As filed with the Securities and Exchange Commission on March 27, 2000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to
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.
(Name of Subject Company (issuer))
PS FINANCIAL, INC. - ISSUER
(Names of Filing Persons (identifying status as offeror,
issuer or other person))
Commons Stock, $0.01 Par Value Per Share
(Title of Class of Securities)
74437V109
(CUSIP Number of Class of Securities)
Kimberly P. Rooney
PS Financial, Inc.
4800 South Pulaski Road
Chicago, Illinois 60632
(312) 376-3800
(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
(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
- --------------------------------------------- ---------------------------------
* 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.
[X] 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: $969 Filing Party: PS Financial, Inc.
Form or Registration No.: Schedule TO Date Filed: March 1, 2000
5-49479
[ ] 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 12. Exhibits.
(a) (1) Amended 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.
(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 27, 2000 PS FINANCIAL, INC.
By: /s/ Kimberly P. Rooney
--------------------------------------
Kimberly P. Rooney
President and Chief Executive Officer
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..........................................18
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. If you
wish to sell without specifying a price, you may check the appropriate
box on the accompanying letter of transmittal and your shares will be
considered to be tendered at the purchase price determined by PS
Financial. See "Number of Shares; Proration" on page 2 and "Procedures
for Tendering Shares" on page 3 of this offer to purchase and the
letter of transmittal.
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 PS Financial 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, September 30, 1999
------------------------ ---------------------------
$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 up to $1.0 million in borrowings
and the sale of marketable securities held in our portfolio. The borrowing will
be from a third party financial institution located in the Chicago, Illinois
area. It will be an interest only loan, at the rate of LIBOR plus 200 basis
points, with a one year term, and it will be secured by the stock of Preferred
Savings. It is currently anticipated that the loan will be repaid through
earnings and the proceeds from the maturity 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;
16
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;
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.
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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 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.
18
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 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
19
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.
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
20
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 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
21
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 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
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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
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