Pulaski Road, Chicago, Illinois 60632.
Preferred Savings serves the financial needs of communities in its
market area which is primarily the southwest side of Chicago and Cook County,
Illinois, through its office located in Chicago, Illinois. Preferred Savings
attracts deposits from the general public and uses the deposits, together with
borrowings and other funds, to originate primarily loans secured by mortgages on
owner-occupied one- to four-family residences and, to a lesser extent,
multi-family, commercial real estate and consumer loans. These loans are
generally originated within Preferred Savings' primary market area. Preferred
Savings also invests in mortgage-backed securities, investment securities and
other short-term liquid assets. Its deposits are insured up to applicable limits
by the FDIC.
Preferred Savings' results of operations are dependent primarily on net
interest income and fee income. Net interest income is the difference between
the interest income earned on its loans, mortgage-backed securities and
investment portfolio and its cost of funds, consisting of interest paid on its
deposits and borrowed money. Preferred Savings' results of operations are also
significantly affected by general economic and competitive conditions,
particularly changes in market interest rates, government policies and actions
of regulatory authorities.
Preferred Savings is subject to examination by the Office of Thrift
Supervision and the FDIC. PS Financial, as a savings and loan holding company,
is subject to examination by the Office of Thrift Supervision.
Upon completion of its initial public offering in 1996, PS Financial
had an equity to assets ratio of 42.8%, well in excess of industry standards,
regulatory requirements and an amount necessary to execute its long term
business plan. Return on equity, a measure of stockholder value, was 2.97% for
the first full fiscal year of operations after completion of the conversion.
Since the time PS Financial went public, the board of directors has continuously
sought ways to maximize PS Financial's value and utilize its excess capital. The
board of directors introduced a regular quarterly cash dividend in the second
quarter of 1998 at $0.12 per share, increasing this steadily over time to its
current rate of $0.14 per share, a 16.7% increase since the initial dividend.
Further, the board declared a special one time dividend of $4.00 per share in
December, 1997 as a way to further utilize the excess capital. We have also
utilized share repurchases and since our inception we have repurchased 488,681
shares at a total cost of $6.4 million. As of September 30, 1999, the equity to
assets ratio stood at 16.37% and the return on equity for the nine months then
ended was 8.07%.
In November, a stockholder submitted a proposal to us that we consider
hiring an investment banking firm to advise us on ways to maximize stockholder
value. Subsequently, the board of directors engaged Keefe, Bruyette & Woods,
Inc., a firm that specializes in financial institutions to analyze our business
plan and advise us on ways to maximize stockholder value. Keefe, Bruyette &
Woods has been familiar with PS Financial since it acted as investment banker
during our mutual to stock conversion in 1996.
As part of its analysis of our business plan, Keefe, Bruyette & Woods
analyzed several potential scenarios developed by management and presented them
to the board of directors. The board of directors determined, based on its
discussions with Keefe, Bruyette & Woods, that continuing to enhance stockholder
value by repurchasing additional shares through this tender offer and refining
and implementing our business plan, would be in the best short-term interest of
stockholders. The board of directors will continue to explore all possible ways
to enhance stockholder value. Regardless of the direction taken next, utilizing
excess capital through this tender offer in a manner that is accretive to
earnings per share and return on equity is consistent with our goals to enhance
stockholder value and the execution of our business plan.
11
Recent Developments
On February 10, 2000, we announced operating results for PS Financial
for the three and twelve month periods ended December 31, 1999. The three months
ended December 31, 1999 produced net income of $389,000 compared to $368,000 for
the three months ended December 31, 1998.
Net interest income before provision for loan losses increased to
$974,000 for the fourth quarter of 1999 from $887,000 for the fourth quarter of
1998. Net interest income increased primarily due to an increase in the ratio of
interest-earning assets to interest-bearing liabilities.
The increase in net interest income was partially offset by an increase
in other noninterest expense of $48,000 and a loss on sale of securities of
$29,000 compared to a gain of $21,000 in 1998. However, due to the utilization
of excess capital to implement our stock repurchase plans, our return on average
equity increased to 7.57% from 6.85% for the same period in the prior year.
Net income for the twelve months ended December 31, 1999 was $1.6
million compared to $1.5 million for the twelve months ended December 31, 1998,
an increase of 6.93%. Net interest income before provision for loan losses
increased to $3.8 million in the twelve months ended December 31, 1999 compared
to $3.7 million in the twelve months ended December 31, 1998 primarily due to an
increase in the ratio of interest-earning assets to interest-bearing
liabilities. The increase in net interest income, as well as a $118,000 decrease
in income taxes, was partially offset by an increase in noninterest expense of
$113,000 and a loss on sales of securities of $86,000 in 1999 compared to a gain
of $43,000 in 1998. The increase in noninterest expense was primarily the result
of expenses incurred to convert data processing systems. The decrease in income
taxes was the result of purchasing tax exempt municipal securities. We had
$121.4 million in assets and $18.9 million in stockholders' equity as of
December 31, 1999.
In addition, on February 17, 2000, we were notified that a stockholder
was nominating two individuals for election to the board of directors of PS
Financial at our upcoming annual meeting.
12
Summary Unaudited Historical Consolidated Financial Data and
Summary Unaudited Pro Forma Consolidated Financial Data
The following summary unaudited historical consolidated financial data
has been derived from the consolidated financial statements of PS Financial. The
data should be read in conjunction with the consolidated financial statements
and notes thereto included in PS Financial's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1999. Copies of this report may be obtained as
described in Section 18 of this offer. The income statement data for the nine
months ended September 30, 1998 and 1999 and the balance sheet data as of
September 30, 1999 have been derived from the unaudited condensed consolidated
financial statements of PS Financial which, in the opinion of management,
include all adjustments, consisting of normal recurring adjustments, necessary
for a fair presentation of financial position and results of operations for such
periods. Operating results for the three months ended September 30, 1999 are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 1999.
September 30, 1999
Historical --------------------------------
September 30, $12.00 per $14.50 per
1999 Share Share
-------------- --------------------------------
Balance Sheet Data:
ASSETS
Cash and cash equivalents.................................... $ 778 $ 778 $ 778
Securities................................................... 44,532 41,857 41,189
Loans receivable, net........................................ 68,104 68,104 68,104
Other assets................................................. 2,398 2,398 2,398
Total assets............................................. $115,812 $113,137 $112,469
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits..................................................... $ 56,461 $ 56,461 $ 56,461
Borrowings................................................... 37,943 39,443 39,443
Other liabilities............................................ 2,447 2,447 2,447
Total liabilities........................................ 96,851 98,351 98,351
Stockholders' equity:
Common stock and additional paid-in capital,
net of unearned ESOP and unearned stock awards.............. 19,847 19,847 19,847
Treasury stock............................................... (6,425) (10,600) (11,268)
Retained earnings............................................ 6,698 6,698 6,698
Accumulated other comprehensive income....................... (1,159) (1,159) (1,159)
Total stockholders' equity .............................. 18,961 14,786 14,118
Total liabilities and stockholders' equity............... $115,812 $113,137 $112,469
Shares outstanding........................................... 1,669,290 1,335,432 1,335,432
13
Historical Nine months ended
Nine months ended September 30, 1999
September 30, -------------------------------
-------------------------- $12.00 per $14.50 per
1998 1999 Share Share
------------ ------------ ------------ ---------------
Income Statement Data:
Total interest income....................... $4,964 $5,848 $5,758 $5,735
Total interest expense...................... 2,195 2,998 3,089 3,089
Net interest income..................... 2,769 2,850 2,669 2,646
Provision for loan losses................... 40 --- --- ---
Net interest income after provision
for loan losses........................ 2,729 2,850 2,669 2,646
Total non-interest income................... 93 3 3 3
Total non-interest expense.................. 1,118 1,183 1,183 1,183
Income before income taxes.............. 1,704 1,670 1,489 1,466
Income taxes................................ 572 455 385 376
Net income.............................. $1,132 $1,215 $1,104 $1,090
Selected Financial Ratios:
Earnings per share - basic.................. $0.61 $0.76 $0.87 $0.86
Earnings per share-diluted.................. $0.60 $0.76 $0.87 $0.86
Ratio of earnings to fixed charges.......... 1.78% 1.56% 1.48% 1.47%
Return on average equity.................... 6.62% 8.07% 9.26% 9.54%
Book value per share(1)..................... $11.49 $11.36 $11.07 $10.57
Weighted average shares 1,883,089 1,607,423 1,273,565 1,273,565
outstanding-diluted......................
<FN>
(1) Unearned ESOP shares and awarded, but unearned stock award shares are
considered to be outstanding for book value per share purposes.
</FN>
14
PS FINANCIAL, INC.
Notes to Unaudited Pro Forma Financial Information
(1) The pro forma financial information reflects the repurchase of 333,858
shares at $12.00 and $14.50 per share, as appropriate.
(2) The balance sheet data gives effect to the purchase of shares as of the
balance sheet date. The income statement data give effect to the
purchase of shares as of the beginning of each period presented.
(3) The funds used to purchase shares were obtained through additional
borrowings and the liquidation of interest bearing deposits held in
other financial institutions. The pro forma data assumes a rate of
interest of 7.4% on additional borrowings and 4.5% on the interest
bearing deposits and an incremental tax rate of 38.74%.
(4) No effect has been given to the cost incurred in connection with this
offer. These costs are not expected to be material and will be
capitalized as part of the cost of the shares purchased.
15
11. SOURCE AND AMOUNT OF FUNDS
Assuming that we purchase the maximum of 333,858 shares pursuant to
this offer at the highest price of $14.50 per share, the total amount required
by us to purchase these shares will be $4.8 million, exclusive of fees and other
expenses. We will fund this purchase through borrowings and the sale of
marketable securities held in our portfolio.
12. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS
AND ARRANGEMENTS CONCERNING SHARES
As of February 23, 2000, PS Financial had 1,669,290 shares issued and
outstanding, including shares allocated pursuant to our employee stock ownership
plan and recognition and retention plan, and had reserved 167,350 shares for
issuance upon exercise of outstanding stock options. The 333,858 shares that we
are offering to purchase represent approximately 20% of the outstanding shares.
As of February 23, 2000, our directors and executive officers as a group, 7
persons, beneficially owned an aggregate of 132,139 shares, including 41,951
shares covered by currently exercisable options granted under our stock option,
representing approximately 7.72% of the outstanding shares, assuming the
exercise by such persons of their currently exercisable options. Directors,
officers and employees of PS Financial who own shares may participate in the
offer on the same basis as our other stockholders. We have been advised that
none of our directors or executive officers intend to tender shares pursuant to
the offer. As of February 23, 2000, 172,814 shares, or approximately 10.35% of
the outstanding shares, were held in the employee stock ownership plan. We have
been advised that the trustee of the employee stock ownership plan does not
intend to tender any shares pursuant to the offer.
Assuming we purchase 333,858 shares pursuant to the offer, and neither
the trustee of the employee stock ownership plan nor any of our directors or
executive officers tender any shares pursuant to the offer, then after the
purchase of shares pursuant to the offer, our executive officers and directors
as a group would own beneficially approximately 9.59% of the outstanding shares,
assuming the exercise by these persons of their currently exercisable options.
In addition, the employee stock ownership plan would own approximately 12.94% of
the outstanding shares.
Neither PS Financial, nor any subsidiary of PS Financial nor, to the
best of our knowledge, any of PS Financial's directors and executive officers,
nor any affiliate of any of the foregoing, had any transactions involving the
shares during the 60 days prior to the date hereof.
Except for outstanding options to purchase shares granted from to time
to time over recent years to certain directors and employees, including
executive officers, of PS Financial pursuant to our stock option plan, and
except as otherwise described herein, neither PS Financial nor, to the best of
our knowledge, any of our affiliates, directors or executive officers, or any of
the directors or executive officers of any of its affiliates, is a party to any
contract, arrangement, understanding or relationship with any other person
relating, directly or indirectly, to the offer with respect to any securities of
PS Financial including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations.
Except as disclosed in this offer, PS Financial, its directors and
executive officers have no current plans or proposals which relate to or would
result in:
o the acquisition by any person of additional securities of PS
Financial or the disposition of securities of PS Financial;
o an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving PS Financial or any
of our subsidiaries;
o a purchase, sale or transfer of a material amount of assets of
PS Financial or any of our subsidiaries;
o any change in the present board of directors or management of
PS Financial;
16
o any material change in the present dividend rate or policy, or
indebtedness or capitalization of PS Financial;
o any other material change in PS Financial's corporate
structure or business;
o any change in our certificate of incorporation or bylaws or
any actions which may impede the acquisition of control of PS
Financial by any person;
o a class of equity security of PS Financial being delisted from
a national securities exchange;
o a class of equity securities of PS Financial becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Exchange Act; or
o the suspension of our obligation to file reports pursuant to
Section 15(d) of the Exchange Act. See section 10.
13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES;
REGISTRATION UNDER THE EXCHANGE ACT
PS Financial's purchase of shares pursuant to this offer will reduce
the number of shares that might otherwise be traded publicly and may reduce the
number of stockholders. Nonetheless, we anticipate that there will be a
sufficient number of shares outstanding and publicly traded following
consummation of the offer to ensure a continued trading market for the shares.
Based upon published guidelines of the Nasdaq National Market, we believe that
following our purchase of shares pursuant to the offer, our remaining shares
will continue to qualify to be quoted on the Nasdaq National Market.
The shares are currently "margin securities" under the rules of the
Federal Reserve Board. This has the effect, among other things, of allowing
brokers to extend credit to their customers using such shares as collateral. We
believe that, following the purchase of shares pursuant to the offer, the shares
will continue to be "margin securities" for purposes of the Federal Reserve
Board's margin regulations.
The shares are registered under the Exchange Act, which requires, among
other things, that we furnish certain information to our stockholders and the
SEC and comply with SEC's proxy rules in connection with meetings of our
stockholders.
14. LEGAL MATTERS; REGULATORY APPROVALS
We are not aware of any license or regulatory permit that appears to be
material to our business that might be adversely affected by our acquisition of
shares as contemplated herein or of any approval or other action by, or any
filing with, any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of shares by us as contemplated herein. Should any
approval or other action be required, we presently contemplate that the approval
or other action will be sought. We are unable to predict whether we may
determine that we are required to delay the acceptance for payment of or payment
for shares tendered pursuant to this offer pending the outcome of any such
matter. There can be no assurance that any approval or other action, if needed,
would be obtained or would be obtained without substantial conditions or that
the failure to obtain any approval or other action might not result in adverse
consequences to our business. Our obligations under the offer to accept for
payment and pay for shares is subject to certain conditions. See section 7.
15. FEDERAL INCOME TAX CONSEQUENCES
General. The following is a discussion of the material United States
federal income tax consequences to stockholders with respect to a sale of shares
pursuant to the offer. The discussion is based upon the provisions of the
Internal Revenue Code of 1986, as amended, Treasury regulations, Internal
Revenue Service rulings and judicial decisions, all in effect as of the date
hereof and all of which are subject to change, possibly with retroactive effect,
by
17
subsequent legislative, judicial or administrative action. The discussion does
not address all aspects of United States federal income taxation that may be
relevant to a particular stockholder in light of the stockholder's particular
circumstances or to certain types of holders subject to special treatment under
the United States federal income tax laws, such as certain financial
institutions, tax-exempt organizations, life insurance companies, dealers in
securities or currencies, employee benefit plans or stockholders holding the
shares as part of a conversion transaction, as part of a hedge or hedging
transaction, or as a position in a straddle for tax purposes. In addition, the
discussion below does not consider the effect of any foreign, state, local or
other tax laws that may be applicable to particular stockholders. The discussion
assumes that the shares are held as "capital assets" within the meaning of
Section 1221 of the Internal Revenue Code. We have neither requested nor
obtained a written opinion of counsel or a ruling from the IRS with respect to
the tax matters discussed below.
Each stockholder should consult his or her own tax advisor as to the
particular United States federal income tax consequences to that stockholder
tendering shares pursuant to the offer and the applicability and effect of any
state, local or foreign tax laws and recent changes in applicable tax laws.
Characterization of the Surrender of Shares Pursuant to the Offer. The
surrender of shares by a stockholder to PS Financial pursuant to the offer will
be a taxable transaction for United States federal income tax purposes and may
also be a taxable transaction under applicable state, local and foreign tax
laws. The United States federal income tax consequences to a stockholder may
vary depending upon the stockholder's particular facts and circumstances. Under
Section 302 of the Internal Revenue Code, the surrender of shares by a
stockholder to PS Financial pursuant to the offer will be treated as a "sale or
exchange" of shares for United States federal income tax purposes, rather than
as a distribution by PS Financial with respect to the shares held by the
tendering stockholder, if the receipt of cash upon surrender (i) is
"substantially disproportionate" with respect to the stockholder, (ii) results
in a "complete redemption" of the stockholder's interest in PS Financial, or
(iii) is "not essentially equivalent to a dividend" with respect to the
stockholder, each as described below.
If any of the above three tests is satisfied, and the surrender of the
shares is therefore treated as a "sale or exchange" of shares for United States
federal income tax purposes, the tendering stockholder will recognize gain or
loss equal to the difference between the amount of cash received by the
stockholder and the stockholder's tax basis in the shares surrendered pursuant
to the offer. Any gain or loss will be capital gain or loss, and will be long
term capital gain or loss if the shares have been held for more than one year.
If none of the above three tests is satisfied, the tendering
stockholder will be treated as having received a distribution by PS Financial
with respect to the stockholder's shares in an amount equal to the cash received
by the stockholder pursuant to the offer. The distribution will be treated as a
dividend taxable as ordinary income to the extent of PS Financial's current or
accumulated earnings and profits for tax purposes. The amount of the
distribution in excess of PS Financial's current or accumulated earnings and
profits will be treated as a return of the stockholder's tax basis in the
shares, and then as gain from the sale or exchange of the shares. If a
stockholder is treated as having received a distribution by PS Financial with
respect to his or her shares, the stockholder's tax basis in his or her
remaining shares will generally be adjusted to take into account the
stockholders return of basis in the shares tendered.
Constructive Ownership. In determining whether any of the three tests
under Section 302 of the Internal Revenue Code is satisfied, stockholders must
take into account not only the shares that are actually owned by the
stockholder, but also shares that are constructively owned by the stockholder
within the meaning of Section 318 of the Internal Revenue Code. Under Section
318 of the Code, a stockholder may constructively own shares actually owned, and
in some cases constructively owned, by certain related individuals or entities
and shares that the stockholder has the right to acquire by exercise of an
option or by conversion.
Proration. Contemporaneous dispositions or acquisitions of shares by a
stockholder or related individuals or entities may be deemed to be part of a
single integrated transaction and may be taken into account in determining
whether any of the three tests under Section 302 of the Internal Revenue Code
has been satisfied. Each stockholder should be aware that because proration may
occur in the offer, even if all the shares actually and constructively owned by
a stockholder are tendered pursuant to the offer, fewer than all of these shares
may be purchased by PS Financial. Thus, proration may affect whether the
surrender by a stockholder pursuant to the offer will meet any of the three
tests
18
under Section 302 of the Code. See Section 6 for information regarding each
stockholder's option to make a conditional tender of a minimum number of shares.
A stockholder should consult his or her own tax advisor regarding whether to
make a conditional tender of a minimum number of shares, and the appropriate
calculation thereof.
Section 302 Tests. The receipt of cash by a stockholder will be
"substantially disproportionate" if the percentage of the outstanding shares in
PS Financial actually and constructively owned by the stockholder immediately
following the surrender of shares pursuant to the offer is less than 80% of the
percentage of the outstanding shares actually and constructively owned by the
stockholder immediately before the sale of shares pursuant to the offer.
Stockholders should consult their tax advisors with respect to the application
of the "substantially disproportionate" test to their particular situation.
The receipt of cash by a stockholder will be a "complete redemption" if
either (i) the stockholder owns no shares in PS Financial either actually or
constructively immediately after the shares are surrendered pursuant to the
offer, or (ii) the stockholder actually owns no shares in PS Financial
immediately after the surrender of shares pursuant to the offer and, with
respect to shares constructively owned by the stockholder immediately after the
offer, the stockholder is eligible to waive, and effectively waives,
constructive ownership of all such shares under procedures described in Section
302(c) of the Internal Revenue Code. A director, officer or employee of PS
Financial is not eligible to waive constructive ownership under the procedures
described in Section 302(c) of the Internal RevenueCode.
Even if the receipt of cash by a stockholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, a
stockholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test if the stockholder's surrender of shares pursuant to the offer
results in a "meaningful reduction" in the stockholder's interest in PS
Financial. Whether the receipt of cash by a stockholder will be "not essentially
equivalent to a dividend" will depend upon the individual stockholder's facts
and circumstances. The IRS has indicated in published rulings that even a small
reduction in the proportionate interest of a small minority stockholder in a
publicly held corporation who exercises no control over corporate affairs may
constitute such a "meaningful reduction." Stockholders expecting to rely upon
the "not essentially equivalent to a dividend" test should consult their own tax
advisors as to its application in their particular situation.
Corporate Stockholder Dividend Treatment. If a sale of shares by a
corporate stockholder is treated as a dividend, the corporate stockholder may be
entitled to claim a deduction equal to 70% of the dividend under Section 243 of
the Internal Revenue Code, subject to applicable limitations. Corporate
stockholders should, however, consider the effect of Section 246(c) of the
Internal Revenue Code, which disallows the 70% dividends-received deduction with
respect to stock that is held for 45 days or less. For this purpose, the length
of time a taxpayer is deemed to have held stock may be reduced by periods during
which the taxpayer's risk of loss with respect to the stock is diminished by
reason of the existence of certain options or other transactions. Moreover,
under Section 246A of the Internal Revenue Code, if a corporate stockholder has
incurred indebtedness directly attributable to an investment in shares, the 70%
dividends-received deduction may be reduced.
In addition, amounts received by a corporate stockholder pursuant to
the offer that are treated as a dividend may constitute an "extraordinary
dividend" under Section 1059 of the Internal Revenue Code. The "extraordinary
dividend" rules of the Internal Revenue Code are highly complicated.
Accordingly, any corporate shareholder that might have a dividend as a result of
the sale of shares pursuant to the offer should review the "extraordinary
dividend" rules to determine the applicability and impact of such rules to it.
Additional Tax Considerations. The distinction between long-term
capital gains and ordinary income is relevant because, in general, individuals
currently are subject to taxation at a reduced rate on their "net capital gain,"
which is the excess of net long-term capital gains over net short-term capital
losses, for the year. Tax rates on long-term capital gain for individual
shareholders vary depending on the shareholders' income and holding period for
the shares. In particular, reduced tax rates apply to gains recognized by an
individual from the sale of capital assets held for more than one year,
currently 20 percent or less.
19
Stockholders are urged to consult their own tax advisors regarding any
possible impact on their obligation to make estimated tax payments as a result
of the recognition of any capital gain, or the receipt of any ordinary income,
caused by the surrender of any shares to PS Financial pursuant to the offer.
Foreign Stockholders. PS Financial will withhold United States federal
income tax at a rate of 30% from gross proceeds paid pursuant to the offer to a
foreign stockholder or his agent, unless we determine that a reduced rate of
withholding is applicable pursuant to a tax treaty or that an exemption from
withholding is applicable because the gross proceeds are effectively connected
with the conduct of a trade or business by the foreign stockholder within the
United States. For this purpose, a foreign stockholder is any stockholder that
is not (i) a citizen or resident of the United States, (ii) a domestic
corporation or domestic partnership, (iii) an estate the income of which from
sources without the United States is effectively connected with the conduct of a
trade or business within the United States, or (iv) a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust, and one or more United States persons have the
authority to control all substantial decisions of the trust. Without definite
knowledge to the contrary, we will determine whether a stockholder is a foreign
stockholder by reference to the stockholder's address. A foreign stockholder may
be eligible to file for a refund of the tax or a portion of the tax if the
stockholder (i) meets the "complete redemption," "substantially
disproportionate" or "not essentially equivalent to a dividend" tests described
above, (ii) is entitled to a reduced rate of withholding pursuant to a treaty
and PS Financial withheld at a higher rate, or (iii) is otherwise able to
establish that no tax or a reduced amount of tax was due. In order to claim an
exemption from withholding on the ground that gross proceeds paid pursuant to
the offer are effectively connected with the conduct of a trade or business by a
foreign stockholder within the United States or that the foreign stockholder is
entitled to the benefits of a tax treaty, the foreign stockholder must deliver
to the depositary, or other person who is otherwise required to withhold United
States tax, a properly executed statement claiming such exemption or benefits.
These statements may be obtained from the depositary. Foreign stockholders are
urged to consult their own tax advisors regarding the application of United
States federal income tax withholding, including eligibility for a withholding
tax reduction or exemption and the refund procedures.
Backup Withholding. See Section 3 with respect to the application of
the United States federal income tax backup withholding.
The tax discussion set forth above is included for general information
only and may not apply to shares acquired in connection with the exercise of
stock options or pursuant to other compensation arrangements with PS Financial.
The tax consequences of a sale pursuant to the offer may vary depending upon,
among other things, the particular circumstances of the tendering stockholder.
No information is provided herein to the state, local or foreign tax
consequences of the transaction contemplated by the offer. Stockholders are
urged to consult their own tax advisors to determine the particular federal,
state, local and foreign tax consequences to them of tendering shares pursuant
to the offer and the effect of the stock ownership attribution rules described
above.
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
PS Financial expressly reserves the right, in our sole discretion and
at any time or from time to time, to extend the period of time during which the
offer is open by giving oral or written notice of the extension to the
depositary and making a public announcement thereof. There can be no assurance,
however, that the we will exercise our right to extend the offer. During any
extension, all shares previously tendered will remain subject to the offer,
except to the extent that shares may be withdrawn as set forth in section 4. We
also expressly reserves the right, in our sole discretion, (i) to terminate the
offer and not accept for payment any shares not previously accepted for payment
or, subject to Rule 13e-4(f)(5) under the Exchange Act which requires us either
to pay the consideration offered or to return the shares tendered promptly after
the termination or withdrawal of the offer, to postpone payment for shares upon
the occurrence of any of the conditions specified in Section 7 hereof, by giving
oral or written notice of such termination to the depositary and making a public
announcement thereof and (ii) at any time, or from time to time, to amend the
offer in any respect. Amendments to the offer may be effected by public
announcement. Without limiting the manner in which PS Financial may choose to
make public announcement of any extension, termination or amendment, PS
Financial shall have no obligation ,except as otherwise required by applicable
law, to publish, advertise or otherwise communicate any such public
announcement, other than by making a release to the Dow Jones News Service,
except in the case of an announcement of an extension of the offer, in which
case PS Financial shall have no obligation to publish, advertise or
20
otherwise communicate the announcement other than by issuing a notice of the
extension by press release or other public announcement, which notice shall be
issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date. Material changes to information
previously provided to holders of the shares in this offer or in documents
furnished subsequent thereto will be disseminated to holders of shares in
compliance with Rule 13e-4(e)(3) promulgated by the SEC under the Exchange Act.
If PS Financial materially changes the terms of the offer or the
information concerning the offer, or if we waive a material condition of the
offer, we will extend the offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(3) under the Exchange Act. Those rules require that the minimum period
during which an offer must remain open following material changes in the terms
of the offer or information concerning the offer, other than a change in price,
change in dealer's soliciting fee or change in percentage of securities sought,
will depend on the facts and circumstances, including the relative materiality
of the terms or information. In a published release, the SEC has stated that in
its view, an offer should remain open for a minimum of five business days from
the date that notice of a material change is first published, sent or given. The
offer will continue or be extended for at least ten business days from the time
PS Financial publishes, sends or gives to holders of shares a notice that we
will (a) increase or decrease the price we will pay for shares or the amount of
the information agent/dealer manager's soliciting fee or (b) increase, except
for an increase not exceeding 2% of the outstanding shares, or decrease the
number of shares we seek.
17. SOLICITATION FEES AND EXPENSES
Keefe, Bruyette & Woods, will act as the dealer manager and information
agent for PS Financial in connection with the offer. Keefe, Bruyette & Woods as
information agent, may contact stockholders by mail, telephone, facsimile,
telex, telegraph, other electronic means and personal interviews, and may
request brokers, dealers and other nominee stockholders to forward materials
relating to the offer to beneficial owners. PS Financial has agreed to pay
Keefe, Bruyette & Woods an advisory fee of $25,000 and, upon acceptance for and
payment of shares pursuant to the offer, a total of $.10 per share purchased by
PS Financial pursuant to the offer. Keefe, Bruyette & Woods will also be
reimbursed for certain out-of-pocket expenses. Keefe will also be indemnified
against certain liabilities, including liabilities under the federal securities
laws, in connection with the offer.
Keefe, Bruyette & Woods has rendered, is currently rendering and may
continue to render various investment banking and other advisory services to PS
Financial. It has received, and may continue to receive, customary compensation
from PS Financial for these services.
We have retained First Bankers Trust Co. as depositary in connection
with the offer. The depositary will receive reasonable and customary
compensation for its services and will also be reimbursed for certain
out-of-pocket expenses. PS Financial has agreed to indemnify the depositary
against certain liabilities, including certain liabilities under the federal
securities laws, in connection with the offer. Neither the information agent nor
the depositary has been retained to make solicitations or recommendations in
connection with the offer.
We will not pay any fees or commissions to any broker, dealer or other
person for soliciting tenders of shares pursuant to the offer, other than the
fee of the dealer manager. PS Financial will, upon request, reimburse brokers,
dealers, commercial banks and trust companies for reasonable and customary
handling and mailing expenses incurred by them in forwarding materials relating
to the offer to their customers.
18. WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION
PS Financial is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports, proxy statements and
other information with the SEC relating to our business, financial condition and
other matters. Certain information as of particular dates concerning our
directors and officers, their remuneration, options granted to them, the
principal holders of PS Financial's securities and any material interest of
these persons in transactions with PS Financial is filed with the SEC. We have
also filed an Issuer Tender Offer Statement on Schedule TO with the SEC, which
includes certain additional information relating to the offer. These reports, as
well as such other material, may be inspected and copies may be obtained at the
SEC's public reference facilities at 450 Fifth Street, N.W., Washington, D.C.,
and should also be available for inspection and copying at the regional offices
of the SEC
21
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and Suite
1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661. Copies of this material may be obtained by mail, upon payment of the
SEC's customary fees, from the SEC's Public Reference Section at 450 Fifth
Street, N.W., Washington, D.C. 20549. PS Financial's Schedule TO may not be
available at the SEC's regional offices.
The offer is being made to all holders of shares. PS Financial is not
aware of any state where the making of the offer is prohibited by administrative
or judicial action pursuant to a valid state statute. If we become aware of any
valid state statute prohibiting the making of the offer, we will make a good
faith effort to comply with the statute. If, after such good faith effort, we
cannot comply with the statute, the offer will not be made to, nor will tenders
be accepted from or on behalf of, holders of shares in that state. In those
jurisdictions whose securities, blue sky or other laws require the offer to be
made by a licensed broker or dealer, the offer shall be deemed to be made on
behalf of PS Financial by the dealer manager/information agent or one or more
registered brokers or dealers licensed under the laws of these jurisdictions.
PS FINANCIAL, INC.
March 1, 2000
22
The dealer manager and information agent for the offer is:
KEEFE, BRUYETTE & WOODS, INC.
211 Bradenton Drive
Dublin, Ohio 43017-5034
Telephone: (877) 298-6520 (toll free)
Any questions concerning tender procedures or requests for additional
copies of this offer, the letter of transmittal or other tender offer materials
may be directed to the dealer manager/information agent.
The depositary for the offer is:
FIRST BANKERS TRUST CO.
By Mail or By For Assistance: By Hand:
Overnight Courier: (217) 228-8063 c/o The Depository Trust Co.
2321 Kochs Lane Transfer Agent Drop
Quincy, Illinois 62301 55 Water Street, 1st Floor
New York, New York 10041-0099
By Facsimile:
(212) 587-3006
(For Eligible Institutions Only)
Any questions concerning tender procedures may be directed to the
depositary at (217) 228-8063.
March 1, 2000
S-1
EXHIBIT (A)(1)-2
PS FINANCIAL, INC.
LETTER OF TRANSMITTAL
To Accompany Shares of Common Stock
of
PS Financial, Inc.
Tendered Pursuant to the Offer to Purchase
Dated March 1, 2000
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON WEDNESDAY, MARCH 29, 2000, UNLESS THE OFFER IS EXTENDED.
To: FIRST BANKERS TRUST CO., Depositary
By Mail or By For Assistance: By Hand:
Overnight Courier: (217) 228-8063 c/o The Depository Trust Co.
2321 Kochs Lane Transfer Agent Drop
Quincy, Illinois 62301 55 Water Street, 1st Floor
New York, New York 10041-0099
By Facsimile:
(212) 587-3006
(For Eligible Institutions Only)
DESCRIPTION OF SHARES TENDERED (See instructions 3 and 4.)
Name(s) and Address(es) of Registered Holder(s) Shares Tendered
(Please Fill in Exactly as Name(s) Appear(s) on Certificate(s) (Attach Additional List if Necessary)
Total Number
of Shares Number of
Certificate Represented by Shares
Number(s)* Certificate(s)* Tendered**
TOTAL SHARES
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all shares
represented by any certificates delivered to the depositary are being
tendered. See instruction 4.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED.
This letter of transmittal is to be used if certificates are to be
forwarded herewith or if delivery of shares is to be made by book-entry transfer
to the depositary's account at The Depository Trust Company pursuant to the
procedures set forth in section 3 of the offer to purchase.
Delivery of documents to PS Financial or to the book-entry transfer
facility does not constitute a valid delivery.
(BOX BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
Account No.
Transaction Code No.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to PS Financial, Inc., a Delaware
corporation, the above-described shares of its common stock, par value $0.01 per
share, at a price per share hereinafter set forth, pursuant to PS Financial's
offer to purchase up to 333,858 shares, upon the terms and subject to the
conditions set forth in the offer to purchase, dated March 1, 2000, receipt of
which is hereby acknowledged, and in this letter of transmittal, which together
constitute the "offer."
Subject to, and effective upon, acceptance for payment of and payment
for the shares tendered herewith in accordance with the terms and subject to the
conditions of the offer, including, if the offer is extended or amended, the
terms and conditions of any such extension or amendment, the undersigned hereby
sells, assigns and transfers to, or upon the order of, PS Financial all right,
title and interest in and to all the shares that are being tendered hereby or
orders the registration of the shares tendered by book-entry transfer that are
purchased pursuant to the offer to or upon the order of PS Financial and
irrevocably constitutes and appoints the depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to the shares, with full
power of substitution, such power of attorney being deemed to be an irrevocable
power coupled with an interest, to (a) deliver certificates for the shares, or
transfer ownership of the shares on the account books maintained by the
book-entry transfer facility, together, in any case, with all accompanying
evidences of transfer and authenticity, to or upon the order of PS Financial
upon receipt by the depositary, as the undersigned's agent, of the purchase
price with respect to the shares, (b) present certificates for the shares for
cancellation and transfer on the books of PS Financial and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of the
shares, all in accordance with the terms of the offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the shares
tendered hereby and that, when and to the extent the same are accepted for
payment by PS Financial, PS Financial will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges,
encumbrances, conditional sales agreements or other obligations relating to the
sale or transfer thereof, and the same will not be subject to any adverse
claims. The undersigned will, upon request, execute and deliver any additional
documents deemed by the depositary or PS Financial to be necessary or desirable
to complete the sale, assignment and transfer of the shares tendered hereby.
The undersigned hereby represents and warrants that the undersigned has
read and agrees to all of the terms of the offer. All authority herein conferred
or agreed to be conferred shall not be affected by, and shall survive the death
or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the offer, this tender is
irrevocable.
The undersigned understands that tenders of shares pursuant to any one
of the procedures described in Section 2 or 3 of the offer to purchase and in
the instructions hereto will constitute the undersigned's acceptance of the
terms and conditions of the offer, including the undersigned's representation
and warranty that (i) the undersigned has a net long position in the shares
being tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (ii) the tender of the shares complies
with Rule 14e-4. PS Financial's acceptance for payment of shares tendered
pursuant to the offer will constitute a binding agreement between the
undersigned and PS Financial upon the terms and subject to the conditions of the
offer.
The undersigned understands that PS Financial will determine a single
per share price, not greater than $14.50 nor less than $12.00 per share, net to
the seller in cash, without interest thereon, that it will pay for shares
validly tendered and not withdrawn pursuant to the offer taking into account the
number of shares so tendered and the prices specified by tendering stockholders.
The undersigned understands that PS Financial will select the lowest purchase
price that will enable it to purchase 333,858 shares, or a lesser number of
shares as are validly tendered and not withdrawn at prices not greater than
$14.50 nor less than $12.00 per share, pursuant to the offer. The undersigned
understands that all shares properly tendered and not withdrawn at prices at or
below the purchase price will be purchased at the purchase price, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions of the offer, including its proration and conditional tender
provisions, and that PS Financial will return all other shares, including shares
tendered and not withdrawn at prices greater than the purchase price, shares not
purchased because of proration and shares that were conditionally tendered and
not accepted. The undersigned understands that tenders of shares pursuant to any
one of the procedures described in Section 2 or 3 of the offer to purchase and
in the instructions hereto will constitute an agreement between the undersigned
and PS Financial upon the terms and subject to the conditions of the offer.
The undersigned recognizes that, under certain circumstances set forth
in the offer to purchase, PS Financial may terminate or amend the offer or may
postpone the acceptance for payment of, or the payment for, shares tendered or
may not be required to purchase any of the shares tendered hereby or may accept
for payment fewer than all of the shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any shares purchased, and/or return
any shares not tendered or not purchased, in the name(s) of the undersigned,
and, in the case of shares tendered by book-entry transfer, by credit to the
account at the book-entry transfer facility. Similarly, unless otherwise
indicated under "Special Delivery Instructions," please mail the check for the
purchase price of any shares purchased and/or any certificates for shares not
tendered or not purchased, and accompanying documents, as appropriate, to the
undersigned at the address shown below the undersigned's signature(s). In the
event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price of
any shares purchased and/or return any shares not tendered or not purchased in
the name(s) of, and mail said check and/or any certificates to, the person(s) so
indicated. The undersigned recognizes that PS Financial has no obligation,
pursuant to the "Special Payment Instructions," to transfer any shares from the
name of the registered holder(s) thereof if PS Financial does not accept for
payment any of the shares so tendered.
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5)
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX
IS CHECKED, THERE IS NO VALID TENDER OF SHARES.
[ ] $12.00 [ ] $12.25 [ ] $12.50 [ ] $12.75 [ ] $13.00 [ ] $13.25
[ ] $13.50 [ ] $13.75 [ ] $14.00 [ ] $14.25 [ ] $14.50
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 PS Financial in accordance with the terms of the offer. Persons checking this
box need not indicate the price per share above. [ ]
ODD LOTS
(SEE INSTRUCTION 9)
This section is to be completed ONLY if shares are being tendered by or on
behalf of a person owning beneficially, as of the close of business on February
23, 2000, and who continues to own beneficially as of the expiration date, an
aggregate of fewer than 100 shares.
The undersigned either (check one box):
[ ] was the beneficial owner as of the close of business on February 23,
2000, and continues to be the beneficial owner as of the expiration
date, of an aggregate of fewer than 100 shares, all of which are being
tendered, or
[ ] is a broker, dealer, commercial bank, trust company or other nominee
that (i) is tendering, for the beneficial owners thereof, shares with
respect to which it is the record owner, and (ii) believes, based upon
representations made to it by each beneficial owner, that the
beneficial owner owned beneficially as of the close of business on
February 23, 2000, and continues to own beneficially as of the
expiration date, an aggregate of fewer than 100 shares, and is
tendering all of those shares.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 6, 7 AND 8)
To be completed ONLY if the check for the purchase price of shares purchased
and/or certificates for shares not tendered or not purchased are to be issued in
the name of someone other than the undersigned.
Issue [ ] check
and/or [ ] certificate(s) to:
Name____________________________________________
(Please Print)
Address_________________________________________
(Include Zip Code)
_________________________________________
(Taxpayer Identification or Social Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 6, 7 AND 8)
To be completed ONLY if the check for the purchase price of shares purchased
and/or certificates for shares not tendered or not purchased are to be mailed to
someone other than the undersigned or to the undersigned at an address other
than that shown below the undersigned's signature(s).
Mail [ ] check
and/or [ ] certificate(s) to:
Name____________________________________________
(Please Print)
Address_________________________________________
(Include Zip Code)
CONDITIONAL TENDER
You may condition the tender of your shares upon the purchase by PS
Financial 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 PS Financial, 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 and a minimum specified, the tender will be deemed unconditional.
Minimum number of shares that must be purchased, if any are purchased:
____________ shares
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL)
(Signature(s) of Owner(s))
Dated ____________________________, 2000
Name(s)
Capacity (full title)
Address
(Include Zip Code)
Area Code and Telephone No.
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm
Authorized Signature
Dated _________________, 2000
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this letter of transmittal must be guaranteed by a firm that is an
eligible institution because it is a member of a registered national securities
exchange or the National Association of Securities Dealers, Inc., or by a
commercial bank, a trust company, a savings bank, a savings and loan association
or a credit union which has membership in an approved signature guarantee
medallion program. Signatures on this letter of transmittal need not be
guaranteed (a) if this letter of transmittal is signed by the registered
holder(s) of the shares, which term, for purposes of this document, shall
include any participant in the book-entry transfer facility whose name appears
on a security position listing as the owner of shares, tendered herewith and
such holder(s) have not completed the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on this letter
of transmittal or (b) if the shares are tendered for the account of an eligible
institution. See instruction 6.
2. Delivery of letter of transmittal and shares. This letter of
transmittal or, in the case of a book-entry transfer, an agent's message, as
defined below, is to be used either if certificates are to be forwarded herewith
or if delivery of shares is to be made by book-entry transfer pursuant to the
procedures set forth in section 3 of the offer to purchase. Certificates for all
physically delivered shares, or a confirmation of a book-entry transfer into the
depositary's account at the book-entry transfer facility of all shares delivered
electronically, as well as a properly completed and duly executed letter of
transmittal, or a manually signed copy thereof, and any other documents required
by this letter of transmittal, must be received by the depositary at the address
set forth on the front page of this letter of transmittal on or prior to the
expiration date, as defined in the offer to purchase. The term "agent's message"
means a message transmitted by the book-entry transfer facility to, and received
by, the depositary and forming a part of the book-entry confirmation, which
states that the book-entry transfer facility has received an express
acknowledgment from the participant in the book-entry transfer facility
tendering the shares, that such participant has received and agrees to be bound
by the terms of the letter of transmittal and that the company may enforce the
agreement against the participant.
The method of delivery of this letter of transmittal, share certificates
and all other required documents is at the option and risk of the tendering
stockholder, and delivery will be deemed made only when actually received by the
depositary. If certificates for shares are sent by mail, registered mail with
return receipt requested, properly insured, is recommended.
Except as specifically permitted by section 6 of the offer to purchase, no
alternative or contingent tenders will be accepted. See section 1 of the offer
to purchase. By executing this letter of transmittal, or a facsimile thereof,
the tendering stockholder waives any right to receive any notice of the
acceptance for payment of the shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of shares should be listed on a separate
signed schedule attached hereto.
4. Partial Tenders; Not Applicable to Stockholders Who Tender by
Book-Entry Transfer. If fewer than all the shares
represented by any certificate delivered to the depositary are to be tendered,
fill in the number of shares that are to be tendered in the box entitled "Number
of shares Tendered." In this case, a new certificate for the remainder of the
shares represented by the old certificate will be sent to the person(s) signing
this letter of transmittal, unless otherwise provided in the "Special Payment
Instructions" or "Special Delivery Instructions" boxes on this letter of
transmittal, as promptly as practicable following the expiration or termination
of the offer. All shares represented by certificates delivered to the depositary
will be deemed to have been tendered unless otherwise indicated.
5. Indication of Price at Which shares are Being Tendered. For shares to
be validly tendered, the stockholder must check the box indicating (1) the price
per share at which he or she is tendering shares under "Price (In Dollars) Per
share at Which shares Are Being Tendered" in this letter of transmittal, or (2)
that the person is tendering shares at the purchase price determined by PS
Financial pursuant to the terms of the offering under this heading. Only one box
may be checked. If more than one box is checked or if no box is checked, there
is no valid tender of shares. A stockholder wishing to tender portions of his or
her share holdings at different prices must complete a separate letter of
transmittal for each price at which he or she wishes to tender each portion of
his or her shares. The same shares cannot be tendered, unless previously validly
withdrawn as provided in section 4 of the offer to purchase, at more than one
price.
6. Signatures on letter of transmittal; Stock Powers and Endorsements. If
this letter of transmittal is signed by the registered holder(s) of the shares
hereby, the signature(s) must correspond with the name(s) as written on the face
of the certificates without alteration, enlargement or any change whatsoever.
If any of the shares hereby are held of record by two or more persons, all
persons must sign this letter of transmittal.
If any of the shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate letters of transmittal as there are different registrations of
certificates.
If this letter of transmittal is signed by the registered holder(s) of the
shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made to, or shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s). Signatures on any such certificates or
stock powers must be guaranteed by an eligible institution. See instruction 1.
If this letter of transmittal is signed by a person other than the
registered holder(s) of the shares tendered hereby, certificates evidencing the
shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on the certificates for the shares. Signature(s) on any
certificates or stock powers must be guaranteed by an eligible institution. See
instruction 1.
If this letter of transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
the person should so indicate when signing, and proper evidence satisfactory to
PS Financial of the authority of the person so to act must be submitted.
7. Stock Transfer Taxes. PS Financial will pay or cause to be paid any
stock transfer taxes with respect to the sale and transfer of any shares to it
or its order pursuant to the offer. If, however, payment of the purchase price
is to be made to, or shares not tendered or not purchased are to be registered
in the name of, any person other than the registered holder(s), or if tendered
shares are registered in the name of any person other than the person(s) signing
this letter of transmittal, the amount of any stock transfer taxes, whether
imposed on the registered holder(s), the other person or otherwise, payable on
account of the transfer to the person will be deducted from the purchase price
unless satisfactory evidence of the payment of taxes, or exemption therefrom, is
submitted. See section 5 of the offer to purchase. Except as provided in this
instruction 7, it will not be necessary to affix transfer tax stamps to the
certificates representing shares tendered hereby.
8. Special Payment and Delivery Instructions. If the check for the
purchase price of any shares purchased is to be issued in the name of, and/or
any shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this letter of transmittal or if the check and/or any
certificates for shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this letter of transmittal or to an
address other than that shown above in the box captioned "Description of shares
Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this letter of transmittal should be
completed. Stockholders tendering shares by book-entry transfer will have any
shares not accepted for payment returned by crediting the account maintained by
the stockholder at the book-entry transfer facility from which the transfer was
made.
9. Odd Lots. As described in the offer to purchase, if fewer than all
shares validly tendered at or below the purchase price and not withdrawn on or
prior to the expiration date are to be purchased, the shares purchased first
will consist of all shares tendered by any stockholder who owned beneficially as
of the close of business on February 23, 2000, and continues to own beneficially
as of the expiration date, an aggregate of fewer than 100 shares and who validly
and unconditionally tendered all the shares at or below the purchase price,
including by not designating a purchase price as described above. Partial or
conditional tenders of shares will not qualify for this preference. This
preference will not be available unless the box captioned "Odd Lots" in this
letter of transmittal is completed.
10. Substitute Form W-9 and Form W-8. The tendering stockholder is
required to provide the depositary with either a correct taxpayer identification
number on Substitute Form W-9, which is provided under "Important Tax
Information" below, or a properly completed Form W-8. Failure to provide the
information on either Substitute Form W-9 or Form W-8 may subject the tendering
stockholder to 31% federal income tax backup withholding on the payment of the
purchase price. The box in Part 2 of Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a taxpayer identification number and
has applied for a number or intends to apply for a number in the near future. If
the box in Part 2 is checked and the depositary is not provided with a taxpayer
identification number by the time of payment, the depositary will withhold 31%
on all payments of the purchase price thereafter until a taxpayer identification
number is provided to the depositary.
11. Requests for Assistance or Additional Copies. Any questions or
requests for assistance may be directed to the information agent/dealer manager
at their telephone number and address listed below. Requests for additional
copies of the offer to purchase, this letter of transmittal or other tender
offer materials may be directed to the information agent/dealer manager and
copies will be furnished promptly at PS Financial's expense. Stockholders may
also contact their local broker, dealer, commercial bank or trust company for
assistance concerning the offer.
12. Irregularities. All questions as to the purchase price, the form of
documents, and the validity, eligibility, including time of receipt, and
acceptance of any tender of shares will be determined by PS Financial, in its
sole discretion, and its determination shall be final and binding. PS Financial
reserves the absolute right to reject any or all tenders of shares that it
determines are not in proper form or the acceptance for payment of or payment
for shares that may, in the opinion of PS Financial's counsel, be unlawful.
Except as otherwise provided in the offer to purchase, PS Financial also
reserves the absolute right to waive any of the conditions to the offer or any
defect or irregularity in any tender of shares and PS Financial's interpretation
of the terms and conditions of the offer, including these instructions, shall be
final and binding. Unless waived, any defects or irregularities in connection
with tenders must be cured within such time as PS Financial shall determine.
None of PS Financial, the information agent/dealer manager, the depositary, or
any other person shall be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice. Tenders will not be deemed to have been made until all
defects and irregularities have been cured or waived.
IMPORTANT: THIS LETTER OF TRANSMITTAL, OR A MANUALLY SIGNED COPY
THEREOF, TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO
THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered shares are
accepted for payment is required to provide the depositary, as payer, with the
stockholder's correct taxpayer identification number on Substitute Form W-9
below. If the stockholder is an individual, the taxpayer identification number
is his or her social security number. For businesses and other entities, the
number is the employer identification number. If the depositary is not provided
with the correct taxpayer identification number or properly completed Form W-8,
the stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such stockholder with respect to
shares purchased pursuant to the offer may be subject to backup withholding.
Certain stockholders, including, among others, all corporations and
certain foreign individuals and entities, are not subject to these backup
withholding and reporting requirements. In order for a noncorporate foreign
stockholder to qualify as an exempt recipient, that stockholder must complete
and sign a Form W-8, Certificate of Foreign Status, attesting to that
stockholder's exempt status. The Form W-8 can be obtained from the depositary.
Exempt stockholders, other than noncorporate foreign stockholders, should
furnish their taxpayer identification number, write "Exempt" on the face of the
Substitute Form W-9 below and sign, date and return the Substitute Form W-9 to
the depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If federal income tax backup withholding applies, the depositary is
required to withhold 31% of any payments made to the stockholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a stockholder
with respect to shares purchased pursuant to the offer, the stockholder is
required to notify the depositary of his or her correct taxpayer identification
number by completing the Substitute Form W-9 included in this letter of
transmittal certifying that the taxpayer identification number provided on
Substitute Form W-9 is correct and that (1) the stockholder has not been
notified by the Internal Revenue Service that he or she is subject to federal
income tax backup withholding as a result of failure to report all interest or
dividends or (2) the Internal Revenue Service has notified the stockholder that
he or she is no longer subject to federal income tax backup withholding. Foreign
stockholders must submit a properly completed Form W-8 in order to avoid the
applicable backup withholding; provided, however, that backup withholding will
not apply to foreign stockholders subject to 30%, or lower treaty rate,
withholding on gross payments received pursuant to the offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the depositary the social security
number or employer identification number of the registered owner of the shares.
If the shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME: FIRST BANKERS TRUST CO.
PART 1 -- PLEASE PROVIDE YOUR TAXPAYER Taxpayer Identification Number
IDENTIFICATION NUMBER IN THE BOX AT
SUBSTITUTE RIGHT AND CERTIFY BY SIGNING AND DATING ______________________________
BELOW. Social Security Number
FORM W-9 or
Employer Identification Number
______________________________
DEPARTMENT OF THE NAME (Please Print) PART 2: For Payees exempt from
TREASURY INTERNAL backup withholding, see the Important
REVENUE SERVICE ______________________________ Tax Information above and Guidelines for
PAYOR'S REQUEST Certification of Taxpayer Identification
FOR TAXPAYER ______________________________ Number of Substitute Form W-9 enclosed
IDENTIFICATION ADDRESS herewith and complete as instructed herein.
NUMBER (taxpayer
identification number) AND ______________________________ Awaiting taxpayer identification
CERTIFICATION CITY STATE ZIP CODE number [ ]
PART 3 -- CERTIFICATION-UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT
(1) the number shown on this form is my correct taxpayer identification number (or
a taxpayer identification number has not been issued to me but I have mailed or
delivered an application to receive a taxpayer identification number or intend to
do so in the near future), (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (the "IRS") that I
am subject to backup withholding as a result of a failure to report all interest
or dividends or the IRS has notified me that I am no longer subject to backup
withholding, and (3) all other information provided on this form is true, correct and
complete.
SIGNATURE______________________________ DATE ________________________
You must cross out item (2) above if you
have been notified by the IRS that you are
currently subject to backup withholding
because of underreporting interest or
dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU
MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2
OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments of the purchase price made to me thereafter will be withheld
until I provide a number.
Signature______________________________ Date _________________________
The information agent/dealer manager:
KEEFE, BRUYETTE & WOODS, INC.
211 Bradenton Drive
Dublin, Ohio 43017-5034
TOLL FREE:
(877) 298-6520
EXHIBIT (A)(2)-1
KEEFE, BRUYETTE & WOODS, INC.
211 Bradenton Drive
Dublin, Ohio 43017-5034
Telephone: (877) 298-6520 (toll free)
PS FINANCIAL, INC.
Offer To Purchase For Cash Up To
333,858 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $14.50
Nor Less Than $12.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON MARCH 29, 2000,
UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
PS Financial, Inc., a Delaware corporation, has appointed us to act as
dealer manager in connection with its offer to purchase for cash up to 333,858
shares of its common stock, $0.01 par value per share, at prices not in excess
of $14.50 nor less than $12.00 per share, specified by stockholders tendering
their shares, upon the terms and subject to the conditions set forth in PS
Financial's offer to purchase, dated March 1, 2000, and in the related letter of
transmittal, which together constitute the "offer."
PS Financial will determine the single per share price, not in excess
of $14.50 nor less than $12.00 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. PS Financial will select the lowest purchase price that will allow
it to buy 333,858 shares, or the lesser number of shares that are properly
tendered at prices not in excess of $14.50 nor less than $12.00 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 333,858 shares are validly tendered at or
below the purchase price and not withdrawn, PS Financial will buy shares (i)
from stockholders who owned beneficially as of the close of business on February
23, 2000 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
1
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 PS
Financial's expense as promptly as practicable following the expiration date.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED PURSUANT TO THE OFFER. SEE SECTION 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. PS Financial
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. PS Financial 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 PS Financial, other than First Bankers Trust Co. 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 March 1, 2000;
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. Letter, dated March 1, 2000, from Kimberly P. Rooney,
President and Chief Executive Officer of PS Financial, to
stockholders of PS Financial;
4. Letter of transmittal for your use and for the information of
your clients, together with an accompanying Form W-9 and
guidelines; and
5. A return envelope addressed to First Bankers Trust Co., 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 29, 2000, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the offer, a duly executed and properly
completed letter of transmittal and any other required documents should be sent
to the depositary with either certificate(s) representing the tendered shares or
confirmation of their book-entry transfer, all in accordance with the
instructions set forth in the letter of transmittal and the offer to purchase.
2
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
dealer manager/information agent, 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 PS FINANCIAL 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.
3
EXHIBIT (A)(2)-2
PS FINANCIAL, INC.
Offer To Purchase For Cash Up To
333,858 Shares Of Its Common Stock
At A Purchase Price Not In Excess Of $14.50
Nor Less Than $12.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON MARCH 29, 2000,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the offer to purchase, dated March
1, 2000, and the related letter of transmittal in connection with the offer by
PS Financial, Inc., a Delaware corporation, to purchase up to 333,858 shares of
its common stock, $0.01 par value per share, at prices not in excess of $14.50
nor less than $12.00 per share, as specified by tendering stockholders, upon the
terms and subject to the conditions set forth in the offer.
PS Financial will determine the single per share price, not in excess
of $14.50 nor less than $12.00 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. PS Financial will select the lowest purchase price that will allow
it to buy 333,858 shares, or the lesser number of shares that are validly
tendered at prices not in excess of $14.50 nor less than $12.00 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 333,858 shares are validly tendered at or
below the purchase price and not withdrawn, PS Financial will buy shares (i)
from stockholders who owned beneficially as of the close of business on February
23, 2000, 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 PS Financial's 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
1
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 $14.50
nor less than $12.00 per share as indicated in the
attached instruction form, net to you in cash.
2. You may tender your shares conditioned upon PS Financial
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 29,
2000, unless PS Financial extends the offer.
5. The offer is for 333,858 shares, constituting
approximately 20% of the shares outstanding as of February
23, 2000.
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 PS Financial's purchase of shares pursuant to the
offer.
7. If you beneficially held, as of the close of business on
February 23, 2000, 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, PS
Financial, 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.
2
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 29, 2000, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in section 1 of the offer to purchase, if more than
333,858 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, PS Financial 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 February 23, 2000 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 PS Financial purchasing a minimum
number of your tendered shares. In such case, if as a result of the proration
provisions in the offer to purchase PS Financial would purchase less than the
minimum number of your shares, then PS Financial 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 333,858 shares, then to the extent feasible, PS Financial will select
enough of the conditional tenders that would otherwise have been so withdrawn to
permit PS Financial to purchase 333,858 shares. In selecting among the
conditional tenders, PS Financial 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. PS Financial is not
aware of any jurisdiction where the making of the offer is not in compliance
with applicable law. If PS Financial becomes aware of any jurisdiction where the
making of the offer is not in compliance with any valid
3
applicable law, PS Financial will make a good faith effort to comply with the
law. If, after a good faith effort, PS Financial 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 PS Financial's behalf by the
information agent/dealer manager or one or more registered brokers or dealers
licensed under the laws of that jurisdiction.
4
EXHIBIT (A)(2)-3
PS FINANCIAL, INC.
March 1, 2000
Dear Stockholders of PS Financial, Inc.:
Over time, PS Financial's profitable operations have contributed to the
growth of a capital base that exceeds all applicable regulatory standards and
the amount of capital needed to support 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 333,858 shares of PS
Financial's common stock, or 20 percent of our 1,669,290 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 $14.50 per share and not less than $12.00 per share. Upon
expiration of the offer, we will select the lowest purchase price from those
shares tendered that will allow us to buy 333,858 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 333,858 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 PS Financial 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 29, 2000. We again encourage you to read carefully the
enclosed material.
As always, we appreciate your interest in PS Financial, Inc.
Sincerely,
/s/ Kimberly P. Rooney
-----------------------------------
Kimberly P. Rooney
President and Chief Executive Officer
EXHIBIT (A)(2)-4
MEMO PLEASE CIRCULATE
DATE: March 1, 2000
TO: All Staff
FROM: Kimberly P. Rooney, President and CEO
RE: Tender Offer for PS Financial, Inc.'s Common Stock
- --------------------------------------------------------------------------------
At PS Financial Inc.'s board of directors meeting on Friday, February
25, 2000, the board approved the purchase of 333,858 shares of our common stock
by means of what is termed a "modified dutch auction tender." It is more fully
described in the attached news release. We have made every effort to communicate
this action to members of the community as quickly as possible. Below you will
find the answers to some questions that are likely to arise from our public
announcement. We will provide further information if additional questions come
up.
Question: Why is PS Financial offering to repurchase its stock?
Answer: Over time, PS Financial's profitable operations have contributed to
the growth of a capital base that exceeds all applicable regulatory
standards and the amount of capital needed to support our banking
business. After evaluating a variety of alternatives to utilize more
effectively our capital base and to attempt to maximize stockholder
value, PS Financial's management and its board of directors believe
that the purchase of its stock pursuant to the tender offer is a
positive action that is intended to improve returns to our
stockholders. Our financial projections indicate that the purchase of
shares will increase earnings per share and return on stockholders'
equity.
Question: Whose idea was this?
Answer: With the assistance of Keefe, Bruyette & Woods, Inc., management has
conducted a detailed analysis of PS Financial's capital structure to
determine how to maximize stockholder value by improving return on
stockholders' equity while maintaining a high level of financial
security and preserving future strategic options. Based upon the
results of a series of financial models developed by management with
the assistance of Keefe, Bruyette & Woods, a purchase of shares
appeared to be the best means to accomplish the desired objectives.
The modified dutch auction tender method was determined to be the
best way to acquire shares in the shortest period of time.
1
Question: How should I respond to questions?
Answer: PS Financial has hired a special information agent to handle all
questions. The information agent is Keefe, Bruyette & Woods and their
toll-free telephone number is (877) 298-6520. Because PS Financial is
the purchaser of the shares, and because securities laws are
involved, it is highly important that all questions be referred to
the information agent. No member of PS Financial's staff is allowed
or authorized to answer any questions or give any advice regarding
the tender offer. We are aware that many stockholders are customers
of the bank and have ties or relationships with staff members. You
should handle these situations as diplomatically as possible, but in
any event, all questions must be referred either to the information
agent or the holder's broker or investment advisor.
Question: What do I say if a stockholder asks, "Should I sell (tender) my
stock?"
Answer: Members of the PS Financial staff must not give any investment advice
to stockholders. The stockholder must make his or her own investment
decision. You should not express an opinion as to whether you think
the tender offer is a "good deal" or a "bad deal." While the
stockholder may call Keefe, Bruyette & Woods, Inc., the information
agent and dealer manager, they will not receive investment advice
from them. They should be directed to contact their broker or
investment advisor.
Question: What do I do if someone brings a letter of transmittal to me or my
office?
Answer: Because tenders must be received by the depositary, First Bankers
Trust Co. within a limited amount of time, we cannot take the
responsibility for having any stockholder's tender delivered.
Stockholders must send tenders directly to First Bankers Trust Co. at
the address provided in the tender offer documents. That address is:
First Bankers Trust Co.
2321 Kochs Lane
Quincy, Illinois 62301
Question: May employees of PS Financial tender shares in the offer?
Answer: Yes. Employees who own shares of PS Financial common stock are
eligible to tender their shares. You will receive a complete copy of
the same documents that are being provided to other stockholders.
2
EXHIBIT (A)(2)-5
PS FINANCIAL, INC.
QUESTIONS AND ANSWERS
ABOUT THE OFFER OF
PS FINANCIAL, INC.
TO PURCHASE FOR CASH UP TO 333,858 SHARES
OF COMMON STOCK AT A PURCHASE PRICE OF
$12.00 TO $14.50 PER SHARE
March 1, 2000
QUESTIONS AND ANSWERS ABOUT THE OFFER OF
PS FINANCIAL, INC.
TO PURCHASE ITS STOCK
The following information is designed to answer frequently asked questions about
the offer by PS Financial, Inc. to purchase shares of its common stock.
Stockholders are referred to the offer to purchase and letter of transmittal for
a detailed description of the terms and conditions of the offer.
Q. What Is This Offer To Purchase?
A. PS Financial, Inc. is inviting its stockholders to tender shares of its
common stock, $0.01 par value per share, at prices not in excess of
$14.50 nor less than $12.00 per share in cash, as specified by
stockholders tendering their shares, upon the terms and subject to the
conditions set forth in its offer to purchase, dated March 1, 2000, and
in the enclosed letter of transmittal, which together constitute the
"offer." PS Financial will determine the single per share price, not in
excess of $14.50 nor less than $12.00 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. PS Financial will select
the lowest purchase price that will allow it to buy 333,858 shares, or
the lesser number of shares that are tendered at prices not in excess
of $14.50 nor less than $12.00 per share. This type of issuer tender
offer is commonly referred to as a "modified dutch auction."
Q. What Is A "Modified Dutch Auction?"
A. A modified dutch auction is a process whereby a company makes a direct
tender offer to its own stockholders to purchase a specified number of
shares of its stock within a specified price range per share, and pays
the highest price at which it accepts shares to all stockholders whose
shares are accepted. In this case, PS Financial is making a direct
offer to all of its stockholders to purchase in the aggregate 333,858
shares of its common stock at a price not in excess of $14.50 nor less
than $12.00 per share. This process allows each stockholder to elect
whether to sell stock, and the price the stockholder is willing to sell
at within the given price range. After receiving tenders of shares, at
the termination of the offer, PS Financial will choose the lowest price
within the specified range that will permit it to purchase the amount
of securities sought and this price will become the purchase price.
Q. What Will Be The Final Purchase Price?
A. All shares acquired in the offer will be acquired at the purchase
price. PS Financial will select the lowest purchase price that will
allow it to buy up to 333,858 shares. All stockholders tendering at or
below the purchase price will receive the price per share. For example,
if 133,858 shares are tendered at $12.00 per share, 200,000 shares are
tendered at $13.50 per share and 200,000 are tendered at $14.50 per
share, 333,858 shares will be purchased at $13.50 per share from the
persons who tendered at $12.00 and $13.50, and the 200,000 shares
tendered at $14.50 per share will be returned and not purchased.
1
Q. What Will Happen If More Than 333,858 Shares Are Tendered At Or Below
The Purchase Price?
A. In the event more than 333,858 shares are tendered at or below the
purchase price, shares tendered at or below the purchase price will be
acquired by PS Financial (i) first from any stockholder who owned
beneficially, as of the close of business on February 23, 2000 and
continues to own beneficially as of the termination of the offer, an
aggregate of fewer than 100 shares and who validly tenders all of the
shares, and (ii) then from all other tendering stockholder subject to
proration.
Q. At What Price May I Tender My shares?
A. Stockholders may elect to tender their shares in increments of a
quarter of a dollar ($.25) starting at $12.00 per share up to and
including $14.50 per share. The election as to the number of shares and
the price a stockholder is willing to tender are to be indicated on the
letter of transmittal.
Q. How Do I Tender My shares?
A. If you hold your shares in certificate form, you must return a properly
completed letter of transmittal (the blue form) and any other documents
required by the letter of transmittal, together with the certificates
for the shares being tendered, to the depositary, First Bankers Trust
Co., which must be received by them by 5:00 p.m. New York City time on
March 29, 2000.
Q. How Do I Tender My Shares If My Shares Are Held By My Broker?
A. If your shares are registered in street name with a broker, dealer,
commercial bank, trust company or other nominee, you will need to
contact your broker, bank or other nominee and instruct the nominee to
make the tender of your shares for you. You cannot tender your shares
using the letter of transmittal even though you may have received one
for your information.
If you are a broker and are tendering shares in book-entry form for
your customers, you must comply with the book-entry delivery procedure
described in Section 3 of the offer to purchase.
Q. What Do I Do If I Have Lost My Certificates, Or If They Have Been
Mutilated, Destroyed Or Stolen, But I Still Want To Tender Them?
A. Call the depositary at (217) 228-8063 for instructions for tendering
shares in these circumstances.
Q. Do I Have To Sell My Stock To PS Financial?
A. No. A stockholder is not required to tender any stock.
2
Q. What Happens If I Do Not Tender My Stock To PS Financial To Purchase?
A. Nothing will happen if you do not tender any or all of your shares.
Your shares will remain outstanding without a change in the terms or
ownership rights. You will continue to own the same number of shares
without any adjustment, and you will continue to receive the same
dividend and voting rights. However, since PS Financial will purchase
up to 333,858 of its outstanding shares, the percentage of the
outstanding stock which you own will increase because the number of
outstanding shares will be reduced.
Q. What If The Terms Of The Offer Change?
A. In the event the expiration date is extended or if the terms of the
offer are materially changed, PS Financial will generally give notice
of the change and for a period of at least 5 business days, and under
certain circumstances at least 10 business days, from the notice
stockholders will be able to change or withdraw their tender.
Q. Can I Tender Part Of My Stock At Different Prices?
A. Yes, you can elect to tender part of your stock at one price and an
additional amount at a second price. For example, if you owned 1,500
shares, you could tender 500 shares at $12.00, 500 shares at $14.00 and
keep the remaining 500 shares. However, you cannot tender the same
stock at different prices. In the prior example, the stockholder owning
1,500 shares cannot tender 1,500 at $12.00 and 1,500 at $14.00. If you
tender some shares at one price and other shares at a different price,
you must use a separate letter of transmittal for each price.
Q. Is There Any Brokerage Commission?
A. No. PS Financial will purchase stock directly from each stockholder at
the purchase price without the use of a broker.
Q. Can I Change Or Cancel My Tender?
A. You may increase or decrease the number of shares indicated in the
letter of transmittal or withdraw it entirely up until 5:00 p.m. on
March 29, 2000. Generally after March 29, 2000, you cannot withdraw
your tender. If you desire to change or withdraw your tender, you are
responsible to make certain that a valid withdrawal is received by the
March 29, 2000 deadline. Except as discussed in the offer to purchase,
tenders are irrevocable after the March 29, 2000 deadline.
Q. Can You Summarize The Process By Which shares Are Validly Tendered?
A. Generally, for certificated shares you must complete the letter of
transmittal (the blue form) as follows:
- List the certificates and the number of shares that you are
tendering in the box captioned "Description of shares Tendered".
3
- Check the box specifying the price at which you are tendering in
the box captioned "Price (in Dollars) Per share at Which shares
are Being Tendered".
- If you want to give us special payment instructions, complete the
box captioned "Special Payment Instructions".
- If you want to give us special delivery instructions, complete the
box captioned "Special Delivery Instructions".
- If you are an odd lot holder who is tendering all your shares,
complete the box captioned "Odd Lots".
- If you want to make a conditional tender of shares, complete the
box captioned "Conditional Tenders".
- If your shares are being delivered by book-entry, complete the box
captioned "Box Below for Use By Eligible Institutions Only".
- Complete substitute Form W-9 to certify your tax identification
number.
- Sign the letter of transmittal in the box captioned "Sign Here"
(in certain circumstances, signatures must be guaranteed in this
box).
You must deliver your share certificates or comply with the book-entry
delivery requirements. See section 3 of the offer to purchase. These
documents must be received by the depositary, First Bankers Trust Co.,
no later than 5:00 p.m. on March 29, 2000. If you are tendering shares
held by a broker, commercial bank, trust company or other nominee, your
instructions must be given to your nominee who will, on the basis of
your instructions, tender shares for you. Please see Section 3 and the
letter of transmittal for more details about how to tender shares.
Q. How Can I Get More Information?
A. If you have a question, please call our information agent/dealer
manager, Keefe, Bruyette & Woods at (877) 298-6520, from 8:30 a.m. -
5:30 p.m., eastern time, Monday through Friday.
This brochure is neither an offer to purchase nor a solicitation of an offer to
sell securities. The offer to purchase the stock of PS Financial is made only by
the PS Financial offer to purchase document dated March 1, 2000 and the
accompanying letter of transmittal.
4
EXHIBIT (A)(2)-6
CONTACTS: Kimberly P. Rooney, President and CEO Patricia A. McJoynt
of PS Financial, Inc. Keefe, Bruyette & Woods, Inc.
(773) 376-3800 (877) 298-6520
Immediate
March 1, 2000
PS FINANCIAL, INC. OFFERS TO BUY
UP TO 333,858 SHARES OF ITS COMMON STOCK
CHICAGO, ILLINOIS: PS Financial, Inc. (NASDAQ NMS: PSFI) announced today that
its Board of Directors has authorized the repurchase of up to 333,858 shares of
its common stock, which represents 20 percent of its 1,669,290 outstanding
shares. The repurchase will be made through a "modified dutch auction tender."
Under this procedure, PS Financial stockholders will be given the opportunity to
sell part or all of their shares to the Company at a price of not less than
$12.00 per share and not more than $14.50 per share. This price range represents
a 7.8 percent premium to a 30.3 percent premium to the February 25, 2000 closing
price of $11.13 per share. Based upon the minimum and maximum offering prices
specified in the offer, the aggregate purchase price, if 333,858 shares are
purchased, would range from $4.0 million to $4.8 million. The offer to purchase
shares will expire at 5:00 p.m. New York City time on March 29, 2000 unless
extended by the Company.
Under the procedures for a modified dutch auction tender, stockholders
may offer to sell all or a portion of the shares they own at a price not more
than the maximum price ($14.50) nor less than the minimum price ($12.00)
specified in the tender. Upon the expiration of the offer, PS Financial, Inc.
will select the lowest purchase price that will allow it to buy 333,858 shares.
All shares purchased in the offer will receive the same price. If the number of
shares tendered is equal to or less than 333,858 shares, the purchase price will
be the highest price specified by tendering stockholders. If the number of
shares tendered is greater than the number sought, the Company will select the
lowest price that will allow it to buy the number of shares it seeks.
Kimberly P. Rooney, PS Financial's President and Chief Executive
Officer, stated, "PS Financial is making the tender offer because its Board of
Directors believes that the purchase of shares pursuant to the offer should have
beneficial effects on stockholder value while maintaining a strong capital base
to support the needs of our business and our customers. After studying a number
of alternatives, we selected the modified dutch auction tender because it is a
positive action that has the potential for improving stockholder returns in an
expeditious manner. Based upon pro forma financial analyses, the purchase of
shares should have the effect of increasing earnings per share and raising the
return on stockholders' equity."
PS Financial, Inc. is a savings and loan holding company based in
Chicago, Illinois and has approximately $121 million in total assets. Its
subsidiary bank, Preferred Savings Bank has one office serving the southwest
side of Chicago and Cook County, Illinois.
1
Keefe, Bruyette & Woods, Inc. will act as the dealer manager and
information agent for the offer, and First Bankers Trust Co. will be the
depositary for the shares tendered. Questions to or requests for assistance may
be directed to Keefe, Bruyette & Woods, Inc., toll free at (877) 298-6520.
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell shares of PS Financial, Inc. common stock. The offer is made
solely by the offer to purchase dated March 1, 2000 and the related letter of
transmittal.
2
EXHIBIT (A)(2)-7
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell shares of PS Financial, Inc. common stock. The offer is made solely by
the offer to purchase, dated March 1, 2000, and the related letter of
transmittal, copies of which may be obtained from the information agent.
PS FINANCIAL, INC.
Offers to
Purchase For Cash up to 333,858 Shares of its
Common Stock
At a Purchase Price Not Greater Than $14.50 Nor Less
Than $12.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON MARCH 29, 2000,
UNLESS THE OFFER IS EXTENDED.
The information agent and dealer manager for the offer is:
KEEFE, BRUYETTE & WOODS, INC.
211 Bradenton Drive
Dublin, Ohio 43017-5034
(877) 298-6520 (toll free)