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Wayne Bancorp, Inc.
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<PAGE>
WAYNE BANCORP LETTERHEAD
March 12, 1998
ANNUAL MEETING MARCH 24
PLEASE VOTE TODAY
Dear Fellow Shareholder:
Your Company's annual meeting is rapidly approaching on Tuesday, March
24, and each of us want to thank all of our shareholders for their continuing
strong support. Your loyalty and resolve are deeply appreciated.
Because your vote is important to the future of Wayne Bancorp and your
investment, we are writing again to ask for your support. We believe your choice
is clear. We urge you to reject Lawrence Seidman, whose past record includes
violations of federal banking laws and federal securities laws. Instead, we urge
you to support all of your Board's nominees nominees with a proven record of
success who are dedicated to enhancing the value of your investment. Regardless
of the size of your investment your vote is important. Please demonstrate your
support by signing, dating and mailing your WHITE proxy.
WAYNE BANCORP'S RECORD OF SUCCESS -
OUTSTANDING STOCK PERFORMANCE
While your Company's many achievements met or exceeded its goals, there
is one specific accomplishment of which your Board of Directors is particularly
proud. As depicted below, your Company's stock price performance relative to the
S&P 5001 has been outstanding. Take a close look at the following chart. We are
confident you will agree that we are meeting our commitment to maximize the
value of your investment in Wayne Bancorp.
[Graph Omitted]
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1 On March 3, 1998 Wayne's stock closed at $25 3/4.
<PAGE>
And, we intend to keep meeting our commitment to maximize the value of
your investment. Mr. Seidman wants you to believe we are opposed to positive
change and that we are unwilling to explore various opportunities, including
possible combinations with other financial institutions.
For the record, nothing could be further from the truth. We have not
foreclosed any option to achieve our goal, including considering any and all
proposals for merger transactions or business combinations with other financial
institutions, if and when they make sense for all of our shareholders. Our
loyalty is to you, and we are committed to further enhancing the value of your
investment both in the short and long term.
WAYNE BANCORP'S RECORD OF SUCCESS -
FAVORABLE PERFORMANCE COMPARED TO PEERS
Despite the strong performance of your stock (which Seidman admits he
is happy with), Mr. Seidman has criticized your Company's financial performance
based, in large part, on unfair comparisons which are not indicative of your
Company's actual performance.
The fact is that since Wayne Bancorp's conversion to a stock
institution in June of 1996, your Company's financial performance is favorable
to its peer group of recently converted thrifts (converted to public ownership
from 4/1/96 through 9/30/96). Take a look at the facts:
<TABLE>
<CAPTION>
TOTAL NET INCOME EPS EPS RETURN ON AVG.
INSTITUTION ASSETS1 (LTM)1 (LTM)1 (MRQ)1 EQUITY (MRQ)1
- ----------- ------- ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C>
Westwood Homestead Fin. Corp. $134,259 $ 883 $ 0.33 N/A 2.23%
Peoples Financial Corp. 82,864 684 0.49$ 0.09 3.27
Prestige Bancorp Inc. 143,263 784 0.92 0.16 5.12
Wayne Bancorp Inc. 267,285 2,147 1.08 0.25 6.01
Catskill Financial Corp. 294,656 3,799 0.85 0.22 5.24
Yonkers Financial Corp. 331,802 3,093 1.09 0.26 7.11
Green Street Financial Corp. 179,700 2,826 0.68 0.17 4.48
AMB Financial Corp. 100,003 1,023 1.10 0.16 6.83
1st Bergen Bancorp 284,739 2,026 0.73 0.18 4.94
Pittsburgh Home Financial Corp. 299,669 2,111 1.14 0.26 7.53
-------- -------- ----- ----- ----
Average $211,784 $ 1,938 $ 0.84 $0.19 5.28%
</TABLE>
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1 LTM-Last Twelve Months. MRQ-Most Recent Quarter. The source of the provided
figures is an independent publication, SNL. Information provided is as of
9/30/97. The Company has not sought, nor will it seek authority to reprint
the above information.
2
<PAGE>
Because Mr. Seidman is unable to refute the facts, he insists on
comparing Wayne's performance to that of Ramapo Financial, a commercial bank. To
some degree, it's like comparing apples to oranges. Despite Mr. Seidman's
unfounded and inaccurate criticisms, we thought you would be interested in the
following:
NEW LOANS AND COMMITMENTS
DURING 1997
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Wayne Bancorp. $72,000,000
Ramapo Financial Corp. $40,000,000
We think your choice is clear. Support your Board's Nominees by
signing, dating and mailing your WHITE proxy.
SEIDMAN HAS VIOLATED THE STANDSTILL
AGREEMENT HE SIGNED WITH YOUR COMPANY
In our last letter to shareholders, we told you about Mr. Seidman's
background and asked you to decide if you should elect him to a position of
trust on your Board of Directors. Shareholders should also know that Mr. Seidman
has in our view intentionally violated the standstill agreement he signed with
your Company in 1997.
Last year Mr. Seidman threatened your Board with a proxy contest. In an
effort to avoid a costly and disruptive proxy fight, only months after becoming
publicly owned - in February, 1997 we entered into a standstill agreement with
Seidman and his associates. Pursuant to the standstill agreement, your Board
agreed to nominate Dennis Pollack, Seidman's handpicked representative, to a
three-year term, and Seidman and his group agreed to vote in favor of the
Company's benefit plans. Since signing the plan, Seidman has, in our opinion,
intentionally violated its provisions. Look at the facts:
THE AGREEMENT - Seidman and his group agreed not acquire any additional shares
of Wayne Bancorp that would cause his ownership to exceed 10%.
THE VIOLATION - On May 27, 1997, Mr. Seidman attempted to violate the agreement
by filing an application with the regulators for permission to own up to 25% of
Wayne Bancorp's stock.
THE AGREEMENT - Seidman and his group agreed not to seek to influence or control
the Company or its management, business, policies or affairs.
THE VIOLATION - Seidman is seeking to influence and control the company by
approaching other financial institutions about buying Wayne Bancorp and running
for director on the platform that the best course of action is to sell the
Company.
3
<PAGE>
Your Board of Directors has carefully considered Mr. Seidman's
background and what we believe are his intentional violations of the agreement
between Seidman and your Company. Ask yourself if you can rely on Mr. Seidman to
represent your best interests and the interests of all Wayne Bancorp
shareholders. We believe the answer is clear and we urge you to not sign any
card which Seidman may send to you, not even as a vote of protest.
Finally, we want to set the record straight regarding Seidman's
unfounded criticism regarding our recently announced Mountain Ridge Estates
joint venture. Seidman wants you to believe that the joint venture is a "giant
step backwards" and "a return to an activity that proved a complete disaster for
thrifts in the early 1990's." In fact Seidman's handpicked representative Dennis
Pollack voted FOR the project. Do not be fooled by Seidman's baseless,
inflammatory and misleading rhetoric. Once again, here are the facts:
FACT - The project calls for the construction and marketing of only 14 single
family homes in partnership with an accomplished builder and developer who
possesses 30 years of successful construction company experience.
FACT - Wayne matched McCoobery Construction Company's capital contribution of
$250,000 to this project which is approximately seven tenths of one percent
(.007%) of your Company's total assets (as of 12/31/97). You should also know
that any additional funding will be in the form of secured loans.
We firmly believe that this project provides your Company with an
excellent opportunity to capitalize on, and profit from, the strong and vibrant
local real estate market. Though relatively small in size, we believe that the
project is a positive step forward. We urge you not to be fooled by Seidman's
rhetoric and what we view as his attempt to distort the facts.
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We have entered 1998 with a high degree of optimism, dedicated to
further enhancing the value of your investment. Our strategic plan includes
continued expansion of commercial lending activities, branch office growth and
introduction of new products and innovative services. We are confident that our
activities on your behalf will continue your Company's transformation into an
even more profitable, multifaceted community bank. With your support, we will
succeed.
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<PAGE>
We urge you to demonstrate your support by signing, dating and mailing
the enclosed WHITE proxy. Your vote is important, so pleas act today.
Thank you for your continued support.
Sincerely,
/s/ Harold P. Cook, III /s/ Johnanna O'Connell /s/ William J. Lloyd
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Harold P. Cook, III Johanna O'Connell William J. Lloyd
Chairman of the Board President and Director Director
and CEO
/s/ David M. Collins /s/ Thomas D. Collins /s/ Nicholas S. Gentile, Jr.
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David M. Collins Thomas D. Collins Nicholas S. Gentile, Jr.
Director Director Director
/s/ Ronald Higgins /s/ Richard Len /s/ Charles A. Lota
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Ronald Higgins Richard Len Charles A. Lota
Director Director Director
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IMPORTANT
Your vote is important. Regardless of the number of shares of Wayne
Bancorp common stock you own, please sign, date and mail your WHITE proxy card.
Please act toady. And, please discard all cards you may receive from Mr. Seidman
or his group.
If you own shares in the name of a brokerage firm or bank nominees,
only it can vote your shares and only after receiving your specific
instructions. Please call your broker/banker and instruct him/her to execute a
WHITE proxy card on your behalf. You should also promptly sign, date and mail
your WHITE proxy card when you receive it from your broker/banker. Please do so
for each separate account you maintain. Please return your WHITE proxy card
immediately to ensure that your vote is counted.
If you have any questions or need assistance in voting your shares,
please call D.F. King & Co., Inc., which is assisting us, toll-free at
1-800-628-8510.
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