-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B57O6t+AkFHmrwBT5fwGbOsz4TUodFg1ZqMfgztMfe0DWNc6/ECyF695NmCljdS4 BPfhoPl+5giEL6BoVQDeqQ== 0000912057-96-027338.txt : 19961125 0000912057-96-027338.hdr.sgml : 19961125 ACCESSION NUMBER: 0000912057-96-027338 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961120 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961122 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PALFED INC CENTRAL INDEX KEY: 0000793075 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 570821295 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15334 FILM NUMBER: 96670999 BUSINESS ADDRESS: STREET 1: PO BOX 1116 CITY: AIKEN STATE: SC ZIP: 29802 BUSINESS PHONE: 8036421400 MAIL ADDRESS: STREET 1: PO BOX 1116 CITY: AIKEN STATE: SC ZIP: 29802 8-K 1 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 20, 1996 PALFED, Inc. - --------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) South Carolina 0-15334 57-0821925 --------------------------------------------------------------------------- (STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.) 107 Chesterfield Street South Aiken, South Carolina 29801 - ----------------------------------------------- ------------ (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) Registrant's telephone number, including area code: (803) 642-1400 Page 1 of 6 sequentially numbered pages The Index to Exhibits is on page 4. ITEM 5. OTHER EVENTS. PALFED, Inc. (the "Company"), the parent savings and loan holding company of Palmetto Federal Savings Bank of South Carolina, announced on November 20, 1996 that it had received a shareholder proposal from Mid-Atlantic Investors for inclusion in the Company's Proxy Statement for the 1997 Annual Meeting of Shareholders. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) FINANCIAL STATEMENTS None. (b) PRO FORMA FINANCIAL STATEMENTS None. (c) EXHIBITS Exhibit 28.1 PALFED, Inc. Press Release dated November 20, 1996. Exhibit 28.2 Shareholder Resolution and Supporting Statement. Exhibit 28.3 Letter dated November 13, 1996 from Mid-Atlantic Investors. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PALFED, INC. By: /s/ John C. Troutman -------------------------------------- John C. Troutman President and Chief Executive Officer and Chief Financial Officer Date: November 20 , 1996 INDEX TO EXHIBITS Sequentially Numbered Page ------------- 28.1 Press Release dated November 20, 1996 28.2 Shareholder Resolution and Supporting Statement 28.3 Letter dated November 13, 1996 from Mid-Atlantic Investors. EX-28.1 2 EXHIBIT 28.1 EXHIBIT 28.1 PALFED, Inc. Press Release For More Information Call: PALFED, INC. 107 Chesterfield Street S. Aiken, South Carolina 29801 John C. Troutman President and CEO (803) 642-1433 Howard M. Hickey, Jr. Executive Vice President and General Counsel (803) 642-1437 November 20, 1996 FOR IMMEDIATE RELEASE AIKEN, South Carolina, November 20, 1996 -- PALFED, INC. (Nasdaq:PALM) ("PALFED" or the "Company") announced that it received a shareholder proposal from Mid-Atlantic Investors for inclusion in the Company's Proxy Statement for the 1997 Annual Meeting of Shareholders. Mid-Atlantic's proposal, which, if adopted, would not be binding on the Company, calls for PALFED's Board of Directors "immediately to take the necessary steps to achieve a sale, merger or other acquisition of the Company." Jerry Zucker, a partner of Mid-Atlantic Investors, joined in the proposal. According to a Schedule 13D filing with the Securities and Exchange Commission, Mid-Atlantic and its partners, Messrs. Zucker and Jerry Shearer, own 474,000 shares or 9.1% of the Company's outstanding stock. In a separate letter to John Troutman, PALFED's President and Chief Executive Officer, Mid-Atlantic Investors offered to withdraw its proposal if PALFED's Board of Directors promptly elected M. Jerry Garfinkle as a director of PALFED, formed a Merger and Acquisitions Committee of the Board with Mr. Garfinkle as a member of this Committee, and engaged an investment advisor skilled in mergers. Mr. Troutman commented, "We believe the Company's current strategy of growth will build long-term shareholder value and the directors have no intention to abandon that strategy and sell the Company solely to satisfy the demands of Mid-Atlantic and Messrs. Shearer and Zucker. "The Board of Directors unanimously opposes the resolution and believes a forced sale of a company is never in the best interest of the shareholders. The Company already has a Strategic Alternatives Committee which considers mergers and acquisitions and also has engaged an investment advisor skilled in such matters. The Company will not be coerced into ill-advised action to satisfy the greed of a minority shareholder." Mr. Troutman also added that the Board of Directors has previously considered Mid-Atlantic's request to add Jerry Garfinkle, Assistant General Counsel with Mr. Zucker's Intertech group, to the Board. The Board found that Mr. Garfinkle does not have the corporate or community presence to represent the Company in Charleston and could not possibly represent the interests of all the shareholders as an attorney of Mr. Zucker. Jerry Zucker was offered the opportunity to be a candidate for the Board and rejected that offer because he "doesn't have the time." PALFED, Inc. is a South Carolina corporation whose principal subsidiary, Palmetto Federal Savings Bank of South Carolina, operates 21 banking and eight mortgage lending offices in South Carolina and one mortgage lending office in Georgia. At September 30, 1996, PALFED had $659.8 million in total assets and deposits of $521.4 million. PALFED's common stock is traded on the Nasdaq National Market under the symbol "PALM." EX-28.2 3 EXHIBIT 28.2 EXHIBIT 28.2 PALFED, INC. SHAREHOLDER RESOLUTION 1997 ANNUAL MEETING RESOLVED, that the shareholders hereby inform the board of directors that it is the desire of the shareholders that the board of directors immediately take the necessary steps to achieve a sale, merger or other acquisition of the Company on terms that will maximize shareholder value as promptly as possible. SUPPORTING STATEMENT OF PROPOSED SHAREHOLDER: We believe that a prompt sale of the Company will result in the greatest return to shareholders with the least amount of risk in the near term. Accordingly, we recommend a vote FOR the proposal to sell the Company. It is important for the shareholders to tell management what the shareholders want. Without consulting the shareholders, management formed a Strategic Alternatives Committee in 1995 to "explore and evaluate the enhancement of long-term shareholder value". Apparently, the Committee "concluded that expansion of the Company's franchise coupled with efforts to increase earnings can best accomplish this goal." Although the decision of the Committee was reported to the shareholders before the 1996 annual meeting, the shareholders were not asked to approve this major decision which affects all of the shareholders. Shareholders also were not advised of the anticipated cost of pursuing this strategy or whether management also evaluated a sale of the Company as an alternative strategy. We believe management's expansion strategy will be expensive, will depress returns on equity, and will drain away current shareholder value in exchange for an elusive expectation of long-term shareholder value. Furthermore, based on historical performance, there is no reason to believe that the stated goals can realistically be expected to be attained in the near future. A good measure of earnings performance is the return on shareholder equity ("ROE"). For fiscal years 1991 through 1995, the Company's ROE's, respectively, were 1.98%, 6.86%, minus 31.94%, 8.35% and 8.54%. Compared to other institutions in South Carolina, this is not high performance. For example, American Federal, an S & L headquartered in Greenville, South Carolina, reported ROE's of 13.35%, 16.40%, 17.70%, 17.81% and 16.14%, respectively, for 1991-1995. The Company is principally engaged in the classic savings and loan business of taking deposits and making mortgage loans. These are very competitive activities which have been substantially affected by technological changes in recent years. We believe that the Company's present franchise, i.e., its customer base, is presently of substantial value to potential acquirors. Whether this will continue to be true in the future is simply a gamble. It is very conceivable that technological change could substantially reduce the value of the Company's franchise over the long-term. It will probably be years before the Company attains a substantial market share as a result of its planned expansion in the larger Charleston and Columbia markets. In the meanwhile, the value of such a share may diminish. Simply put, neither we nor management know what the future will hold. However, we believe that the Company could presently be sold for a substantial premium over its "go it alone" value. That makes more sense to us than a risky bet on the long-term future of the Company. The better long-term bet is for a merger with another financial institution with a proven record of above average performance and with greater geographic diversity. Please vote FOR the proposal. This is your Company and your future. -2- EX-28.3 4 EXHIBIT 28.3 EXHIBIT 28.3 Mid-Atlantic Investors A.S.C. General Partnership Tel. 803-749-7888 P.O. Box 7674 FAX 803-749-7090 Columbia, South Carolina 29202 November 13, 1996 Mr. John C. Troutman President and CEO PALFED, Inc. 107 Chesterfield Street South Aiken, SC 29801-4501 Via FedEx Dear Mr. Troutman: Mid-Atlantic Investors has sought to have Mr. Jerry Garfinkle elected to the Board. Mid-Atlantic Investors and its partners own almost 10% of the Company's stock and would like for Mr. Garfinkle to be one of the Company's eleven directors. We believe the Company's response regarding Mr. Garfinkle's election has been vague and action to elect him unnecessarily slow. Such inaction has caused us to move ahead with other available alternatives. In our resolve to maximize shareholder value, today we notified the Company's Corporate Secretary that we intend to promote a "sell the bank proposal" at the next annual meeting. Our proposal opens the door for what very well may be an expensive and time consuming proxy contest. It need not be so; however, we are up to the task. Mid-Atlantic Investors is prepared to withdraw its shareholder proposal provided that 1) Mr. Garfinkle is elected promptly to the Board, 2) a Mergers and Acquisitions Committee of the Board is formed forthwith with Mr. Garfinkle as a member, and 3) an advisor skilled in mergers is engaged. Sincerely, Jerry Shearer Managing Partner cc: Mr. Jerry Zucker -----END PRIVACY-ENHANCED MESSAGE-----