December 10, 1996
AN IMPORTANT MESSAGE FROM:
THE WAYNE BANCORP, INC. COMMITTEE TO
PRESERVE SHAREHOLDER VALUE
TO: FELLOW SHAREHOLDERS OF
WAYNE BANCORP, INC.
STOP!
The Wayne Bancorp, Inc. Committee to Preserve Shareholder Value (the
"Committee") urges you not to return the proxy card you will be receiving from
the management of Wayne Bancorp, Inc. (the "Company").
As of December 2, 1996, the Members of the Committee collectively owned
approximately 9.05% of the outstanding Common Stock of the Company.
Do not vote to approve the Stock Programs (Programs), or the Stock Option
Plans (Options) until you have had an opportunity to consider the information
contained in the Committee's proxy statement, which will be mailed as soon as
practicable, and will detail the cost of the Programs and Options and quantify
the extent same will dilute the value of your shares.
HOW WOULD YOU LIKE TO EARN $785,000 FOR 2 1/2 MONTHS OF WORK?
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On or about September 6, 1996, Mr. Vanderberg, resigned as President and
Chief Executive Officer of the Company. The information the Company sent to
shareholders claimed Mr. Vanderberg resigned 2 1/2 months after the Company went
public because of a temporary treatable medical condition. The Company, then
owned by us shareholders, paid Mr. Vanderberg approximately $785,000. This
represents a payment of approximately $15,700 per work day to a person who was
no longer to be of any service to the Company. This payment cost each
shareholder approximately $ .35 per share. Was this generosity prudent? Did this
payment enhance the value of our shares, or even do anything to preserve the
value of the shares?
MANAGEMENT AND THE DIRECTORS ARE NOW SEEKING PERFORMANCE
AWARDS FOR THEMSELVES BEFORE THEY PERFORM
-----------------------------------------
Management and the Directors of the Company are seeking to be rewarded
before they have proven that their performance warrants a reward.
Based upon the disclosures on Pages 28 and 29 of the Offering Prospectus
for the Company, dated May 13, 1996, The Company will be seeking approval:
(i) to acquire approximately 89,255 shares at a cost to the Company
(and us shareholders) of approximately $1,283,040(1), or issue approximately
89,255 authorized but unissued shares, which a majority of shares will presently
be given without payment to certain officers and directors. The cost of giving
away all these shares will result in a book value reduction of each share in the
amount of $.58.
(ii) to authorize the creation of approximately 223,138 option shares
for future issuance which shares upon issuance will result in a dilution of the
present shareholders ownership interests.
THE COMMITTEE'S POSITION ON
PERFORMANCE STOCK COMPENSATION
------------------------------
The Committee does not object to, and is in favor of, directors and
officers receiving performance based stock compensation awards. However, the
Committee objects to the awarding of Programs and Options shares (i.e., stock
compensation awards) before positive performance is demonstrated. The Committee
would
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(1) Based on the closing price of the Common Stock on December 2, 1996 of
$14.375.
<PAGE>
have endorsed the Programs and Options if the Company had agreed not to award
any shares to anyone until a future date, at which time the shareholders could
evaluate the performance of the directors and management and then vote on awards
that are matched to the performance.
WHAT THE COMMITTEE IS SEEKING?
------------------------------
The Committee does not want any officer or director to receive any
performance related stock award until the performance of the present directors
and management can be evaluated. Simply stated:
OUR INTENTION IS TO PRESERVE MONEY FOR ALL SHAREHOLDERS. IF THE
COMPANY DOES NOT PERFORM, THE OFFICERS AND DIRECTORS SHOULD NOT
RECEIVE REWARDS FOR BAD PERFORMANCE!
LOOK!
The Company became a public entity on June 27, 1996. For the quarter ended
June 30, 1996 the Company's net income was $320,000 and the Company suffered a
net loss for the period ending September 30, 1996 of $614,000.(2)
Based upon this short time frame and the existence of a loss, all decisions
concerning performance based stock awards should be postponed to a point in time
when a positive track record has been established.
A SPECIAL MEETING IS AN UNNECESSARY EXPENSE
-------------------------------------------
The cost of a special meeting comes directly out of the shareholders'
pockets.
The Company did not have to, and was not required to, call a Special
Meeting to vote upon the Program and Options. Instead, the Company could have
waited for the next Annual Meeting, which most likely would be held in May or
June 1997 to seek these approvals. The shareholders would have had a longer time
frame in which to evaluate management and the Board's performance and also would
not have incurred the expense of a Special Meeting.
Why the rush, and the attendant expense associated with this rush? Does
Management hope the shareholders will rush to a judgment on this issue and vote
to approve these improvident proposals?
LISTEN!
Listen to our message about what Management wants for themselves, which
shall be detailed in our proxy statement. Our message is one that Management
should be sending: Let's reserve shareholder value and not squander money!
-------
STOP Don't vote Management's Proxy Card. You
have approximately five weeks to vote.
LOOK For our Proxy Material and our Gold Proxy Card and
vote against the Programs and Options.
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(2) Net income for the Third Quarter was reduced by a non-recurring charge
associated with the retirement of the Company former President and Chief
Executive Officer and a one-time regulatory $1 million charge to replenish the
Savings Association Insurance Fund.
<PAGE>
LISTEN To our program which we believe will preserve shareholder
value and provide for a reasoned approach to
rewarding management and Directors with stock awards
after their performance can be evaluated.
<TABLE>
THE COMMITTEE TO MAXIMIZE SHAREHOLDER VALUE
AND ITS NOMINEES
----------------
<CAPTION>
Number of Shares
of Common Stock Percent
Beneficially Of
Name Business Address Owned Class
---- ---------------- ----- -----
<S> <C> <C> <C>
Seidman and Associates, L.L.C. 100 Misty Lane 23,600 1.05
(SAL) Parsippany, NJ 07054
Seidman and Associates II, L.L.C. 100 Misty Lane 55,700 2.49
(SALII) Parsippany, NJ 07054
Seidman Investment Partnership, L.P. 19 Veteri Place 15,500 .69
(SIP) Wayne, NJ 07470
Lawrence B. Seidman, Individually 100 Misty Lane 130,450 5.84
(1) Parsippany, NJ 07054
The Benchmark Company, Inc. (2) 750 Lexington Avenue 22,600 1.01
New York, NY 10022
Benchmark Partners L.P. (3) 750 Lexington Avenue 30,000 1.34
New York, NY 10022
S/B International Fund, Ltd. (3) 750 Lexington Avenue 5,000 *
New York, NY 10022
Richard Whitman, Individually (3) 750 Lexington Avenue 2,000 *
New York, NY 10022
Lorraine Di Paolo, Individually (3) 750 Lexington Avenue 4,750 *
New York, NY 10022
</TABLE>
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(1) Seidman owns 5,500 shares of common stock directly, but may be deemed to
have sole voting power and dispositive power as to 130,450 shares beneficially
owned by SAL, SALII and several clients.
(2) Whitman and Di Paolo respectively own 2,000 and 4,750 shares of Common
Stock directly, but may be deemed to have shared voting power and shared
dispositive power as to 52,600 shares beneficially owned by TBCI and Partner.
Mr. Whitman has the power to vote and dispose of the shares owned by S/B
International Fund, Ltd.
(3) Less than 1%.
I M P O R T A N T
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If your shares are held in "Street Name" only your bank or broker can vote
your shares, and only upon receipt of your specific instructions. Please contact
the person responsible for your account and instruct them NOT to vote at this
time.
If you have any questions or need further assistance, please call Lawrence
Seidman at (201) 560-1400 Ext. 108 or Richard Whitman collect at (212) 421-4080
or (800) 628-0048, or our proxy solicitor: Beacon Hill Partners, Inc., 90 Broad
Street, New York, New York 10004 (800) 755-5001.
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