AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON OCTOBER 2, 2000
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) of the
Securities Exchange Act of 1934.
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[_] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6 (e) (2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[X] Soliciting Material Under Rule 14a-12
SUMMIT BANCORP.
--------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
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0-11.
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NY2:\968731\01\krh701!.DOC\78455.0045
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================================================================================
<PAGE>
Date: October 2, 2000
On October 1, 2000, Summit Bancorp. and FleetBoston
Financial Corporation announced that they had entered into an Agreement and Plan
of Merger, dated as of October 1, 2000. The Merger Agreement provides that,
subject to certain conditions, including obtaining Summit stockholder approval
and certain regulatory approvals, Summit will merge with and into Fleet, with
Fleet as the surviving corporation.
Summit will solicit the proxies of the Summit stockholders
to vote to approve the transaction, pursuant to a proxy statement/prospectus to
be filed with the Securities and Exchange Commission. The participants in the
proxy solicitation may be deemed to include the directors and executive officers
of Summit. A list of the names of Summit's directors and officers is contained
in Summit's proxy statement for its 2000 annual meeting. Summit's 2000 proxy
statement also discloses the interests of such directors and officers in the
proposed transaction (including, among other things, the acceleration of certain
benefits or rights upon a "change in control" of Summit pursuant to retirement
plans, termination and severance agreements and stock option and restricted
stock grants). In addition to the interests disclosed in Summit's 2000 proxy
statement, upon completion of the merger, Joseph Semrod, Chief Executive Officer
of Summit, will serve as a member of the Board of Directors of Fleet and will
hold the positions of Vice Chairman of Fleet and Chairman of the New Jersey Bank
for a term of two years. Also upon completion of the Merger, John G. Collins,
Vice Chairman of Summit, will serve as President of the New Jersey Bank for a
term of two years.
As of the date of this communication, none of the foregoing
directors and officers of Summit who may be deemed to be participants in the
proxy solicitation individually beneficially owns in excess of 5% of Summit's
common stock. Except as disclosed above and in Summit's proxy statement for its
2000 annual meeting, to the knowledge of Summit, none of the directors or
executive officers of Summit has any interest, direct or indirect, by security
holdings or otherwise, in Summit or in the proposed transaction.
Summit's stockholders should read the proxy
statement/prospectus regarding the proposed transaction that will be filed with
the SEC and mailed to stockholders. The proxy statement/prospectus will contain
important information that stockholders should consider, including a more
detailed description of the benefits and arrangments involving directors and
officers. Stockholders will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing information about
Summit and Fleet, without charge, at the SEC's internet site
(http://www.sec.gov). Copies of the joint proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to Summit Bancorp., 301 Carnegie Center, P.O. Box 2066, Princeton, New
Jersey 08543-2066, Attention: Office of the Corporate Secretary (609-987-3200).
Except for historical information, all other information in
this filing consists of forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are based upon
the current beliefs and expectations of management and are subject to
<PAGE>
significant risks and uncertainties. Actual results may differ from those set
forth in the forward-looking statements. These uncertainties include: the
ability to obtain governmental approvals of the merger on the proposed terms and
schedule; the failure of Summit stockholders to approve the merger; the risk
that the businesses will not be integrated successfully; the risk that the
revenue synergies and cost savings from the merger may not be fully realized or
may take longer to realize than expected; disruption from the merger making it
more difficult to maintain relationships with clients, employees or suppliers;
increased competition and its effect on pricing, spending, third-party
relationships and revenues; the risk of new and changing regulation in the U.S.
and internationally. Additional factors that could cause results to differ
materially from those described in the forward-looking statements can be found
in the 1999 Annual Reports on Forms 10-K of Summit and Fleet, filed with the
Securities and Exchange Commission and available at the SEC's internet site
(http://www.sec.gov).
* * *
FOR IMMEDIATE RELEASE
CONTACTS: Media Media
James Mahoney Steven Lubetkin
FleetBoston Financial Summit Bancorp
617-434-9552 609-514-7920
Investor Investor
John Kahwaty Kerry Calaiaro
FleetBoston Financial Summit Bancorp
617-434-3650 609-987-3226
FLEETBOSTON FINANCIAL AGREES TO ACQUIRE SUMMIT BANCORP IN
$7 BILLION STOCK TRANSACTION
Summit Customer Base to Benefit from Greater Breadth of
Products and Services; Strategic Acquisition Solidifies Fleet Position in
Metropolitan New York Area
Boston, MA, October 1, 2000 - FleetBoston Financial
Corporation (NYSE:FBF) today announced that it has signed a definitive merger
agreement to acquire Summit Bancorp (NYSE:SUB), the leading retail and
commercial bank in New Jersey. The transaction, which is valued at $7.0 billion,
solidifies Fleet's presence in the New Jersey and metropolitan New York markets,
and is a logical extension of Fleet's geographic franchise across the Northeast.
Under the terms of the agreement, Summit shareholders will
receive 1.02 shares of Fleet for each share of Summit they own in a fixed stock
exchange. Based on the closing price of Fleet's stock on Friday, September 29,
the transaction values Summit at $39.78 per share (or in the aggregate at $7.0
billion). The price per share represents a 15.7% premium over Summit's stock
price as of September 29. The transaction, which is expected to be tax-free to
Summit shareholders, will be accounted for on a pooling basis and has been
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<PAGE>
approved by the Boards of Directors of both companies. The transaction is
expected to close before March 31, 2001 and is subject to approval by Summit
shareholders as well as customary regulatory approvals.
Terrence Murray, Chairman and Chief Executive Officer of
Fleet, said, "Summit has a formidable presence in the attractive New Jersey
market. This transaction is an excellent geographic fit with our existing
franchises, making Fleet the number one bank in New Jersey and, for the first
time, extending our banking franchise into the Philadelphia region. In addition,
it furthers Fleet's strategic goals of balanced earnings and leveraging our
product and services capabilities over an expanded customer base, as we extend
our range of sophisticated offerings to Summit's one million households."
Chad Gifford, President and Chief Operating Officer of
Fleet, said, "We will bring together the best of the two companies, specifically
the capabilities and expertise of Fleet and the relationship management skills
of Summit. Moreover, we will combine and maintain the outstanding community
investment and philanthropic levels of both companies in New Jersey, which total
$4 million per year."
T. Joseph Semrod, Chief Executive Officer of Summit, said,
"This acquisition is the right one for Summit, as it provides significant value
to our shareholders, our customers, our employees, and the members of our
communities. Together, our combined organization will be able to offer our
customers a broader and more sophisticated array of products and services, while
continuing to provide the highest levels of customer service. Importantly, Fleet
has committed to maintaining our current high levels of community, charitable
and economic development commitments, deserving of our outstanding CRA rating."
Semrod has agreed to continue to serve as Chairman of the New Jersey bank and
will be named a Vice Chairman and a member of the board of directors of
FleetBoston Financial Corporation. John G. Collins, a current Vice Chairman of
Summit, will serve as President of the New Jersey bank.
Summit has $39 billion in assets, and more than 500
branches across New Jersey, Pennsylvania and Connecticut. Fleet, with assets of
$181 billion, has approximately 1,200 branches in New England, New York and New
Jersey. At completion of the transaction, expected in the first quarter of 2001,
the combined institution will have approximately $220 billion in assets.
The transaction is expected to be immediately accretive to
Fleet's earnings.
Also today, Fleet announced that its Board of Directors has
rescinded its prior authority, granted in April 2000, to repurchase up to $2.0
billion of its common stock to comply with the limitations of
pooling-of-interests accounting in its acquisition of Summit.
FleetBoston Financial is the eighth largest financial
holding company in the United States. An $181 billion diversified financial
services company, it offers a comprehensive array of innovative financial
solutions to 20 million customers in more than 20 countries and territories.
Among the company's key lines of business are: retail banking, with
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approximately 1,200 branches and over 3,400 ATMs in the Northeast; commercial
banking, including capital markets/investment banking and commercial finance;
investment services, including discount brokerage, and full service banking
through more than 250 offices in Latin America. Fleet Boston Financial is
headquartered in Boston and listed on the New York Stock Exchange (NYSE:FBF) and
the Boston Stock Exchange (BSF:FBF).
Summit Bancorp (NYSE:SUB) is a $39 billion diversified
financial services company headquartered in Princeton, New Jersey. Through
Summit's 500 branches, 600 ATMs and electronic commerce offerings such as Summit
Online Banking, it provides comprehensive financial services to an extensive
retail, corporate banking and private bank customer base in New Jersey, Eastern
Pennsylvania, and Connecticut. For additional information about the company,
please visit its web site at www.summitbank.com.
A conference call for the investing public will be
broadcast live over the Internet at 10:00 a.m. EDT on Monday, October 2, 2000.
The call is available at www.fleet.com (listen only).
* * *
On October 2, 2000, Summit and Fleet held a meeting for the
investment community to discuss the proposed merger of Summit and Fleet. A copy
of the slides shown at the meeting follows:
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[FLEETBOSTON LOGO] [SUMMIT LOGO]
OCTOBER 2, 2000
Leveraging the Franchise
Strategic Rationale:
Compelling Fit with FleetBoston's Franchise
o COMMANDING SHARE IN HIGHLY ATTRACTIVE MARKET
o ACCELERATES FEE INCOME GROWTH RATE:
o Bringing FleetBoston's Products to Summit Customers
o MAINTAINS DIVERSIFIED BUSINESS MIX AND EARNINGS CONSISTENCY
o LEVERAGES SCALE CREATED BY FLEET/BKB MERGER
o ATTRACTIVE SHAREHOLDER ECONOMICS
Why Summit.... ?
New Jersey - A Highly Attractive Market
o # 1 in Population Density
o # 2 in Household Income
o 9 of the Top 100 Wealthiest Counties in the U.S.
o 25% of all Households in Northeast with $1MM+ of Investable Assets
o Small Business Base - Equals MA and CT Combined
o 50% of Fortune 500 have HQ's or Operations in N.J.
... Great Opportunity to Leverage Our Franchise
Northeast Powerhouse
FleetBoston will have Sizable Lead Positions in
Three of the Wealthiest States
<TABLE>
<CAPTION>
HOUSEHOLD INCOME RANK STATE FBF DEPOSIT SHARE RANK
------------------------------- --------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
#1 Conn. 27% #1
------------------------------- --------------------------- -------------------------- --------------------------
#2 N.J. 21% (pro forma) #1
------------------------------- --------------------------- -------------------------- --------------------------
#6 Mass. 37% #1
</TABLE>
5
<PAGE>
Ability to Cross-Sell
Synergies Emerging From Fleet/Summit Merger
On-Line Banking Customers (000s)
12/98: 510 (12% penetration)
9/00: 1,023 (26% penetration)
On-Line Brokerage Customer (000s)
12/98: 230
9/00: 950
Cash Management Revenues ($ billions)
1999: $0.8
2000 Annualized: $1.0
Accelerating Summit's Growth Rate
Huge Opportunity to Leverage Summit's Customers with
FleetBoston's Stronger Product Mix
Commercial:
Ssmall Business (#1 SBA Lender)
Global services (Forex, Trade)
Cash Management (Top 5 Provider)
Capital Markets (equity & debt, principal Inv.)
Comm'l Finance (leasing, asset based)
Consumer:
E-commerce initiavies
On-Line Banking (Home Link)
On-Line Brokerage (Quick & Reilly)
Invest Mgmt ($130B AUM)
Compelling Fit
Summit Brings Features Unique to the Combination
o PENNSYLVANIA PRESENCE
o $3B Deposits
o 115 Branches
o $11B AUM
o Includes High-Performing Pillar Funds
o INSURANCE BROKERAGE
o # 1 in N.J.
o 3rd Largest Among Banks
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o MERCHANT BANKCARD PROCESSING
o # 1 in N.J.
o 16,000+ Merchants
How This Transforms our Strategy
Circle of Value Creation
Move Customers in Highly Attractive Markets -> Greater Penetration
Growth & Scale -> Free Cash Flow and Capital ->
Reinvestment in Growth Businesses
PPT SLIDE
Attractive Shareholder Economics
o ACCRETIVE TO OPERATING EARNINGS IN 2001
o 3% ACCRETIVE IN 2002 AND BEYOND
o IRR: 19%
o 30% COST SAVES
o GENERATES $1B OF EXCESS CAPITAL THROUGH BALANCE SHEET REPOSITIONING
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Transaction Summary
STRUCTURE: - POOLING
- TAX-FREE EXCHANGE
FIXED EXCHANGE RATIO: - 1.02 FBF SHARES FOR EACH SUB SHARE
PRICE: - $39.78 PER SHARE (BASED ON FBF CLOSE ON 9/29)
- $7B AGGREGATE TRANSACTION VALUE
- 15.7% PREMIUM TO MARKET
TIMING: - SUBJECT TO REGULATORY AND SUMMIT SHAREHOLDER APPROVAL
- TARGETED TO CLOSE Q1'01
BOARD OF DIRECTORS - 2 SUMMIT DIRECTORS INCLUDING T. JOSEPH SEMROD,
CHAIRMAN & CEO, TO JOIN FBF BOARD
DIVESTITURES - $250MM - PRIMARILY SOUTHERN NEW JERSEY
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PPT SLIDE
Low-Risk Integration
o FBF: AN EXCELLENT OPERATOR & CONSOLIDATOR
o NATURAL EXTENSION OF CURRENT GEOGRAPHY
o EACH COMPANY ALREADY ON A SINGLE OPERATING PLATFORM
o MANY COMMON VENDOR SYSTEMS
o VAST MAJORITY OF FLEETBOSTON BUSINESSES NOT AFFECTED
o EXPECT TO COMPLETE WITHIN 6 MONTHS
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<PAGE>
We've Delivered
Fleet/BKB Merger Completed
<TABLE>
<CAPTION>
E.P.S. Expectations Pre-Merger Announcement We've Delivered
--------------------------- ----------------------------
<S> <C> <C>
1999 $2.85 $2.91
--------------------------- ----------------------------
2000 $3.19 $3.39
--------------------------- ----------------------------
1% accretion 7% accretion
---------------------------------------------------- --------------------------- ----------------------------
Cost Savings $1 Billion Achieved by year end
--------------------------- ----------------------------
-$600mm (merger) -$800mm annualized
--------------------------- ----------------------------
-$400mm (divestiture) Thru 3Q 100
---------------------------------------------------- --------------------------- ----------------------------
Divestitures $13B Deposits Done
--------------------------- ----------------------------
12% premium $13B & 315 Branches to
Sovereign & Community
Banking
</TABLE>
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<PAGE>
Financial Assumptions
COST SAVINGS: $275 MILLION (60% IN 2001 / 100% IN 2002)
BALANCE SHEET $15B OF LOW-MARGIN ASSET DISPOSITIONS REPOSITIONING - $10B
INVESTMENT SECURITIES
- $ 5B Loans
$175 million after-tax cost
RESTRUCTURING CHARGES: $250 MILLION AFTER-TAX AT CLOSE $ 60 MILLION
AFTER-TAX IN SUBSEQUENT PERIODS
REVENUE ENHANCEMENTS: NONE ASSUMED
Estimated Cost Savings
Personnel $ 150MM
Facilities and Equipment 60
Other 65
Total $ 275MM
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E.P.S. Accretion
<TABLE>
<CAPTION>
------------------- -------------------
2001E 2002E
------------------- -------------------
<S> <C> <C>
FBF EPS $ 3.72 $ 4.09
FBF Net Income 3,440 3,775
Summit Net Income 560 600
Combined Net Income 4,000 4,375
Cost Savings (after-tax) 100 175
Balance Sheet Restructuring (25) (35)
Earnings on Reinvested Capital 50 110
----------------------------------------------- ------------------- -------------------- -------------------
Incremental Earnings 125 250
----------------------------------------------- ------------------- -------------------- -------------------
Pro Forma Earnings 4,125 4,625
Pro Forma E.P.S. $ 3.73 $ 4.20
----------------------------------------------- ------------------- -------------------- -------------------
E.P.S. Accretion $ $ .01 $ .11
% 0.3% 3%
----------------------------------------------- ------------------- -------------------- -------------------
</TABLE>
Note: Above figures are derived from First Call earnings consensus for both
companies and assumes after-tax earnings of 8.5% in 1001 and 8% in 2002 on
reinvested capital. Excludes merger-related charges
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Balance Sheet
June 30, 2000
$ in Billions
<TABLE>
<CAPTION>
Balance Sheet
FleetBoston Summit Restruct ProForma*
<S> <C> <C> <C> <C>
Net Loans $ 110.0 $ 24.7 $ (5.0) $ 129.7
Securities 22.8 11.3 (10.0) 24.1
Other Asset 48.5 3.0 - 51.5
--------------- --------------- --------------- ---------------
Total Assets $ 181.3 $ 39.0 $ (15.0) $ 205.3
--------------- --------------- --------------- ---------------
Deposits $ 104.7 $ 26.1 $ - $ 130.8
Borrowings 51.5 9.5 (15.0) 46.0
Other Liabilities 9.8 0.4 - 10.2
--------------- --------------- --------------- ---------------
Total Assets $ 166.0 $ 36.0 $ (15.0) $ 187.0
--------------- --------------- --------------- ---------------
Preferred Stock 0.6 - - 0.6
Common Stock 14.7 2.9 - 17.6
--------------- --------------- --------------- ---------------
Total Liab & Equity $ 181.3 $ 39.0 $ (15.0) $ 205.3
--------------- --------------- --------------- ---------------
</TABLE>
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Loan Composition
$ in Billions
<TABLE>
<CAPTION>
FleetBoston Summit Balance Sheet Pro Forma
Restruct
Q2'00 % of Q2'00 % of Q2'00 % of
Avg Total Avg Total Avg Total
<S> <C> <C> <C> <C> <C> <C>
C&I/ Lease Financing $ 66.0 57% $ 8.5 35% $ 74.5 55%
Commercial Real Estate 8.0 7% 3.2 13% 11.2 8%
Residential Real Estate 9.1 8% 5.8 24% (5.0) 9.9 7%
Consumer 18.5 16% 6.4 27% 24.9 18%
International 15.1 13% - 0% 15.1 11%
---------- ------- ---------- --------- --------- ---------- --------
Gross Loans $116.7 100% $ 24.0 100% $ (5.0) $ 136.7 100%
</TABLE>
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Deposit Composition
$ in Billions
<TABLE>
<CAPTION>
FleetBoston Summit Pro Forma
Q2'00 % of Q2'00 % of Q2'00 % of
Avg Total Avg Total Avg Total
<S> <C> <C> <C> <C> <C> <C>
Demand $ 25.7 24% $ 4.9 20% $ 30.6 23%
Savings NOW 44.0 41% 11.8 47% 55.8 42%
CDs 22.0 20% 8.3 33% 30.3 23%
Foreign 16.0 15% - 0% 16.0 12%
---------- ------- ---------- ------- ---------- ---------
Total $ 107.7 100% $ 25.1 100% $ 132.8 100%
</TABLE>
* Excludes Expected Divestitures of $250MM
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Credit Quality
June 30, 2000
$ in Billions
<TABLE>
<CAPTION>
----------------- ----------------- ----------------------------- -----------------
Avg Loans FBF SUB Balance Sheet Pro Forma
Restruct
----------------- ----------------- ----------------------------- -----------------
<S> <C> <C> <C> <C>
Gross Loans $112,476 $25,048 $(5,000) $132,524
Loan Loss Reserve 2,472 335 2,807
Non-Performing Assets 950 120 1,070
NPAs/Loans 0.84% 0.48% 0.81%
NCOs/Avg Loans 0.96% 0.36% 0.89%
Reserve/Loans 2.20% 1.34% 2.12%
</TABLE>
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Compelling Fit with FleetBoston's Franchise
o COMMANDING SHARE IN HIGHLY ATTRACTIVE MARKET
o ACCELERATES FEE INCOME GROWTH RATE:
o Bringing FleetBoston's Products to Summit Customers
o MAINTAINS DIVERSIFIED BUSINESS MIX AND EARNINGS CONSISTENCY
o LEVERAGES SCALE CREATED BY FLEET/BKB MERGER
o ATTRACTIVE SHAREHOLDER ECONOMICS
Strategic Rationale
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<PAGE>
APPENDIX
FORWARD LOOKING INFORMATION
This presentation contains forward looking statements with respect to the
financial condition, results of operations and business of FleetBoston
Financial Corporation ("Fleet") and Summit Bancorp ("Summit"), and
assuming the consummation of the merger, a combined Fleet and BankBoston,
including statements relating to: (i) the cost savings and revenue
enhancements and accretion to reported earnings that will be realized from
the merger; and (ii) the restructuring charges expected to be incurred in
connection with the merger. These forward looking statements involve
certain risks and uncertainties. Factors that may cause actual results to
differ materially from those contemplated by such forward looking
statements include, among other things, the following possibilities: (i)
expected cost savings from the merger cannot be fully realized or realized
within the expected time; (ii) revenues following the merger are lower
than expected; (iii) competitive pressure among depository institutions
increases significantly; (iv) costs related to the integration of the
business of Fleet and BankBoston are greater than expected; (v) changes in
the interest rate environment reduce interest margins; (vi) general
economic conditions, either internationally or domestically in those
regions in which the combined company will be doing business, are less
favorable than expected; (vii) legislation or regulatory requirements or
changes adversely affect the business in which the combined company will
be engaged; and (viii) changes which may occur in the securities market.
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