<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
DIME COMMUNITY BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
[LOGO]
DIME COMMUNITY BANCORP
October 6, 1997
Dear Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of Shareholders
(the "Annual Meeting") of Dime Community Bancorp, Inc. (the "Company"), the
holding company for The Dime Savings Bank of Williamsburgh, Brooklyn, New
York, which will be held on November 13, 1997 at 10:00 a.m., local time, at
Giando on the Water, 400 Kent Avenue, Brooklyn, New York 11211.
The attached Notice of the 1997 Annual Meeting of Shareholders and Proxy
Statement describe the business to be transacted at the Annual Meeting.
Directors and officers of the Company, as well as a representative of Deloitte
& Touche LLP, the accounting firm appointed by the Board of Directors to be
the Company's independent auditors for the fiscal year ending June 30, 1998,
will be present at the Annual Meeting to respond to appropriate questions.
The Board of Directors of the Company has determined that an affirmative
vote on each matter to be considered at the Annual Meeting is in the best
interests of the Company and its shareholders and unanimously recommends a
vote "FOR" each of these matters.
Please complete, sign and return the enclosed proxy card promptly, whether
or not you plan to attend the Annual Meeting. YOUR VOTE IS IMPORTANT
REGARDLESS OF THE NUMBER OF SHARES YOU OWN. VOTING BY PROXY WILL NOT PREVENT
YOU FROM VOTING IN PERSON AT THE ANNUAL MEETING, BUT WILL ASSURE THAT YOUR
VOTE IS COUNTED IF YOU ARE UNABLE TO ATTEND. IF YOU ARE A SHAREHOLDER WHOSE
SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL
DOCUMENTATION FROM YOUR RECORD HOLDER TO ATTEND AND TO VOTE PERSONALLY AT THE
ANNUAL MEETING. EXAMPLES OF SUCH DOCUMENTATION INCLUDE A BROKER'S STATEMENT,
LETTER OR OTHER DOCUMENT CONFIRMING YOUR OWNERSHIP OF SHARES OF THE COMPANY.
On behalf of the Board of Directors and the employees of Dime Community
Bancorp, Inc. and The Dime Savings Bank of Williamsburgh, we thank you for
your continued support and hope to see you at the Annual Meeting.
Sincerely yours,
/s/ Vincent F. Palagiano
-----------------------------
Vincent F. Palagiano
Chairman of the Board
and Chief Executive Officer
<PAGE>
DIME COMMUNITY BANCORP, INC.
209 HAVEMEYER STREET
BROOKLYN, NEW YORK 11211
(718) 782-6200
NOTICE OF THE 1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 13, 1997
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders of Dime
Community Bancorp, Inc. (the "Company") will be held at Giando on the Water,
400 Kent Avenue, Brooklyn, New York 11211, on November 13, 1997 at 10:00 a.m.,
local time, to consider and vote upon the:
1.Election of four directors for terms of three years each;
2. Approval of Amendments to the Dime Community Bancorp, Inc. 1996 Stock
Option Plan for Outside Directors, Officers and Employees;
3. Approval of Amendments to the Recognition and Retention Plan for Outside
Directors, Officers and Employees of Dime Community Bancorp, Inc.;
4. Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending June 30, 1998;
and
5. Authorization of the Board of Directors, in its discretion, to direct
the vote of proxies upon such other matters incident to the conduct of
the Annual Meeting as may properly come before the Annual Meeting, and
any adjournment or postponement thereof, including, without limitation,
a motion to adjourn the Annual Meeting. Please note that the Company is
not aware of any such business.
The Board of Directors has fixed September 22, 1997 as the record date for
the determination of shareholders entitled to notice of and to vote at the
Annual Meeting and any adjournment or postponement thereof. Only shareholders
of record at the close of business on that date will be entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
A list of such shareholders will be available for inspection at the office of
the Company for 10 days prior to the Annual Meeting.
By Order of the Board of Directors
/s/ Kenneth J. Mahon
Kenneth J. Mahon
Executive Vice President, Chief
Financial Officer and Secretary
Brooklyn, New York
October 6, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. THE BOARD OF DIRECTORS URGES YOU TO MARK, SIGN AND DATE THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. RETURNING THE
PROXY CARD WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE
ANNUAL MEETING.
<PAGE>
DIME COMMUNITY BANCORP, INC.
PROXY STATEMENT FOR THE
1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 13, 1997
GENERAL INFORMATION
GENERAL
This Proxy Statement and accompanying proxy card are being furnished to the
shareholders of Dime Community Bancorp, Inc. (the "Company") in connection
with the solicitation of proxies by the Board of Directors of the Company from
holders of the shares of the Company's issued and outstanding common stock,
par value $.01 per share (the "Common Stock"), as of the close of business on
September 22, 1997 (the "Record Date"), for use at the 1997 Annual Meeting of
Shareholders of the Company to be held on November 13, 1997 at Giando on the
Water, 400 Kent Avenue, Brooklyn, New York, at 10:00 a.m., local time, and at
any adjournment or postponement thereof (the "Annual Meeting"). This Proxy
Statement, together with the enclosed proxy card, is first being mailed to
shareholders on or about October 7, 1997.
On June 26, 1996, the Company became the holding company for The Dime
Savings Bank of Williamsburgh (the "Bank") upon completion of the Bank's
conversion from the mutual form of organization into the stock form of
organization (the "Conversion"). The Company, a Delaware corporation, operates
as a unitary savings association holding company for its wholly-owned
subsidiary, the Bank.
RECORD DATE AND VOTING RIGHTS
The Board of Directors of the Company has fixed the close of business on
September 22, 1997 as the record date for the determination of the Company's
shareholders entitled to notice of, and to vote at, the Annual Meeting.
Accordingly, only holders of record of shares of Common Stock at the close of
business on such date will be entitled to vote at the Annual Meeting. On the
Record Date, there were 12,624,750 shares of Common Stock issued and
outstanding. The presence, in person or by proxy, of the holders of at least a
majority of the total number of outstanding shares of Common Stock entitled to
vote at the Annual Meeting is necessary to constitute a quorum thereat.
Each holder of shares of Common Stock outstanding on the Record Date will be
entitled to one vote for each share held of record (other than Excess Shares
as defined below) at the Annual Meeting. As provided in the Company's
Certificate of Incorporation, record holders (other than any compensation plan
maintained by the Company and certain others) of Common Stock who beneficially
own in excess of 10% of the outstanding shares of Common Stock ("Excess
Shares") shall be entitled to cast only one-hundredth of one vote per share
for each Excess Share. A person or entity is deemed to beneficially own shares
owned by an affiliate or associate as well as by persons acting in concert
with such person or entity. The Company's Certificate of Incorporation
authorizes the Board of Directors to interpret and apply the provisions of the
Certificate of Incorporation and Bylaws governing Excess Shares, and to
determine on the basis of information known to them after reasonable inquiry
all facts necessary to ascertain compliance with the Certificate of
Incorporation, including, without limitation, (i) the number of shares of
Common Stock beneficially owned by any person or purported owner, (ii) whether
a person or purported owner is an affiliate or associate of, or is acting in
concert with, any other person or purported owner and (iii) whether a person
or purported owner has an agreement or understanding with any person or
purported owner as to the voting or disposition of any shares of Common Stock.
All properly executed proxies received by the Company will be voted in
accordance with the instructions indicated thereon. IF NO INSTRUCTIONS ARE
GIVEN, EXECUTED PROXIES WILL BE VOTED FOR ELECTION OF EACH OF THE FOUR
NOMINEES FOR DIRECTOR, AND FOR EACH OTHER PROPOSAL IDENTIFIED IN THE NOTICE OF
THE 1997 ANNUAL MEETING OF SHAREHOLDERS. Management is not aware of any
matters other than those set forth in the Notice of the 1997 Annual Meeting of
Shareholders that may be brought before the Annual Meeting. See "Proposal 5."
<PAGE>
IF YOU ARE A SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME,
YOU WILL NEED APPROPRIATE DOCUMENTATION FROM YOUR SHAREHOLDER OF RECORD TO
VOTE PERSONALLY AT THE ANNUAL MEETING. Examples of such documentation would
include a broker's statement, letter or other document that will confirm your
ownership of shares of the Company.
VOTE REQUIRED
Directors are elected by a plurality of the votes cast in person or by proxy
at the Annual Meeting. The holders of Common Stock may not vote their shares
cumulatively for the election of directors. Proposals 2, 3, 4 and 5 each
requires the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock represented, in person or by proxy, and entitled to
vote at the Annual Meeting.
Shares as to which the "ABSTAIN" box has been selected on the Proxy Card
with respect to all matters except the election of directors will be counted
as present and entitled to vote and will have the effect of a vote against the
proposal. In contrast, shares underlying broker non-votes will not be counted
as present and entitled to vote and will have no effect on the vote on such
matters presented.
REVOCABILITY OF PROXIES
A proxy may be revoked at any time before it is voted by filing a written
revocation of the proxy with the Secretary of the Company or by submitting a
duly executed proxy bearing a later date. A proxy also may be revoked by
attending and voting at the Annual Meeting, if a written revocation is filed
with the Secretary of the Annual Meeting prior to the voting of such proxy.
SOLICITATION OF PROXIES
The Company will bear the costs of soliciting proxies from its shareholders.
In addition to the use of mail, proxies may be solicited by officers,
directors or employees of the Company and the Bank, by telephone or through
other forms of communication. The Company will also request persons, firms and
corporations holding shares in their names or in the name of their nominees,
which are beneficially owned by others, to send proxy materials to and obtain
proxies from such beneficial owners, and will reimburse such holders for
reasonable expenses incurred in connection therewith. In addition, the Company
has retained ChaseMellon Shareholder Services, L.L.C. to assist in the
solicitation of proxies. The estimated cost of such solicitation is $4,500
plus reimbursement for reasonable out-of-pocket expenses.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Certain terms of the stock options and restricted stock awards granted to
directors, officers and employees of the Company and the Bank will be modified
if shareholders approve the proposed amendments to each the Dime Community
Bancorp, Inc. 1996 Stock Option Plan for Outside Directors, Officers and
Employees (the "Option Plan") and to the Recognition and Retention Plan for
Outside Directors, Officers and Employees of Dime Community Bancorp, Inc. (the
"RRP"). For complete descriptions of these plans and proposed amendments, see
"Proposal 2" and "Proposal 3."
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table sets forth, as of August 31, 1997, certain information
as to Common Stock beneficially owned by persons owning in excess of 5% of the
outstanding shares of Common Stock. Management knows of no person, except as
listed below, who beneficially owned more than 5% of the Company's outstanding
shares of Common Stock as of August 31, 1997. Except as otherwise indicated,
the information provided in the following table was obtained from filings with
the Securities and Exchange Commission (the "SEC") and with the Company
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Addresses provided are those listed in the filings as the address of
the person authorized to receive notices and communications. For purposes of
the table below and the table set forth under "Security Ownership of
Management," in accordance with Rule 13d-3 under the Exchange Act, a person is
deemed to be the beneficial owner, for purposes of this table, of any shares
of Common Stock (1) over which he has or shares, directly or indirectly,
voting or investment power, or (2) of which he has the right to acquire
beneficial ownership at any time within 60 days after August 31, 1997. As used
herein, "voting power" is the power to vote or direct the voting of shares and
"investment power" includes the power to dispose or direct the disposition of
such shares. Unless otherwise noted, each beneficial owner has sole voting and
sole investment power over the shares beneficially owned.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT
------------------- -------------------- -------
<S> <C> <C>
The Employee Stock Ownership Plan Trust
of Dime Community Bancorp, Inc. and
Certain Affiliates........................... 1,163,800(1) 9.21%
140 Broadway, 11th Floor
New York, NY 10005
Janus Capital Corporation(2).................. 887,700 7.03%
100 Filmore Street
Denver, CO 80206
Fiduciary Trust Company International(3)...... (3) (3)
Two World Trade Center
New York, NY 10048
</TABLE>
- --------
(1) The Employee Stock Ownership Plan ("ESOP") is administered by a committee
of the Company's Board of Directors (the "ESOP Committee"). The ESOP's
assets are held in a trust (the "ESOP Trust") for which Marine Midland
Bank serves as trustee (the "ESOP Trustee"). The ESOP Trust purchased
these shares with funds borrowed from the Company and initially placed
these shares in a suspense account for release and allocation to
participants' accounts in annual installments. As of June 30, 1997,
131,400 shares held by the ESOP Trust have been allocated. The terms of
the ESOP provide that, subject to the ESOP Trustee's fiduciary
responsibilities under the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the ESOP Trustee will vote, tender or exchange
shares of Common Stock held in the ESOP Trust in accordance with
instructions received from the participants. The ESOP Trustee will vote
allocated shares as to which no instructions are received and any shares
that have not been allocated to participants' accounts in the same
proportion as allocated shares with respect to which the ESOP Trustee
receives instructions are voted. The ESOP Trustee will tender or exchange
any shares in the suspense account or that otherwise have not been
allocated to participants' accounts in the same proportion as allocated
shares with respect to which the ESOP Trustee receives instructions are
tendered or exchanged. With respect to allocated shares as to which no
instructions are received, the ESOP Trustee will be deemed to have
received instructions not to tender or exchange such shares. Except as
described above, the ESOP Committee has sole investment power, except in
limited circumstances, but no voting power over all Common Stock held in
the ESOP Trust.
(2) Janus Capital Corporation ("JCC") filed a Schedule 13F with the SEC
disclosing its holdings as of June 30, 1997. JCC is an Investment Advisor
registered under Section 203 of the Investment Advisors Act of 1940, as
amended (an "Investment Advisor"), for Janus Growth and Income Fund, a
mutual fund.
(3) Fiduciary Trust Company International ("FTC") filed a Schedule 13F with
the SEC as of June 30, 1997, disclosing its ownership of 768,000 of Common
Stock, or 6.08% of the Common Stock outstanding as of August 31, 1997. FTC
is a Bank as defined in Section 3(a)(6) of the Exchange Act. FTC
subsequently filed a Schedule 13G with the SEC dated as of September 3,
1997 stating that it sold shares of Common Stock, bringing its holdings to
less than five percent.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the shares of
Common Stock beneficially owned by each director of the Company, by each named
executive officer of the Company identified in the Summary Compensation Table
included elsewhere herein, and all directors and executive officers of the
Company or the Company's wholly-owned subsidiary, the Bank, as a group as of
August 31, 1997. Except as otherwise indicated, each person and each group
shown in the table has sole voting and investment power with respect to the
shares of Common Stock indicated.
<TABLE>
<CAPTION>
PERCENT OF
AMOUNT AND NATURE COMMON
POSITION WITH OF BENEFICIAL STOCK
NAME THE COMPANY(1) OWNERSHIP(2)(3)(4)(5) OUTSTANDING
---- -------------- --------------------- -----------
<S> <C> <C> <C>
Vincent F. Palagiano.... Director, Chairman of 162,346(6) 1.28%
the Board and Chief
Executive Officer
Michael P. Devine....... Director, President and 115,846(7) *
Chief Operating Officer
Anthony Bergamo......... Director 30,870 *
George L. Clark, Jr..... Director 65,520(8) *
Steven D. Cohn.......... Director 26,020(9) *
Patrick E. Curtin....... Director 35,972(10) *
Joseph H. Farrell....... Director 45,870 *
Fred P. Fehrenbach...... Director 40,970(11) *
John J. Flynn........... Director 25,870 *
Malcolm T. Kitson....... Director 21,470 *
Stanley Meisels......... Director 25,970 *
Louis V. Varone......... Director 25,870 *
Kenneth J. Mahon........ Executive Vice 78,404 *
President, Chief
Financial Officer and
Secretary
Timothy B. King......... First Vice President and 40,648(12) *
Treasurer
All directors and executive officers as a group 1,931,314 15.29%
(18 persons)....................................
</TABLE>
- --------
* Less than one percent
(1) Titles are for both the Company and the Bank.
(2) See "Principal Shareholders of the Company" for a definition of
"beneficial ownership."
(3) The figures shown include shares held in trust pursuant to the ESOP that
have been allocated as of June 30, 1997 to individual accounts as
follows: Mr. Palagiano, 3,346 shares; Mr. Devine, 3,346 shares; Mr.
Mahon, 3,346 shares; Mr. King, 2,811 shares; and all directors and
executive officers as a group, 22,261 shares. Such persons have voting
power (subject to the legal duties of the ESOP Trustee) but no investment
power, except in limited circumstances, as to such shares. The figures
shown for Messrs. Palagiano, Devine, Mahon and King do not include any
portion of 1,032,400 shares held in trust pursuant to the ESOP that have
not been allocated to any individual's account and as to which Messrs.
Palagiano, Devine, Mahon and King share voting power with other ESOP
participants. The figure shown for all directors and executive officers
as a group includes such 1,032,400 shares as to which the members of the
Company's ESOP Committee (consisting of Messrs. Clark, Fehrenback,
Meisels and Varone) may be deemed to have sole investment power, except
in limited circumstances, thereby causing each such Committee member to
be deemed a beneficial owner of such shares. Each of the members of the
ESOP Committee disclaims beneficial ownership of such shares and,
accordingly, such shares are not attributed to the members of the ESOP
Committee individually. See "Compensation of Directors and Officers--
Benefits--Employee Stock Ownership Plan and Trust."
(4) The figures shown include shares held pursuant to The Dime Savings Bank
of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust in
individual accounts as of June 30, 1997: Mr. Palagiano, 20,000 shares;
Mr. Devine, 20,000 shares; Mr. Mahon, 18,692 shares; Mr. King, 4,930
shares; and all directors and executive officers as a group, 116,938
shares. Such persons have sole voting power and sole investment power as
to such shares. See "Compensation of Directors and Executive Officers --
Benefits--401(k) Plan."
(5) The figures shown include shares held in trust pursuant to the RRP that
have been awarded as of August 31, 1997 to individuals as follows: Mr.
Palagiano, 115,000 shares; Mr. Devine, 75,000 shares; each other
director, 15,870 shares; Mr. Mahon, 55,000 shares; Mr. King, 28,790
shares; and all directors and executive officers as a group, 519,530
shares. Such persons have sole voting power (subject to the legal duties
of the RRP Trustee) but no investment power, except in limited
circumstances, as to such shares.
(6) Includes 4,000 shares as to which Mr. Palagiano may be deemed to share
voting and investment power.
(7) Includes 17,500 shares as to which Mr. Devine may be deemed to share
voting and investment power.
(8) Includes 25,000 shares as to which Mr. Clark may be deemed to share
voting and investment power.
(9) Includes 100 shares as to which Mr. Cohn may be deemed to share voting
and investment power.
(10) Includes 838 shares as to which Mr. Curtin may be deemed to share voting
and investment power.
(11) Includes 100 shares as to which Mr. Fehrenbach may be deemed to share
voting and investment power.
(12) Includes 3,717 shares as to which Mr. King may be deemed to share voting
and investment power.
4
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
The Certificate of Incorporation and Bylaws of the Company provide for the
election of directors by the shareholders. For this purpose, the Board of
Directors of the Company is divided into three classes, each class to be as
nearly equal in number as possible. The terms of office of the members of one
class expire, and a successor class is to be elected, at each annual meeting
of shareholders. There are currently twelve directors of the Company, with a
vacant board seat created due to the death of James M. Fox, a director, in May
1997.
The terms of three directors and the term of the vacant board seat created
by Mr. Fox's death expire at the Annual Meeting. The three incumbent directors
with terms expiring at the Annual Meeting, Michael P. Devine, Anthony Bergamo
and Louis V. Varone, have been nominated by the Nominating Committee of the
Board of Directors to be re-elected at the Annual Meeting for three-year terms
expiring at the annual meeting of shareholders to be held in 2000, or when
their successors are otherwise duly elected and qualified. In addition, to
achieve equality among the three classes of directors, Mr. Joseph H. Farrell,
an incumbent director whose current term expires at the Annual Meeting of
Shareholders to be held in 1999, has been nominated to be elected to fill the
vacant board seat, for a three-year term expiring at the annual meeting of
shareholders to be held in 2000, or when his successor is otherwise duly
elected and qualified. Upon election at the Annual Meeting to the class of
directors with a term of office expiring in 2000, Mr. Farrell will
simultaneously resign his current board seat with a term expiring in 1999
thereby creating a vacancy in the class of directors with a term expiring in
1999. In such event, the Company will reduce the size of the board to
eliminate such vacancy. If Mr. Farrell is not elected to the class of
directors with a term of office expiring in 2000, Mr. Farrell will retain his
current board seat, and serve until the annual meeting of shareholders to be
held in 1999, or when his successor is otherwise duly elected and qualified.
Each nominee has consented to being named in this Proxy Statement and to serve
if elected.
The terms of the remaining two classes of directors expire at the annual
meetings of shareholders to be held in 1998 and 1999, respectively, or when
their successors are otherwise duly elected and qualified. In the event that
any nominee for election as a director at the Annual Meeting is unable or
declines to serve, which the Board of Directors has no reason to expect, the
persons named in the Proxy Card will vote with respect to a substitute nominee
designated by the present Board of Directors.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth certain information with respect to each
nominee for election as a director and each director whose term does not
expire at the Annual Meeting ("Continuing Director"). There are no
arrangements or understandings between the Company and any director or nominee
pursuant to which such person was elected or nominated to be a director of the
Company. For information with respect to security ownership of directors, see
"Security Ownership of Certain Beneficial Owners and Management--Security
Ownership of Management."
<TABLE>
<CAPTION>
POSITION(S) HELD WITH
DIRECTOR TERM THE
NOMINEES AGE(1) SINCE(2) EXPIRES COMPANY AND THE BANK
- -------- ----- -------- ------- ------------------------
<S> <C> <C> <C> <C>
Michael P. Devine............... 51 1980 1997 Director, President and
Chief
Operating Officer
Anthony Bergamo................. 51 1986 1997 Director
Joseph H. Farrell............... 66 1969 1999 Director
Louis V. Varone................. 67 1985 1997 Director
<CAPTION>
CONTINUING DIRECTORS
- --------------------
<S> <C> <C> <C> <C>
Vincent F. Palagiano............ 56 1978 1999 Director, Chairman of
the Board
and Chief Executive
Officer
George L. Clark, Jr............. 56 1980 1999 Director
Steven D. Cohn.................. 48 1994 1999 Director
Patrick E. Curtin............... 52 1986 1998 Director
Fred P. Fehrenbach.............. 60 1987 1998 Director
John J. Flynn................... 61 1994 1999 Director
Malcolm T. Kitson............... 69 1990 1998 Director
Stanley Meisels................. 67 1990 1998 Director
</TABLE>
(footnotes on following page)
5
<PAGE>
- --------
(1)As of August 31, 1997.
(2) Includes service as a Director or Trustee with The Dime Savings Bank of
Williamsburgh and predecessor institutions prior to the incorporation of
the Company on December 12, 1995.
The principal occupation and business experience of each nominee for
election as a director and each Continuing Director are set forth below.
Unless otherwise indicated, each of the following persons has held his present
position for the last five years.
NOMINEES FOR ELECTION AS DIRECTOR
Michael P. Devine has served as President of the Company and the Bank since
January 1, 1997 and Chief Operating Officer of the Bank since 1989. Prior to
Mr. Devine's appointment as President, he served as Executive Vice President
and Secretary of the Company and the Bank. Mr. Devine has served as a Director
of the Company since its formation in 1995 and as a Trustee or Director of the
Bank since 1980. Mr. Devine joined the Bank in 1971 and has served as the
Internal Auditor, Comptroller and Investment Officer. Prior to 1971, Mr.
Devine served as a Senior Accountant with the firm of Peat Marwick Mitchell &
Co.
Anthony Bergamo has served as a Director of the Company since its formation
in 1995 and as a Trustee or Director of the Bank since 1986. Mr. Bergamo is a
licensed attorney in New York and New Jersey and is an independent fiduciary.
Joseph H. Farrell has served as a Director of the Company since its
formation in 1995 and as a Trustee or Director of the Bank since 1969. Mr.
Farrell is Chairman of the law firm of Conway Farrell Curtin & Kelly, P.C. Mr.
Farrell is also President of the William F. Casey Foundation, which is a not-
for-profit real estate holding foundation. Mr. Farrell is a trial attorney for
the Roman Catholic Diocese of Brooklyn and Vice President of the New York
State Bar Association.
Louis V. Varone has served as a Director of the Company since its formation
in 1995 and as a Trustee or Director of the Bank since 1985. Mr. Varone has
been a licensed real estate broker for over 30 years. Mr. Varone is self-
employed as a principal in the firm of Century 21 Lewis & Clark Realty.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE NOMINEES FOR ELECTION AS DIRECTORS.
CONTINUING DIRECTORS
Vincent F. Palagiano has served as Chairman of the Board and Chief Executive
Officer of the Company since its formation and of the Bank since 1989. He has
served as a Trustee or Director of the Bank since 1978. In addition, Mr.
Palagiano served on the Board of Directors of the Institutional Investors
Mutual Fund since 1996. Mr. Palagiano joined the Bank in 1970 as an appraiser
and has also served as the Company's President and the Bank's President,
Executive Vice President, Chief Operating Officer and Chief Lending Officer.
Prior to 1970, Mr. Palagiano served in the real estate and mortgage
departments at other financial institutions and title companies.
George L. Clark, Jr. has served as a Director of the Company since its
formation in 1995 and as a Trustee or Director of the Bank since 1980. Mr.
Clark is President of George L. Clark Inc. (Realtors), a New York State
licensed real estate firm. Mr. Clark is a former director of the Federal
National Mortgage Association, and a former Chairman of the New York
Republican State Committee. Mr. Clark has been a licensed real estate broker
for 34 years.
Steven D. Cohn has served as a Director of the Company since its formation
in 1995 and as a Trustee or Director of the Bank since 1994. Mr. Cohn is the
managing partner in the law firm of Goldberg and Cohn Esq., in Brooklyn
Heights, New York. Mr. Cohn is also a member of the Board of Directors of
Complete Management, Inc., a medical management firm.
6
<PAGE>
Patrick E. Curtin has served as a Director of the Company since its
formation in 1995 and as a Trustee or Director of the Bank since 1986. Mr.
Curtin is a senior partner in the law firm of Conway Farrell Curtin & Kelly,
P.C. in New York, New York.
Fred P. Fehrenbach has served as a Director of the Company since its
formation in 1995 and as a Trustee or Director of the Bank since 1987. Mr.
Fehrenbach is President of Consolidated Brokerage Corp. located in Great Neck,
New York, which is a retail insurance brokerage business, and has formed a
joint venture with the firm of Forman International, a general insurance firm
in Great Neck, New York. Mr. Fehrenbach has been with Consolidated Brokerage
Corp. since 1990. Mr. Fehrenbach is the President of BF International Corp.,
an import/export sales organization.
John J. Flynn has served as a Director of the Company since its formation in
1995 and as a Trustee or Director of the Bank since October 1994 and before
that from February 1983 to February 1993. From February 1993 through August
1994, Mr. Flynn was Executive Vice President of Flushing Savings Bank, FSB in
Flushing, New York. From 1990 to February 1993, and since September 1994, Mr.
Flynn has been a self-employed real estate mortgage broker.
Malcolm T. Kitson has served as a Director of the Company since its
formation in 1995 and as a Trustee or Director of the Bank since 1990. Mr.
Kitson served as a Vice President of Citibank, N.A. until his retirement in
1990.
Stanley Meisels has served as a Director of the Company since its formation
in 1995 and as a Trustee or Director of the Bank since 1990. Mr. Meisels has
been a stockbroker with Gruntal & Co. in Hewlett, New York since 1986. Mr.
Meisels is also President and sole owner of Small Business Electronics
Investment Corp., a private investment company.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY
The Board of Directors meets substantially on a monthly basis and may have
additional special meetings upon the request of the Chairman of the Board. The
Company's Board of Directors met 12 times during the fiscal year ended June
30, 1997. No current director attended fewer than 75% of the total number of
Board meetings and committee meetings of which such director was a member.
The Board of Directors of the Company has established the following
committees:
The Executive Committee consists of Messrs. Palagiano, Devine, Bergamo,
Clark, Farrell and Varone. The purpose of this committee is to consider
longer-term strategic, planning and industry issues. This committee, from time
to time, also reviews regulatory issues and reports of regulatory
examinations. This committee meets as requested by the Board of Directors. The
Executive Committee did not meet in fiscal 1997.
The Compensation Committee consists of Messrs. Clark (Chairman), Fehrenbach,
Meisels and Varone. This committee establishes the compensation of the Chief
Executive Officer, approves the compensation of other officers, and determines
compensation and benefits to be paid to employees of the Bank. The committee
meets yearly and as requested by the Board of Directors. The Compensation
Committee met three times in fiscal 1997.
The Audit Committee consists of Messrs. Kitson (Chairman), Cohn, Flynn and
Meisels. The purpose of this committee is to provide assurance that the
Company's internal controls are adequate and that financial disclosures made
by management portray the Company's financial condition and results of
operations. The committee is responsible for the classification of assets and
the establishment of adequate valuation allowances. The committee also
maintains a liaison with the outside auditors. The committee meets at least
annually or as called by the Committee Chairman. The Audit Committee met twice
in fiscal 1997.
The Nominating Committee consists of Messrs. Fehrenbach (Chairman), Curtin,
Kitson and Meisels. The committee nominates candidates for the election of
directors. The committee meets as called by the Committee
7
<PAGE>
Chairman. The Nominating Committee met once in fiscal 1997. In addition, the
Nominating Committee met on July 10, 1997 to select the nominees for election
as directors at the Annual Meeting. In accordance with the Company's Bylaws,
no nominations for election as director, except those made by the Nominating
Committee, shall be voted upon at the Annual Meeting unless properly made by a
shareholder in accordance with the procedures set forth under "Additional
Information--Notice of Business to be Conducted at Annual Meeting."
EXECUTIVE OFFICERS
The following individuals are executive officers of the Company and hold the
offices set forth below opposite their names.
<TABLE>
<CAPTION>
NAME POSITION HELD WITH THE COMPANY
---- ------------------------------
<S> <C>
Vincent F. Palagiano.... Chairman of the Board and Chief Executive Officer
Michael P. Devine....... President and Chief Operating Officer
Kenneth J. Mahon........ Executive Vice President, Chief Financial Officer and Secretary
Timothy B. King......... First Vice President and Treasurer
Michael Pucella......... First Vice President and Comptroller
</TABLE>
The executive officers of the Company are elected annually and hold office
until their respective successors have been elected and qualified or until
death, resignation, or removal by the Board of Directors. The Company has
entered into Employment Agreements with certain of its executive officers
which set forth the terms of their employment. See "--Employment Agreements."
Biographical information of executive officers of the Company or the Bank
who are not directors is set forth below.
Kenneth J. Mahon, age 46, was promoted to Comptroller of the Bank in 1983,
to Senior Vice President in 1988, and to Executive Vice President and
Secretary of the Company in 1997. He has served as Chief Financial Officer of
the Company since its formation and of the Bank since 1996. Prior to joining
the Bank in 1980, Mr. Mahon served in the financial areas of several New York
metropolitan savings banks.
Peter J. Castelli, age 56, was promoted to First Vice President of the Bank
in 1988. He is responsible for security, banking facilities, and community and
public relations. Mr. Castelli has served the Bank in numerous capacities
during his career, which spans 33 years in banking.
Timothy B. King, age 39, has over 18 years of banking experience, and has
been with the Bank since 1983. Mr. King was promoted to First Vice President
of the Company and the Bank in 1997 and to be the Bank's Vice President in
1993 and Treasurer in 1989. Mr. King manages the securities investment,
corporate planning and interest rate risk functions of the Bank.
Gasper Messana, age 56, has served as First Vice President of the Bank since
1997. Prior, he served as Vice President of the Bank since 1988. He manages
the underwriting and loan administration functions of the Bank's multi-family
lending department. Mr. Messana is a licensed real estate broker and has over
28 years of banking and real estate experience.
Michael Pucella, age 44, was promoted to Comptroller of the Bank in 1989, to
Vice President in 1996 and to First Vice President of the Company and the Bank
in 1997. He has been with the Bank since 1981, and is responsible for
financial reporting, budgeting and tax administration. Mr. Pucella has over 22
years of banking experience.
Stephen Varriale, age 42, joined the Bank in 1979 and was promoted to Vice
President of the Bank in 1993. He is responsible for the Branch Retail and
Operations Support Departments, and the Pension Department. Mr. Varriale has
over 21 years of banking experience.
8
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
REPORT OF COMPENSATION COMMITTEE
The following Report of the Company's Compensation Committee is provided in
accordance with the rules and regulations of the SEC. Pursuant to such rules
and regulations, this Report shall not be deemed "soliciting material," filed
with the SEC subject to Regulation 14A or 14C of the SEC or subject to the
liabilities of Section 18 of the Exchange Act.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company annually reviews and recommends
changes to the compensation levels of the executive officers to the Board of
Directors. Since the Bank's conversion to a stock company, the Compensation
Committee has begun a process to revise the compensation program to better
reflect the Company's public company status. It is intended that the new
executive compensation program will enable the Company and the Bank to
attract, develop and retain strong executive officers who are capable of
maximizing the Company's performance for the benefit of its shareholders. The
Committee has adopted a compensation strategy that seeks to provide
competitive compensation that is strongly aligned with the financial and stock
performance of the institution. The program has three key elements: base
salary, annual incentives and long term incentives.
Base Salary
During fiscal 1997 an independent review of the competitiveness of the total
compensation of the executive group was conducted by a nationally recognized
compensation consulting firm. Compensation levels were compared to other
comparably-sized and similarly-located thrift institutions. Base salary levels
were found to be within an appropriate targeted range when compared to these
institutions. Based on market data, but also reflecting strong bank and
individual performance, and recognizing the extended time period since salary
increases were last made to this group, the Compensation Committee is
currently considering modest adjustments to base salaries for fiscal 1998.
Although individual increases have not been finalized, the Committee expects
that increases in the aggregate will not exceed 6% of current salary rates.
Annual Incentive Program
The independent review confirmed the use of annual incentive programs by all
of the Company's peer institutions. It also identified the range in size of
these opportunities in the marketplace. The Bank did not provide this form of
compensation when it was a mutual bank due to state regulations. The
identified compensation strategy contemplates the use of annual incentive
compensation as the means to tie the achievement of annual strategic and
operating goals with executive remuneration. Without the availability of this
element of compensation, the Company's program would also not be competitive.
Due to the significant accomplishments management has achieved in this
transition year, the Committee has approved the accrual of a $300,000
incentive pool to be distributed to executive management.
The Compensation Committee is currently developing, with the assistance of
its consultant, a formal, performance-based incentive program for fiscal 1998
for the executive group.
Long Term Incentives
On December 26, 1996 the Company's shareholders adopted the Option Plan and
the Recognition and Retention Plan for outside directors, executives and other
employees. Awards of stock options and restricted stock were made to the
executive officers at that time. The options are exercisable and the shares
vest at the rate of 20% per year over a five year period. The Committee
believes that long term incentives are the most effective way of aligning
executive rewards with the creation of value for shareholders through stock
appreciation. Future awards, if any, will be dependent on Company and
individual performance, as well as competitive market conditions.
Chief Executive Officer
During fiscal 1997, and as identified in the Summary Compensation Table, the
Chief Executive Officer was granted 285,000 stock options and 115,000 stock
awards under the Recognition and Retention Plan. The
9
<PAGE>
Compensation Committee determined these awards based on: a study of
competitive practices of other comparable institutions, its philosophy on the
importance of emphasizing equity participation, and its evaluation of the
CEO's long term contribution to the Company's performance. The Committee
sought to recognize the CEO's successful efforts in building a high-quality
institution and management team capable of becoming a public company and his
ability to manage the ongoing transition and future direction that will focus
on quality, growth and profitability, and maximizing shareholder returns.
COMPENSATION COMMITTEE OF DIME
COMMUNITY BANCORP, INC.
George L. Clark, Jr., Chairman
Fred P. Fehrenbach, Member
Stanley Meisels, Member
Louis V. Varone, Member
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Clark, Fehrenback, Meisels
and Varone. There are no other interlocks, as defined under the rules and
regulations of the SEC, between the members of the Compensation Committee and
or executive officers of the Company and corporations with respect to which
such persons are affiliated, or otherwise.
PERFORMANCE GRAPH
Pursuant to the regulations of the SEC, the graph below compares the
performance of the Company with that of the total return for the Nasdaq Stock
Market, United States and for all thrift stocks as reported by SNL Securities
L.C. from June 26, 1996, the date of the Conversion, through June 30, 1997. On
June 26, 1996, the Bank completed the Conversion and the Company offered
14,547,500 shares of Common Stock at a subscription price of $10.00 per share.
Immediately thereafter, the Common Stock began trading on the Nasdaq Stock
Market. The graph assumes the reinvestment of dividends in additional shares
of the same class of equity securities as those listed below.
LOGO
THERE CAN BE NO ASSURANCE THAT STOCK PERFORMANCE WILL CONTINUE INTO THE
FUTURE WITH THE SAME OR SIMILAR TRENDS TO THOSE DEPICTED IN THE GRAPH ABOVE.
10
<PAGE>
DIRECTORS' COMPENSATION
Fee Arrangements. Currently, each non-officer director ("Outside Director")
of the Company receives an annual retainer of $15,000 and a fee of $1,000 per
meeting of the Company or the Bank attended. All committee members receive a
fee of $400 for attendance at each committee meeting of the Company or the
Bank. If both the Company's and the Bank's Boards of Directors or
corresponding committees of the Company and the Bank meet on the same day,
such directors only receive one fee, paid by the Bank.
Directors' Retirement Plan. The Company has adopted a non-qualified
Retirement Plan for Outside Directors of the Company and the Bank (the
"Directors' Retirement Plan"), which will provide benefits to each eligible
Outside Director commencing on his termination of Board service at or after
age 65. An eligible Outside Director retiring at or after age 65 will be paid
an annual retirement benefit equal to the amount of the aggregate compensation
for services as a director (excluding stock compensation) paid to him for the
twelve-month period immediately prior to his termination of Board service,
multiplied by a fraction, the numerator of which is the number of his years of
service as an Outside Director (including service as a director or trustee of
the Bank or any predecessor) and the denominator of which is 10. An individual
who terminates Board service after having served as an Outside Director for 10
years may elect to begin collecting benefits under the Directors' Retirement
Plan at or after attainment of age 50, but the annual retirement benefits
payable to him will be reduced pursuant to the Plan's early retirement
reduction formula to reflect the commencement of benefit payments prior to age
65. An Outside Director may elect to have his benefits distributed in any one
of the following forms: (i) a single life annuity; (ii) a 50% or 100% joint
and survivor annuity; or (iii) a single life annuity with a 5, 10, or 15 year
guaranteed term. In the event an Outside Director dies prior to the
commencement of benefit payments under the Directors' Retirement Plan, a 50%
survivor annuity will automatically be paid to his surviving spouse, unless
the decedent has elected otherwise.
Option Plan and RRP. The Option Plan and RRP were adopted by the Board of
Directors of the Company and subsequently approved by the Company's
shareholders at the annual meeting held on December 17, 1996 (the "1996 Annual
Meeting"). On December 26, 1996, the effective date of the Option Plan, each
Outside Director of the Company and the Bank was granted a non-qualified stock
option to purchase 39,675 shares of Common Stock. These options are scheduled
to vest at the rate of 20% per year over a five-year period and will become
immediately exercisable upon a director's death or disability. If the proposed
amendments to the Option Plan are approved by shareholders, these options will
also become immediately exercisable upon the "retirement" of the director or a
"change in control" of the Company, as such terms are defined in the Option
Plan. Similarly, on December 26, 1996, the effective date of the RRP,
restricted stock awards were granted to each director with respect to 15,870
shares of Common Stock. These awards are also scheduled to vest in 20%
increments over a five-year period beginning on February 1, 1998, with
accelerated vesting to occur in the event of the director's death or
disability. If the proposed amendments to the RRP are approved by
shareholders, awards made under this Plan will also become automatically
vested upon the "retirement" of the director or a "change of control" of the
Company as such terms are defined in the RRP.
For complete descriptions of the Option Plan and RRP and the proposed
amendments to these Plans, see "Proposal 2" and "Proposal 3."
11
<PAGE>
EXECUTIVE COMPENSATION
Cash Compensation. The following table sets forth the cash compensation paid
by the Bank for services rendered in all capacities during the fiscal years
ended June 30, 1997, June 30, 1996 and June 30, 1995 to the executive officers
of the Bank who received salary plus bonus during the fiscal year ended June
30, 1997 in excess of $100,000 ("Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------------
ANNUAL COMPENSATION(1) AWARDS PAYOUTS
----------------------------------- ------------------ -------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
RESTRICTED
NAME AND OTHER ANNUAL STOCK LTIP ALL OTHER
PRINCIPAL BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
POSITIONS YEAR SALARY($) ($)(2) ($)(3) ($)(4) (#)(5) ($)(6) ($)(7)
--------- ---- --------- ------- ------------ ---------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Vincent F.
Palagiano, 1997 $450,000 -- -- $1,667,500 285,000 -- $199,470
Chairman of the
Board and
Chief Executive 1996 425,000 -- -- -- -- -- 29,553
Officer 1995 380,000 -- -- -- -- -- 24,288
Michael P.
Devine, 1997 $340,000 -- -- $1,087,500 190,000 -- $140,685
President and
Chief Operating 1996 320,000 -- -- -- -- -- 23,184
Officer 1995 287,500 -- -- -- -- -- 17,988
Kenneth J. Mahon, 1997 $178,000 -- -- $797,500 130,000 -- $59,133
Executive Vice
President, Chief
Financial
Officer and 1996 170,500 $32,600 -- -- -- -- 14,961
Secretary 1995 156,500 22,500 -- -- -- -- 10,878
Timothy B. King, 1997 $ 96,000 $11,000 -- $417,455 50,000 -- 26,875
First Vice
President and 1996 88,500 17,000 -- -- -- -- 8,633
Treasurer 1995 82,000 11,850 -- -- -- -- 5,824
</TABLE>
- --------
(1) Under Annual Compensation, the column titled "Salary" includes base
salary, amounts deferred under the Bank's 401(k) plan and payroll
deductions for health insurance under the Bank's health insurance plan.
(2) Prior to its conversion from a New York state chartered mutual savings
bank to a federal mutual savings bank in November, 1995, the Bank was
generally prohibited by state law from awarding bonuses to officers who
were also Board members.
(3) For 1997, there were no: (a) perquisites with an aggregate value for any
named individual in excess of the lesser of $50,000 or 10% of the total of
the individual's salary and bonus for the year; (b) payments of above-
market preferential earnings on deferred compensation; (c) payments of
earnings with respect to long-term incentive plans prior to settlement or
maturation; (d) tax payment reimbursements; or (e) preferential discounts
on stock.
(4) Includes the following shares granted to each Executive Officer pursuant
to the RRP approved by shareholders at the 1996 Annual Meeting: Mr.
Palagiano, 115,000 shares; Mr. Devine, 75,000 shares; Mr. Mahon 55,000
shares and Mr. King, 28,790 shares. The value of the shares awarded as
shown in the table above is based on a per share price of $14.50, the
final quoted sales price of a share on the date of the award. Stock awards
vest in five equal installments on each February 1 following the first,
second, third, fourth and fifth anniversaries of the grant date, subject
to earlier vesting upon termination of employment. In the case of
termination due to death or disability, all shares granted become
immediately vested. For a description of the plan as proposed to be
amended, see "Proposal 3."
(5) Includes the following shares subject to options granted to each Executive
Officer pursuant to the Option Plan approved by shareholders at the 1996
Annual Meeting: Mr. Palagiano, 285,000; Mr. Devine, 190,000; Mr. Mahon,
130,000; and Mr. King, 50,000. At June 30, 1997, none of the options held
by the Executive Officers under the Option Plan to purchase shares of
Common Stock at the exercise price of $14.50 per share were exercisable.
On December 26, 1997, 20% of the options granted to the Executive Officers
will first become exercisable. The options granted under the Option Plan
are intended to qualify as "incentive stock options" under Section 422 of
the Internal Revenue Code of 1986, as amended ("Code") to the maximum
extent possible and any options that do not so qualify will constitute
non-qualified stock options. The Option Plan provides for options to
become exercisable in five equal installments on the first, second, third,
fourth and fifth anniversaries of the grant date and to generally remain
exercisable until the tenth anniversary of the grant date, subject to
earlier expiration upon termination of employment. In the case of
termination due to death or disability, all options granted become
immediately exercisable. For a description of the plan as proposed to be
amended, see "Proposal 2."
(6) During the fiscal year ended June 30, 1997, neither the Bank nor the
Company maintained any long-term incentive plans ("LTIP").
(7) Includes (i) the dollar value of premiums, if any, paid by the Bank with
respect to term life insurance (other than group term insurance coverage
under a plan available to substantially all salaried employees) for the
benefit of the executive officer and (ii) the Bank's contributions on
behalf of the executive officer to the Bank's 401(k) plan and the ESOP and
the defined contribution portion of the Bank's Benefit Maintenance Plan
("BMP"). See "--Benefits--Retirement Plan," "--401(k) Plan," "--Benefit
Maintenance Plan" and "--Employee Stock Ownership Plan and Trust."
12
<PAGE>
EMPLOYMENT AGREEMENTS
Each of the Company and the Bank is a party to an Employment Agreement with
each of Messrs. Palagiano, Devine and Mahon ("Senior Executives"). These
Employment Agreements establish the respective duties and compensation of the
Senior Executives and are intended to ensure that the Bank and the Company
will be able to maintain a stable and competent management base. The continued
success of the Bank and the Company depends to a significant degree on the
skills and competence of the Senior Executives.
The Employment Agreements provide for three-year terms. The Bank's
Employment Agreements provide that, commencing on the first anniversary date
and continuing each anniversary date thereafter, the Bank's Board of Directors
may agree, after conducting a performance evaluation of the Senior Executive,
to extend its Employment Agreements for an additional year, so that the
remaining terms shall be three years. The Company's Employment Agreements
provide for automatic daily extensions such that the remaining terms of the
Employment Agreements shall be three years unless written notice of non-
renewal is given by the Board of Directors or the Senior Executive.
The Employment Agreements provide for termination by the Bank or the Company
at any time for cause as defined in the Employment Agreements. In the event
the Bank or the Company chooses to terminate the Senior Executive's employment
for reasons other than for cause, or in the event of the Senior Executive's
resignation from the Bank and the Company for "good reason" as defined in the
Employment Agreements, the Senior Executive or, in the event of death, his
beneficiary, would be entitled to a lump sum cash payment in an amount equal
to the remaining base salary and bonus payments due to the Senior Executive
and the additional contributions or benefits that would have been earned under
any employee benefit plans of the Bank or the Company during the remaining
terms of the Employment Agreements and payments that would have been made
under any incentive compensation plan during the remaining terms of the
Employment Agreements. The Senior Executive would also have the right to
receive a lump sum cash payment of benefits to which the Senior Executive is
entitled under the Bank's BMP. The Bank and the Company would also continue
the Senior Executive's life, health and disability insurance coverage for the
remaining terms of the Employment Agreements. "Good reason" for purposes of
the Employment Agreements generally means (i) assignment of duties
inconsistent with the Senior Executive's status or a substantial adverse
alteration in the nature or status of responsibilities or a requirement to
report to a different position, (ii) reduction in annual base salary (unless
mandated at the initiation of applicable regulatory authority), (iii) failure
to pay compensation or deferred compensation when due unless inadvertent,
immaterial and cured after notice, (iv) failure to continue in effect
compensation plans material to total compensation (or substitute plans) with
respect to the Senior Executive or to fail to provide certain benefits or
materially reduce benefits (unless mandated at the initiation of applicable
regulatory authority), (v) failure of the Bank to obtain a satisfactory
agreement from a successor to assume and agree to perform the Employment
Agreements, (vi) any purported termination by the Bank not for cause or
disability, (vii) any or no reason during the period of 60 (sixty) days
beginning on the first anniversary of the effective date of a change of
control, as defined in the Employment Agreement, (viii) a change in the
majority of the Board, unless approved by a vote of at least two-thirds of the
members of the Board at the time the Employment Agreements were entered into
or members elected or nominated by such members, (ix) a relocation of the
Senior Executive's principal place of employment outside of the New York
metropolitan area or (x) a material breach of the Employment Agreements,
unless cured within 30 days. In general, for purposes of the Employment
Agreements, a "change of control" will generally be deemed to occur when a
person or group of persons acting in concert acquires beneficial ownership of
25% or more of any class of equity security, such as Common Stock of the
Company or the Bank, or in connection with mergers or consolidations of assets
or contested election of directors which results in a change of control of the
majority of the Board of Directors of the Company or the Bank or liquidation
or sale of substantially all the assets of the Company or the Bank.
Payments to the Senior Executives under the Bank's Employment Agreements
will be guaranteed by the Company in the event that payments or benefits are
not paid by the Bank. Payment under the Company's Employment Agreements would
be made by the Company. To the extent that payments under the Company's
Employment Agreements and the Bank's Employment Agreements are duplicative,
payments due under the
13
<PAGE>
Company's Employment Agreements would be offset by amounts actually paid by
the Bank. Senior Executives would be entitled to reimbursement of certain
costs incurred in interpreting or enforcing the Employment Agreements up to
$50,000 for each Senior Executive.
Cash and benefits paid to a Senior Executive under the Employment Agreements
together with payments under other benefit plans following a "change of
control" of the Bank or the Company may constitute an "excess parachute"
payment under Section 280G of the Code, resulting in the imposition of a 20%
excise tax on the recipient and the denial of the deduction for such excess
amounts to the Company and the Bank. The Company's Employment Agreements
include a provision indemnifying each Senior Executive on an after-tax basis
for any "golden parachute" excise taxes.
EMPLOYEE RETENTION AGREEMENTS
The Bank and the Company have entered into Employee Retention Agreements
with twenty-one additional employees including the following five executive
officers: Messrs. Castelli, King, Messana, Pucella and Varriale ("Contract
Employee" or "Contract Employees"). The purpose of the Retention Agreements is
to secure the Contract Employees' continued availability and attention to the
Bank's affairs, relieved of distractions arising from the possibility of a
corporate change of control. The Retention Agreements do not impose an
immediate obligation on the Bank to continue the Contract Employees'
employment but provide for a period of assured employment ("Assurance Period")
following the change of control of the Bank or the Company. The Retention
Agreements provide for initial Assurance Periods of one or two years
commencing on the date of a change of control. The Bank and the Company
entered into Employee Retention Agreements with an initial Assurance Period of
two years with each of the five officers listed above. The applicable
Assurance Periods will be automatically extended on a daily basis under the
Retention Agreements until written notice of non-extension is given by the
Bank or the Contract Employee, in which case the Assurance Period would end on
the first or second anniversary of the date such notice is given.
If, upon a change of control, or within twelve months of, and in connection
with, a change of control, a Contract Employee is discharged without "cause"
(as defined in the Retention Agreements) or voluntarily resigns within one
year following a material adverse change in position, duties or salary or due
to a material breach of the Retention Agreement by the Bank or the Company,
the Contract Employee (or, in the event of his death, his estate) would be
entitled to a lump sum cash payment equal to the remaining base salary and
bonus payments due during the Assurance Period plus any additional
contributions and benefits that the Contract Employee would have earned under
the Bank's or the Company's employee benefit plans during the Assurance
Period. Each Contract Employee's life, health, and disability coverage would
also be continued during the Assurance Period. The total amount of termination
benefits payable to each Contract Employee under the Retention Agreements is
limited to three times the Contract Employee's average total compensation for
the prior five years. Payments to the Contract Employees under their
respective Retention Agreements are guaranteed by the Company to the extent
that the required payments are not made by the Bank.
BENEFITS
Retirement Plan. The Bank maintains a non-contributory, tax-qualified
defined benefit pension plan (the "Retirement Plan") for eligible employees.
All salaried employees at least age 21 who have completed at least one year of
service are eligible to participate in the Retirement Plan. The Retirement
Plan provides for a benefit for each participant, including the Named
Executive Officers, equal to 2% of the participant's average annual basic
earnings multiplied by the participant's years (and any fraction thereof) of
eligible employment (up to a maximum of 30 years). Such benefit is not reduced
by a Social Security offset. A participant is fully vested in his or her
benefit under the Retirement Plan after five years of service. The Retirement
Plan is funded by the Bank on an actuarial basis and all assets are held in
trust by the Retirement Plan trustee.
14
<PAGE>
The following table illustrates the annual benefit payable upon normal
retirement at age 65 (in single life annuity amounts with no offset for Social
Security benefits) at various levels of compensation and years of service
under the Retirement Plan and the BMP.
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------
REMUNERATION(1) 15 20 25 30 35(4)
- --------------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
150,000(2).......... $ 45,000 $ 60,000 $75,000 $ 90,000 $ 90,000
175,000(2).......... 52,500 70,000 87,500 105,000 105,000
200,000(2).......... 60,000 80,000 100,000 120,000 120,000
225,000(2).......... 67,500 90,000 112,500 135,000(3) 135,000(3)
250,000(2).......... 75,000 100,000 125,000(3) 150,000(3) 150,000(3)
300,000(2).......... 90,000 120,000 150,000(3) 180,000(3) 180,000(3)
350,000(2).......... 105,000 140,000(3) 175,000(3) 210,000(3) 210,000(3)
400,000(2).......... 120,000 160,000(3) 200,000(3) 240,000(3) 240,000(3)
450,000(2).......... 135,000(3) 180,000(3) 225,000(3) 270,000(3) 270,000(3)
500,000(2).......... 150,000(3) 200,000(3) 250,000(3) 300,000(3) 300,000(3)
550,000(2).......... 165,000(3) 220,000(3) 275,000(3) 330,000(3) 330,000(3)
</TABLE>
- --------
(1) The Retirement Plan does not provide a deduction for Social Security
benefits and there are no other offsets to benefits.
(2) Annual Compensation taken into account under the Retirement Plan for the
fiscal year of the Retirement Plan beginning on October 1, 1997, cannot
exceed $160,000 (as adjusted for subsequent years pursuant to the Code
provisions). Benefits in excess of the limitation are provided through the
BMP.
(3) For the fiscal year of the Retirement Plan beginning on October 1, 1997,
the maximum annual benefit payable under the Retirement Plan cannot exceed
$125,000 (as adjusted for subsequent years pursuant to the Code
provisions). Benefits in excess of the limitations are provided through
the BMP. See "--Benefit Maintenance Plan."
(4) The maximum years of service credited for benefit purposes is 30 years.
The following table sets forth the years of credited service and the average
annual basic earnings (as defined above) determined as of September 30, 1997
for each of the Named Executive Officers.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
------------------------- AVERAGE
YEARS MONTHS ANNUAL EARNINGS
------------ ------------- ---------------
<S> <C> <C> <C>
Vincent F. Palagiano........ 27 0 $403,333
Michael P. Devine........... 26 2 $305,000
Kenneth J. Mahon............ 17 2 $163,667
Timothy B. King............. 14 5 $ 85,333
</TABLE>
401(k) Plan. The Bank maintains the 401(k) Plan, which is a tax-qualified
defined contribution plan which permits salaried employees with at least one
year of service to make pre-tax salary deferrals under Section 401(k) of the
Code. Salary deferrals are made by election and are limited to 9% of
compensation up to $160,000 (for 1997), or to a limit imposed under the Code
($9,500 for 1997). It is anticipated that employees will not be able to defer
amounts in 1997 because of limitations on contributions to all plans under the
Internal Revenue Code. Employees are fully vested in their salary deferrals,
and become 25% vested in the Bank's contribution after two years, and an
additional 25% vested in each of the next three years. Employees select the
investments made with their account balances from a fixed menu of options.
Effective January 1, 1997, the 401(k) Plan was amended whereby participant
contributions were no longer permitted. The elimination of participant
contributions to the plan resulted from participants receiving virtually all
of their allowable benefits under Section 415 of the Internal Revenue Code
from other tax-qualified benefit plans of the Bank or the Company.
The Plan permits participating employees to elect to invest all or any part
of their 401(k) Plan account balances in Common Stock. Common Stock held by
the 401(k) Plan may be newly issued or treasury shares acquired from the
Company or outstanding shares purchased on the open market or in privately
negotiated transactions. All Common Stock held by the 401(k) Plan will be held
by an independent trustee and allocated to the accounts of individual
participants. Participants will control the exercise of voting and tender
rights relating to Common Stock held in their accounts.
15
<PAGE>
Employee Stock Ownership Plan and Trust. The Company has established, and
the Bank has adopted, for the benefit of eligible employees, an ESOP and
related trust. All salaried employees of the Bank or the Company are eligible
to become participants in the ESOP. The ESOP purchased 1,163,800 shares of
Common Stock issued in connection with the Conversion. In order to fund the
ESOP's purchase of such Common Stock, the ESOP borrowed funds from the Company
to pay the aggregate purchase price of Common Stock. This loan is for a term
of 10 years, bears interest at the rate of 8% per annum and calls for level
annual payments of principal and interest designed to amortize the loan over
its term, except that payments in any year may be deferred, in whole or in
part, in prescribed circumstances. Prepayments are also permitted.
Shares purchased by the ESOP were pledged as collateral for the loan and are
held in a suspense account until released for allocation among participants in
the ESOP as the loan is repaid. The pledged shares will be released annually
from the suspense account in an amount proportional to the repayment of the
ESOP loan for each plan year. The released shares will be allocated among the
accounts of participants on the basis of the participant's compensation for
the calendar year preceding allocation. Benefits generally become vested at
the rate of 25% per year after two years with 100% vesting after five years of
service. Participants also become immediately vested upon termination of
employment due to death, retirement at age 65, permanent disability or upon
the occurrence of a change of control. Forfeitures will be reallocated among
remaining participating employees, in the same proportion as contributions.
Vested benefits may be paid in a single sum or installment payments and are
payable upon death, retirement at age 65, disability or separation from
service.
The ESOP Committee may instruct the unrelated corporate trustee regarding
investment of funds contributed to the ESOP. The ESOP Trustee, subject to its
fiduciary duty, must vote all allocated shares held in the ESOP in accordance
with the instructions of the participating employees. Under the ESOP,
unallocated shares will be voted in a manner calculated to most accurately
reflect the instructions it has received from participants regarding the
allocated stock as long as such vote is in accordance with the provisions of
ERISA. The ESOP may purchase additional shares of Common Stock in the future.
Benefit Maintenance Plan. The BMP provides eligible employees with benefits
that would be due under the Retirement Plan, ESOP and 401(k) Plan, if such
benefits were not limited under the Code. BMP benefits provided with respect
to the Retirement Plan are reflected in the pension table. See "--Benefits--
Retirement Plan." BMP benefits provided to the Named Executive Officers for
the fiscal year ended June 30, 1997 with respect to the 401(k) Plan and ESOP
are included in the Summary Compensation Table under the column "All Other
Compensation." See "--Executive Compensation--Cash Compensation."
Stock Option Plan. The Board of Directors of the Company has adopted the
Dime Community Bancorp, Inc. 1996 Stock Option Plan for Outside Directors,
Officers and Employees which was approved by shareholders at the 1996 Annual
Meeting. Amendments to the Option Plan are subject to the approval of the
shareholders of the Company at the Annual Meeting. For a description of this
plan, see "Proposal 2."
Recognition and Retention Plan. The Board of Directors of the Company has
adopted the Recognition and Retention Plan for Outside Directors, Officers and
Employees of Dime Community Bancorp, Inc. which was approved by shareholders
at the 1996 Annual Meeting. Amendments to the RRP are subject to the approval
of the shareholders at the Annual Meeting. For a description of this plan, see
"Proposal 3."
16
<PAGE>
The following table summarizes the grants of stock options that were made to
the Named Executive Officers during fiscal 1997.
OPTION / SAR GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
TOTAL ANNUAL RATE OF
NUMBER OF OPTIONS/ STOCK PRICE
SECURITIES SARS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM
OPTIONS/SARS EMPLOYEES IN EXERCISE OR ---------------------
GRANTED FISCAL YEAR BASE PRICE EXPIRATION 5% 10%
NAME (#)(1) (%) ($ PER SHARE) DATE ($) ($)
---- ------------ ------------ ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Vincent F. Palagiano.... 285,000 29.8% $14.50 12/26/06 $2,598,907 $6,586,140
Michael P. Devine....... 190,000 19.9% $14.50 12/26/06 $1,732,604 $4,390,760
Kenneth J. Mahon........ 130,000 13.6% $14.50 12/26/06 $1,185,466 $3,004,204
Timothy B. King......... 50,000 5.2% $14.50 12/26/06 $ 455,948 $1,155,463
</TABLE>
- --------
(1) All options granted become exercisable in five equal installments on the
first, second, third, fourth, and fifth anniversaries of the grant date
and generally remain exercisable until the tenth anniversary of the grant
date, subject to earlier expiration upon termination of employment. In the
case of termination due to death or disability, all Options granted become
immediately exercisable. If the Option Plan Amendments are approved by
shareholders, these options will also become immediately exercisable upon
an option holder's "retirement" or a "Change in Control" of the Company,
as such terms are defined in the Option Plan. See "--Option Plan."
The following table provides certain information with respect to the number
of shares of Common Stock acquired through the exercise of, or represented by
outstanding, stock options held by the Named Executive Officers on June 30,
1997. Also reported is the value for "in-the-money" options, which represent
the positive spread between the exercise price of any such existing stock
options and the closing sale price of the Common Stock of $20.00 per share at
fiscal year end, June 30, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
YEAR-END (1) (2) YEAR-END
# ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
Vincent F. Palagiano. 0 / 285,000 0 / $1,567,500
Michael P. Devine.... 0 / 190,000 0 / $1,045,000
Kenneth J. Mahon..... 0 / 130,000 0 / $715,000
Timothy B. King...... 0 / 50,000 0 / $275,000
</TABLE>
- --------
(1) None of the Named Executive Officers exercised options during the fiscal
year ended June 30, 1997.
(2) None of the outstanding stock options held by the Named Executive Officers
were exercisable as of June 30, 1997.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") requires that all loans or extensions of credit to executive
officers and directors must be made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more than the normal
risk of repayment or present other unfavorable features. The Bank has made
loans or extended credit to executive officers and also to certain persons
related to executive officers and directors. All such loans were made by the
Bank in the ordinary course of business and were not made with more favorable
terms nor involved more than the normal risk of collectibility or presented
unfavorable features. The outstanding principal balance of such loans to
executive officers and associates of executive officers or directors totaled
$313,527, or 0.21% of the Bank's total equity as of August 31, 1997. The
Company intends that all transactions in the future between the Company and
its executive officers, directors, holders of 10% or more of the shares of any
class of its Common Stock and affiliates thereof, similarly will contain terms
no less
17
<PAGE>
favorable to the Company than could have been obtained by it in arm's-length
negotiations with unaffiliated persons and will be approved by a majority of
independent outside directors of the Company not having any interest in the
transaction.
Messrs. Curtin and Farrell are partners in the law firm of Conway, Farrell,
Curtin & Kelly, P.C., which the Bank retains to provide certain legal
services. In the fiscal years ended June 30, 1997, 1996 and 1995, the Bank
paid this firm $176,000, $126,000 and $255,000, respectively, for legal
services provided during such periods. In addition, the firm received fees in
the amount of approximately $1,034,000, $586,000 and $321,000 from third
parties pursuant to its representation of the Bank in loan closings and other
legal matters for each of the fiscal years ended June 30, 1997, 1996 and 1995,
respectively.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of Common Stock, to file with
the SEC reports of ownership and changes of ownership. Officers, directors and
greater than 10% shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on its
review of the copies of such forms received by it, or written representations
from certain reporting persons, the Company believes that all filing
requirements applicable to its executive officers, directors and greater than
10% beneficial owners were complied with.
PROPOSAL 2
APPROVAL OF AMENDMENTS TO THE
DIME COMMUNITY BANCORP, INC. 1996 STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS, OFFICERS AND EMPLOYEES
GENERAL PLAN INFORMATION
The Company's Board of Directors adopted the Dime Community Bancorp, Inc.
1996 Stock Option Plan For Outside Directors, Officers and Employees on
October 8, 1996, subject to approval by the shareholders, and the shareholders
approved the Plan on December 17, 1996 with an effective date of December 26,
1996 ("Effective Date"). Pursuant to regulations of the Office of the Thrift
Supervision (the "OTS") applicable to stock option plans established or
implemented within one year following the completion of a mutual-to-stock
conversion, the Option Plan contained certain restrictions and limitations,
including among others, provisions requiring the vesting of options granted to
occur no more rapidly than ratably over a five year period and the resultant
prohibition against accelerated vesting of option grants upon retirement of
the optionee or the occurrence of a Change in Control (as defined in the
Option Plan) of the Company. In addition, OTS ruling positions may restrict
the Company's ability to implement anti-dilutive provisions contained in the
Option Plan that would apply in the event that an extraordinary dividend,
including a nontaxable return of capital, is to be paid to shareholders and
limits the Board's ability to cancel and make payment for Options at the time
of a merger, consolidation or other business reorganization to Options which
are exercisable at that time.
OTS ruling positions permit the elimination of the provisions of the Option
Plan which reflect the restrictions and limitations described above, provided
that shareholder approval therefor is obtained more than one year following
the completion of the mutual-to-stock conversion. The Board of Directors has
adopted amendments to the Option Plan, subject to approval by shareholders of
the Company, for the purpose of eliminating such restrictions and limitations
(these changes to the Option Plan are collectively referred to herein as
"Option Plan Amendments"). The Option Plan Amendments do not increase the
number of shares reserved for issuance under the Plan, decrease the price per
share at which Options may be granted under the Plan or alter the classes of
individuals eligible to participate in the Plan. In the event that the Option
Plan Amendments are not approved by shareholders at the Annual Meeting, the
Option Plan Amendments will not take effect, but the Option Plan will remain
in effect. The principal provisions of the Option Plan, as it would be amended
by the
18
<PAGE>
Option Plan Amendments, are described below. The full text of the Option Plan
Amendments is set forth as Appendix A to this Proxy Statement, to which
reference is made, and the summary of Option Plan Amendments provided below is
qualified in its entirety by such reference.
PURPOSE OF THE OPTION PLAN
The purpose of the Option Plan is to promote the growth and profitability of
the Company, to provide certain outside directors, key officers and employees
of the Company and its affiliates with an incentive to achieve corporate
objectives, to attract and retain individuals of outstanding competence and to
provide such individuals with an equity interest in the Company. The Option
Plan provides for the grant of options to purchase common stock of the Company
("Options") to certain outside directors, officers and employees of the
Company.
DESCRIPTION OF THE OPTION PLAN
Administration. A Committee consisting of members of the Compensation
Committee of the Board (or any successor committee) or such other committee as
the Board may designate ("Committee") administers the Option Plan. Such
Committee is comprised of at least two directors of the Company, and all
directors on the Committee are "outside directors" (as that term is defined
under Section 162(m) of the Code) and "disinterested directors" (as such term
is defined under section 16(b) of the Exchange Act and the rules and
regulations promulgated thereunder) who are not currently employees of the
Company, the Bank or any affiliate. The Committee will determine, within the
limitations of the Option Plan, the officers and employees of the Company or
Bank ("Eligible Employees") to whom Options will be granted, the number of
shares subject to each Option, the terms of such Options for Eligible
Employees (including provisions regarding exercisability and acceleration of
exercisability) and the procedures by which the Options may be exercised.
Subject to certain specific limitations and restrictions set forth in the
Employee Option Plan, the Committee has full and final authority to interpret
the Option Plan, to prescribe, amend and rescind rules and regulations, if
any, relating to the Option Plan and to make all determinations necessary or
advisable for the administration of the Option Plan. The costs and expenses of
administering the Option Plan will be borne by the Company.
Stock Subject to the Option Plan. The Company has reserved 1,454,750 Shares
for issuance upon exercise of Options. A maximum of 436,425 Shares may be
granted to directors who are not employees or officers of the Company or the
Bank ("Eligible Directors") and a maximum of 1,018,325 Shares may be granted
to Eligible Employees. Such Shares may be authorized and unissued shares or
shares previously issued and reacquired by the Company. Any Shares subject to
grants under the Option Plan which expire or are terminated, forfeited or
canceled without having been exercised or vested in full, shall again be
available for purposes of the Option Plan. As of June 30, 1997, the aggregate
fair market value of the Shares reserved for issuance was $29,095,000, based
on the closing sales price per share of Common Stock of $20.00 on the Nasdaq
Stock Market as of such date.
Eligibility. Any employee of the Company (or a participating affiliate) who
is selected by the Committee is eligible to participate in the Option Plan as
an "Eligible Employee." As of June 30, 1997, there were 38 Eligible Employees
who had been granted Options. On the effective date of the Option Plan, each
Eligible Director was granted an Option to purchase 39,675 shares. Each of
these Options have an exercise price of $14.50, which equals the fair market
value of a Share on the date the Options were granted. On the first
anniversary of the grant date and continuing for each consecutive anniversary
date occurring thereafter, 20% of the total number of Shares subject to the
Option will become exercisable.
Terms and Conditions of Options. The Option Plan provides for the grant of
Options which qualify for favorable federal income tax treatment as "incentive
stock options" ("ISOs") and for non-qualified stock options which do not so
qualify ("NQSOs"). Eligible Directors will receive only NQSOs. Unless
otherwise designated by the Committee, Options granted under the Option Plan
to Eligible Employees will be ISOs, that will be exercisable at a price per
Share equal to the fair market value of a Share on the date of the Option
grant. In general, ISOs will be exercisable for a period of ten years after
the date of grant (or for a shorter period ending
19
<PAGE>
three months after the option holder's termination of employment for reasons
other than disability or discharge for cause); one year after termination of
employment due to disability; or immediately upon termination for cause. In no
event may an Option be granted with an exercise price per Share that is less
than the fair market value of a Share when the Option is granted, or for a
term exceeding ten years from the date of grant.
Currently, the Option Plan requires that Options granted to Eligible
Employees or Eligible Directors become exercisable no more rapidly than
ratably over a five-year period (with acceleration only upon death or
disability) and would prohibit the accelerated vesting of Options upon
retirement or a Change in Control (as such terms are defined in the Option
Plan). As permitted by OTS ruling positions, the Option Plan Amendments would
eliminate these requirements, both with respect to outstanding Options and any
Options that may be granted in the future. Pursuant to the Option Plan, as
amended by the Option Plan Amendments, upon a Change in Control or retirement,
all Options granted to such Eligible Employee or Eligible Director that are
outstanding as of the date of such person's retirement or a Change in Control
will automatically become fully vested and exercisable. The amended Option
Plan also permits the Committee to establish a vesting schedule that is either
more or less favorable than the five year vesting schedule to be applicable to
an Option granted to an Eligible Employee under the Plan.
Upon the exercise of an Option granted to an Eligible Director or Eligible
Employee, the Exercise Price must be paid in full. Payment may be made in cash
or in such other consideration as the Committee deems appropriate, including,
but not limited to, Shares already owned by the option holder or Shares to be
acquired by the option holder upon exercise of the Option.
Adjustments for Extraordinary Dividends. Under OTS ruling positions
applicable to stock benefit plans established or implemented within one year
after a mutual-to-stock conversion, any adjustment in the exercise price of
outstanding Options to reflect the payment of any extraordinary dividend
requires the prior approval of the OTS, and the OTS will not permit a cash
payment in lieu of a price adjustment, unless plan provisions authorizing
these actions are approved by shareholders at least one year after the mutual-
to-stock conversion. Under applicable tax regulations, the adjustment of the
exercise price of outstanding Options granted to certain executive officers of
the Company may, in certain circumstances, cause the Company to lose the
federal income tax deduction that would otherwise be available to it upon
exercise of the Option. However, the making of a cash payment would not affect
the availability of the deduction. Accordingly, the Option Plan has been
amended, subject to shareholder approval, to permit the Committee, on a case-
by-case basis, to authorize either a price adjustment or a cash payment to an
option holder to reflect the payment of an extraordinary dividend. This
provision provides the Committee with necessary flexibility to maximize the
tax benefits available to the Company with respect to the Option Plan.
Adjustments for Mergers, Consolidations or Other Business
Reorganizations. Under OTS ruling positions applicable to stock benefit plans
established or implemented within one year after a mutual-to-stock conversion,
only outstanding Options which are exercisable at the time of a merger,
consolidation or other business reorganization in which the Company is not the
surviving entity may be canceled by the Board on 30 days' written notice if
the Option holder receives payment. In order to permit the Board to cancel and
provide payment for Options which are not exercisable, the Option Plan has
been amended to permit the Board to cancel and make payments for Options,
whether or not exercisable under such circumstances.
TERMINATION OR AMENDMENT OF THE OPTION PLAN
Unless sooner terminated, the Option Plan will terminate automatically on
the day preceding the tenth anniversary of the Effective Date of the Plan. The
Board may suspend or terminate the Option Plan in whole or in part at any time
prior to the tenth anniversary of the Effective Date by giving written notice
of such suspension or termination to the Committee. In the event of any
suspension or termination of the Option Plan, all Options theretofore granted
under the Option Plan that are outstanding on the date of such suspension or
termination of the Option Plan will remain outstanding under the terms of the
agreements granting such Options.
20
<PAGE>
Generally, the Board may amend or revise the Option Plan in whole or in part
at any time, but, to the extent required to comply with applicable tax
regulations, if the amendment or revision amends a material term of the Plan,
such amendment or revision will be subject to approval by the shareholders of
the Company. Subject to the above provisions, the Board has broad authority to
amend the Option Plan to take into account changes in applicable financial
institution, securities and tax laws and accounting standards, as well as
other developments.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a summary and does not purport
to be a comprehensive description of the federal tax laws, regulations and
policies affecting the Company and recipients of ISOs and NQSOs that may be
granted under the Option Plan and any descriptions of the provisions of any
law, regulation or policy. Any change in applicable law or regulation or in
the policies of various taxing authorities may have a material effect on the
discussion contained herein.
There are no federal income tax consequences for the Company or the option
holder at the time an ISO is granted or for the Company upon the exercise of
an ISO. Upon the exercise of an ISO, the option holder does not recognize
income for tax purposes but the difference between the fair market value of
the Shares acquired upon exercise and the exercise price is an item of tax
preference that may affect the option holder's liability for alternative
minimum tax. If there is no sale or other disposition of the Shares acquired
upon the exercise of an ISO within two years after the date the ISO was
granted, or within one year after the exercise of the ISO, then at no time
will any amount be deductible by the Company with respect to the ISO. If the
option holder exercises an ISO and sells or otherwise disposes of the Shares
so acquired after satisfying the foregoing holding period requirements, then
he will realize a capital gain or loss on the sale or disposition. If the
option holder exercises his ISO and sells or disposes of his Shares prior to
satisfying the foregoing holding period requirements, then an amount equal to
the difference between the amount realized upon the sale or other disposition
of such Shares and the price paid for such Shares upon the exercise of the ISO
will be includible in the ordinary income of such person, and such amount will
ordinarily be deductible by the Company at the time it is includible in such
person's income.
With respect to the grant of NQSOs, there are no federal income tax
consequences for the Company or the option holder at the date of the grant.
Upon the exercise of a NQSO, an amount equal to the difference between the
fair market value of the Shares to be purchased on the date of exercise and
the aggregate purchase price of such Shares is generally includible in the
ordinary income of the person exercising such NQSO, although such inclusion
may be at a later date in the case of an option holder whose disposition of
such Shares could result in liability under Section 16(b) of the Exchange Act.
The Company will ordinarily be entitled to a deduction for federal income tax
purposes at the time the option holder is taxed on the exercise of the NQSO
equal to the amount which the option holder is required to include as ordinary
income.
Section 162(m) of the Code may limit the Company's deductions of
compensation in excess of $1 million per year for the most highly paid
executives named in the Company's Proxy Statement, but provides for certain
exceptions to such limitations of "performance-based" compensation. The
Company intends the Option Plan to comply with the requirement for an
exception to Section 162(m) of the Code applicable to stock option plans so
that the Company's deduction for compensation related to the exercise of
Options would not be subject to the deduction limitation set forth in Section
162(m) of the Code.
The foregoing statements are intended to summarize the general principles of
current federal income tax law applicable to Options that may be granted under
the Option Plan. State and local tax consequences may also be significant.
Participants are advised to consult with their tax advisor as to the tax
consequences of the Option Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE APPROVAL OF THE OPTION PLAN AMENDMENTS TO THE DIME COMMUNITY BANCORP, INC.
1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS, OFFICERS AND EMPLOYEES.
21
<PAGE>
PROPOSAL 3
APPROVAL OF AMENDMENTS TO THE RECOGNITION AND RETENTION PLAN FOR OUTSIDE
DIRECTORS, OFFICERS AND EMPLOYEES OF DIME COMMUNITY BANCORP, INC.
GENERAL PLAN INFORMATION
The Company's Board of Directors adopted the Recognition and Retention Plan
for Outside Directors, Officers and Employees of Dime Community Bancorp, Inc.
on October 8, 1996, subject to approval by the shareholders, and the
shareholders approved the Plan on December 17, 1996 with an effective date of
December 26, 1996 ("Effective Date"). Pursuant to regulations of the OTS
applicable to stock benefit plans established or implemented within one year
following the completion of a mutual-to-stock conversion, the RRP contained
certain restrictions and limitations, including among others: provisions
requiring the vesting of restricted stock awards to occur no more rapidly than
ratably over a five year period; the resultant prohibition against accelerated
vesting of restricted stock awards upon retirement of the award recipient or
the occurrence of a Change of Control (as defined in the RRP) of the Company;
and a prohibition against the distribution of cash dividends to a participant
prior to the vesting of the underlying stock award.
OTS ruling positions permit the elimination of the provisions of the RRP
which reflect the restrictions and limitations described above, provided that
shareholder approval therefor is obtained more than one year following the
completion of the mutual-to-stock conversion. The Board of Directors has
adopted amendments to the RRP, subject to approval by shareholders of the
Company, for the purpose of eliminating such restrictions and limitations
(these changes to the RRP are collectively referred to herein as "RRP
Amendments"). The RRP Amendments do not increase the number of shares
available for distribution under the RRP, change the RRP's eligibility
requirements, or alter the types of restricted stock awards that may be made
to participants in the RRP. In the event that the RRP Amendments are not
approved by shareholders at the Annual Meeting, the RRP Amendments will not
take effect, but the RRP will remain in effect. The principal provisions of
the RRP, as it would be amended by the RRP Amendments, are described below.
The full text of the RRP Amendments is set forth as Appendix B to this Proxy
Statement, to which reference is made, and the summary of the RRP Amendments
provided below is qualified in its entirety by such reference.
PURPOSE OF THE RRP
The purpose of the RRP is to advance the interest of the Company and its
shareholders by providing certain outside directors, officers and employees of
the Company and its affiliates with an incentive to achieve corporate
objectives and by attracting and retaining certain outside directors, officers
and employees of outstanding competence through the award of equity interests
in the Company.
DESCRIPTION OF THE RRP
Administration. A committee comprised of at least two directors of the
Company, all qualifying as "disinterested directors" (as that term is defined
under Section 16(b) of the Exchange Act and the rules and regulations
promulgated thereunder), who are not currently employees of the Company, the
Bank or any affiliates administers the RRP. The Committee determines, subject
to the terms and conditions of the RRP, described below, the officers and
employees to whom restricted stock awards ("Awards") will be granted, the
number of Shares subject to Awards to officers and employees, and all other
terms of such Awards. Subject to certain specific limitations and restrictions
set forth in the RRP, the Committee has full and final authority to interpret
the RRP, to prescribe, amend and rescind rules and regulations, if any,
relating to the RRP and to make all determinations necessary or advisable for
the administration of the RRP. The costs and expenses of administering the RRP
will be borne by the Company and are not charged to any grant of an Award nor
to any participating director, officer or employee.
22
<PAGE>
Stock Subject to the RRP. The Company has established a trust ("Trust") to
which it contributes, from time to time, amounts of money or property
determined by the Board, in its discretion. Contributions by participants are
not permitted. The trustee will generally invest the assets of the Trust in
Shares and in such other investments including savings accounts, time or other
interest bearing deposits in or other interest bearing obligations of the
Company, in such proportions as shall be determined by the Committee. However,
in no event shall the assets of the Trust be used to purchase more than
581,900 Shares. As of June 30, 1997, the aggregate fair market value of the
Shares authorized for the RRP was $11,638,000, based on the closing sales
prices per share of $20.00 on the Nasdaq Stock Market as of such date. A
maximum of 174,570 Shares may be granted to directors who are not employees or
officers of the Company or the Bank ("Eligible Directors") with a maximum of
29,095 granted to any one Eligible Director.
Eligibility. Any employee of the Company (or a participating affiliate) who
is selected by the Committee is eligible to participate in the RRP as an
"Eligible Employee." As of June 30, 1997, there were 31 Eligible Employees and
Eligible Directors participating in the RRP. Each Eligible Director received
an Award of 15,870 Shares on December 26, 1996.
Terms and Conditions of Awards. The Committee may, in its discretion, grant
Awards of restricted stock to Eligible Employees. The Committee will determine
at the time of the grant the number of Shares subject to an Award and the
vesting schedule applicable to the Award and may, in its discretion, establish
other terms and conditions applicable to the Award.
Pursuant to the terms of the RRP, Shares subject to Awards are held in the
RRP Trust until vested. An individual to whom an Award is granted will be
entitled to exercise voting rights. The Committee will exercise voting rights
employees received with respect to Shares in the RRP Trust that have not been
allocated as directed by the individuals eligible to participate in the RRP,
whether or not such individuals have been granted an Award. Shares covered by
an Award will become vested in accordance with the terms of the Award and, as
soon as practicable following such vesting, the trustee will transfer the
Shares to the Award recipient.
Currently the RRP provides that for Shares covered by an Award will vest at
the rate of 20% each year beginning on the February 1 following the date of
grant, with full vesting to occur after five years or upon the disability or
death of the option holder unless the Committee determines to impose a less
favorable vesting schedule. In addition, the RRP currently provides for
dividends declared and paid with respect to Shares subject to an outstanding
Award to be retained in the RRP Trust until the Shares underlying the Award
have vested. As permitted by OTS ruling positions, these restrictions on
vesting and distribution of dividends may be removed through shareholder
approval of the RRP Amendments to the RRP. Accordingly, pursuant to the RRP,
as amended by the RRP Amendments, all Shares covered by an outstanding Award
will become 100% vested upon the death, disability or retirement of an Award
recipient or a Change of Control of the Company. The amended RRP also permits
the Committee to establish a vesting schedule that is more favorable than the
five year vesting schedule to be applicable to an Award made to an Eligible
Employee under the Plan. In addition, pursuant to the RRP, as amended, the
Committee may distribute cash payments representing dividends declared and
paid on Shares, whether or not vested, covered by an Award held by a recipient
under the RRP.
TERMINATION OR AMENDMENT OF THE RRP
The Board may suspend or terminate the RRP in whole or in part at any time
prior to the fifth anniversary of the Effective Date of the RRP, by giving
written notice of such suspension or termination to the Committee, but the RRP
may not be terminated while there are outstanding Awards that may thereafter
become vested. Upon the termination of the RRP, the trustee shall make
distributions from the Trust in such amounts and to such persons as the
Committee may direct and shall return the remaining assets of the Trust, if
any, to the Company.
The Board may amend or revise the RRP in whole or in part at any time.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a summary and does not purport
to be a comprehensive description of the federal tax laws, regulations and
policies affecting the company and recipients of Awards that
23
<PAGE>
may be granted under the RRP. Any descriptions of the provisions of any law,
regulation or policy contained herein are qualified in their entirety by
reference to the particular law, regulation or policy. Any change in
applicable law or regulation or in the policies of various taxing authorities
may have a material effect on the discussion contained herein. The RRP does
not constitute a qualified plan under Section 401(a) of the Code.
The grant of an Award of Shares under the RRP does not result in federal
income tax consequences to either the Company or the Award recipient. Upon the
vesting of an Award and distribution of the vested Shares, the Award recipient
will generally be required to include in ordinary income, for the taxable year
in which the vesting date occurs, an amount equal to the fair market value of
the Shares on the vesting date, and the Company will generally be allowed to
claim a deduction, for compensation expense, in a like amount. Section 162(m)
limits the Company's deductions of compensation in excess of $1 million for
the most highly paid executives named in the Company's Proxy Statement. To the
extent that dividends are paid with respect to unvested Shares held under the
RRP and distributed to the Award recipient, such dividend amounts will
likewise be includible in the ordinary income of the recipient and generally
allowable as a deduction, for compensation expense to the Company. Dividends
declared and paid with respect to vested Shares, as well as any gain or loss
realized upon an Award recipient's disposition of the Shares, will be treated
as dividend income and capital gain or loss, respectively, in the same manner
for other shareholders.
The foregoing statements are intended to summarize the general principles of
current federal income tax law applicable to Awards that may be granted under
the RRP. State and local tax consequences may also be significant.
Participants are advised to consult with their tax advisor as to the
consequences of the RRP.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE RRP AMENDMENTS TO THE RECOGNITION AND RETENTION PLAN FOR
OUTSIDE DIRECTORS, OFFICERS AND EMPLOYEES OF DIME COMMUNITY BANCORP, INC.
The following table sets forth the Options and Awards granted under the
Option Plan and RRP to the individuals and groups indicated for the fiscal
year ended June 30, 1997. Shareholder approval of the Amendments to these
Plans, previously described in more detail, affects primarily the vesting of
the Options and Awards granted pursuant to these Plans. The number of Options
and Awards which have been, and will be granted, under these Plans will be
unaffected by the Option Plan Amendments and the RRP Amendments.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
OPTION PLAN(1) RRP(2)
--------------- ------------------
NAME/POSITION # $ VALUE # $ VALUE
------------- ------- ------- ------- ----------
<S> <C> <C> <C> <C>
Vincent F. Palagiano........................ 285,000 -- 115,000 $1,667,500
Chairman of the Board and Chief Executive
Officer
Michael P. Devine........................... 190,000 -- 75,000 1,087,500
President and Chief Operating Officer
Kenneth J. Mahon............................ 130,000 -- 55,000 797,500
Executive Vice President, Chief Financial
Officer and Secretary
Timothy B. King............................. 50,000 -- 28,790 417,455
First Vice President and Treasurer
All Executive Officers as a Group (8 per- 810,000 -- 360,830 5,232,035
sons)......................................
All Outside Directors as a Group (11 per- 436,425 -- 174,570 2,531,265
sons)......................................
Each Nominee for Election as Outside Direc- 39,675 -- 15,870 230,115
tor (Messrs. Bergamo, Farrell and Varone)..
All Non-Executive Employees as a Group...... 147,000 -- 46,500 674,250
</TABLE>
(footnotes on following page)
24
<PAGE>
- --------
(1) The Exercise Price of the Options was $14.50 per Share which was the Fair
Market Value of a Share on December 26, 1996, the date of grant. The
dollar value of an Option on the grant date was not readily ascertainable,
and the future value, if any, will be dependent on the price of a Share in
the future. The Options granted will become exercisable in 20% increments
on each anniversary of the grant date, with full vesting to occur on the
fifth consecutive anniversary of the grant date or upon the earlier death
or disability of the Option recipient. The information provided includes
39,675 options granted to James Fox, a former director who died in May,
1997. These options became fully vested on Mr. Fox's death and will be
distributed to his beneficiaries. If approved by the Company's
shareholders, the Option Plan Amendments would provide for accelerated
vesting to occur upon the "retirement" of the Option holder or a "Change
in Control" of the Company, as such terms are defined in the Option Plan
and would permit the Committee under the Option Plan to establish a
different vesting schedule for Eligible Employees.
(2) On December 26, 1996, each Eligible Outside Director received an Award of
15,870 Shares under the RRP and each Eligible Employee who is an Executive
Officer received an Award as shown in the above table. The dollar value of
such Awards, shown in the table above, was calculated on the basis of
$14.50 per Share, the Fair Market Value of a Share on the date these
Awards were granted. Currently the RRP provides for these Awards to vest
in 20% increments, with full vesting to occur on the fifth consecutive
anniversary of the February 1st following the date of grant or upon the
earlier death or disability of the Award recipient. The information
provided includes an award of 15,870 Shares to James Fox, a former
director who died in May, 1997. The Shares became fully vested on Mr.
Fox's death and will be distributed to his beneficiaries. If approved by
the Company's shareholders, the RRP Amendments would provide for
accelerated vesting of these Awards to occur upon the "retirement" of the
Award recipient or the date of a "Change of Control" of the Company, as
such terms are defined in the RRP and would permit the Committee under the
RRP to establish a different vesting schedule for Eligible Employees.
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
GENERAL
The Board of Directors has appointed the firm of Deloitte and Touche LLP to
act as the Company's independent auditors for the fiscal year ending June 30,
1998, subject to ratification of such appointment by the Company's
shareholders. A representative of Deloitte and Touche LLP is expected to be
present at the Annual Meeting and will be given an opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions. No determination has been made as to what action the
Board of Directors would take if the shareholders do not ratify the
appointment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS.
PROPOSAL 5
AUTHORIZATION OF THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO
DIRECT THE VOTE OF PROXIES UPON SUCH OTHER MATTERS
INCIDENT TO THE CONDUCT OF THE ANNUAL MEETING AS MAY PROPERLY
COME BEFORE THE ANNUAL MEETING, AND ANY ADJOURNMENT OR
POSTPONEMENT THEREOF, INCLUDING, WITHOUT LIMITATION,
A MOTION TO ADJOURN THE ANNUAL MEETING
The Board of Directors is not aware of any other business that may properly
come before the Annual Meeting. The Board seeks the authorization of the
shareholders of the Company, in the event matters incident to the conduct of
the Annual Meeting properly come before the meeting, including, but not
limited to, the consideration of whether to adjourn the Annual Meeting once
called to order, to direct the manner in which those shares represented at the
Annual Meeting by proxies solicited pursuant to this Proxy Statement shall be
voted. As to all such matters, the Board intends that it would direct the
voting of such shares in the manner determined by the Board, in its
discretion, and in the exercise of its duties and responsibilities, to be in
the best interests of the Company and its shareholders, taken as a whole.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
AUTHORIZATION OF THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO DIRECT THE VOTE
OF PROXIES UPON SUCH OTHER MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL
MEETING AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING, AND ANY ADJOURNMENT OR
POSTPONEMENT THEREOF, INCLUDING, WITHOUT LIMITATION, A MOTION TO ADJOURN THE
ANNUAL MEETING.
25
<PAGE>
ADDITIONAL INFORMATION
NOTICE OF BUSINESS TO BE CONDUCTED AT ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for a
shareholder to properly bring business before an annual meeting or to nominate
any person for election to the Board of Directors. The shareholder must be a
shareholder of record and have given timely notice thereof in writing to the
Secretary of the Company. To be timely, a shareholder's notice must be
delivered to or received by the Secretary not later than the following dates:
(i) with respect to an annual meeting of shareholders, sixty (60) days in
advance of such meeting if such meeting is to be held on a day which is within
thirty (30) days preceding the anniversary of the previous year's annual
meeting, or ninety (90) days in advance of such meeting if such meeting is to
be held on or after the anniversary of the previous year's annual meeting; and
(ii) with respect to an annual meeting of shareholders held at a time other
than within the time periods set forth in the immediately preceding clause
(i), the close of business on the tenth (10th) day following the date on which
notice of such meeting is first given to shareholders. Notice shall be deemed
to first be given to shareholders when disclosure of such date of the meeting
of shareholders is first made in a press release reported to Dow Jones News
Services, Associated Press or comparable national news service, or in a
document publicly filed by the Company with the SEC pursuant to Section 13, 14
or 15(d) of the Exchange Act. A shareholder's notice to the Secretary shall
set forth such information as required by the Bylaws of the Company. Nothing
in this paragraph shall be deemed to require the Company to include in its
proxy statement and proxy card relating to an annual meeting any shareholder
proposal or nomination which does not meet all of the requirements for
inclusion established by the SEC in effect at the time such proposal or
nomination is received. See "--Date For Submission of Shareholder Proposals."
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the Company's proxy
statement and proxy card relating to the Company's 1998 Annual Meeting of
Shareholders must be received by the Company by June 8, 1998, pursuant to the
proxy soliciting regulations of the SEC. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement and proxy card
for such meeting any shareholder proposal which does not meet the requirements
of the SEC in effect at the time. Any such proposal will be subject to 17
C.F.R. (S)240.14a-8 of the Rules and Regulations promulgated by the SEC under
the Exchange Act.
26
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not know of any other matters to be brought before the
shareholders at the 1997 Annual Meeting. See "Proposal 5."
A copy of the 1997 Annual Report to shareholders, including the consolidated
financial statements prepared in conformity with generally accepted accounting
principles, for the fiscal year ended June 30, 1997 accompanies this Proxy
Statement. The consolidated financial statements have been audited by Deloitte
and Touche LLP, whose report appears in the Annual Report. SHAREHOLDERS MAY
OBTAIN, FREE OF CHARGE, A COPY OF THE ANNUAL REPORT ON FORM 10-K FILED WITH
THE SEC (WITHOUT EXHIBITS) BY WRITING TO KENNETH A. CEONZO, DIRECTOR OF
INVESTOR RELATIONS, DIME COMMUNITY BANCORP, INC., 209 HAVEMEYER STREET,
BROOKLYN, NEW YORK 11211 OR BY CALLING (718) 782-6200, EXTENSION 279.
By Order of the Board of Directors
/s/ Kenneth J. Mahon
Kenneth J. Mahon
Executive Vice President, Chief
Financial Officer and Secretary
Brooklyn, New York
October 6, 1997
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING PLEASE
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
27
<PAGE>
APPENDIX A
DIME COMMUNITY BANCORP, INC.
1996 STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS,
OFFICERS AND EMPLOYEES
(ADOPTED ON JULY 10, 1997
EFFECTIVE AS OF JUNE 27, 1997)
AMENDMENT
1. ARTICLE V--Effective as of June 27, 1997, the last sentence of section
5.3(b) shall be amended by deleting the proviso and substituting the
following:
provided, however, that such an Option shall become fully exercisable, and
all optioned Shares not previously purchased shall become available for
purchase, on the date of the Option holder's death or Disability or
Retirement or the date of a Change in Control.
2. Effective as of June 27, 1997, section 6.5(c) shall be amended by
deleting the two provisos and adding the following:
provided, however, that such an Option shall become fully exercisable, and
all optioned Shares not previously purchased shall become available for
purchase, on the date of the Option holder's death or Disability or
Retirement or the date of a Change in Control; and provided, further, that
the Committee may establish a different vesting schedule for any Options.
3. ARTICLE VIII--Effective as of June 27, 1997, section 8.3(b) shall be
amended in its entirety to read as follows:
(b) In the event of any merger, consolidation, or other business
reorganization in which the Company is not the surviving entity, any
Options granted under the Plan which remain outstanding may be cancelled as
of the effective date of such merger, consolidation, business
reorganization, liquidation or sale by the Board upon 30 days' written
notice to the Option holder; provided, however, that on or as soon as
practicable following the date of cancellation, each Option holder shall
receive a monetary payment in such amount, or other property of such kind
and value, as the Board determines in good faith to be equivalent in value
to the Options that have been cancelled.
4. ARTICLE VIII--Effective as of December 26, 1996, section 8.3(c) shall be
amended in its entirety to read as follows:
(c) In the event that the Company shall declare and pay any dividend with
respect to Shares (other than a dividend payable in Shares) which results
in a nontaxable return of capital to the holders of Shares for federal
income tax purposes or otherwise than by dividend makes distribution of
property to the holders of its Shares, the Company shall, in the discretion
of the Committee, either:
(i) make an equivalent payment to each Person holding an outstanding
Option as of the record date for such dividend. Such payment shall be
made at substantially the same time, in substantially the same form and
in substantially the same amount per optioned Share as the dividend or
other distribution paid with respect to outstanding Shares; provided,
however, that if any dividend or distribution on outstanding Shares is
paid in property other than cash, the Company, in the Committee's
discretion, may make such payment in a cash amount per optioned Share
equal in fair market value to the fair market value of the non-cash
dividend or distribution; or
A-1
<PAGE>
(ii) adjust the Exercise Price of each outstanding Option in such
manner as the Committee may determine to be appropriate to equitably
reflect the payment of the dividend; or
(iii) take the action described in section 8.3(c) with respect to
certain outstanding Options and the action described in with respect to
the remaining outstanding Options;
provided, however, that no such action shall be taken without the approval
of the Office of Thrift Supervision until the stockholders of the Company
have voted to approve the provisions of this section 8.3(c) in a vote taken
after June 26, 1997.
A-2
<PAGE>
APPENDIX B
RECOGNITION AND RETENTION PLAN
FOR OUTSIDE DIRECTORS,
OFFICERS AND EMPLOYEES OF
DIME COMMUNITY BANCORP, INC.
(ADOPTED ON JULY 10, 1997
EFFECTIVE AS OF JUNE 27, 1997)
AMENDMENT
1. ARTICLE II--Effective as of June 27, 1997, the following new section 2.19
shall be added and following sections shall be renumbered accordingly:
Section 2.19 Retirement means retirement at or after the normal or early
retirement date set forth in any tax-qualified plan of the Bank.
2. ARTICLE VI--Effective as of June 27, 1997, the first sentence of section
6.5(a) shall be amended to read in its entirety as follows:
Any cash dividends or distributions declared and paid with respect to
Shares in the Trust Fund that are, as of the record date for such dividend,
allocated to an Eligible Director or Eligible Employee in connection with
an Award shall be promptly paid to such Eligible Director or Eligible
Employee.
3. Effective as of June 27, 1997, section 7.1 shall be amended by deleting
the last proviso and substituting the following:
and provided, further, an Award shall become 100% vested upon the Award
holder's death or Disability or Retirement or the date of a Change in
Control.
4. ARTICLE VII--Effective as of June 27, 1997, section 7.2 shall be amended
by deleting the last proviso and substituting the following:
provided, however, that an Award shall become fully vested on the date of
the Award holder's death or Disability or Retirement or the date of a
Change in Control; and provided, further, that the Committee may establish
a different vesting schedule for any Awards.
5. ARTICLE VIII--Effective as of June 27, 1997, section 8.3(c) shall be
deleted in its entirety.
B-1
<PAGE>
REVOCABLE PROXY
DIME COMMUNITY BANCORP, INC.
209 Havemeyer Street
Brooklyn, New York 11211
This Proxy is solicited on behalf of the Board of Directors
of Dime Community Bancorp, Inc. for the Annual Meeting of Shareholders
to be held on November 13, 1997
The undersigned shareholder of Dime Community Bancorp, Inc. hereby
appoints George L. Clark, Jr., Steven D. Cohn and John J. Flynn or any of them,
with full powers of substitution, to represent and to vote as proxy, as
designated, all shares of common stock of Dime Community Bancorp, Inc. held of
record by the undersigned on September 22, 1997, at the 1997 Annual Meeting of
Shareholders (the "Annual Meeting") to be held at 10:00 a.m., local time, on
November 13, 1997, or at any adjournment or postponement thereof, upon the
matters described in the accompanying Notice of the 1997 Annual Meeting of
Shareholders and Proxy Statement, dated october 6, 1997 and upon such other
matters as may properly come before the Annual Meeting. The undersigned hereby
revokes all prior proxies.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is given, this Proxy will
be voted FOR the election of all nominees listed in Item 1 and FOR the proposals
listed in Items 2, 3, 4 and 5.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE PLEASE MARK [X]
"FOR" ALL OF THE NOMINEES NAMED IN ITEM 1 AND A VOTE YOUR VOTES AS
"FOR" EACH OF THE PROPOSAL IN ITEMS 2, 3, 4 AND 5. INDICATED IN
THIS EXAMPLE
1. Election of four Directors for terms of three years each.
FOR WITHHOLD
All nominees for all
(except as otherwise nominees
indicated)
[ ] [ ]
NOMINEES: Michael P. Devine, Anthony Bergamo, Joseph H.
Farrell and Louis V. Varone
Instruction: TO WITHHOLD AUTHORITY to vote for any individual
nominee, write that nominee's name in the space provided:
- -------------------------------------------------------------
- -------------------------------------------------------------
2. Approval of Amendments to the Dime
Community Bancorp, Inc. 1997 Stock
Option Plan for Outside Directors,
Officers and Employees.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of Amendments to the Recognition
and Retention Plan for Outside Directors,
Officers and Employees of Dime Community
Bancorp, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Ratification of the appointment of Deloitte
& Touche LLP as Independent auditors
for the fiscal year ending June 30, 1997
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Authorization of the Board of Directors, in its discretion, to direct
the vote of proxies upon such matters incident to the conduct of the Annual
Meeting as may properly come before the Annual Meeting, and any
adjournment or postponement thereof, including, without limitation, a motion
to adjourn the Annual Meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I will attend the
Annual Meeting
[ ]
The undersigned hereby acknowledges receipt of the Notice of the 1997 Annual
Meeting of Shareholders and the Proxy Statement, dated October 1997 for the
Annual Meeting.
- -------------------------------------------------------------------------
Signature(s)
- -------------------------------------------------------------------------
Signature(s)
Dated: , 1997
-----------------------------------------------------------------
Please sign exactly as your name appears on this proxy. Joint owners should each
sign personally. If signing as attorney, executor, administrator, trustee,
or guardian, please include your full title. Corporate or partnership proxy
should be signed by an authorized officer.
- -----------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
October 6, 1997
TO: ALL EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP")
AND 401(K) SAVINGS PLAN ("401(K) PLAN") PARTICIPANTS
Re: Annual Meeting of Shareholders to be held on November 13, 1997
--------------------------------------------------------------
Dear Participants:
As you know, The Dime Savings Bank of Williamsburgh (the "Bank") 401(k)
Savings Plan ("401(k) Plan") includes an investment alternative to purchase the
stock of the Bank's parent company, Dime Community Bancorp, Inc. (the "Company")
using funds from your 401(k) Plan account (the "401(k) Stock Fund") and the
Company maintains the Employee Stock Ownership Plan ("ESOP") for employees of
the Company. The 401(k) Stock Fund and the ESOP each hold shares of the Company
for the benefit of participants in those plans. These shares are held by Marine
Midland Bank as trustee (the "Trustee") for each of the ESOP and the 401(k)
Plan. Shares purchased by the ESOP are being held by the Trustee to be given to
ESOP participants over a period of years. Interests in shares that you have
purchased in the 401(k) Stock Fund are being held by the Trustee for your
benefit. Both the ESOP and the 401(k) Plan allow participants of each
respective plan (including former participants and beneficiaries) to have
certain voting rights at the Company's shareholder meetings.
In connection with the Annual Meeting of Shareholders of Dime Community
Bancorp, Inc. to be held on November 13, 1997, enclosed are the following
documents:
1. Confidential Voting Instruction card for the ESOP (blue card);
2. Confidential Voting Instruction card for the 401(k) Plan (yellow card);
3. Proxy Statement dated October 6, 1997, including a Notice of the 1997
Annual Meeting of Shareholders; and
4. 1997 Annual Report to Shareholders.
As a participant in the ESOP and/or the 401(k) Plan, you have the right to
direct the Trustee how to vote the shares held by the ESOP and/or shares in the
401(k) Stock Fund as of September 22, 1997, the record date for the Annual
Meeting ("Record Date"), on the proposals
<PAGE>
-2-
to be voted by the Company's shareholders. Your rights as a participant in the
ESOP and/or 401(k) Plan will vary depending on whether the matter being voted on
is an "Anticipated Proposal" or an "Unanticipated Proposal."
ANTICIPATED PROPOSALS.
ESOP Participants.
Each ESOP participant has the right to specify how the Trustee, as Trustee
for the ESOP, should vote the shares in his or her ESOP account as of the Record
Date. In general, the Trustee will vote the shares in your ESOP account by
casting votes FOR and AGAINST each proposal as you specify on the Confidential
Voting Instruction accompanying this letter. The number of shares in your ESOP
account are shown on the enclosed Confidential Voting Instruction card.
The Trustee's fiduciary duties require it to vote any shares for which it
receives no voting instructions, as well as any shares not yet given to ESOP
participants, in a manner determined to be prudent and solely in the interest of
the participants and beneficiaries. If you do not direct the Trustee how to
vote the shares in your ESOP account, the Trustee will, to the extent consistent
with its fiduciary duties, vote your shares in a manner calculated to most
accurately reflect the instructions received from other participants in the
ESOP. The same is true of Shares not yet placed in anyone's ESOP account.
If you do not have any shares allocated to your account in the ESOP as of
September 22, 1997, there will be no Confidential Voting Instruction card for
the ESOP enclosed with this letter.
401(k) Plan Participants.
In general, 401(k) Plan participants have the right to direct how the
Trustee, as Trustee for the 401(k) Plan, should vote the shares in the 401(k)
Stock Fund. In general, the Trustee will vote FOR and AGAINST each proposal
specified on the Confidential Voting Instruction card in the same proportions as
instructions to cast votes FOR and AGAINST such proposal are given by 401(k)
Plan participants entitled to give voting instructions. The instructions given
by each 401(k) Plan participant will be weighted according to value of his or
her respective interest in the 401(k) Stock Fund as of September 22, 1997. For
purposes of the 401(k) Plan, if you ABSTAIN as to a proposal, or if you do not
return your Confidential Voting Instruction card for the 401(k) Plan to the
Trustee by ______________, 1997, your instructions will not be counted.
If you do not have any shares of Company stock allocated to your 401(k)
Stock Fund as of _______________, 1997, there will be no Confidential Voting
Instruction card for the 401(k) Plan enclosed with this letter.
<PAGE>
-3-
UNANTICIPATED PROPOSALS.
It is possible, although very unlikely, that proposals other than those
specified on the Confidential Voting Instruction cards will be presented for
shareholder action at the 1997 Annual Meeting of Shareholders. If this should
happen, the Trustee will vote upon such matters in its discretion, or cause such
matters to be voted upon in the discretion of the individuals named in any
proxies executed by it.
* * * * *
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction card or cards to signify your direction to the
Trustee. You should then seal the completed card or cards in the enclosed
----------------------------------------------------------------
envelope and return it directly to the Trustee using the postage-paid return
- ----------------------------------------------------------------------------
envelope provided. The Confidential Voting Instruction card or cards must be
- -----------------
received by the Trustee no later than ____________, 1997.
PLEASE NOTE THAT THE VOTING INSTRUCTIONS OF INDIVIDUAL PARTICIPANTS ARE TO
BE KEPT CONFIDENTIAL BY THE TRUSTEE, WHO HAS BEEN INSTRUCTED NOT TO DISCLOSE
THEM TO ANYONE AT THE BANK OR THE COMPANY. IF YOU HAVE ANY QUESTIONS REGARDING
YOUR VOTING RIGHTS OR THE TERMS OF THE ESOP OR 401(K) PLAN, PLEASE CALL MYLES
MCLOUGHLIN AT (718) 782-6200 EXTENSION 203.
Very truly yours,
THE COMPENSATION COMMITTEE OF
DIME COMMUNITY BANCORP, INC.
Enclosures
<PAGE>
DIME COMMUNITY BANCORP, INC.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMPENSATION COMMITTEE
OF DIME COMMUNITY BANCORP, INC.
FOR THE DIME SAVINGS BANK OF WILLIAMSBURGH 401(K) SAVINGS PLAN
The undersigned participant, former participant or beneficiary of a
deceased former participant in the The Dime Savings Bank of Williamsburgh 401(k)
Savings Plan in RSI Retirement Trust (the "401(k) Plan") hereby provides the
voting instructions specified to the Trustee of the 401(k) Plan (the "Trustee"),
which instructions shall be taken into account by the Trustee in voting, in
person, by limited or general power of attorney, or by proxy, the shares and
fractional shares of common stock of Dime Community Bancorp, Inc. that are held
by the Trustee, in its capacity as Trustee of the 401(k) Plan, as of September
22, 1997 at the 1997 Annual Meeting of Shareholders of Dime Community Bancorp,
Inc. to be held on November 13, 1997, and at any adjournment or postponement
thereof.
As to the proposals listed on the reverse side, which are more particularly
described in the Proxy Statement dated October 6, 1997, the Trustee will vote
the common stock of Dime Community Bancorp, Inc. held by the 401(k) Plan Trust
to reflect the voting instructions on this Confidential Voting Instruction, in
the manner described in the accompanying letter from the Compensation Committee
dated October 6, 1997.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE REVERSE
SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
THE BOARD OF DIRECTORS OF DIME COMMUNITY BANCORP, INC. RECOMMENDS A VOTE
"FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4.
IF THIS CONFIDENTIAL VOTING INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN,
THIS VOTING INSTRUCTION CARD WILL BE DEEMED TO INSTRUCT VOTES "FOR" ALL NOMINEES
IN PROPOSAL NO. 1, AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4. THE DIRECTIONS,
IF ANY, GIVEN IN THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE KEPT CONFIDENTIAL
FROM ALL DIRECTORS, OFFICERS AND EMPLOYEES OF DIME COMMUNITY BANCORP, INC. OR
THE DIME SAVINGS BANK OF WILLIAMSBURGH.
<TABLE>
<CAPTION>
Please mark your votes like this
[ ]
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Election of four Directors for terms of three years FOR all nominees WITHHOLD as to all nominees
each. Nominees: Michael P. Devine, Anthony Bergamo, (except as otherwise indicated)
Joseph H. Farrell and Louis V. Varone. [ ] [ ]
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED:
- ------------------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN*
- ------------------------------------------------------------------------------------------------------------------------------------
2. Approval of Amendments to the Dime Community Bancorp, [ ] [ ] [ ]
Inc. 1996 Stock Option Plan for Outside Directors,
Officers and Employees.
- ------------------------------------------------------------------------------------------------------------------------------------
3. Approval of Amendments to the Recognition and Retention [ ] [ ] [ ]
Plan for Outside Directors, Officers and Employees of Dime
Community Bancorp, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
4. Ratification of the appointment of Deloitte & Touche LLP [ ] [ ] [ ]
as independent auditors of Dime Community Bancorp, Inc.
for the fiscal year ending June 30, 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For purposes of your 401(k) Plan account, abstaining is the same as not voting.
In its discretion, the Trustee is authorized to vote upon such other
business as may come before the Annual Meeting or any adjournment or
postponement thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustees.
All proposals listed above in this Confidential Voting Instruction were
proposed by Dime Community Bancorp, Inc.
The undersigned hereby instructs the Trustee to vote in accordance with the
voting instruction indicated above and hereby acknowledges receipt, prior to the
execution of this Confidential Voting Instruction, of a Voting Instruction
Letter, a Notice of the 1997 Annual Meeting of Shareholders of Dime Community
Bancorp, Inc., a Proxy Statement dated October 6, 1997 for the 1997 Annual
Meeting and a 1997 Annual Report to Shareholders.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOUR CONFIDENTIAL VOTING INSTRUCTION MUST BE RECEIVED NO LATER THAN
__________________, 1997.
Date
-----------------------------------------------------------------------
Signature
------------------------------------------------------------------
Signature of participant, former participant or designated beneficiary of
deceased former participant. Please sign name exactly as it appears herein.
When signing as attorney, executor, administrator, trustee or guardian,
please give your full title as such .
---------------------------------------------------------------------------
<PAGE>
DIME COMMUNITY BANCORP, INC.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMPENSATION COMMITTEE
OF DIME COMMUNITY BANCORP, INC.
FOR THE EMPLOYEE STOCK OWNERSHIP PLAN
OF DIME COMMUNITY BANCORP, INC. AND CERTAIN AFFILIATES
The undersigned participant, former participant or beneficiary of a
deceased former participant in the Employee Stock Ownership Plan of Dime
Community Bancorp, Inc. and Certain Affiliates (the "ESOP") hereby provides the
voting instructions specified to the Trustee of the ESOP (the "Trustee"), which
instructions shall be taken into account by the Trustee in voting, in person, by
limited or general power of attorney, or by proxy, the shares and fractional
shares of common stock of Dime Community Bancorp, Inc. that are held by the
Trustee, in its capacity as Trustee of the ESOP, as of September 22, 1997 at the
1996 Annual Meeting of Shareholders of Dime Community Bancorp, Inc. to be held
on November 13, 1997, and at any adjournment or postponement thereof.
As to the proposals listed on the reverse side, which are more particularly
described in the Proxy Statement dated October 6, 1997, the Trustee will vote
the common stock of Dime Community Bancorp, Inc. held by the ESOP Trust to
reflect the voting instructions on this Confidential Voting Instruction, in the
manner described in the accompanying letter from the Compensation Committee
dated October 6, 1997.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE REVERSE
SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
THE BOARD OF DIRECTORS OF DIME COMMUNITY BANCORP, INC. RECOMMENDS A VOTE
"FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4.
IF THIS CONFIDENTIAL VOTING INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN,
THIS VOTING INSTRUCTION CARD WILL BE DEEMED TO INSTRUCT VOTES "FOR" ALL NOMINEES
IN PROPOSAL NO. 1, AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4. THE DIRECTIONS,
IF ANY, GIVEN IN THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE KEPT CONFIDENTIAL
FROM ALL DIRECTORS, OFFICERS AND EMPLOYEES OF DIME COMMUNITY BANCORP, INC. OR
THE DIME SAVINGS BANK OF WILLIAMSBURGH.
<TABLE>
<CAPTION>
Please mark your votes like this
[X]
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Election of four Directors for terms of three years FOR all nominees WITHHOLD as to all nominees
each. Nominees: Michael P. Devine, Anthony Bergamo, (except as otherwise indicated)
Joseph H. Farrell and Louis V. Varone. [ ] [ ]
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED:
- ---------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- ------------------------------------------------------------------------------------------------------------------------------------
2. Approval of Amendments to the Dime Community Bancorp, [ ] [ ] [ ]
Inc. 1996 Stock Option Plan for Outside Directors, Officers
and Employees.
- ------------------------------------------------------------------------------------------------------------------------------------
3. Approval of Amendments to the Recognition and Retention [ ] [ ] [ ]
Plan for Outside Directors, Officers and Employees of Dime
Community Bancorp, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
4. Ratification of the appointment of Deloitte & Touche LLP [ ] [ ] [ ]
as independent auditors of Dime Community Bancorp, Inc. for
the fiscal year ending June 30, 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In its discretion, the Trustee is authorized to vote upon such other
business as may come before the Annual Meeting or any adjournment or
postponement thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustees.
All proposals listed above in this Confidential Voting Instruction were
proposed by Dime Community Bancorp, Inc.
The undersigned hereby instructs the Trustee to vote in accordance with the
voting instruction indicated above and hereby acknowledges receipt, prior to the
execution of this Confidential Voting Instruction, of a Voting Instruction
Letter, a Notice of the 1997 Annual Meeting of Shareholders of Dime Community
Bancorp, Inc., a Proxy Statement dated October 6, 1997 for the 1997 Annual
Meeting and a 1997 Annual Report to Shareholders.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOUR CONFIDENTIAL VOTING INSTRUCTION MUST BE RECEIVED NO LATER THAN
______________, 1997.
Date
-----------------------------------------------------------------------
Signature
------------------------------------------------------------------
Signature of participant, former participant or designated beneficiary of
deceased former participant. Please sign name exactly as it appears herein.
When signing as attorney, executor, administrator, trustee or guardian,
please give your full title as such.
---------------------------------------------------------------------------
<PAGE>
October 6, 1997
TO ALL RECOGNITION AND RETENTION PLAN ("RRP") PARTICIPANTS
Re: Annual Meeting of Shareholders to be held on November 13, 1997
--------------------------------------------------------------
As you know, after The Dime Savings Bank of Williamsburgh (the "Bank")
completed its stock conversion last year, its parent company, Dime Community
Bancorp, Inc.(the "Company"), established a new benefit plan and trust for the
benefit of eligible employees of the Company and the Bank. This Plan is known
as the Recognition and Retention Plan for Outside Directors, Officers and
Employees of Dime Community Bancorp, Inc." or "RRP." Shares of the Company's
common stock (the "Common Stock") were purchased by the RRP, and are held in
trust by its trustee Marine Midland Bank (the "Trustee"). The RRP allows its
participants to have certain voting rights at the Company's stockholder meetings
with respect to shares of Common Stock held by the Trustee.
In connection with the Annual Meeting of Shareholders of Dime Community
Bancorp, Inc. to be held on November 13, 1997, enclosed are the following
documents:
1. Confidential Voting Instruction card for the RRP;
2. Proxy Statement dated October 6, 1997, including a
Notice of the 1997 Annual Meeting of Shareholders; and
3. 1997 Annual Report to Shareholders
As a participant in the RRP, you have the right to direct the Trustee how
to vote the shares awarded to you under the RRP as of September 22, 1997, the
record date for the Special Meeting (the "Record Date"), on the proposals to be
voted on by the Company's Shareholders.
Each RRP participant has the right to specify how the RRP Trustee should
vote the shares awarded to such participant under the RRP as of the Record Date.
In general, the Trustee will vote the shares awarded to you by casting votes
FOR, AGAINST or ABSTAIN with respect to each proposal as you specify on the
Confidential Voting Instruction card accompanying this letter.
<PAGE>
The number of shares awarded to you under the RRP are shown on the enclosed
Confidential Voting Instruction card.
The Trustee's fiduciary duties require it to vote any shares for which it
receives no voting instructions, as well as any shares not yet awarded under the
RRP, in a manner determined to be prudent and solely in the interest of the RRP
participants and beneficiaries. With respect to shares of Common Stock not yet
awarded under the RRP, the Trustee will, to the extent consistent with its
fiduciary duties, vote such shares in a manner calculated to most accurately
reflect the instructions received from other participants in the RPP. If you do
not direct the Trustee how to vote the shares awarded to you under the RRP, such
shares will not be voted.
* * * * *
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction card to signify your direction to the Trustee.
You should then seal the completed card in the enclosed envelope and return it
- ------------------------------------------------------------------------------
directly to the Trustee using the postage-paid return envelope provided. The
- -----------------------------------------------------------------------
Confidential Voting Instruction card must be received by the Trustee no later
than ______________, 1997.
PLEASE NOTE THAT THE VOTING INSTRUCTIONS OF INDIVIDUAL PARTICIPANTS ARE TO
BE KEPT CONFIDENTIAL BY THE TRUSTEE, WHO HAS BEEN INSTRUCTED NOT TO DISCLOSE
THEM TO ANYONE AT THE BANK OR THE COMPANY. IF YOU HAVE ANY QUESTIONS REGARDING
YOUR VOTING RIGHTS OR THE TERMS OF THE RRP, PLEASE CALL MYLES MCLOUGHLIN AT
(718) 782-6200 EXTENSION 203.
Very truly yours,
THE COMPENSATION COMMITTEE OF
DIME COMMUNITY BANCORP, INC.
Enclosures
-2-
<PAGE>
DIME COMMUNITY BANCORP, INC.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMPENSATION COMMITTEE
OF DIME COMMUNITY BANCORP, INC.
FOR THE RECOGNITION AND RETENTION PLAN
FOR OUTSIDE DIRECTORS, OFFICERS AND EMPLOYEES
OF DIME COMMUNITY BANCORP, INC.
The undersigned participant of the Recognition and Retention Plan for
Outside Directors, Officers and Employees of Dime Community Bancorp, Inc. (the
"RRP") hereby provides the voting instructions specified to the trustee (the
"Trustee") of the RRP trust (the "RRP Trust"), which instructions shall be taken
into account by the Trustee in voting, in person, by limited or general power of
attorney, or by proxy, the shares of common stock of Dime Community Bancorp,
Inc. that are held by the Trustee, in its capacity as Trustee of the RRP, as of
September 22, 1997, at the 1997 Annual Meeting of Shareholders of Dime Community
Bancorp, Inc. to be held on November 13, 1997, and at any adjournment or
postponement thereof.
As to the proposals listed on the reverse side, which are more particularly
described in the Proxy Statement dated October 6, 1997, the Trustee will vote
the common stock of Dime Community Bancorp, Inc. held by the RRP Trust to
reflect the voting instructions on this Confidential Voting Instruction, in the
manner described in the accompanying letter from the Compensation Committee
dated October 6, 1997.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE REVERSE
SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
THE BOARD OF DIRECTORS OF DIME COMMUNITY BANCORP, INC. RECOMMENDS A VOTE
"FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4.
IF THIS CONFIDENTIAL VOTING INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN,
THIS VOTING INSTRUCTION CARD WILL BE DEEMED TO INSTRUCT VOTES "FOR" ALL NOMINEES
IN PROPOSAL NO. 1, AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4. THE DIRECTIONS,
IF ANY, GIVEN IN THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE KEPT CONFIDENTIAL
FROM ALL DIRECTORS, OFFICERS AND EMPLOYEES OF DIME COMMUNITY BANCORP, INC. OR
THE DIME SAVINGS BANK OF WILLIAMSBURGH.
<TABLE>
<CAPTION>
Please mark your votes like this
[ ]
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Election of four Directors for terms of three years FOR all nominees WITHHOLD as to all nominees
each. Nominees: Michael P. Devine, Anthony Bergamo, Joseph (except as otherwise indicated)
Joseph H. Farrell and Louis V. Varone. [ ] [ ]
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED:
- ------------------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- ------------------------------------------------------------------------------------------------------------------------------------
2. Approval of Amendments to the Dime Community Bancorp, [ ] [ ] [ ]
Inc. 1996 Stock Option Plan for Outside Directors, Officers
and Employees.
- ------------------------------------------------------------------------------------------------------------------------------------
3. Approval of Amendments to the Recognition and Retention [ ] [ ] [ ]
Plan for Outside Directors, Officers and Employees of Dime
Community Bancorp, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
4. Ratification of the appointment of Deloitte & Touche LLP [ ] [ ] [ ]
as independent auditors of Dime Community Bancorp, Inc. for
the fiscal year ending June 30, 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In its discretion, the Trustee is authorized to vote upon such other
business as may come before the 1997 Annual Meeting or any adjournment or
postponement thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustees.
All proposals listed above in this Confidential Voting Instruction were
proposed by Dime Community Bancorp, Inc.
The undersigned hereby instructs the Trustee to vote in accordance with the
voting instruction indicated above and hereby acknowledges receipt, prior to the
execution of this Confidential Voting Instruction, of a Voting Instruction
Letter, a Notice of the 1997 Annual Meeting of Shareholders of Dime Community
Bancorp, Inc., a Proxy Statement dated October 6, 1997 for the Annual Meeting
and a 1997 Annual Report to Shareholders.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOUR CONFIDENTIAL VOTING INSTRUCTION MUST BE RECEIVED NO LATER THAN
_______________, 1997.
Date
------------------------------------------------------------------------
Signature
-------------------------------------------------------------------
Signature of participant, former participant or designated beneficiary of
deceased former participant. Please sign name exactly as it appears herein.
When signing as attorney, executor, administrator, trustee or guardian,
please give your full title as such.
----------------------------------------------------------------------------
