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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
DIME COMMUNITY BANCSHARES, INC.
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(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------------------
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(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:
Common stock, $0.01 par value.
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(2) Aggregate number of securities to which transaction applies:
N/A
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(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):
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO]
October 6, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders (referred to as the "Annual Meeting") of Dime Community
Bancshares, Inc, the holding company for The Dime Savings Bank of
Williamsburgh, Brooklyn, New York, which will be held on November 9, 2000 at
10:00 a.m., eastern standard time, at Giando on the Water, 400 Kent Avenue,
Brooklyn, New York 11211.
The attached Notice of the 2000 Annual Meeting of Shareholders and Proxy
Statement describe the business to be transacted at the Annual Meeting. Our
directors and officers, as well as a representative of Deloitte & Touche LLP,
the accounting firm appointed by the Board of Directors to be our independent
auditors for the fiscal year ending June 30, 2001, will be present at the
Annual Meeting.
Our Board of Directors have determined that an affirmative vote on each
matter to be considered at the Annual Meeting is in our best interest and the
best interests of our 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 OUR SHARES.
On behalf of our Board of Directors, employees and the Bank's employees,
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 BANCSHARES, INC.
209 HAVEMEYER STREET
BROOKLYN, NEW YORK 11211
(718) 782-6200
NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 9, 2000
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders of
Dime Community Bancshares, Inc. will be held at Giando on the Water, 400 Kent
Avenue, Brooklyn, New York 11211, on November 9, 2000 at 10:00 a.m., eastern
standard time, to consider and vote upon the:
1. Election of four directors for terms of three years each;
2. Ratification of the appointment of Deloitte & Touche LLP as our
independent auditors for the fiscal year ending June 30, 2001; and
3. Such other business as may properly come before the Annual Meeting
or any adjournment or postponement thereof. As of the date hereof,
management is not aware of any other such business.
The Board of Directors has fixed September 22, 2000, 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 our office for 10
days prior to the Annual Meeting.
By Order of the Board of
Directors
/s/ KENNETH A. CEONZO
Kenneth A. Ceonzo
FIRST VICE PRESIDENT AND
SECRETARY
Brooklyn, New York
October 6, 2000
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 BANCSHARES, INC.
PROXY STATEMENT FOR THE
2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 9, 2000
GENERAL INFORMATION
GENERAL
This Proxy Statement and accompanying proxy card are being furnished to
the shareholders of Dime Community Bancshares, Inc. (hereafter referred to as
"we" and "our") in connection with the solicitation of proxies by our Board of
Directors from holders of the shares of our issued and outstanding common
stock, par value $0.01 per share (referred to as the "Common Stock"), as of the
close of business on September 22, 2000 (referred to as the "Record Date"), for
use at our 2000 Annual Meeting of Shareholders to be held on November 9, 2000
at Giando on the Water, 400 Kent Avenue, Brooklyn, New York, at 10:00 a.m.,
eastern standard time, and at any adjournment or postponement thereof (referred
to as the "Annual Meeting"). We are a Delaware corporation and operate as a
unitary savings and loan holding company for The Dime Savings Bank of
Williamsburgh (hereafter referred to as the "Bank"). This Proxy Statement,
together with the enclosed proxy card, is first being mailed to shareholders on
or about October 9, 2000.
RECORD DATE AND VOTING RIGHTS
Our Board of Directors has fixed the close of business on September 22,
2000 as the record date for the determination of our 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 September 22,
2000, will be entitled to vote at the Annual Meeting. On the Record Date,
there were 11,544,774 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.
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 our Certificate of
Incorporation, record holders (other than any compensation plan maintained by
us and certain affiliates) of Common Stock who beneficially own in excess of
10% of the outstanding shares of Common Stock (referred to as "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. Our Certificate of Incorporation authorizes the Board of
Directors to interpret and apply the provisions of the Certificate of
Incorporation 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 us 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 2000
ANNUAL MEETING OF SHAREHOLDERS.
Management is not aware of any matters other than those set forth in the
Notice of the 2000 Annual Meeting of Shareholders that may be brought before
the Annual Meeting. If any other matters properly come before the
-1-
<PAGE>
Annual Meeting, the persons named in the accompanying proxy will vote the
shares represented by all properly executed proxies on such matters in such
manner as shall be determined by a majority of our Board of Directors.
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 our shares.
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. Proposal 2 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
will be counted as present and entitled to vote and will have the effect of a
vote against the appointment of Deloitte & Touche LLP as independent auditors.
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 the appointment of
Deloitte & Touche LLP as independent auditors.
REVOCABILITY OF PROXIES
A proxy may be revoked at any time before it is voted by filing a written
revocation of the proxy with our secretary 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, only if a written revocation is filed with the
Secretary of the Annual Meeting prior to the voting of such proxy.
SOLICITATION OF PROXIES
We will bear the costs of soliciting proxies from our shareholders. In
addition to the use of mail, proxies may be solicited by our officers,
directors or employees and the Bank's employees by telephone or through other
forms of communication. We 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, we have 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
OUR PRINCIPAL SHAREHOLDERS
The following table sets forth, as of September 22, 2000, 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 our
outstanding shares of Common Stock as of September 22, 2000. 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 us 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 or she has or shares, directly or indirectly,
voting or investment power, or (2) of which he or she has the right to acquire
beneficial ownership at any time within 60
2
<PAGE>
days after September 22, 2000. 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>
<S> <C> <C> <C>
Title of Name and Address of Amount and Nature of
CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT
------------------ ----------------------------------------------- ---------------------- -------
Common Stock The Employee Stock Ownership Plan Trust of Dime 1,133,955<F1> 9.82%
Community Bancshares, Inc. and
Certain Affiliates
140 Broadway
New York, NY 10005
Common Stock Compensation Committee of Dime Community 1,698,986<F2> 14.72%
Bancshares, Inc.
209 Havemeyer Street
Brooklyn, NY 11211
Common Stock Thomson Horstmann & Bryant, Inc. 814,500<F3> 7.06%
Park 80 West, Plaza Two
Saddle Brook, NJ 07663
______________________
<FN>
<F1> The Employee Stock Ownership Plan of Dime Community Bancshares, Inc. and
Certain Affiliates (referred to as the ESOP) filed a Schedule 13G with the
SEC on February 7, 2000. The ESOP is administered by the Compensation
Committee of our Board of Directors (the "Compensation Committee"). The
ESOP's assets are held in a trust (the "ESOP Trust") for which HSBC Bank
USA (formerly Marine Midland Bank) serves as trustee (referred to as the
"ESOP Trustee"). The ESOP Trust purchased these shares with funds borrowed
from us and initially placed these shares in a suspense account for release
and allocation to participants' accounts in annual installments. As of
June 30, 2000, 439,753 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 (referred to as "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, subject to fiduciary duties of the ESOP
Trustee. 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, subject
to fiduciary duties of the ESOP Trustee. 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. Each
of the members of the Compensation Committee disclaims beneficial ownership
of such shares. For a discussion of the voting and investment powers of
the Compensation Committee, see footnote 2.
<F2> The Compensation Committee filed a Schedule 13G with the SEC on February 7,
2000. The Compensation Committee serves certain administrative functions
for the ESOP and Recognition and Retention Plan for Outside Directors,
Officers and Employees of Dime Community Bancshares, Inc. (referred to as
the "RRP"). As of September 22, 2000, the RRP owns 267,268 shares of our
common stock, of which 206,912 have been allocated to individuals. All
shares of common stock owned by the RRP are held at HSBC Bank USA, as
Trustee, as of September 22, 2000. The Committee has the power and
authority to direct the Trustee of the RRP with respect to the exercise of
voting rights, but has assigned voting and tender rights over allocated
shares to participating officers and directors. Shares indicated as
beneficially owned by the Compensation Committee include all shares
indicated in the table as beneficially owned by the ESOP Trust. The
Committee has the power and authority to direct the ESOP Trustee with
respect to the investment of the ESOP's assets (including the acquisition
or disposition of both allocated and unallocated shares) in the absence of
a tender offer, but has no voting power with respect to any shares. With
respect to the ESOP, ERISA, in limited circumstances, may confer upon the
ESOP Trustee, the power and duty to control the voting and tendering of
Common Stock allocated to the accounts of participating employees and
beneficiaries who fail to exercise their voting and/or tender rights. Each
of the members of the Compensation Committee disclaims beneficial ownership
of such shares.
<F3> Thomson Horstmann and Bryant , Inc. (referred to as "Thomson") filed a
Schedule 13G/A on January 12, 2000. Thomson is an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940, as
amended. Thomson has sole voting power over 516,600 shares, shared voting
power over 20,300 shares and sole dispositive power over 814,500 shares.
</TABLE>
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the shares of
Common Stock beneficially owned by each of our directors and named executive
officers identified in the Summary Compensation Table included elsewhere
herein, and all of our or the Bank's directors and executive officers as a
group as of the record date. 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>
<S> <C> <C> <C>
Amount and Nature Percent of
of Beneficial Common Stock
Name Position <F1> Ownership<F2><F3><F4><F5><F6> Outstanding
---------------------- ------------------------------------------ ----------------------------- ------------
Vincent F. Palagiano Director, Chairman of the Board and Chief
Executive Officer 341,761<F7> 2.96%
MICHAEL P. DEVINE Director, President and Chief 238,261<F8> 2.06
Operating Officer
ANTHONY BERGAMO Director 54,675 *
GEORGE L. CLARK, JR. Director 89,325<F9> *
STEVEN D. COHN Director 49,825<F10> *
PATRICK E. CURTIN Director 63,777<F11> *
JOSEPH H. FARRELL Director 69,675 *
FRED P. FEHRENBACH Director 63,775<F12> *
JOHN J. FLYNN Director 44,675 *
MALCOLM T. KITSON Director 45,275 *
STANLEY MEISELS Director 49,775 *
LOUIS V. VARONE Director 56,675 *
KENNETH J. MAHON Executive Vice President abd Chief
Financial Officer, and Directoe
of the Bank 150,684 1.31
TIMOTHY B. KING Senior Vice President and Treasurer 72,077<F14> *
MICHAEL PUCELLA Senior Vice president - Finance 69,242<F14> *
VINCENT J. MARTUCCI Senior Vice President - Mortgage
Officer of the Bank 2,404 *
ALL DIRECTORS AND EXECUTIVE
OFFICERS AS A GROUP
(17 PERSONS) 2,147,134 18.60%
________________________
* LESS THAN ONE PERCENT
<FN>
<F1> TITLES ARE FOR BOTH US AND THE BANK UNLESS OTHERWISE SPECIFIED.
<F2) SEE "OUR PRINCIPAL SHAREHOLDERS" FOR A DEFINITION OF "BENEFICIAL
OWNERSHIP."
<F3> The figures shown include shares held in trust pursuant to the ESOP that
have been allocated as of June 30, 2000 to individual accounts as follows:
Mr. Palagiano, 11,761 shares; Mr. Devine, 11,761 shares; Mr. Mahon, 11,761
shares; Mr. King, 10,831 shares; Mr. Pucella, 9,775 shares, Mr. Martucci,
2,404 shares and all directors and executive officers as a group, 58,293
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,
King, Pucella and Martucci do not include 53,347 shares, 34,390 shares,
15,540 shares, 4,250 shares, 4,201 shares and 371 shares, respectively,
which are held in Trust for the benefit of Messrs. Palagiano, Devine,
Mahon, King, Pucella and Martucci under the Benefit Maintenance Plan of
Dime Community Bancshares, Inc. (referred to as the "BMP"). Messrs.
Palagiano, Devine, Mahon, King, Pucella and Martucci have neither voting
nor investment rights with respect to these shares. The figures shown for
Messrs. PALAGIANO, DEVINE, MAHON, KING, Pucella and Martucci also do not
include any portion of the 685,253 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, King, Pucella and Martucci may be
deemed to share voting power with other ESOP participants. The figure
shown for all directors and executive officers as a group includes such
685,253 shares as to which the members of our Compensation Committee
(consisting of Messrs. Fehrenbach, Bergamo, Cohn and Kitson) 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. In addition, the figure
shown for all directors and executive officers as a group includes 112,099
shares held in trust (referred to as the "BMP Trust") for the benefit of
Messrs. Palagiano, Devine, Mahon, King, Pucella and Martucci under the BMP.
The BMP Trust, as directed by us, exercises voting and investment power
over these shares. See "Compensation of Directors and Officers - Benefits
- Employee Stock Ownership Plan and Trust."
<F4> THE FIGURES SHOWN INCLUDE SHARES HELD PURSUANT TO THE DIME SAVINGS BANK OF
WILLIAMSBURGH 401(K) SAVINGS PLAN IN RSI RETIREMENT TRUST (REFERRED TO AS
THE "401(K) PLAN") THAT HAVE BEEN ALLOCATED AS OF JUNE 30, 2000 TO
INDIVIDUAL ACCOUNTS AS FOLLOWS: MR. PALAGIANO, 20,000 SHARES; MR. DEVINE,
20,000 SHARES; MR. MAHON, 19,140 SHARES; MR. KING, 6,319 SHARES; MR.
PUCELLA, 11,274 SHARES; AND ALL
4
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP, 76,733 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."
<F5> THE FIGURES SHOWN INCLUDE UNVESTED SHARES HELD IN TRUST PURSUANT TO THE
RRP THAT HAVE BEEN AWARDED AS OF AUGUST 31, 2000 TO INDIVIDUALS AS FOLLOWS:
MR. PALAGIANO, 46,000 SHARES; MR. DEVINE, 30,000 SHARES; EACH OF MESSRS.
BERGAMO, CLARK, COHN, CURTIN, FARRELL, FEHRENBACH, FLYNN, KITSON, MEISELS,
AND VARONE, 6,348 SHARES; MR. MAHON, 22,000 SHARES; MR. KING, 11,516
SHARES; MR. PUCELLA, 11,516 SHARES AND ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP, 184,512 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.
<F6> THE FIGURES SHOWN INCLUDE THE FOLLOWING SHARES WHICH MAY BE ACQUIRED UPON
EXERCISE OF STOCK OPTIONS THAT ARE, OR WILL BECOME, EXERCISABLE WITHIN 60-
DAYS AFTER AUGUST 31, 2000: MR. PALAGIANO, 171,000 SHARES; MR. DEVINE,
114,000 SHARES; MR. MAHON, 78,000 SHARES; MESSRS. KING AND PUCELLA, 30,000
SHARES; AND EACH OF MESSRS. BERGAMO, CLARK, COHN, CURTIN, FARRELL,
FEHRENBACH, FLYNN, KITSON, MEISELS, AND VARONE, 23,805 SHARES; AND ALL
DIRECTORS AND OFFICERS AS A GROUP, 661,050 SHARES.
<F7> INCLUDES 4,000 SHARES AS TO WHICH MR. PALAGIANO MAY BE DEEMED TO SHARE
VOTING AND INVESTMENT POWER.
<F8> INCLUDES 62,500 SHARES AS TO WHICH MR. DEVINE MAY BE DEEMED TO SHARE
VOTING AND INVESTMENT POWER.
<F9> INCLUDES 25,000 SHARES AS TO WHICH MR. CLARK MAY BE DEEMED TO SHARE VOTING
AND INVESTMENT POWER.
<F10> INCLUDES 100 SHARES AS TO WHICH MR. COHN MAY BE DEEMED TO SHARE VOTING AND
INVESTMENT POWER.
<F11> INCLUDES 838 SHARES AS TO WHICH MR. CURTIN MAY BE DEEMED TO SHARE VOTING
AND INVESTMENT POWER.
<F12> INCLUDES 9,522 SHARES AS TO WHICH MR. FEHRENBACH MAY BE DEEMED TO SHARE
VOTING AND INVESTMENT POWER.
<F13> INCLUDES 3,717 SHARES AS TO WHICH MR. KING MAY BE DEEMED TO SHARE VOTING
AND INVESTMENT POWER.
<F14> INCLUDES 900 SHARES AS TO WHICH MR. PUCELLA MAY BE DEEMED TO SHARE VOTING
AND INVESTMENT POWER.
</TABLE>
5
<PAGE>
______________________________________
PROPOSAL 1
ELECTION OF DIRECTORS
______________________________________
GENERAL
Our Certificate of Incorporation and Bylaws provide for the election of
directors by the shareholders. For this purpose, our Board of Directors 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. We
currently have twelve directors.
The four incumbent directors with terms expiring at the Annual Meeting,
Michael P. Devine, Anthony Bergamo, Joseph H. Farrell, 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 2003, or when their successors are
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 2001 and 2002, 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 us and any director or nominee pursuant to which such
person was elected or nominated to be our director. For information with
respect to security ownership of directors, see "Security Ownership of Certain
Beneficial Owners and Management - Security Ownership of Management."
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DIRECTOR TERM
NOMINEES AGE<F1> SINCE<F2> EXPIRES POSITION(S) HELD WITH US AND THE BANK
---------------------- ------------ ----------- --------- -------------------------------------
Michael P. Devine 54 1980 2000 Director, President and Chief
Operating Officer
Anthony Bergamo 54 1986 2000 Director
Joseph H. Farrell 69 1969 2000 Director
Louis V. Varone 70 1985 2000 Director
CONTINUING DIRECTORS
----------------------
Vincent F. Palagiano 59 1978 2002 Director, Chairman of the Board and
Chief Executive Officer
George L. Clark, Jr. 59 1980 2002 Director
Steven D. Cohn 51 1994 2002 Director
Patrick E. Curtin 55 1986 2001 Director
Fred P. Fehrenbach 63 1987 2001 Director
John J. Flynn 64 1994 2002 Director
Malcolm T. Kitson 72 1990 2001 Director
Stanley Meisels 70 1990 2001 Director
<FN>
<F1> As of August 31, 2000.
<F2> Includes service as a Director or Trustee with The Dime Savings Bank of
Williamsburgh and predecessor institutions prior to our incorporation
on December 12, 1995.
</TABLE>
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.
6
<PAGE>
NOMINEES FOR ELECTION AS DIRECTOR
MICHAEL P. DEVINE has served as our President and the Bank's President
since January 1, 1997 and Chief Operating Officer of the Bank since 1989.
Prior to Mr. Devine's appointment as President, he served as both our and the
Bank's Executive Vice President and Secretary. Mr. Devine has served as our
Director since our 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 since our 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 currently serves as managing director of
the Milford Plaza Hotel. Mr. Bergamo also is the chief executive officer of
the Niagara Falls Redevelopment LLC and is Chairman of the Federal Law
Enforcement Foundation.
JOSEPH H. FARRELL has served as a Director since our 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 since our 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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" THE NOMINEES FOR ELECTION AS DIRECTORS.
CONTINUING DIRECTORS
VINCENT F. PALAGIANO has served as our Chairman of the Board and Chief
Executive Officer since our formation in 1995 and of the Bank since 1989. He
has served as a Trustee or Director of the Bank since 1978. In addition, Mr.
Palagiano has served on the Board of Directors of the Institutional Investors
Capital Appreciation Fund since 1996. Mr. Palagiano joined the Bank in 1970 as
an appraiser and has also served as our 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 since our 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 38 years.
STEVEN D. COHN has served as a Director since our 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 LLP, in Brooklyn Heights, New
York.
PATRICK E. CURTIN has served as a Director since our 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 since our 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. Mr. Fehrenbach has been with
Consolidated Brokerage Corp. since 1975. Mr. Fehrenbach is also the President
of BF International Corp., an import/export sales organization.
7
<PAGE>
JOHN J. FLYNN has served as a Director since our 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 since our 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 since our 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 OUR BOARD OF DIRECTORS
The Board of Directors meets on a monthly basis and may have additional
special meetings upon the request of the Chairman of the Board. Our Board of
Directors met 12 times during the fiscal year ended June 30, 2000. No current
director attended fewer than 75% of the total number of Board meetings and
committee meetings of which such director was a member.
Our Board of Directors 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 2000.
THE COMPENSATION COMMITTEE consists of Messrs. Fehrenbach (Chairman),
Bergamo, Cohn and Kitson. 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 2000.
THE AUDIT COMMITTEE consists of Messrs. Fehrenbach (Chairman), Bergamo,
Flynn, Meisels and Varone. The purpose of this committee is to provide
assurance that our internal controls are adequate and that financial
disclosures made by management portray our 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 Audit Committee operates
pursuant to a written charter which was adopted by the Board of Directors on
May 18, 2000. The audit committee charter requires that the committee meet at
least four times annually or as called by the Committee Chairman. Prior to
adoption of the charter, the Audit Committee met at least annually or as called
by the Committee Chairman. The Audit Committee met twice in fiscal 2000.
THE NOMINATING COMMITTEE consists of Messrs. Flynn (Chairman), Clark,
Cohn and Fehrenbach. The committee nominates candidates for the election of
directors. The committee meets as called by the Committee Chairman. The
Nominating Committee met once in fiscal 2000. In addition, the Nominating
Committee met on July 20, 2000, to select the nominees for election as
directors at the Annual Meeting. In accordance with our 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."
8
<PAGE>
DIRECTORS' COMPENSATION
FEE ARRANGEMENTS. During the year ended June 30, 2000, each of our non-
officer directors (referred to as "Outside Director") received an annual
retainer of $20,000 and a fee of $1,000 for each of our or the Bank's meetings
attended. All committee members received a fee of $400 for attendance at each
of our committee meetings or committee meetings of the Bank. If both of our
and the Bank's Boards of Directors or corresponding committees meet on the same
day, such directors will only receive one fee for the Board meetings and one
fee for the Committee meetings, paid by the Bank.
DIRECTORS' RETIREMENT PLAN. We have adopted the Retirement Plan for
Board Members of Dime Community Bancshares, Inc., (referred to as 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, up to a maximum of 10, 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 55, but the annual
retirement benefits payable to him will be reduced pursuant to the Directors'
Retirement 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.
1996 STOCK OPTION PLAN AND RRP. The Dime Community Bancshares, Inc. 1996
Stock Option Plan for Outside Directors, Officers and Employees (referred to as
the "1996 Stock Option Plan") and Recognition and Retention Plan were adopted
by our Board of Directors and subsequently approved by our shareholders at the
annual meeting held on December 17, 1996 (the "1996 Annual Meeting"). On
December 26, 1996, the effective date of the 1996 Stock Option Plan, each of
our Outside Directors and the Bank's Outside Directors 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 beginning on December 26, 1997, and will become immediately exercisable
upon a director's death, disability, retirement, or in the event of our "change
in control," as defined in the 1996 Stock 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, disability, retirement or in the event of our "change in
control," as defined in the RRP.
EXECUTIVE OFFICERS
The following individuals are either our or the Bank's executive officers
and hold the offices set forth below opposite their names.
NAME POSITION HELD
--------------------- ----------------------
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
and Chief Financial
Officer
Timothy B. King Senior Vice President and
Treasurer
Michael Pucella Senior Vice President -
Finance
Vincent J. Martucci Senior Vice President -
Mortgage Officer of
the Bank
9
<PAGE>
Both our and the Bank's executive officers 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. We have entered
into Employment Agreements with certain of our executive officers which set
forth the terms of their employment. See "-Employment Agreements."
Biographical information of either our or the Bank's executive officers
who are not our directors is set forth below.
KENNETH J. MAHON, age 49, was promoted to Comptroller of the Bank in
1983, to Senior Vice President in 1988, and to our Executive Vice President in
1997. He has served as our Chief Financial Officer since our formation and of
the Bank since 1996. Mr. Mahon has also served as a director of the Bank since
1998. Prior to joining the Bank in 1980, Mr. Mahon served in the financial
areas of several New York metropolitan savings banks.
TIMOTHY B. KING, age 42, has over 21 years of banking experience, and has
been with the Bank since 1983. Mr. King was promoted to our Treasurer in 1989,
Vice President in 1993, First Vice President in 1997, and Senior Vice President
and the Bank's Senior Vice President in 1999. Mr. King manages the securities
investment and interest rate risk functions of the Bank.
MICHAEL PUCELLA, age 47, was promoted to Comptroller of the Bank in 1989,
to Vice President in 1996, to First Vice President in 1997 and Senior Vice
President of both our and the Bank's Finance Division in 1999. He has been
with the Bank since 1981, and is responsible for financial reporting,
budgeting, corporate planning and tax administration. Mr. Pucella has over 25
years of banking experience.
Vincent J. Martucci, age 53, joined the Bank in January, 1999, as a
Senior Vice President and was named an executive officer of the Bank in
September, 1999. He currently serves as the Bank's chief lending officer. Mr.
Martucci has over 30 years of real estate and banking experience with companies
located throughout the New York metropolitan area, most recently North Fork
Bank and Reliance Federal Savings Bank.
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF COMPENSATION COMMITTEE
THE FOLLOWING REPORT OF OUR 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 ("the Committee") of the Board of Directors
annually reviews the executive compensation program. Based on its review, the
Committee may make recommendations to the full Board of Directors regarding
changes to compensation levels, opportunities of the executive officers
participating in the program, or to the make-up of the program itself.
The goal of the executive compensation program is to enable the Company
to attract, develop and retain strong executive officers who are capable of
maximizing the Company's performance for the benefit of its shareholders. To
that end, the Committee has adopted a compensation strategy that seeks to
provide competitive compensation opportunities that are strongly aligned with
the financial and stock performance of the Company. Three key compensation
elements are used in support of the strategy: base salary, annual incentives
and long term incentives.
The Company retains a nationally recognized compensation consulting firm
to provide guidance as to competitive executive compensation practices and pay
levels. As part of this activity, the consulting firm
10
<PAGE>
regularly analyzes the
Company's executive pay levels, by each of the three elements cited and in
total, and the Company's performance. A group of 10 to 15 comparably-sized and
similarly-located public banks are used for comparison purposes. The companies
included in this group may change slightly from year to year due to merger
activity within the industry, or to other relevant factors. The results of the
annual executive pay and company performance comparison and the consulting
firm's corresponding recommendations are considered by the Committee in making
executive compensation program recommendations to the Board of Directors.
BASE SALARY
Executive base salary levels are generally reviewed on an annual basis
and adjusted as appropriate. During the 2000 fiscal year, the Company
increased individual base salary levels by approximately 7.2%. In making its
determinations, the Committee considered the competitive base salary review, as
well as bank and individual performance. After adjustment, base salary levels
were found to be within an appropriate targeted range when compared to pay
levels of comparison group companies. Individual variations in the level of
salary increase provided reflect an effort to reward outstanding individual
contributions and / or an effort to align a position's pay level with the
market.
ANNUAL INCENTIVE PROGRAM
Annual incentive opportunities are provided to the Company's executives
to link the achievement of annual goals with executive compensation. A new
annual incentive program to reward appropriate management efforts beginning
with fiscal 2000 was approved by shareholders at the last annual meeting.
Under this plan, the Committee has established a target and range of award
opportunities for each proxy reported executive considering competitive
practices and the consulting firm's recommendations. These award opportunities
are linked with a specific target and range of performance results for one or
more objective performance goals approved by the Committee at the beginning of
the fiscal year (e.g., return on average equity). For fiscal 2000, pursuant to
the annual incentive program an aggregate pool of approximately $674,000 was
permitted to be distributed to the Company's executives. After reviewing Dime's
performance on Earnings Per Share and Return on Average Equity, the Committee
provided awards that approximate target opportunities (and an aggregate pool of
approximately $625,000) to Dime's executives.
LONG TERM INCENTIVE PROGRAM
The Company uses the 1996 Option Plan and the Recognition and Retention
Plan to provide long term incentive compensation opportunities to its executive
team. 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. Initial program awards of stock options and
restricted stock were made to executive officers in the 1997 fiscal year and
generally vest over 5 years. In the 2000 fiscal year, a stock option award was
also provided to one recent addition to this executive group. The Company
intends to annually evaluate and continue to provide future long term incentive
grants to its officers based on Company and individual performance, as well as
competitive market conditions. The consulting firm has recommended, and the
Committee will consider, making long term incentive program grants during the
2001 fiscal year and on a regular basis thereafter to provide competitive long
term incentive and total compensation opportunities.
CHIEF EXECUTIVE OFFICER
Subsequent to June 30, 2000, the Compensation Committee increased the
base salary level of the Chief Executive Officer by 4.8% for services rendered
during the 2000 fiscal year based upon the same criteria used for other
executive officers. Subsequent to June 30, 2000, the Chief Executive Officer
earned an annual incentive award of $225,000 under the new annual incentive
plan based on the Committee's review of Dime's performance on Earnings Per
Share and Return on Average Equity. As was the case for other executive
officers, no long-term incentive grants were made to the CEO during the 2000
fiscal year.
11
<PAGE>
TAX DEDUCTIBILITY OF EXECUTIVE OFFICER COMPENSATION
Section 162(m) of the Internal Revenue Code imposes a $1,000,000 annual
limit, per executive officer, on the Company's federal tax deduction for
certain types of compensation paid to the executive officers named in the
summary compensation table. The Compensation Committee does not have a formal
policy with respect to the payment of compensation in excess of this deduction
limit. It has been the Committee's practice to structure the compensation and
benefit programs offered to the named executive officers with a view to
maximizing the tax deductibility of amounts paid. However, in structuring
compensation programs and making compensation decisions, the Committee
considers a variety of factors, including the Company's tax position, the
materiality of the payments and tax deductions involved, and the need for
flexibility to address unforeseen circumstances. After considering these
factors, the Committee may decide to authorize compensation payments all or
part of which would be nondeductible for federal tax purposes.
COMPENSATION COMMITTEE OF DIME
COMMUNITY BANCSHARES, INC.
Fred P. Fehrenbach, Chairman
Anthony Bergamo, Member
Steven D. Cohn, Member
Malcolm T. Kitson, Member
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Messrs. Fehrenbach, Bergamo, Cohn
and Kitson. There are no other interlocks, as defined under the rules and
regulations of the SEC, between us and the members of the Compensation
Committee and corporations with respect to which they are affiliated, or
otherwise.
12
<PAGE>
PERFORMANCE GRAPH
Pursuant to the regulations of the SEC, the graph below compares our
stock performance 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 our initial public offering through June 30, 2000.
The graph assumes the reinvestment of dividends in additional shares of the
same class of equity securities as those listed below.
[GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDED
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INDEX 6/26/96 6/30/97 6/30/98 6/30/99 6/30/00
------- ------- ------- ------- -------
Dime Community Bancshares, Inc. 100.00 171.57 240.46 206.06 149.16
NASDAQ - Total US 100.00 125.06 164.67 235.53 350.26
SNL Thrift Index 100.00 163.27 221.09 187.54 157.72
</TABLE>
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.
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, 2000, June 30, 1999 and June 30, 1998 to the executive
officers of the Bank who received salary plus bonus during the fiscal year
ended June 30, 2000 in excess of $100,000 (such officers are referred to as the
"Named Executive Officers").
13
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION<F1> LONG-TERM COMPENSATION
------------------------------------------ -------------------------------------------------
AWARDS PAYOUTS
----------------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Other Restricted
Annual Stock LTIP All Other
Salary Bonus Compensation Awards Options Payouts Compensation
NAME AND PRINCIPAL POSITIONS YEAR ($) ($) ($)<F2> ($)<F3> (#)<F4> ($)<F5> ($)<F6>
---------------------------- ------ ------- ------ ------------ ---------- --------- -------- ------------
Vincent F. Palagiano, 2000 $525,000 $225,000 - - - - $322,343
Chairman of the Board and Chief 1999 500,000 210,000 - - - - 509,889
Executive Officer 1998 477,000 200,000 - - - - 580,499
Michael P. Devine, President 2000 $395,000 $160,000 - - - - $224,334
and Chief Operating Officer 1999 375,000 145,000 - - - - 353,254
1998 360,000 135,000 - - - - 394,161
Kenneth J. Mahon, Executive 2000 $225,000 $100,000 - - - - $140,124
Vice President and Chief 1999 204,000 80,000 - - - - 214,691
Financial Officer 1998 189,000 70,000 - - - - 169,220
Timothy B. King, Senior Vice 2000 $140,000 $50,000 - - - - $77,171
President and Treasurer 1999 120,000 35,000 - - - - 114,251
1998 106,000 30,000 - - - - 72,344
Michael Pucella, Senior Vice 2000 $140,000 $50,000 - - - - $76,733
President - Finance 1999 120,000 35,000 - - - - 113,111
1998 100,000 30,000 - - - - 58,220
Vincent J. Martucci, Senior 2000 $160,000 $40,000 - - 15,000 - $45,094
Vice President - Mortgage 1999 43,750 30,000 - - - - -
Officer <F7> 1998 - - - - - - -
____________________
<FN>
<F1> 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.
<F2> For 2000, 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; (d) tax payment
reimbursements; or (e) preferential discounts on stock.
<F3> On December 26, 1996, the Executive Officers were granted shares of
restricted stock pursuant to the RRP, which was approved by the
shareholders at the 1996 Annual Meeting, as follows: Mr. Palagiano,
115,000 shares, Mr. Devine, 75,000 shares, Mr. Mahon, 55,000 shares and
Messrs. King and Pucella, 28,790 shares each. 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, retirement, or under a "change of control," as defined
by the RRP, all shares granted become immediately vested. No additional
grants of restricted stock were made during the fiscal year ended June 30,
2000. At the end of the 2000 fiscal year, 60% of such grants had vested.
As of June 30, 2000, the number and value of the aggregate restricted stock
holdings based on a per share price of $16.25, the closing sale price of
common stock on June 30, 2000, for each executive officer which have not
yet vested, is: Mr. Palagiano, 46,000 shares and $747,500; Mr. Devine,
30,000 shares and $487,500; Mr. Mahon 22,000 shares and $357,500 and
Messrs. King and Pucella, 11,516 shares and $187,135 each. Dividends paid
in cash on restricted shares awarded to each individual will be paid to the
individual and dividends paid in property other than cash will be held in
trust for and distributed or forfeited in accordance with the terms and
conditions of the award.
<F4> Executive officers were granted shares subject to options pursuant to the
1996 Stock Option Plan approved by shareholders at the 1996 Annual Meeting:
On December 26, 1996, option awards, with an exercise price of $14.50 per
share, were granted as follows: Mr. Palagiano, 285,000; Mr. Devine,
190,000; Mr. Mahon, 130,000; and Messrs. King and Pucella, 50,000 each. On
January 20, 2000, Mr. Martucci was granted 15,000 options at an exercise
price of $15.375. The options granted under the 1996 Stock Option Plan are
intended to qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended (referred to as "the Code"), to
the maximum extent possible and any options that do not so qualify will
constitute non-qualified stock options. The 1996 Stock 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, retirement, or under
a "change in control," as defined by the 1996 Stock Option Plan, all
options become immediately exercisable. At June 30, 2000, 171,000 options
held by Mr. Palagiano, 114,000 options held by Mr. Devine, 78,000 options
held by Mr. Mahon, and 30,000 options each held by Messrs. King and
Pucella, respectively, under the 1996 Stock Option Plan to purchase shares
of Commons Stock at the exercise price of $14.50 per share were
exercisable. At June 30, 2000, none of the options held by Mr. Martucci
were exercisable.
14
<PAGE>
<F5> During the fiscal year ended June 30, 2000, neither we nor the Bank
maintained any long-term incentive plans ("LTIP").
<F6> 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.
During the year ended June 30, 2000, the dollar value of such life
insurance premiums were as follows: Mr. Palagiano, $6,573 and Mr. Devine,
$2,830. During the year ended June 30, 2000, shares allocated under the
ESOP to the Executive Officers were as follows: Messrs. Palagiano, Devine,
Mahon, King Pucella and Martucci were 2,404 shares each. The amount
reported above for shares allocated under the ESOP were determined based
upon the acquisition cost of shares by the ESOP of $10.00. See "-Benefits -
Retirement Plan," "-401(k) Plan," and "-Employee Stock Ownership Plan and
Trust." Amounts also include accruals under the defined contribution
portion of the Bank's BMP, which during the fiscal year ended June 30, 2000
were $273,813, $179,546, $98,166, $35,588, $35,588 and $6,029, for Messrs.
Palagiano, Devine, Mahon, King, Pucella and Martucci. See "-Benefits -
Benefit Maintenance Plan."
<F7> Mr. Martucci began employment with us on January 26, 1999.
</TABLE>
EMPLOYMENT AGREEMENTS
Both the Bank and us are parties to an Employment Agreement with each of
Messrs. Palagiano, Devine and Mahon (referred to as "Senior Executives").
These Employment Agreements establish the respective duties and compensation of
the Senior Executives and are intended to ensure that both we and the Bank will
be able to maintain a stable and competent management base. Our and the Bank's
continued success 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 his Employment Agreement for an additional year, so that the
remaining term shall be three years. Each of the Bank's Employment Agreement
has been extended to a June 26, 2003 expiration date. Our 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 us at
any time for cause as defined in the Employment Agreements. In the event that
either we or the Bank 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 us 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 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. Both the Bank and
us would also continue the Senior Executive's life, health and disability
insurance coverage for the remaining terms of the Employment Agreements. For
purposes of the Employment Agreements, good reason 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 sixty (60) days
beginning on the first anniversary of the effective date of a change in
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
15
<PAGE>
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 in 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 us 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 our Board of Directors or the Bank's Board of Directors or
liquidation or sale of substantially all the assets of us or the Bank.
Payments to the Senior Executives under the Bank's Employment Agreements
will be guaranteed by us in the event that payments or benefits are not paid by
the Bank. Payment under our Employment Agreements would be made by us. To the
extent that payments under our Employment Agreements and the Bank's Employment
Agreements are duplicative, payments due under our 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 us 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 us
and the Bank under Section 4999 of the Code. Our Employment Agreements include
a provision indemnifying each Senior Executive on an after-tax basis for any
"excess parachute" excise taxes.
EMPLOYEE RETENTION AGREEMENTS
We and the Bank have jointly entered into Employee Retention Agreements
with 33 additional employees including the following three executive officers:
Messrs. King, Martucci and Pucella (referred to as "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 "change of
control, as defined in the Retention Agreements." 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 compensation
(referred to as the "Assurance Period") following a change of control. The
Retention Agreements provide for initial assurance periods of one, two or three
years commencing on the date of a change of control. Both we and the Bank
entered into Employee Retention Agreements with an initial Assurance Period of
three years with each of Messrs. King, Martucci and Pucella, the Contract
Employees. 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, second or third anniversary of the
date such notice is given.
If, within three months prior to, and in connection with, a change of
control, or, during the Assurance Period, 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
us, 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 our 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, excluding
executives 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 us to the extent that
the required payments are not made by the Bank.
Cash and benefits paid to an Executive under the Employee Retention
Agreements together with payments under other benefit plans following a "change
of control" may constitute an "excess parachute" payment under
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<PAGE>
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 us and
the Bank under Section 4999 of the Code. The Employee Retention
Agreements include a provision whereby we pay each Executive the net
amount of the executive's termination benefits after any tax imposed under
Section 4999 of the Code or the maximum amount which may be paid
without giving rise to any tax under Section 4999, whichever is greater.
BENEFITS
RETIREMENT PLAN. The Bank maintains the Retirement Plan of The Dime
Savings Bank of Williamsburgh in RSI Retirement Trust, a non-contributory, tax-
qualified defined benefit pension 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 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. Effective March 31, 2000, all participant benefits under the
Retirement Plan were frozen, and no additional benefits shall be accrued under
the Retirement Plan in the future.
Generally, an employee's average annual earnings under the Retirement
Plan are the employee's average annual compensation and contributions to the
401(k) Plan, but not the employee's overtime pay, bonus, other deferred
compensation arrangements, or other special payments, for the 36-month period
within the last 120-month period affording the highest such average, such
average not to exceed the compensation limitation under Section 401(a)(17) of
the Code. 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
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REMUNERATION<F1> 15 20 25 30 35<F4>
------------------ ------------ ----------- --------- --------- --------
150,000<F2> $45,000 $60,000 $75,000 $90,000 $90,000
175,000<F2> 52,500 70,000 87,500 105,000 105,000
200,000<F2> 60,000 80,000 100,000 120,000 120,000
300,000<F2> 90,000 120,000 150,000<F3> 180,000<F3> 180,000<F3>
400,000<F2> 120,000 160,000<F3> 200,000<F3> 240,000<F3> 240,000<F3>
500,000<F2> 150,000<F3> 200,000<F3> 250,000<F3> 300,000<F3> 300,000<F3>
600,000<F2> 180,000<F3> 240,000<F3> 300,000<F3> 360,000<F3> 360,000<F3>
650,000<F2> 195,000<F3> 260,000<F3> 325,000<F3> 390,000<F3> 390,000<F3>
________________________
<FN>
<F1> THE RETIREMENT PLAN DOES NOT PROVIDE A DEDUCTION FOR SOCIAL SECURITY
BENEFITS AND THERE ARE NO OTHER OFFSETS TO BENEFITS.
<F2> ANNUAL COMPENSATION TAKEN INTO ACCOUNT UNDER THE RETIREMENT PLAN FOR THE
FISCAL YEAR OF THE RETIREMENT PLAN BEGINNING ON OCTOBER 1, 2000, CANNOT
EXCEED $170,000 (AS ADJUSTED FOR SUBSEQUENT YEARS PURSUANT TO THE CODE
PROVISIONS). BENEFITS IN EXCESS OF THE LIMITATION ARE PROVIDED THROUGH THE
BMP. SEE "-BENEFIT MAINTENANCE PLAN."
<F3> FOR THE FISCAL YEAR OF THE RETIREMENT PLAN BEGINNING ON OCTOBER 1, 2000,
THE MAXIMUM ANNUAL BENEFIT PAYABLE UNDER THE RETIREMENT PLAN CANNOT EXCEED
$135,000 (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."
<F4> THE MAXIMUM YEARS OF SERVICE CREDITED FOR BENEFIT PURPOSES IS 30 YEARS.
</TABLE>
17
<PAGE>
THE FOLLOWING TABLE SETS FORTH THE YEARS OF CREDITED SERVICE AND THE
AVERAGE ANNUAL EARNINGS (NOT SUBJECT TO THE CODE SECTION 401(A)(17) LIMITATION)
DETERMINED AS OF MARCH 31, 2000 (THE DATE ON WHICH PLAN PARTICIPANT BENEFITS
WERE FROZEN)FOR EACH OF THE NAMED EXECUTIVE OFFICERS.
YEARS OF CREDITED SERVICE
------------------------- AVERAGE
YEARS MONTHS ANNUAL EARNINGS
-------- ------- ---------------
Vincent F. Palagiano 30 0 $494,417
Michael P. Devine 29 2 372,083
Kenneth J. Mahon 20 2 202,083
Timothy B. King 17 5 118,667
Michael Pucella 19 6 114,083
Vincent J. Martucci 1 8 160,000
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. When we initially established the ESOP in 1996, the 401(k) Plan
was amended whereby participant contributions were no longer permitted to avoid
violating limitations on contributions to all plans under the Internal Revenue
Code. Effective July 1, 2000, participant contributions to the 401(k) plan of
up to 12% of "covered compensation," as defined in the Plan document, were
reinstated, and employer contributions of 3% of "covered compensation" were
reinstated for all eligible participants, regardless of their participant
contribution levels. The reinstated of contributions was made in order to
compensate employees for a reduction of annual ESOP plan benefits also
instituted on July 1, 2000. Employees are fully vested in their salary
deferrals, and become 25% vested in the Bank's contribution after two years of
service, and an additional 25% vested in each of the next three years of
service. Employees select the investments made with their account balances from
a fixed menu of options.
The 401(k) Plan permits participating employees to elect to invest all or
any part of their 401(k) Plan account balances in our Common Stock. Common
Stock held by the 401(k) Plan may be newly issued or treasury shares acquired
from us 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.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST. We have established, and the
Bank has adopted, for the benefit of eligible employees, an ESOP and related
trust. All or our and the Bank's salaried employees are eligible to become
participants in the ESOP. As of the record date, the ESOP holds 1,125,006
shares of Common Stock, all of which were purchased during our initial public
offering. Of this total, 439,753 shares have been allocated to individual
participant accounts, while 685,253 remain unallocated. In order to fund the
ESOP's purchase of such Common Stock, the ESOP borrowed funds from us to pay
the aggregate purchase price of Common Stock. Effective July 1, 2000, the loan
maturity period was extended to approximately 30 years, and continues to bear
interest at the rate of 8% per annum. The loan 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 of service 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 in control," as defined by the ESOP. Forfeitures
will be
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<PAGE>
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." As mentioned previously, effective April 1,
2000, additional benefits will no longer be accrued under the Retirement Plan,
thus eliminating related accruals under the BMP. BMP benefits provided to the
Named Executive Officers for the fiscal year ended June 30, 2000 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."
RECOGNITION AND RETENTION PLAN. Our Board of Directors has adopted the
Recognition and Retention Plan for Outside Directors, Officers and Employees of
Dime Community Bancshares, Inc. ("RRP") which was approved by shareholders at
the 1996 Annual Meeting. Under the RRP, 581,900 shares were acquired and
allocated to our directors, officers and employees during the fiscal year ended
June 30, 1997.
STOCK OPTION PLAN. Our Board of Directors has adopted the Dime Community
Bancshares, Inc. 1996 Stock Option Plan for Outside Directors, Officers and
Employees which was approved by shareholders at the 1996 Annual Meeting. Under
the 1996 Stock Option Plan, up to 1,454,750 options are eligible for grant to
our outside directors, officers and employees. On December 26, 1996, 1,393,425
options were granted to outside directors, officers and employees. All of these
options granted have an exercise value of $14.50 and 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. On January 20, 2000, 66,500 options were granted to selected
officers and employees, of which, 15,000 were granted to Mr. Martucci, and none
of which were granted to our other executive officers or directors. All of
these options granted have an exercise value of $15.375 and become exercisable
in five equal installments on the first, second, third, fourth and fifth
anniversaries of the grant date and generally remain exercisable until the
tenth anniversary of the grant date, subject to earlier expiration upon
termination of employment. In the case of termination due to death or
disability, retirement, or in the event of a "change in control," as such terms
are defined by the Stock Option Plan, all Options granted become immediately
exercisable.
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<PAGE>
The following table provides certain information with respect to the
grant of options during the fiscal year ended June 30, 2000 to Mr. Martucci.
The table discloses the gain that would be realized if the stock options
granted to Mr. Martucci were exercised when our stock price had appreciated by
the percentage rates indicated from the date of the grant.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
--------------------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise Base
Options/SARs Employees in Price ($ Per
Granted <F1> Fiscal Year Share) Expiration Date 5% 10%
-------------- ------------ --------------- ---------------- -------- --------
Vincent J. Martucci 15,000 22.56% $15.375 January 20, 2010 $145,039 $367,557
<FN>
<F1> THE OPTIONS WERE GRANTED UNDER THE 1996 STOCK OPTION PLAN AND BECOME
EXERCISABLE IN FIVE EQUAL INSTALLMENTS BEGINNING ON JANUARY 20, 2001. ALL
OPTIONS WERE GRANTED IN TANDEM WITH STOCK APPRECIATION RIGHTS (REFERRED TO
AS "SARS") WHICH PROVIDE THAT IN THE EVENT OF A MERGER IN WHICH WE ARE NOT
THE SURVIVING ENTITY, THE OPTIONS SHALL BE CANCELED ON THE EFFECTIVE DATE
OF THE MERGER AND EACH OPTION HOLDER SHALL RECEIVE A CASH PAYMENT OR OTHER
PROPERTY OF SUCH KIND AND VALUE THAT OUR BOARD OF DIRECTORS DEEMS IN GOOD
FAITH TO BE OF EQUAL VALUE
</TABLE>
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, 2000. 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 $16.25 PER
SHARE AT FISCAL YEAR END, JUNE 30, 2000.
<TABLE>
<CAPTION>
<S> <C> <C>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-money
Options/SARs at Fiscal Options/SARS at Fiscal
Year-end <F1> Year-end <F1>
# ($)
NAME EXERCISABLE / UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
------------------------ --------------------------- ---------------------------
Vincent F. Palagiano 171,000 / 114,000 $299,250 /$199,500
Michael P. Devine 114,000 / 76,000 $199,500 / $133,000
Kenneth J. Mahon 78,000 / 52,000 $136,500 / $91,000
Timothy B. King 30,000 / 20,000 $52,500 / $35,000
Michael Pucella 30,000 / 20,000 $52,500 / $35,000
Vincent J. Martucci -/15,000 $- / $13,125
_______________________________
<FN>
<F1> None of the Named Executive Officers have exercised options granted under the
1996 Stock Option Plan.
</TABLE>
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
$338,430, or 0.17% of the Bank's total equity as of August 31, 2000. We intend
that all
20
<PAGE>
transactions in the future between us and our executive officers,
directors, holders of 10% or more of the shares of any class of our Common
Stock and affiliates thereof, similarly will contain terms no less favorable to
us than we could have obtained in arm's-length negotiations with unaffiliated
persons and will be approved by a majority of our independent outside directors
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. The firm received fees in the amount of approximately $1,589,339
$2,125,600 and $1,385,000 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, 2000, 1999 and 1998, respectively. In addition, during the
fiscal years ended June 30, 2000 and 1998, the Bank paid this firm $50,000 and
$24,000, respectively, for other legal services provided.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our 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 us with
copies of all Section 16(a) forms they file. Other than the statement of
beneficial ownership of securities on Form 4 for Fred P. Fehrenbach for the
period ended May 31, 2000, which was accurate in all material respects but was
filed on August 9, 2000, based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that all filing requirements applicable to our executive officers,
directors and greater than 10% beneficial owners were complied with.
__________________________________________________________________
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
__________________________________________________________________
GENERAL
The Board of Directors has appointed the firm of Deloitte and Touche LLP
to act as our independent auditors for the fiscal year ending June 30, 2001,
subject to ratification of such appointment by our 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.
OTHER MATTERS
As of the date of this Proxy Statement, our Board of Directors does not
know of any other matters to be brought before the shareholders at the 2000
Annual Meeting. If, however, any other matters not known are properly brought
before the meeting, the persons named in the accompanying proxy will vote the
shares represented by all properly executed proxies on such matters in such
manner as shall be determined by a majority of the Board of Directors.
ADDITIONAL INFORMATION
NOTICE OF BUSINESS TO BE CONDUCTED AT ANNUAL MEETING
Our Bylaws 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
21
<PAGE>
shareholder of
record and have given timely notice thereof in writing to our Secretary. 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 us 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 our Bylaws. Nothing in this paragraph shall be
deemed to require us to include in our 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 our proxy statement
and proxy card relating to our 2000 Annual Meeting of Shareholders must be
received by us by June 7, 2000, pursuant to the proxy solicitation regulations
of the SEC. Nothing in this paragraph shall be deemed to require us to include
in our 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. <section>240.14a-8 of the Rules and
Regulations promulgated by the SEC under the Exchange Act.
ANNUAL REPORT
A copy of the 2000 Annual Report to shareholders, including the
consolidated financial statements prepared in conformity with generally
accepted accounting principles, for the fiscal year ended June 30, 2000
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 BANCSHARES, 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 A. CEONZO
Kenneth A. Ceonzo
FIRST VICE PRESIDENT AND SECRETARY
Brooklyn, New York
October 7, 2000
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
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<PAGE>
REVOCABLE PROXY
DIME COMMUNITY BANCSHARES, INC.
209 HAVEMEYER STREET
BROOKLYN, NY 1121
This Proxy is solicited on behalf of the Board of Directors of Dime Community
Bancshares, Inc. for the Annual Meeting of Shareholders to be held on November
9, 2000.
The undersigned shareholder of Dime Community Banchares, Inc. hereby
appoints Vincent F. Palagiano, 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
Bancshares, Inc. held of record by the undersigned on September 22, 2000, at
the 2000 Annual Meeting of Shareholders (the "Annual Meeting") to be held at
10:00 a.m., on November 9, 2000, or at any adjournment or postponement thereof,
upon the matters described in the accompanying Notice of the 2000 Annual
Meeting of Shareholders and Proxy Statement, dated October 6, 2000, 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 f all nominees in Item 1 and FOR the proposal listed in
Items 2.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
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<CAPTION>
The Board of Directors unanimously recommends a vote Please mark
"FOR" all of the nominees in Item 1 and a vote "FOR" the your vote as
proposal in Item 2. indicated in this X
example
<S> <C>
1. Election of Directors for terms of Nominees: Michael P. Devine, Anthony I will attend
three years each. Bergamo, Joseph H. Farrell and Louis V. the Annual Meeting X
FOR WITHHOLD Varone.
All nominees for all
(except as nominees Instruction: TO WITHHOLD AUTHORITY to
otherwise vote for any individual nominee, write
indicated) that nominee's name in the space
provided:
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2. Ratification of the appointment of Deloite
& Touche LLP as independent auditors for the
fiscal year ending June 30, 2001.
FOR AGAINST ABSTAIN
3. The proxies are authorized to vote upon such other business as may come
before the Annual Meeting or any adjournment or postponement thereof in such
manner as shall be determined by a majority of the Board of Directors.
The undersigned hereby acknowledges receipt of the Notice of the 2000 Annual
Meeting of Shareholders and the Proxy Statement, dated October 6, 2000 for
the Annual Meeting.
__________________________________
Signatures(s)
__________________________________
Signatures(s)
Dated: _____________________________, 2000
Please sign exactly as your name appears on the Proxy. Joint
owners should each sign personally. If signing as attorney, executor,
administrator, trustee, or guardian, please include your full title.
Corporate or partnership proxies should be signed by an authorized
officer.
FOLD AND DETACH HERE
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