<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NORTH FORK BANCORPORATION, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 6712 36-3154608
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
275 BROAD HOLLOW ROAD
MELVILLE, NEW YORK 11747
(516) 298-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JOHN ADAM KANAS, PRESIDENT
NORTH FORK BANCORPORATION, INC.
275 BROAD HOLLOW ROAD
MELVILLE, NEW YORK 11747
(516) 298-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
WILLIAM S. RUBENSTEIN, ESQ. DENNIS J. BLOCK, ESQ.
SKADDEN, ARPS, SLATE, WEIL, GOTSHAL & MANGES, LLP
MEAGHER & FLOM LLP 767 FIFTH AVENUE
919 THIRD AVENUE NEW YORK, NEW YORK 10153
NEW YORK, NEW YORK 10022 (212) 310-8000
(212) 735-3000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effectiveness of this
Registration Statement and the satisfaction or waiver of all other conditions to
the Merger described in the Joint Proxy Statement/Prospectus.
------------------------
If the securities being registered on this form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES BEING AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED(1) BE REGISTERED PER SHARE OFFERING PRICE(2) FEE(2)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Common Stock, par value
$2.50 per share ("Common
Stock").................... 28,131,644 N/A $887,978,890 $261,954
===================================================================================================================
</TABLE>
(1) Also includes associated Rights to purchase shares of the Registrant's
Series A Junior Participating Preferred Stock, which Rights (a) are not
currently separable from the shares of Common Stock and (b) are not
currently exercisable. See "DESCRIPTION OF NORTH FORK CAPITAL STOCK" and
"COMPARISON OF STOCKHOLDER RIGHTS."
(2) The registration fee has been computed pursuant to Rule 457(f)(1) under the
Securities Act of 1933, as amended, based on the average of the high and low
prices for shares of Common Stock of New York Bancorp Inc. ("New York
Bancorp") as reported on the New York Stock Exchange on December 15, 1997,
($37.5625) and the maximum number of such shares (23,640,037) that may be
exchanged for the securities being registered. Pursuant to Rule 457(b), the
registration fee has been reduced by the $169,026.00 paid on November 24,
1997 upon the filing under the Securities Exchange Act of 1934, as amended,
of North Fork's proxy materials included herein relating to the Merger.
Accordingly, the registration fee payable upon the filing of this
Registration Statement is $92,928.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE> 2
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING THE LOCATION IN THE JOINT PROXY STATEMENT/PROSPECTUS
OF THE INFORMATION REQUIRED BY THE ITEMS OF FORM S-4
<TABLE>
<CAPTION>
S-4 ITEM NUMBER AND CAPTION LOCATION IN PROXY STATEMENT/PROSPECTUS
------------------------------------------- -------------------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus... Cover Page of Registration Statement; Cross
Reference Sheet; Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus............................ Inside Front Cover Page; Available
Information; Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed
Charges, and Other Information........... Summary; The Special Meetings, The Merger;
Pro Forma Combined Selected Historical
Financial Information (Unaudited);
4. Terms of the Transaction................... Summary; Pro Forma Combined Selected
Historical Financial Information
(Unaudited); The Merger; Description of
North Fork Capital Stock; Comparison of
Stockholder Rights
5. Pro Forma Financial Information............ Pro Forma Condensed Combined Financial
Statements (Unaudited)
6. Material Contacts with the Company Being
Acquired................................. Summary; The Merger
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters....................... *
8. Interests of Named Experts and Counsel..... Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.............................. *
10. Information with Respect to S-3
Registrants.............................. Available Information; Incorporation of
Certain Documents by Reference; Summary;
The Merger; Pro Forma Condensed Combined
Financial Statements (Unaudited); The
Companies -- North Fork
11. Incorporation of Certain Information by
Reference................................ Incorporation of Certain Documents by
Reference
12. Information with Respect to S-2 or S-3
Registrants.............................. *
13. Incorporation of Certain Information by
Reference................................ *
14. Information with Respect to Registrants
Other Than S-3 or S-2 Registrants........ *
15. Information with Respect to S-3
Companies................................ Available Information, Incorporation of
Certain Documents By Reference; Summary;
The Companies -- New York Bancorp
16. Information with Respect to S-2 or S-3
Companies................................ *
17. Information with Respect to Companies Other
Than S-2 or S-3 Companies................ *
18. Information if Proxies, Consents or
Authorizations are to be Solicited....... Summary; The Special Meetings; The Merger
19. Information if Proxies, Consents or
Authorizations are not to be Solicited,
or in an Exchange Offer.................. *
</TABLE>
- ---------------
* Omitted because inapplicable or answer is negative.
<PAGE> 3
[NORTH FORK BANCORPORATION LOGO]
December , 1997
Dear North Fork Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of
North Fork Bancorporation, Inc. ("North Fork") which will be held on January 30,
1998 at 10:00 a.m. local time, at the Wyndham Windwatch Hotel, 1717 Vanderbilt
Motor Parkway, Hauppauge, New York (the "Special Meeting"). At this meeting, you
will be asked to consider and vote upon a proposal to approve an Amended and
Restated Agreement and Plan of Merger (the "Merger Agreement") pursuant to which
New York Bancorp Inc. ("New York Bancorp") will be merged (the "Merger") with
and into North Fork and the stockholders of New York Bancorp will become
stockholders of North Fork.
Your shares of North Fork Common Stock will be unaffected by the Merger.
Upon consummation of the Merger, it is expected that New York Bancorp's former
stockholders will own approximately 28.1% of North Fork's outstanding common
stock.
The Merger has been unanimously approved by the Board of Directors of each
company. Your Board of Directors believes that the Merger will provide
significant value to North Fork's stockholders by extending the markets served
by North Fork and allowing North Fork to provide a broader array of services to
New York Bancorp's customers. YOUR BOARD HAS DETERMINED THAT THE MERGER IS IN
THE BEST INTERESTS OF NORTH FORK AND ITS STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR APPROVAL OF THE MERGER AGREEMENT. The investment banking firm
of Goldman, Sachs & Co. has issued a written opinion to your Board of Directors
that, as of the date of such opinion, the Exchange Ratio pursuant to the Merger
Agreement was fair, from a financial point of view, to North Fork. The written
opinion of Goldman, Sachs & Co. is reproduced in full as Annex C to the
accompanying Joint Proxy Statement/Prospectus, and North Fork's stockholders are
urged to read carefully such opinion in its entirety.
Consummation of the Merger is subject to certain conditions, including the
approval of the Merger Agreement by the holders of a majority of the outstanding
shares of common stock of each of North Fork and New York Bancorp and the
approval of the Merger by various regulatory agencies.
Specific information regarding the Special Meeting is contained in the
enclosed Notice of Special Meeting and Joint Proxy Statement/Prospectus. Please
read these materials carefully.
It is very important that your shares are represented at the Special
Meeting, whether or not you plan to attend in person. A failure to vote for
approval of the Merger Agreement will have the same effect as a vote against the
Merger Agreement. Therefore, I urge you to execute, date and return the enclosed
proxy card in the enclosed postage-paid envelope as soon as possible to assure
that your shares will be voted at the Special Meeting.
On behalf of the Board of Directors, I thank you for your support and urge
you to vote FOR approval of the Merger Agreement.
Sincerely,
/s/ JOHN ADAM KANAS
JOHN ADAM KANAS
Chairman, President and Chief
Executive Officer
<PAGE> 4
NORTH FORK BANCORPORATION, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 30, 1998
To the Stockholders of
North Fork Bancorporation, Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of North Fork
Bancorporation, Inc. ("North Fork") will be held at the Wyndham Windwatch Hotel,
1717 Vanderbilt Motor Parkway, Hauppauge, New York on January 30, 1998, at 10:00
a.m. local time (the "Special Meeting"), for the following purposes, all of
which are more fully described in the accompanying Joint Proxy
Statement/Prospectus:
1. To consider and vote upon a proposal to approve and adopt the Amended
and Restated Agreement and Plan of Merger, dated as of October 7, 1997 (the
"Merger Agreement"), by and between North Fork and New York Bancorp Inc.
("New York Bancorp"), and the consummation of the transactions contemplated
thereby, including the merger of New York Bancorp with and into North Fork.
A copy of the Merger Agreement is attached as Annex A to the accompanying
Joint Proxy Statement/Prospectus.
2. To transact such other business as may properly come before the
Special Meeting or any adjournments or postponements thereof including,
without limitation, a motion to adjourn or postpone the Special Meeting to
another time and/or place for the purpose of soliciting additional proxies
in order to approve and adopt the Merger Agreement.
The North Fork Board of Directors has fixed the close of business on
December 16, 1997 as the record date for the determination of stockholders
entitled to notice of and to vote at the Special Meeting and any adjournments or
postponements thereof. Only stockholders of record at the close of business on
such date are entitled to notice of and to vote at the Special Meeting. A list
of North Fork stockholders entitled to vote at the Special Meeting will be
available for examination for any purpose germane to the Special Meeting, during
ordinary business hours, at the principal executive offices of North Fork,
located at 275 Broad Hollow Road, Melville, New York, for 10 days prior to the
Special Meeting. In the event there are not sufficient shares represented for a
quorum or votes to approve the Merger Agreement or otherwise at the time of the
Special Meeting, the Special Meeting may be adjourned in order to permit further
solicitation of proxies by North Fork.
The common stock of North Fork is the only security of North Fork the
holders of which are entitled to vote upon the proposal to be presented at the
Special Meeting.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. EACH
STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE SPECIAL MEETING, IS REQUESTED
TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO
ITS EXERCISE. A PROXY MAY BE REVOKED BY FILING WITH THE SECRETARY OF NORTH FORK
A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE. ANY
STOCKHOLDER PRESENT AT THE SPECIAL MEETING OR AT ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH
MATTER BROUGHT BEFORE THE SPECIAL MEETING.
By Order of the Board of Directors,
/s/ ANTHONY J. ABATE
ANTHONY J. ABATE
Secretary
December , 1997
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
PROPOSAL TO APPROVE AND ADOPT THE MERGER AGREEMENT.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED POSTAGE-PAID RETURN ENVELOPE.
<PAGE> 5
NEW YORK BANCORP LETTERHEAD
December , 1997
To New York Bancorp Stockholders:
You are cordially invited to attend a Special Meeting of Stockholders of
New York Bancorp Inc. ("New York Bancorp") to be held at the Adria Conference
Center, 220-33 Northern Boulevard, Bayside, New York on January 30, 1998 at
10:00 a.m. local time (the "Special Meeting").
At the Special Meeting, you will be asked to consider and vote upon a
proposal to approve and adopt an Amended and Restated Agreement and Plan of
Merger (the "Merger Agreement") pursuant to which New York Bancorp will be
merged (the "Merger") with and into North Fork Bancorporation, Inc. ("North
Fork"). It is intended that immediately following the Merger, Home Federal
Savings Bank ("Home Federal"), a wholly owned subsidiary of New York Bancorp,
will merge (the "Subsidiary Bank Merger") with and into North Fork Bank, a
wholly owned subsidiary of North Fork. Upon consummation of the Merger, each
holder of a share of the common stock, par value $0.01 per share, of New York
Bancorp ("New York Bancorp Common Stock") will be entitled to receive 1.19
shares (the "Exchange Ratio") of the common stock, par value $2.50 per share, of
North Fork ("North Fork Common Stock"). If the Average Closing Price (as defined
below) is less than $25.50, either party may terminate the Merger Agreement
unless, in the case of termination by New York Bancorp, North Fork increases the
Exchange Ratio so that the shares of North Fork Common Stock issued in exchange
for each share of New York Bancorp Common Stock have a value (valued at the
Average Closing Price) of $30.35. The term "Average Closing Price" means the
average last reported sales price per share of North Fork Common Stock on the
New York Stock Exchange, Inc. ("NYSE") (as reported by The Wall Street Journal
or, if not reported thereby, another authoritative source), for the 10
consecutive trading days ending on the date on which the last of all regulatory
approvals required to consummate the transactions contemplated by the Merger
Agreement (including the Merger and the Subsidiary Bank Merger) are obtained,
without regard to any requisite waiting periods.
The Merger Agreement has been unanimously approved by the Board of
Directors of both New York Bancorp and North Fork. YOUR BOARD OF DIRECTORS HAS
DETERMINED THAT THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, NEW YORK
BANCORP AND ITS STOCKHOLDERS AND RECOMMENDS THAT YOU VOTE FOR APPROVAL AND
ADOPTION OF THE MERGER AGREEMENT. Each of the investment banking firms of
Sandler O'Neill & Partners, L.P. and Keefe, Bruyette & Woods, Inc. has issued
its written opinion to your Board of Directors, dated as of the date of the
Merger Agreement and updated as of the date of the accompanying Joint Proxy
Statement/ Prospectus, to the effect that, as of such dates, the Exchange Ratio
was fair, from a financial point of view, to New York Bancorp's stockholders.
The written opinions of Sandler O'Neill & Partners, L.P. and Keefe, Bruyette &
Woods, Inc. are reproduced in full as Annex D and Annex E, respectively, to the
accompanying Joint Proxy Statement/Prospectus, and New York Bancorp's
stockholders are urged to read each such opinion carefully in its entirety.
Consummation of the Merger is subject to certain conditions, including, but
not limited to, approvals by the requisite vote of the stockholders of both New
York Bancorp and North Fork and the approval of the Merger and the Subsidiary
Bank Merger by various regulatory agencies.
The enclosed Notice of Special Meeting and Joint Proxy Statement/Prospectus
describe the Merger and provide specific information regarding the Special
Meeting. Please read these materials carefully.
It is very important that your shares of New York Bancorp Common Stock be
represented at the Special Meeting, whether or not you plan to attend in person.
The affirmative vote of the holders of a majority of the
<PAGE> 6
outstanding shares of New York Bancorp Common Stock entitled to vote at the
Special Meeting is required for approval and adoption of the Merger Agreement. A
failure to vote for approval and adoption of the Merger Agreement will have the
same effect as a vote against the Merger Agreement. Therefore, I urge you to
execute, date and return the enclosed proxy card in the enclosed postage-paid
envelope as soon as possible to ensure that your shares will be voted at the
Special Meeting. If you attend the Special Meeting, you may revoke the proxy
given on such form and vote in person if you wish, even if you have previously
returned your form of proxy. YOU SHOULD NOT SEND IN ANY STOCK CERTIFICATES AT
THIS TIME.
On behalf of the Board of Directors, I thank you for your support and urge
you to vote FOR approval and adoption of the Merger Agreement.
Sincerely,
PATRICK E. MALLOY, III
Chairman
<PAGE> 7
NEW YORK BANCORP INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 30, 1998
To the Stockholders of New York Bancorp Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of New York
Bancorp Inc. ("New York Bancorp") will be held at the Adria Conference Center,
220-33 Northern Boulevard, Bayside, New York on January 30, 1998 at 10:00 a.m.,
local time (the "Special Meeting"), for the following purposes, all of which are
more completely set forth in the accompanying Joint Proxy Statement/Prospectus:
1. To consider and vote upon a proposal to approve and adopt the
Amended and Restated Agreement and Plan of Merger, dated as of October 7,
1997 (the "Merger Agreement"), by and between North Fork Bancorporation,
Inc. ("North Fork") and New York Bancorp pursuant to which New York Bancorp
will merge with and into North Fork (the "Merger"). A copy of the Merger
Agreement is attached as Annex A to the accompanying Joint Proxy
Statement/Prospectus.
2. To transact such other business as may properly come before the
Special Meeting or any adjournments or postponements thereof including,
without limitation, a motion to adjourn or postpone the Special Meeting to
another time and/or place for the purpose of soliciting additional proxies
in order to approve and adopt the Merger Agreement.
Pursuant to the By-laws of New York Bancorp, the Board of Directors has
fixed December 16, 1997 as the record date for the determination of stockholders
entitled to notice of and to vote at the Special Meeting and at any adjournments
or postponements thereof. Only stockholders of record at the close of business
on that date will be entitled to notice of and to vote at the Special Meeting or
any adjournments or postponements thereof. In the event there are not sufficient
shares represented for a quorum or votes to approve the Merger Agreement or
otherwise at the time of the Special Meeting, the Special Meeting may be
adjourned in order to permit further solicitation of proxies by New York
Bancorp.
The affirmative vote of the holders of a majority of the outstanding shares
of common stock, par value $0.01 per share, of New York Bancorp (the "New York
Bancorp Common Stock") entitled to vote at the Special Meeting is required for
approval and adoption of the Merger Agreement.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. EACH
STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE SPECIAL MEETING, IS REQUESTED
TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO
ITS EXERCISE. A PROXY MAY BE REVOKED BY FILING WITH THE SECRETARY OF NEW YORK
BANCORP A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE. ANY
STOCKHOLDER PRESENT AT THE SPECIAL MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT
BEFORE THE SPECIAL MEETING.
By Order of the Board of Directors
STAN I. COHEN
Secretary
Douglaston, New York
December , 1997
<PAGE> 8
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO
APPROVE AND ADOPT THE MERGER AGREEMENT.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED POSTAGE-PAID RETURN ENVELOPE.
PLEASE DO NOT SEND YOUR COMMON STOCK CERTIFICATES AT THIS TIME. IF THE MERGER IS
CONSUMMATED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF YOUR
CERTIFICATES.
<PAGE> 9
------------------------
NORTH FORK BANCORPORATION, INC.
NEW YORK BANCORP INC.
[NYB LOGO] JOINT PROXY STATEMENT [NF LOGO]
------------------------
NORTH FORK BANCORPORATION, INC.
PROSPECTUS
------------------------
28,131,644 SHARES OF COMMON STOCK
This Joint Proxy Statement/Prospectus (the "Joint Proxy
Statement/Prospectus") is being furnished to stockholders of New York Bancorp
Inc. ("New York Bancorp") in connection with the solicitation of proxies by the
Board of Directors of New York Bancorp for use at a special meeting of
stockholders of New York Bancorp (including any adjournments or postponements
thereof) to be held on January 30, 1998 at 10:00 a.m. local time (the "New York
Bancorp Meeting"). At the New York Bancorp Meeting, New York Bancorp's
stockholders will consider and vote upon a proposal to approve and adopt the
Amended and Restated Agreement and Plan of Merger, dated as of October 7, 1997,
between North Fork Bancorporation, Inc. ("North Fork") and New York Bancorp (the
"Merger Agreement"). Pursuant to the Merger Agreement, New York Bancorp will be
merged (the "Merger") with and into North Fork.
This Joint Proxy Statement/Prospectus is also being furnished to
stockholders of North Fork in connection with the solicitation of proxies by
North Fork's Board of Directors for use at a special meeting of stockholders of
North Fork (including any adjournments or postponements thereof) to be held on
January 30, 1998 at 10:00 a.m., local time (the "North Fork Meeting," and
together with the New York Bancorp Meeting, the "Special Meetings"). At the
North Fork Meeting, North Fork's stockholders will consider and vote upon a
proposal to approve and adopt the Merger Agreement and the consummation of the
transactions contemplated thereby.
The Merger Agreement is attached as Annex A hereto and is incorporated
herein by reference.
This Joint Proxy Statement/Prospectus also constitutes a prospectus of
North Fork with respect to up to 28,131,644 shares of common stock, par value
$2.50 per share, of North Fork (the "North Fork Common Stock") issuable in the
Merger to holders of common stock, par value $0.01 per share, of New York
Bancorp ("New York Bancorp Common Stock") and to holders of New York Bancorp
Options (see "SUMMARY -- Exchange Ratio). Upon consummation of the Merger, each
outstanding share of New York Bancorp Common Stock will, with certain
exceptions, be converted into and exchangeable for 1.19 shares (the "Exchange
Ratio") of North Fork Common Stock. If the Average Closing Price (as defined
below) is less than $25.50, either party may terminate the Merger Agreement
unless, in the case of termination by New York Bancorp, North Fork increases the
Exchange Ratio so that the shares of North Fork Common Stock issued in exchange
for each share of New York Bancorp Common Stock have a value (valued at the
Average Closing Price) of not less than $30.35. The Average Closing Price is the
average of the last reported sales prices of the North Fork Common Stock on the
New York Stock Exchange, Inc. (the "NYSE") for the 10 consecutive trading days
ending on the date on which the last of all regulatory approvals required to
consummate the transactions contemplated by the Merger Agreement is obtained,
without regard to any requisite waiting period in respect thereof. Under the
terms of the Merger Agreement, cash will be paid in lieu of the issuance of
fractional shares of North Fork Common Stock. In addition, each share of North
Fork Common Stock issued in the Merger will include the corresponding number of
rights attached thereto pursuant to the North Fork Rights Agreement (as defined
herein).
Because the market price of North Fork Common Stock is subject to
fluctuation, the value of the shares of North Fork Common Stock that holders of
New York Bancorp Common Stock would receive in the Merger may increase or
decrease prior to and after the Merger. See "SUMMARY -- Market Prices and
Dividend Information."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS JOINT PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE SHARES OF NORTH FORK COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY NOR ARE THEY GUARANTEED BY ANY BANK OR BANK HOLDING COMPANY.
------------------------
This Joint Proxy Statement/Prospectus and the accompanying forms of proxy
are first being mailed to stockholders of North Fork and New York Bancorp on or
about December , 1997.
The date of this Joint Proxy Statement/Prospectus is December , 1997
<PAGE> 10
No persons have been authorized to give any information or to make any
representations other than those contained in this Joint Proxy
Statement/Prospectus or incorporated by reference herein in connection with the
solicitation of proxies or the offering of securities made hereby and, if given
or made, such information or representations must not be relied upon as having
been authorized by North Fork or New York Bancorp. This Joint Proxy
Statement/Prospectus does not constitute an offer to sell, or a solicitation of
an offer to buy, any securities, or the solicitation of a proxy, in any
jurisdiction to or from any person to whom it is not lawful to make any such
offer or solicitation in such jurisdiction. Neither the delivery of this Joint
Proxy Statement/ Prospectus nor any distribution of securities made hereunder
shall, under any circumstances, create an implication that there has been no
change in the affairs of North Fork or New York Bancorp since the date of this
Joint Proxy Statement/Prospectus or that the information herein or the documents
or reports incorporated by reference herein is correct as of any time subsequent
to such date. All information contained in this Joint Proxy Statement/Prospectus
relating to North Fork and its subsidiaries has been supplied by North Fork and
has not been independently verified by New York Bancorp and all information
contained in this Joint Proxy Statement/Prospectus relating to New York Bancorp
and its subsidiaries has been supplied by New York Bancorp and has not been
independently verified by North Fork.
<PAGE> 11
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION............................................................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..................................... 2
SUMMARY............................................................................. 4
Parties to the Merger............................................................. 4
The Special Meetings.............................................................. 4
Recommendations of Boards of Directors............................................ 5
Effect of the Merger and the Subsidiary Bank Merger............................... 6
Exchange Ratio.................................................................... 6
Effective Time.................................................................... 7
Opinions of Financial Advisors.................................................... 7
Interests of Certain Persons in the Merger........................................ 8
Employee Matters.................................................................. 8
Conditions; Regulatory Approvals.................................................. 8
Termination of the Merger Agreement............................................... 8
Stock Exchange Listing............................................................ 8
Anticipated Accounting Treatment.................................................. 8
Certain Federal Income Tax Consequences of the Merger............................. 9
No Appraisal Rights............................................................... 9
Stock Option Agreement............................................................ 9
Board of Directors and Management Following the Merger............................ 10
Consolidation of Operations; Projected Cost Savings and Revenue Enhancements;
Projected Earnings Per Share................................................... 10
Merger and Restructuring Charge................................................... 10
Comparison of Stockholder Rights.................................................. 11
SELECTED HISTORICAL FINANCIAL INFORMATION (UNAUDITED)............................... 12
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION (UNAUDITED)....................... 18
COMPARATIVE PER SHARE DATA (UNAUDITED).............................................. 22
MARKET PRICES AND DIVIDEND INFORMATION.............................................. 24
THE COMPANIES....................................................................... 26
North Fork........................................................................ 26
New York Bancorp.................................................................. 27
THE SPECIAL MEETINGS................................................................ 28
North Fork Meeting................................................................ 28
New York Bancorp Meeting.......................................................... 29
THE MERGER.......................................................................... 32
Effects of the Merger............................................................. 32
Exchange Ratio.................................................................... 32
Effective Time.................................................................... 34
Background of the Merger.......................................................... 34
Recommendation of the Boards of Directors; Reasons for the Merger................. 36
Opinions of Financial Advisors.................................................... 37
Interests of Certain Persons in the Merger........................................ 50
Employee Matters.................................................................. 52
Conversion of Shares; Procedures for Exchange of Certificates; Fractional
Shares......................................................................... 52
Conditions to the Merger.......................................................... 53
Regulatory Approvals Required for the Merger...................................... 55
Conduct of Business Pending the Merger............................................ 56
Waiver and Amendment; Termination................................................. 58
Resales of North Fork Common Stock Received in the Merger......................... 59
Stock Exchange Listing............................................................ 59
</TABLE>
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<PAGE> 12
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Anticipated Accounting Treatment.................................................. 60
Certain Federal Income Tax Consequences of the Merger............................. 60
No Appraisal Rights............................................................... 62
Stock Option Agreement............................................................ 62
Expenses.......................................................................... 67
MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER...................................... 67
Board of Directors and Management Following the Merger............................ 67
Consolidation of Operations; Projected Cost Savings and Revenue Enhancements;
Projected Earnings Per Share................................................... 67
Merger and Restructuring Charge................................................... 69
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF NORTH FORK AND NEW YORK
BANCORP........................................................................... 70
Beneficial Ownership of Shares of North Fork Common Stock......................... 70
Beneficial Ownership of Shares of New York Bancorp Common Stock................... 71
CERTAIN REGULATORY CONSIDERATIONS................................................... 73
General........................................................................... 73
Payment of Dividends.............................................................. 73
Transactions with Affiliates...................................................... 74
Holding Company Liability......................................................... 74
Prompt Corrective Action.......................................................... 74
Capital Adequacy.................................................................. 75
Enforcement Powers of the Federal Banking Agencies................................ 76
FDIC Insurance Assessments........................................................ 76
Control Acquisitions.............................................................. 77
Future Legislation................................................................ 77
DESCRIPTION OF NORTH FORK CAPITAL STOCK............................................. 78
General........................................................................... 78
Common Stock...................................................................... 78
Rights Plan....................................................................... 78
COMPARISON OF STOCKHOLDER RIGHTS.................................................... 81
Stockholder Action by Written Consent............................................. 81
Stockholder Nominations and Proposals for Business................................ 81
Business Combinations Involving Interested Stockholders........................... 82
Removal of Directors.............................................................. 83
Consideration of Other Constituencies............................................. 84
Personal Liability of Directors................................................... 84
Rights Plans...................................................................... 84
Amendment of By-laws.............................................................. 85
Amendment of Certificate.......................................................... 85
Special Meeting of Stockholders................................................... 85
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS................................... 86
LEGAL MATTERS....................................................................... 95
EXPERTS............................................................................. 95
STOCKHOLDER PROPOSALS............................................................... 95
ANNEX A AGREEMENT AND PLAN OF MERGER
ANNEX B STOCK OPTION AGREEMENT
ANNEX C OPINION OF GOLDMAN SACHS & CO.
ANNEX D OPINION OF SANDLER O'NEILL & PARTNERS, L.P.
ANNEX E OPINION OF KEEFE, BRUYETTE & WOODS, INC.
</TABLE>
ii
<PAGE> 13
AVAILABLE INFORMATION
Each of North Fork and New York Bancorp is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). The
reports, proxy statements and other information filed by North Fork and New York
Bancorp with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, New York, New York 10048 and Citicorp Center, 500 West Madison,
Suite 1400, Chicago, Illinois 60661. Copies of such material also can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates or from the Web Site
maintained by the Commission at "http://www.sec.gov." In addition, material
filed by North Fork and New York Bancorp can be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005.
North Fork has filed with the Commission a Registration Statement on Form
S-4 (together with any amendments thereof, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the shares of North Fork Common Stock to be issued pursuant to the Merger
Agreement. This Joint Proxy Statement/Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits thereto.
Such additional information may be inspected and copied as set forth above.
Statements contained in this Joint Proxy Statement/Prospectus or in any document
incorporated by reference in this Joint Proxy Statement/Prospectus as to the
contents of any contract or other document referred to herein or therein are not
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement or
such other document, each such statement being qualified in all respects by such
reference.
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<PAGE> 14
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by North Fork (File No.
0-10280) and New York Bancorp (File No. 1-11684) are incorporated by reference
in this Joint Proxy Statement/Prospectus:
1. North Fork's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 (the "1996 North Fork Form 10-K").
2. North Fork's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997.
3. North Fork's Current Reports on Form 8-K, dated February 25, 1997,
April 10, 1997, April 22, 1997, June 24, 1997, July 25, 1997, October 7,
1997, October 15, 1997, November 20, 1997, December 9, 1997, December 10,
1997 and December 12, 1997.
4. The description of North Fork Common Stock and North Fork Series A
Junior Participating Preferred Stock and Preferred Stock Purchase Rights
set forth in North Fork's registration statements filed by North Fork
pursuant to Section 12 of the Exchange Act including any amendment or
report filed for purposes of updating any such description.
5. The portions of North Fork's Proxy Statement for the Annual
Meeting of Stockholders held on April 22, 1997 that have been incorporated
by reference in the 1996 North Fork Form 10-K.
6. New York Bancorp's Annual Report on Form 10-K for the fiscal year
ended September 30, 1996 (the "1996 New York Bancorp Form 10-K").
7. New York Bancorp's Quarterly Reports on Form 10-Q for the quarters
ended December 31, 1996, March 31, 1997 and June 30, 1997.
8. New York Bancorp's Current Reports on Form 8-K dated January 2,
1997, October 15, 1997 and October 29, 1997.
9. The description of New York Bancorp Common Stock and preferred
stock, par value $0.01 per share (the "New York Bancorp Preferred Stock")
set forth in New York Bancorp's Registration Statement filed by New York
Bancorp pursuant to Section 12 of the Exchange Act including any amendment
or report filed for purposes of updating any such description.
10. The portions of New York Bancorp's Proxy Statement for the Annual
Meeting of Stockholders held on January 28, 1997 that have been
incorporated by reference in the 1996 New York Bancorp Form 10-K.
All documents and reports filed by North Fork and New York Bancorp pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Joint Proxy Statement/Prospectus and prior to the date of the Special Meetings
shall be deemed to be incorporated by reference in this Joint Proxy
Statement/Prospectus and to be a part hereof from the dates of filing of such
documents or reports. Any statement contained in a document or report
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Joint Proxy Statement/Prospectus
to the extent that a statement contained herein, or in any other subsequently
filed document or report which also is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Joint Proxy Statement/Prospectus.
THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE) ARE AVAILABLE, WITHOUT CHARGE, TO ANY PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS JOINT PROXY STATEMENT/PROSPECTUS IS DELIVERED, ON
WRITTEN OR ORAL REQUEST, IN THE CASE OF DOCUMENTS RELATING TO NORTH FORK, TO
NORTH FORK BANCORPORATION, INC., 275 BROAD HOLLOW ROAD, MELVILLE, NEW YORK
11747, ATTENTION: ANTHONY ABATE, SECRETARY, TELEPHONE NUMBER (516) 844-1004, AND
IN THE CASE OF DOCUMENTS RELATING TO NEW YORK BANCORP, TO NEW YORK BANCORP INC.,
241-02 NORTHERN BOULEVARD, DOUGLASTON, NEW YORK 11362, ATTENTION: LINDA BISHOP,
TELEPHONE NUMBER (718) 631-8100. IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS, REQUESTS SHOULD BE RECEIVED BY JANUARY 23, 1998.
2
<PAGE> 15
THIS JOINT PROXY STATEMENT/PROSPECTUS CONTAINS CERTAIN FORWARD LOOKING
STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
BUSINESS OF NORTH FORK FOLLOWING THE CONSUMMATION OF THE MERGER, INCLUDING
STATEMENTS RELATING TO: (A) THE COST SAVINGS AND REVENUE ENHANCEMENTS THAT ARE
EXPECTED TO BE REALIZED FROM THE MERGER, (B) THE IMPACT ON REVENUES OF THE
MERGER, (C) PROJECTED EARNINGS PER SHARE OF THE COMBINED COMPANY, AND (D) THE
RESTRUCTURING CHARGES EXPECTED TO BE INCURRED IN CONNECTION WITH THE MERGER. SEE
"SUMMARY," "MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER -- CONSOLIDATION OF
OPERATIONS; PROJECTED COST SAVINGS AND REVENUE ENHANCEMENTS; PROJECTED EARNINGS
PER SHARE" AND "PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)."
FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE
FOLLOWING POSSIBILITIES: (1) EXPECTED COST SAVINGS FROM THE MERGER CANNOT BE
FULLY REALIZED WITHIN THE EXPECTED TIME FRAME OR THEREAFTER; (2) REVENUES
FOLLOWING THE MERGER ARE LOWER THAN EXPECTED; (3) COMPETITIVE PRESSURE AMONG
DEPOSITORY INSTITUTIONS INCREASES SIGNIFICANTLY; (4) COSTS OR DIFFICULTIES
RELATED TO THE INTEGRATION OF THE BUSINESSES OF NORTH FORK AND NEW YORK BANCORP
ARE GREATER THAN EXPECTED; (5) CHANGES IN THE INTEREST RATE ENVIRONMENT REDUCE
INTEREST MARGINS; (6) GENERAL ECONOMIC CONDITIONS, EITHER NATIONALLY OR IN THE
MARKETS IN WHICH THE COMBINED COMPANY WILL BE DOING BUSINESS, ARE LESS FAVORABLE
THAN EXPECTED; OR (7) LEGISLATION OR REGULATORY REQUIREMENTS OR CHANGES
ADVERSELY AFFECT THE BUSINESSES IN WHICH THE COMBINED COMPANY WOULD BE ENGAGED.
3
<PAGE> 16
SUMMARY
The following is a summary of certain information contained elsewhere in
this Joint Proxy Statement/Prospectus. As this summary is necessarily
incomplete, reference is made to, and this summary is qualified in its entirety
by, the more detailed information contained or incorporated by reference in this
Joint Proxy Statement/Prospectus and the Annexes hereto. North Fork and New York
Bancorp stockholders are urged to read this Joint Proxy Statement/Prospectus and
the Annexes hereto in their entirety. Certain capitalized terms which are used
but not defined in this summary are defined elsewhere in this Joint Proxy
Statement/Prospectus.
PARTIES TO THE MERGER
North Fork. North Fork, with its executive headquarters located in
Melville, New York, is a bank holding company organized under the laws of the
State of Delaware in 1980 and registered under the Bank Holding Company Act of
1956, as amended (the "BHC Act"). North Fork's primary subsidiary, North Fork
Bank, operates 80 retail banking facilities throughout Suffolk and Nassau
Counties on Long Island, New York, as well as in the New York City boroughs of
Manhattan, Queens and the Bronx and in Westchester and Rockland Counties north
of New York City. North Fork's acquisition of Branford Savings Bank (see below)
represents North Fork's initial acquisition outside the State of New York.
At September 30, 1997, North Fork had assets of $6.6 billion, deposits of
$4.5 billion and stockholders' equity of $538 million. The principal executive
offices of North Fork are located at 275 Broad Hollow Road, Melville, New York
11747 and its telephone number is (516) 844-1004.
On December 12, 1997, North Fork acquired Branford Savings Bank
("Branford"), a Connecticut-chartered savings bank, through the merger (the
"Branford Merger") of Branford with and into a wholly owned subsidiary of North
Fork. At September 30, 1997, Branford had total assets of $183 million, deposits
of $162 million and stockholders' equity of $18 million. North Fork issued
approximately 1,283,674 shares of its common stock to the Branford shareholders
and paid cash in the amount of approximately $3,000,000 to the holders of
Branford warrants. The transaction, will be accounted for under the purchase
method of accounting. See "PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS."
For more information about North Fork, reference is made to "THE
COMPANIES -- North Fork" and to the 1996 North Fork Form 10-K which is
incorporated herein by reference. See "AVAILABLE INFORMATION" and "INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE."
New York Bancorp. New York Bancorp, with its executive headquarters
located in Douglaston, New York, is a savings and loan holding company organized
under the laws of the State of Delaware in 1988. New York Bancorp's primary
subsidiary, Home Federal Savings Bank ("Home Federal"), operates 31 full service
branch offices throughout Kings, Queens, Nassau, Westchester and Suffolk
Counties of New York.
At September 30, 1997, New York Bancorp had assets of approximately $3.2
billion, deposits of approximately $1.7 billion and stockholders' equity of
approximately $169 million. The principal executive offices of New York Bancorp
are located at 241-02 Northern Boulevard, Douglaston, New York 11362 and its
telephone number is (718) 631-8100.
For more information about New York Bancorp, reference is made to "THE
COMPANIES -- New York Bancorp" and to the 1996 New York Bancorp Form 10-K which
is incorporated herein by reference. See "AVAILABLE INFORMATION" and
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
THE SPECIAL MEETINGS
North Fork. The North Fork Meeting will be held at 10:00 a.m. on January
30, 1998 at the Wyndham Windwatch Hotel, 1717 Vanderbilt Motor Parkway,
Hauppauge, New York. The purpose of the North Fork Meeting is to consider and
vote upon a proposal to approve the Merger Agreement and the consummation of
4
<PAGE> 17
the transactions contemplated thereby, and such other matters as may properly be
brought before the meeting and any adjournments or postponements thereof.
Only holders of record of North Fork Common Stock at the close of business
on December 16, 1997 (the "North Fork Record Date") will be entitled to vote at
the North Fork Meeting. The affirmative vote of the holders of a majority of the
outstanding shares of North Fork Common Stock entitled to vote on such date is
required to approve the Merger Agreement. As of the North Fork Record Date,
there were 67,360,337 shares of North Fork Common Stock outstanding and entitled
to be voted at the North Fork Meeting.
The directors and executive officers of North Fork and their affiliates
beneficially owned, as of the North Fork Record Date, 3,812,717 shares, or
approximately 5.66% of the outstanding shares, of North Fork Common Stock
entitled to vote at the North Fork Meeting and all such persons have indicated a
present intent to vote their shares for approval and adoption of the Merger
Agreement. See "THE SPECIAL MEETINGS -- North Fork Meeting -- Record Date;
Voting; Solicitation and Revocation of Proxies." As of the North Fork Record
Date, neither New York Bancorp nor its subsidiaries, nor the directors and
executive officers of New York Bancorp, beneficially owned any shares of North
Fork Common Stock, except for one executive officer who beneficially owned
42,870 shares of North Fork Common Stock as of such date. Such executive officer
has indicated a present intent to vote his shares for approval and adoption of
the Merger Agreement. See "THE SPECIAL MEETINGS -- North Fork
Meeting -- General."
New York Bancorp. The New York Bancorp Meeting will be held at 10:00 a.m.
on January 30, 1998 at the Adria Conference Center, 220-33 Northern Boulevard,
Bayside, New York. The purpose of the New York Bancorp Meeting is to consider
and vote upon a proposal to approve and adopt the Merger Agreement, and such
other matters as may properly be brought before the meeting and any adjournments
or postponements thereof.
Only holders of record of New York Bancorp Common Stock at the close of
business on December 16, 1997 (the "New York Bancorp Record Date") will be
entitled to notice of and to vote at the New York Bancorp Meeting. The
affirmative vote of the holders of a majority of the outstanding shares of New
York Bancorp Common Stock entitled to vote at the Special Meeting is required to
approve and adopt the Merger Agreement. As of the New York Bancorp Record Date,
there were 21,359,427 shares of New York Bancorp Common Stock outstanding and
entitled to be voted at the New York Bancorp Meeting.
The directors and executive officers of New York Bancorp and their
affiliates owned, as of the New York Bancorp Record Date, 5,486,320 shares, or
approximately 26% of the outstanding shares, of New York Bancorp Common Stock
entitled to vote at the New York Bancorp Meeting, and all such persons have
indicated a present intent to vote their shares for approval and adoption of the
Merger Agreement. See "THE SPECIAL MEETINGS -- New York Bancorp -- Record Date;
Voting; Solicitation and Revocation of Proxies." As of the New York Bancorp
Record Date, neither North Fork and its subsidiaries, nor the directors and
executive officers of North Fork, beneficially owned any outstanding shares of
New York Bancorp Common Stock. See "THE SPECIAL MEETINGS -- New York
Bancorp -- General."
RECOMMENDATIONS OF BOARDS OF DIRECTORS
North Fork. THE NORTH FORK BOARD OF DIRECTORS (THE "NORTH FORK BOARD") HAS
UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND HAS DETERMINED THAT THE MERGER IS
FAIR TO, AND IN THE BEST INTERESTS OF, NORTH FORK AND ITS STOCKHOLDERS. THE
NORTH FORK BOARD THEREFORE UNANIMOUSLY RECOMMENDS THAT NORTH FORK'S STOCKHOLDERS
VOTE FOR APPROVAL AND ADOPTION OF THE MERGER AGREEMENT. See "THE SPECIAL
MEETINGS -- North Fork Meeting -- Recommendation of the Board of Directors" and
"THE MERGER -- Recommendation of the Boards of Directors; Reasons for the
Merger."
New York Bancorp. THE NEW YORK BANCORP BOARD OF DIRECTORS (THE "NEW YORK
BANCORP BOARD") HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND HAS DETERMINED
THAT THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, NEW YORK BANCORP AND
ITS STOCKHOLDERS. THE NEW YORK BANCORP BOARD THEREFORE UNANIMOUSLY RECOMMENDS
THAT NEW YORK BANCORP'S STOCKHOLDERS VOTE FOR APPROVAL AND ADOPTION OF THE
MERGER AGREEMENT. See "THE SPECIAL MEETINGS -- New York Bancorp
Meeting -- Recommendation
5
<PAGE> 18
of the Board of Directors" and "THE MERGER -- Background of the Merger" and "--
Recommendation of the Boards of Directors; Reasons for the Merger."
EFFECT OF THE MERGER AND THE SUBSIDIARY BANK MERGER
Pursuant to the Merger Agreement, at the Effective Time (as defined below),
New York Bancorp will be merged with and into North Fork, and New York Bancorp
stockholders will become stockholders of North Fork. See "THE MERGER -- Effects
of the Merger."
Immediately following the consummation of the Merger, Home Federal will
merge with and into North Fork Bank (the "Subsidiary Bank Merger"). North Fork
Bank will continue as a New York-chartered commercial bank and a wholly owned
subsidiary of North Fork. See "THE MERGER -- Effects of the Merger."
EXCHANGE RATIO
At the Effective Time, each issued and outstanding share of New York
Bancorp Common Stock, except for shares held directly or indirectly by North
Fork or New York Bancorp (other than shares held by North Fork or New York
Bancorp in a fiduciary capacity ("Trust Account Shares") or in respect of a debt
previously contracted ("DPC Shares")) will be converted into and exchangeable
for 1.19 shares of North Fork Common Stock (the "Exchange Ratio"). If the
Average Closing Price (as defined below) is less than $25.50, either party may
terminate the Merger Agreement by giving written notice to the other party
within two business days after the Valuation Period (as defined below), in the
case of a termination by North Fork, or within four business days after the
Valuation Period, in the case of a termination by New York Bancorp, unless, in
the case of termination by New York Bancorp, North Fork elects, within two
business days after the Valuation Period, to increase the Exchange Ratio such
that the shares of North Fork Common Stock issued in exchange for each share of
New York Bancorp Common Stock have a value (valued at the Average Closing Price)
of not less than $30.35. The Average Closing Price is the average of the last
reported sales prices per share of North Fork Common Stock on the NYSE for the
10 consecutive trading days (the "Valuation Period") ending on the date on which
the last of all regulatory approvals required to consummate the transactions
contemplated by the Merger Agreement (including the Merger and the Subsidiary
Bank Merger) are obtained, without regard to any requisite waiting period in
respect thereof.
If the Average Closing Price is less than $25.50 and North Fork elects to
increase the Exchange Ratio, the Exchange Ratio will be equal to the quotient
obtained by dividing (i) $30.35 by (ii) the Average Closing Price. Assuming the
Merger is approved by New York Bancorp stockholders, the New York Bancorp Board
may elect not to terminate the Merger Agreement and to consummate the Merger
without resoliciting New York Bancorp stockholders if the Average Closing Price
is less than $25.50 and North Fork does not elect to increase the Exchange
Ratio, even though, as a result of the application of the Exchange Ratio, the
value of the shares of North Fork Common Stock (valued at the Average Closing
Price) issued in exchange for each share of New York Bancorp Common Stock would
be less than $30.35. In such a situation, in considering whether to consummate
the Merger without the resolicitation of New York Bancorp stockholders, the New
York Bancorp Board will take into account, consistent with its fiduciary duty,
all relevant facts and circumstances that exist at such time, including, without
limitation, the advice of its financial advisors and legal counsel. See "THE
MERGER -- Exchange Ratio" and "-- Waiver and Amendment; Termination."
In addition, at the Effective Time, each outstanding and unexercised option
(a "New York Bancorp Option") to purchase shares of New York Bancorp Common
Stock which was granted under New York Bancorp's Incentive Stock Option Plan
dated February 4, 1988, 1990 Incentive Stock Option Plan (the "1990 Incentive
Plan"), 1990 Stock Option Plan for Outside Directors, 1993 Long-Term Incentive
Plan (the "1993 Incentive Plan"), and 1993 Stock Option Plan for Outside
Directors (collectively, the "New York Bancorp Option Plans") will be converted
automatically into the right to receive such number of shares (rounded to the
nearest whole share) of North Fork Common Stock as is equal in value (determined
by valuing each share of North Fork Common Stock at the Option Share Average
Closing Price (as defined below)) to the amount by which (i) the product of the
number of shares of New York Bancorp Common Stock subject to such
6
<PAGE> 19
option, the Exchange Ratio and the Option Share Average Closing Price exceeds
(ii) the aggregate exercise price of such option, provided, that notwithstanding
the foregoing, at the Effective Time, each outstanding New York Bancorp Option
with respect to which the holder was issued either option surrender rights
("OSRs") under the 1993 Incentive Plan or limited rights ("Limited Rights")
under the 1990 Incentive Plan will be converted automatically into the right to
receive the greater of (x) the number of shares of North Fork Common Stock into
which such option would be converted pursuant to the foregoing formula, and (y)
such number of shares (rounded to the nearest whole share) of North Fork Common
Stock as is equal in value (determined by valuing each share of North Fork
Common Stock at the Option Share Average Closing Price) to the amount of cash
which the holder of such New York Bancorp Option would otherwise be entitled to
receive upon exercise of such OSRs or Limited Rights, as the case may be, at the
Effective Time pursuant to the terms of the applicable New York Bancorp Option
Plan and such holder's option agreement. As used herein, the term "Option Share
Average Closing Price" means the average of the last reported sale prices per
share of North Fork Common Stock on the NYSE for the 20 consecutive NYSE trading
days ending on the fifth business day prior to the date on which the last of all
regulatory approvals required to consummate the transactions contemplated by the
Merger Agreement (including the Merger and the Subsidiary Bank Merger) are
obtained, without regard to any requisite waiting periods in respect thereof.
See "THE MERGER -- Interest of Certain Person in the Merger -- Options."
EFFECTIVE TIME
The Merger will become effective upon the filing of a certificate of merger
with the Secretary of State of the State of Delaware in accordance with
applicable law or on such later time as the certificate may specify (the
"Effective Time"). The certificate will be filed on the first day which is (i)
the last business day of a month and (ii) at least two business days after
satisfaction or waiver of the latest to occur of certain conditions to the
Merger specified in the Merger Agreement, unless another date is agreed to by
North Fork and New York Bancorp. See "THE MERGER -- Effective Time."
OPINIONS OF FINANCIAL ADVISORS
Goldman, Sachs & Co. ("Goldman Sachs") has rendered a written opinion to
the North Fork Board, dated as of the date of the Merger Agreement and updated
as of the date of this Joint Proxy Statement/ Prospectus, to the effect that, as
of such dates, the Exchange Ratio was fair from a financial point of view to
North Fork. As discussed in "THE MERGER -- Recommendation of the Boards of
Directors; Reasons for the Merger -- North Fork," Goldman Sachs' opinion and
presentation to the North Fork Board, together with a review by the North Fork
Board of the assumptions made by Goldman Sachs, were among the factors
considered by the North Fork Board in reaching its determination to approve the
Merger. The opinion of Goldman Sachs is attached as Annex C to this Joint Proxy
Statement/Prospectus. Stockholders are urged to read such opinion in its
entirety for a description of the procedures followed, assumptions made, matters
considered and qualifications on the review undertaken by Goldman Sachs in
connection therewith. See "THE MERGER -- Opinions of Financial Advisors -- North
Fork."
Each of Sandler O'Neill & Partners, L.P. ("Sandler O'Neill") and Keefe,
Bruyette & Woods, Inc. ("KBW") has rendered a written opinion to the New York
Bancorp Board, dated as of the date of the Merger Agreement and updated as of
the date of this Joint Proxy Statement/Prospectus, to the effect that, as of
such dates, the Exchange Ratio was fair, from a financial point of view, to the
holders of New York Bancorp Common Stock. As discussed in "THE
MERGER -- Recommendation of the Boards of Directors; Reasons for the
Merger -- New York Bancorp," each of Sandler O'Neill's and KBW's opinions and
presentations to the New York Bancorp Board were among the factors considered by
the New York Bancorp Board in reaching its determination to approve the Merger
Agreement. The opinions of Sandler O'Neill and KBW are attached as Annex D and
Annex E, respectively, to this Joint Proxy Statement/Prospectus. Stockholders
are urged to read such opinions in their entirety for a description of the
procedures followed, assumptions made, matters considered and qualifications and
limitations on the review undertaken by each of Sandler O'Neill and KBW in
connection therewith. See "THE MERGER -- Opinions of Financial Advisors -- New
York Bancorp."
7
<PAGE> 20
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of New York Bancorp's management and the New York Bancorp
Board have interests in the Merger in addition to their interests as
stockholders of New York Bancorp generally. These include, among other things,
provisions in the Merger Agreement relating to indemnification and insurance,
the appointment of Mr. Patrick E. Malloy, III, Chairman of the New York Bancorp
Board, to the North Fork Board, the payment of certain retention bonuses and
severance benefits to officers of New York Bancorp, the provision by North Fork
of a consulting agreement for Mr. Malloy, and the acceleration of benefits under
certain employee benefit plans. The New York Bancorp Board was aware of these
interests and considered them, among other matters, in unanimously approving the
Merger Agreement and the transactions contemplated thereby. See "THE
MERGER -- Interests of Certain Persons in the Merger."
EMPLOYEE MATTERS
The Merger Agreement provides for New York Bancorp and Home Federal
employees to participate in benefit plans maintained by North Fork and North
Fork Bank following the Merger to the same extent as comparable employees of
North Fork and North Fork Bank. See "THE MERGER -- Employee Matters."
CONDITIONS; REGULATORY APPROVALS
Consummation of the Merger is subject to various mutual conditions,
including, among others, receipt of the stockholder approvals solicited hereby,
receipt of necessary regulatory approvals, receipt of opinions of counsel
regarding certain federal income tax consequences of the Merger, receipt of a
letter addressed to North Fork from North Fork's independent accountants to the
effect that the Merger qualifies for pooling of interests accounting treatment
and the satisfaction of other customary closing conditions. See "THE
MERGER -- Conditions to the Merger."
Consummation of the Merger and the transactions contemplated thereby
(including the Subsidiary Bank Merger) are subject to the prior approval or
notification requirements of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), the Federal Deposit Insurance Corporation
("FDIC"), the Office of Thrift Supervision ("OTS") and the New York State
Banking Department. See "THE MERGER -- Regulatory Approvals Required for the
Merger."
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated at any time prior to the Effective
Time by the mutual consent of New York Bancorp and North Fork and by either of
them individually under certain specified circumstances, including if the Merger
has not been consummated by September 30, 1998. In addition, the Merger
Agreement provides that either party may elect to terminate the Merger Agreement
if the Average Closing Price is less than $25.50 unless, in the case of
termination by New York Bancorp, North Fork elects to increase the Exchange
Ratio to an amount equal to $30.35 divided by the Average Closing Price. See
"THE MERGER -- Exchange Ratio" and "-- Waiver and Amendment; Termination."
STOCK EXCHANGE LISTING
The North Fork Common Stock is listed on the NYSE. North Fork has agreed to
use reasonable efforts to cause the shares of North Fork Common Stock to be
issued in the Merger to be approved for listing on the NYSE. See "THE
MERGER -- Stock Exchange Listing." The obligation of each of New York Bancorp
and North Fork to consummate the Merger is subject to approval for listing by
the NYSE of such shares. See "THE MERGER -- Conditions to the Merger."
ANTICIPATED ACCOUNTING TREATMENT
The Merger is expected to qualify as a pooling of interests for accounting
and financial reporting purposes. Further, pursuant to the Merger Agreement, New
York Bancorp must use all reasonable efforts to reissue approximately 800,000
shares of New York Bancorp Common Stock currently held by New York
8
<PAGE> 21
Bancorp as treasury stock (the "New York Bancorp Treasury Stock") prior to
consummation of the Merger in order that the Merger will not fail to qualify for
pooling of interests accounting treatment by virtue of the number of shares of
New York Bancorp Treasury Stock. It is currently expected that the offering of
the shares of New York Bancorp Treasury Stock will occur on or about the
Effective Time. It is a condition to each of North Fork's and New York Bancorp's
obligation to consummate the Merger that North Fork and New York Bancorp receive
a letter addressed to North Fork from North Fork's independent accountants to
the effect that the Merger qualifies for pooling of interests accounting
treatment. See "THE MERGER -- Conditions to the Merger" and "-- Anticipated
Accounting Treatment."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
It is a condition to the obligation of North Fork to consummate the Merger
that North Fork shall have received an opinion of its counsel, dated as of the
Effective Time, in form and substance reasonably satisfactory to North Fork, to
the effect that the Merger and the Subsidiary Bank Merger will be treated as
reorganizations within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that, accordingly, for federal income
tax purposes, no gain or loss will be recognized by North Fork, New York
Bancorp, North Fork Bank or Home Federal as a result of the Merger and the
Subsidiary Bank Merger (except to the extent any income may be required to be
recognized due to the recapture of bad debt reserves as a result of the
Subsidiary Bank Merger). It is a condition to the obligation of New York Bancorp
to consummate the Merger that New York Bancorp shall have received an opinion of
its counsel, dated as of the Effective Time, in form and substance reasonably
satisfactory to New York Bancorp, to the effect that the Merger will be treated
as a reorganization within the meaning of Section 368(a) of the Code and that,
accordingly, for federal income tax purposes (i) no gain or loss will be
recognized by New York Bancorp as a result of the Merger and (ii) no gain or
loss will be recognized by the stockholders of New York Bancorp who exchange all
of their New York Bancorp Common Stock solely for North Fork Common Stock
pursuant to the Merger (except with respect to cash received in lieu of a
fractional share interest in North Fork Common Stock and the payment of any real
property transfer taxes, if any, on behalf of stockholders of New York Bancorp).
Each of these conditions is waivable at the option of the party entitled to
receive the requisite opinion. New York Bancorp stockholders are urged to
consult their tax advisors concerning the specific tax consequences to them of
the Merger, including the applicability and effect of various state, local and
foreign tax laws. See "THE MERGER -- Certain Federal Income Tax Consequences of
the Merger" and "-- Conditions to the Merger."
NO APPRAISAL RIGHTS
No stockholders of New York Bancorp or North Fork are entitled to appraisal
rights in connection with, or as a result of, the Merger. See "THE MERGER -- No
Appraisal Rights."
STOCK OPTION AGREEMENT
Execution of the Stock Option Agreement, dated as of October 7, 1997 (the
"Stock Option Agreement"), by and between New York Bancorp and North Fork, was a
condition to North Fork's merger proposal. Pursuant to the Stock Option
Agreement, New York Bancorp granted North Fork an option (the "Option") to
purchase 4,261,000 shares of New York Bancorp Common Stock, representing
approximately 19.9% of the issued and outstanding shares of such common stock
without giving effect to the shares issuable upon exercise of such option, at an
exercise price of $30.50, subject to the terms and conditions set forth therein.
The Option may only be exercised upon the occurrence of certain events (none of
which has occurred as of the date of this Joint Proxy Statement/Prospectus). The
Stock Option Agreement is attached as Annex B to this Joint Proxy
Statement/Prospectus. See "THE MERGER -- Stock Option Agreement."
The Stock Option Agreement is intended to increase the likelihood that the
Merger will be consummated in accordance with the terms of the Merger Agreement.
Consequently, certain aspects of the Stock Option Agreement may have the effect
of discouraging persons who might now or prior to the Effective Time be
interested in acquiring all or a significant interest in New York Bancorp from
considering or proposing such an
9
<PAGE> 22
acquisition, even if such persons were prepared to pay a higher price per share
for New York Bancorp Common Stock than the price per share implicit in the
Exchange Ratio.
BOARD OF DIRECTORS AND MANAGEMENT FOLLOWING THE MERGER
Pursuant to the terms of the Merger Agreement, at the Effective Time, North
Fork will cause the North Fork Board to include Mr. Patrick E. Malloy, III,
Chairman of the New York Bancorp Board. See "MANAGEMENT AND OPERATIONS FOLLOWING
THE MERGER -- Board of Directors and Management Following the Merger" and "THE
MERGER -- Interests of Certain Persons in the Merger."
CONSOLIDATION OF OPERATIONS; PROJECTED COST SAVINGS AND REVENUE ENHANCEMENTS;
PROJECTED EARNINGS PER SHARE
North Fork expects to achieve significant cost savings subsequent to the
Merger. The cost savings are expected to be derived from reductions in
personnel, elimination of selected branch facilities located in communities in
which both North Fork and New York Bancorp branches are located, the integration
of New York Bancorp's data processing operations with those of North Fork, and
the integration of other facilities and back office operations. Further, the
separate corporate existence of New York Bancorp and Home Federal will cease
with the consummation of the Merger and the Subsidiary Bank Merger.
Consequently, costs associated with New York Bancorp's operating as a separate
publicly held entity will also be eliminated. The aggregate annual pre-tax cost
savings to be achieved in connection with the Merger are estimated by North Fork
to be $25 million. Management of North Fork believes that realization of these
cost savings will be substantially phased in before the end of the first full
quarter following consummation of the Merger. There can be no assurance that all
of the potential cost savings will be realized or that they will be realized in
the time frame currently estimated or thereafter. Such realization will depend,
among other things, upon the existing regulatory and economic environment,
business changes implemented by North Fork management and other factors, certain
of which are beyond the control of North Fork.
Following the Subsidiary Bank Merger, North Fork will convert the former
operations of Home Federal to a full service commercial bank. As such, North
Fork believes, based on its previous experience in acquiring savings banks and
branches of savings banks, that revenue enhancement opportunities exist with the
offering of commercial bank products to Home Federal's customers and the
communities Home Federal serves. These products include but are not limited to a
variety of demand deposit accounts, discount brokerage, investment management
and trust services, cash management, annuity and mutual fund products and
commercial and installment loans to small and midsize businesses. The amounts
and realization of any additional revenues will depend upon a number of factors
including, but not limited to, competition, the economic environment and
regulatory requirements, which are all beyond the control of North Fork.
Based on the synergies anticipated, North Fork believes that the Merger
will result in earnings accretion of approximately $.14 per share in 1998 and
approximately $.19 per share in 1999. See "MANAGEMENT AND OPERATIONS FOLLOWING
THE MERGER -- Consolidation of Operations; Projected Cost Savings and Revenue
Enhancements; Projected Earnings Per Share" and "-- Merger and Restructuring
Charge."
For additional factors that could cause actual results to differ materially
from the estimates described above, see "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE."
MERGER AND RESTRUCTURING CHARGE
A non-recurring merger and restructuring charge of approximately $34.4
million, net of income taxes, will be incurred upon consummation of the Merger.
The restructuring charge includes merger related compensation, severance and
employee related expenses, facility and system costs and state and local tax bad
debt recapture. See "MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER -- Merger
and Restructuring Charge."
10
<PAGE> 23
COMPARISON OF STOCKHOLDER RIGHTS
As a result of the Merger, New York Bancorp stockholders will become
stockholders of North Fork and their rights as stockholders of North Fork will
be governed by the Delaware General Corporation Law and by North Fork's
Certificate of Incorporation and By-laws. The rights of stockholders of North
Fork differ from the rights of the stockholders of New York Bancorp with respect
to certain matters, including, among others, with respect to the ability of
stockholders to act by written consent, the vote required for certain business
combinations, limitations on personal liability of directors, consideration of
constituencies other than stockholders, the removal of directors and amendments
to the by-laws or certificate of incorporation. For a summary of these
differences, see "COMPARISON OF STOCKHOLDER RIGHTS."
11
<PAGE> 24
SELECTED HISTORICAL FINANCIAL INFORMATION
(UNAUDITED)
The following tables set forth selected historical consolidated financial
information (unaudited) for North Fork for the five years ended December 31,
1996 and the nine month periods ended September 30, 1997 and 1996, and for New
York Bancorp for the five years ended September 30, 1996 and the nine month
periods ended September 30, 1997 and 1996. The financial information for New
York Bancorp for the nine month periods ended September 30, 1997 and 1996 has
been presented to coincide with the reporting period for North Fork. Following
the Merger, the combined company's fiscal year, like that of North Fork, will
end on December 31. The tables have been derived from, and should be read in
conjunction with, the historical financial statements of North Fork and New York
Bancorp, including the related notes thereto incorporated by reference in this
Joint Proxy Statement/Prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE." Certain New York Bancorp financial information has been reclassified
to conform with North Fork. The financial information for the nine month periods
ended September 30, 1997 and 1996 for North Fork and New York Bancorp reflect,
in the opinions of the management of North Fork and New York Bancorp, all
adjustments necessary for a fair presentation of such information. Results for
these interim periods are not necessarily indicative of the results which may be
expected for the full year or any other interim period.
12
<PAGE> 25
NORTH FORK BANCORPORATION, INC.
SELECTED HISTORICAL FINANCIAL INFORMATION
(UNAUDITED)
(in thousands, except ratios and per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY STATEMENTS OF INCOME:
Interest income.................... $ 359,458 $ 300,093 $ 405,307 $ 332,492 $ 295,062 $ 289,045 $ 329,654
Interest expense................... 151,977 130,677 174,361 140,399 112,576 117,153 175,937
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income................ 207,481 169,416 230,946 192,093 182,486 171,892 153,717
---------- ---------- ---------- ---------- ---------- ---------- ----------
Provision for loan losses.......... 4,500 5,100 6,800 11,825 6,825 26,608 34,612
Non-interest income................ 26,032 21,877 29,245 23,010 21,674 21,868 20,161
Net securities gains/(losses)...... 2,273 2,968 1,878 6,734 (9,189) 1,321 10,111
Other real estate expense.......... 163 876 753 1,255 4,929 25,246 17,696
Merger related restructure
charges.......................... -- -- 21,613 -- 14,338 -- 1,200
SAIF recapitalization charge....... -- 8,350 8,350 -- -- -- --
Other non-interest expense......... 91,174 81,965 112,281 91,565 99,338 117,316 101,605
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes......... 139,949 97,970 112,272 117,192 69,541 25,911 28,876
Provision for income taxes......... 54,670 39,617 49,830 49,850 26,502 13,015 14,378
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income......................... $ 85,279 $ 58,353 $ 62,442 $ 67,342 $ 43,039 $ 12,896 $ 14,498
========== ========== ========== ========== ========== ========== ==========
Weighted average common shares
outstanding(3)................... 66,215 64,757 64,278 64,432 62,312 61,126 53,976
Common shares outstanding at period
end(3)........................... 65,987 62,642 64,892 64,617 60,932 59,584 54,947
CONSOLIDATED PER SHARE DATA:(3)
Net income(4)...................... $ 1.29 $ .90 $ .97 $ 1.05 $ 0.69 $ .21 $ .27
Cash dividends declared(5)......... .43 .30 .43 .28 .18 -- --
Stated book value at period-end.... 8.16 6.88 7.05 6.59 5.84 5.27 5.15
Tangible book value at
period-end....................... 7.00 5.53 5.79 6.16 5.48 4.83 4.46
Dividend payout ratio(5)........... 33% 33% 36% 26% 25% -- --
CONSOLIDATED BALANCE SHEET DATA AT
PERIOD END:
Securities(6):
Available-for-sale............... $1,633,737 $1,396,685 $ 857,391 $1,150,510 $ 141,805 $ 200,219 $ 338,841
Held-to-maturity................. 1,166,329 1,028,647 1,300,115 1,084,829 1,624,430 1,582,052 1,115,394
Loans, net of unearned income
and fees......................... 3,509,722 2,970,408 3,171,525 2,400,282 2,303,920 2,128,808 2,419,107
Allowance for loan losses.......... 54,611 54,698 53,894 56,627 61,247 67,670 84,595
Intangible assets.................. 76,692 84,537 82,073 27,893 22,208 26,239 38,026
Total assets....................... 6,615,620 5,709,877 5,750,527 4,890,866 4,258,827 4,268,034 4,178,229
Deposits........................... 4,458,649 4,450,769 4,469,510 3,739,720 3,538,768 3,633,619 3,736,054
Federal funds purchased and
securities sold under agreements
to repurchase.................... 1,331,024 734,167 621,789 642,369 246,875 255,643 50,476
Other borrowings................... 85,000 35,000 35,000 35,000 75,000 33,000 53,000
Company-obligated mandatorily
redeemable capital securities of
subsidiary trust................. 99,646 -- 99,637 -- -- -- --
Stockholders' equity............... 538,281 430,910 457,531 426,129 355,921 314,263 282,886
CONSOLIDATED AVERAGE BALANCE SHEET
DATA:
Securities......................... $2,648,635 $2,430,065 $2,386,493 $1,874,624 $1,832,327 $1,675,583 $1,242,146
Loans, net of unearned income and
fees............................. 3,353,105 2,683,148 2,778,663 2,358,636 2,313,419 2,288,712 2,581,547
Total assets....................... 6,346,543 5,482,488 5,518,016 4,470,920 4,417,627 4,315,839 4,360,516
Deposits........................... 4,476,393 4,330,108 4,373,570 3,634,149 3,600,686 3,671,336 3,897,054
Federal funds purchased and
securities sold under agreements
to repurchase.................... 1,125,692 617,346 610,960 350,393 378,198 220,120 82,791
Other borrowings................... 47,637 40,255 38,934 36,397 49,044 36,559 55,190
Stockholders' equity............... 489,008 426,286 431,376 389,095 338,826 304,108 267,239
</TABLE>
- ---------------
(1) On December 31, 1996, North Fork completed a business combination with North
Side Savings Bank ("North Side") by merging North Side with and into North
Fork Bank. On November 30, 1994, North Fork completed a business combination
with Metro Bancshares, Inc. ("Metro") by a direct merger of Metro with and
into North Fork. These mergers have been accounted for as
pooling-of-interests transactions and, accordingly, the consolidated
financial results of North Fork for all reported periods
13
<PAGE> 26
preceding such mergers have been retroactively restated to include the
financial results of North Side and Metro for such periods. Certain
financial information of North Side and Metro has been reclassified to
conform with that of North Fork.
(2) In March, 1996, North Fork Bank completed the purchase of the domestic
commercial banking business of Extebank and ten Long Island branches of
First Nationwide Bank. These transactions were accounted for under the
purchase method of accounting and, accordingly, North Fork's consolidated
results of operations reflect activity of the acquired operations subsequent
to the acquisition dates. As a result of these acquisitions, North Fork
added approximately $200 million in net loans and $920 million in deposit
liabilities. The intangible assets created in the aforementioned
transactions aggregated approximately $62 million.
(3) Outstanding share figures and all applicable per share amounts have been
restated to reflect the two-for-one common stock split effective May 15,
1997.
(4) North Fork's historical earnings per share for the nine months ended
September 30, 1997 and 1996 and for the five years ended December 31, 1996,
were based on weighted average common shares outstanding plus common stock
equivalents.
(5) Cash dividends and the dividend payout ratios have not been restated for the
mergers with North Side and Metro.
(6) Effective January 1, 1994, North Fork adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities" (the "Statement"). The Statement requires that
securities available-for-sale be reported at fair value, with unrealized
gains and losses net of tax effects reflected as a separate component of
stockholders' equity. Prior to 1994, these securities were included in the
held-for-sale category and carried at the lower of cost or market with
unrealized losses or gains included in net income.
(7) See accompanying "Selected Financial Ratios" on page 20 for additional
information.
14
<PAGE> 27
NEW YORK BANCORP INC.
SELECTED HISTORICAL FINANCIAL INFORMATION
(UNAUDITED)
(in thousands, except ratios and per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,(2) YEARS ENDED SEPTEMBER 30,
------------------------ ------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY STATEMENTS
OF INCOME:
Interest income.............. $ 183,432 $ 156,832 $ 207,491 $ 196,972 $ 175,530 $ 160,752 $ 152,417
Interest expense............. 93,095 79,755 106,746 101,730 79,948 71,385 84,415
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income.......... 90,337 77,077 100,745 95,242 95,582 89,367 68,002
---------- ---------- ---------- ---------- ---------- ---------- ----------
Provision for loan losses.... 1,800 900 1,200 1,700 2,650 4,700 8,404
Interest income.............. 13,646 7,853 10,321 7,460 7,398 8,745 7,198
Net securities
gains/(losses)............. 2,259 4,112 4,346 (848) 602 2,439 11,787
Other real estate expense.... 655 330 463 883 880 1,296 3,413
Merger related restructure
charge..................... -- -- -- 19,024 -- -- --
SAIF recapitalization
charge..................... -- 9,432 9,432 -- -- -- --
Other non-interest expense... 37,890 35,625 47,535 48,968 50,845 48,455 42,374
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes... 65,897 42,755 56,782 31,279 49,207 46,100 32,796
Provision for income taxes... 24,950 18,577 24,776 19,717 21,740 20,912 15,346
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative
effect of change in
accounting principle and
extraordinary item......... 40,947 24,178 32,006 11,562 27,467 25,188 17,450
Cumulative effect of change
in accounting for income
taxes(3)................... -- -- -- -- 5,685 -- --
Extraordinary item, early
extinguishment of debt..... -- -- -- -- -- -- (570)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income................... $ 40,947 $ 24,178 $ 32,006 $ 11,562 $ 33,152 $ 25,188 $ 16,880
========== ========== ========== ========== ========== ========== ==========
Weighted average common
shares outstanding(4)(5)... 22,795 23,468 23,889 26,656 27,220 N/M N/M
Common shares outstanding at
period end(4)(5)........... 21,319 22,198 22,198 24,278 26,447 26,176 N/M
CONSOLIDATED PER SHARE
DATA:(4)(5)
Net income before cumulative
effect of change in
accounting principle and
extraordinary item(6)...... $ 1.80 $ 1.03 $ 1.34 $ 0.43 $ 1.01 N/M N/M
Net income(6)................ 1.80 1.03 1.34 0.43 1.22 N/M N/M
Cash dividends declared(7)... .41 0.30 0.40 0.40 0.39 $ 0.32 $ 0.23
Stated book value at
period-end................. 7.93 6.84 6.84 6.44 6.48 5.87 N/M
Tangible book value at
period-end................. 7.93 6.84 6.84 6.44 6.48 5.87 N/M
Dividend payout ratio(7)..... 23% 29% 30% 77% 25% 29% 26%
</TABLE>
15
<PAGE> 28
NEW YORK BANCORP INC.
SELECTED HISTORICAL FINANCIAL INFORMATION -- (CONTINUED)
(UNAUDITED)
(in thousands, except ratios and per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,(2) YEARS ENDED SEPTEMBER 30,
------------------------ ------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA
AT PERIOD END:
Securities:(8)
Available-for-sale......... $ 495,910 $ 444,500 $ 444,500 $ 273,355 $ 189,572 $ 255,970 $ 97,650
Held-to-maturity........... 644,840 551,460 551,460 685,905 838,577 444,267 474,916
Trading account............ -- -- -- 2,003 12,939 12,487 12,242
Loans, net of unearned income
and fees................... 2,039,111 1,872,548 1,872,548 1,686,215 1,458,059 1,415,245 1,319,218
Allowance for loan losses.... 18,695 19,386 19,386 21,272 25,705 26,828 19,455
Total assets................. 3,244,200 2,940,907 2,940,907 2,731,592 2,583,982 2,250,605 2,153,861
Deposits..................... 1,700,748 1,730,350 1,730,350 1,764,755 1,806,532 1,773,919 1,800,928
Federal funds purchased and
securities sold under
agreements to repurchase... 840,331 453,698 453,698 344,860 244,891 156,369 72,350
Other borrowings............. 413,600 555,088 555,088 422,278 334,006 137,324 150,500
Stockholders' equity(9)...... 169,063 151,903 151,903 156,386 171,291 153,769 99,933
CONSOLIDATED AVERAGE BALANCE
SHEET DATA:
Securities................... $1,149,588 $ 964,695 $ 960,070 $1,005,239 $ 949,503 $ 618,426 $ 717,837
Loans, net of unearned income
and fees................... 1,982,924 1,778,036 1,752,878 1,560,706 1,411,067 1,425,134 1,074,982
Total assets................. 3,192,755 2,794,216 2,765,402 2,628,232 2,463,204 2,166,011 1,898,980
Deposits..................... 1,705,101 1,751,947 1,754,038 1,768,457 1,803,241 1,776,297 1,365,608
Federal funds purchased and
securities sold under
agreements to repurchase... 861,698 328,791 328,405 307,657 232,916 84,968 139,517
Other borrowings............. 406,226 523,804 494,582 361,433 240,038 129,862 266,186
Stockholders' equity(9)...... 164,847 158,534 157,976 169,721 164,665 134,399 94,794
</TABLE>
- ---------------
(1) In January 1995, New York Bancorp completed a business combination with
Hamilton Bancorp, Inc. ("Hamilton"). The merger was accounted for as a
pooling-of-interest transaction and, accordingly, the consolidated
financial results of New York Bancorp for all reported periods preceding
the merger include the financial results of Hamilton for such periods.
Certain financial information of Hamilton was reclassified to conform with
that of New York Bancorp.
(2) New York Bancorp's operating results for the nine months ended September
30, 1997 and 1996 are presented to conform with the reporting periods of
North Fork. New York Bancorp's operating results for the three-month
periods ended December 31, 1996 and 1995 have not been included in the
foregoing and are presented in the following table:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-------------------
1996 1995
------- -------
(UNAUDITED)
(in thousands,
except
per share amounts)
<S> <C> <C>
Interest Income.......................................... $55,417 $50,659
Interest Expense......................................... 27,538 26,991
Net Interest Income...................................... 27,879 23,668
Net Income............................................... 10,264 7,828
Earnings per share....................................... $ .45 $ .32
</TABLE>
16
<PAGE> 29
NEW YORK BANCORP INC.
SELECTED HISTORICAL FINANCIAL INFORMATION -- (CONTINUED)
(UNAUDITED)
(3) Reflects the cumulative effect from the adoption of the Statement of
Financial Accounting Standards Number 109 "Accounting for Income Taxes" on
October 1, 1993.
(4) Hamilton converted to stock ownership on April 1, 1993. Accordingly,
restated outstanding share figures and per share data for periods beginning
prior to such time are not meaningful.
(5) Outstanding share figures and all applicable per share amounts have been
restated to reflect the following: (a) the 3-for-2 common stock splits
effective October 22, 1992 and July 29, 1993; (b) the ten percent common
stock dividend effective February 14, 1994; (c) the 3-for-2 common stock
split effective January 23, 1997; and (d) the 4-for-3 stock split effective
July 24, 1997.
(6) New York Bancorp's historical earnings per share for the nine months ended
September 30, 1997 and 1996 and for the five years ended September 30, 1996
were based on weighted average common shares outstanding plus common stock
equivalents.
(7) Cash dividends and the dividend payout ratios have not been restated for
the merger with Hamilton.
(8) Effective October 1, 1993, New York Bancorp adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." The statement requires that securities
available-for-sale be reported at fair value, with unrealized gains and
losses net of tax effects reflected as a separate component of
stockholders' equity. Prior to 1993, these securities were included in the
held-for-sale category and carried at the lower of cost or market with
unrealized losses or gains included in net income.
(9) Stockholders' equity at September 30, 1992 includes only the retained
earnings of Hamilton, which converted to stock ownership on April 1, 1993.
(10) See accompanying "Selected Financial Ratios" on page 20 for additional
information.
17
<PAGE> 30
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(UNAUDITED)
The following tables set forth certain selected condensed financial
information for North Fork, Branford and New York Bancorp on an unaudited pro
forma combined basis giving effect to (i) the Merger, with respect to all
periods indicated, as if the Merger had become effective as of the end of the
periods indicated, in the case of the balance sheet information presented, and
as of the beginning of the periods indicated, in the case of the income
statement information presented, and (ii) the Branford Merger, with respect to
information as of and for the nine months ended September 30, 1997 and 1996 and
as of and for the year ended 1996, as if such transaction had become effective
as of the end of such periods, in the case of balance sheet information
presented, and as of the beginning of such periods, in the case of income
statement information presented. The pro forma information in the tables assumes
that the Merger is accounted for using the pooling-of-interests method of
accounting (see "THE MERGER -- Anticipated Accounting Treatment") and the
Branford Merger is accounted for under the purchase method of accounting.
The unaudited pro forma combined selected year-end balance sheet and income
statement information reflects information for North Fork and Branford as of and
for their annual reporting periods ended December 31 for each of the periods
indicated and information for New York Bancorp as of and for its annual
reporting period ended September 30 for each of the periods indicated. Financial
information for the nine-months ended September 30, 1997 and September 30, 1996
combine North Fork, Branford and New York Bancorp with interim results of New
York Bancorp presented to coincide with the reporting period for North Fork.
Following the Merger, the combined company's fiscal year, like that of North
Fork, will end on December 31. These tables should be read in conjunction with,
and are qualified in their entirety by, the historical financial statements,
including the notes thereto, of North Fork and New York Bancorp incorporated by
reference herein and the more detailed pro forma financial information,
including the notes thereto, appearing elsewhere in this Joint Proxy
Statement/Prospectus. Certain New York Bancorp financial information has been
reclassified to conform with North Fork. See "INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE" and "PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)."
The pro forma financial information set forth in the following tables do
not reflect merger expenses and the restructuring charge anticipated to be
incurred by North Fork and/or New York Bancorp, as the case may be, the expected
cost savings and revenue enhancement opportunities that could result from the
Merger or any other items of income or expense which may result from the Merger.
See "MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER." The unaudited pro forma
combined selected financial information is presented for informational purposes
only and is not necessarily indicative of the combined financial position or
results of operations that would have occurred if the Merger had been
consummated on the dates, or at the beginning of the periods indicated or which
may be obtained in the future.
18
<PAGE> 31
NORTH FORK BANCORPORATION, INC.
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION FOR ALL TRANSACTIONS
(UNAUDITED)
(in thousands, except ratios and per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30, YEARS ENDED
------------------------- --------------------------------------
1997 1996 1996 1995 1994
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY STATEMENTS OF INCOME:
Interest income..................................... $ 553,386 $ 467,120 $ 626,495 $ 529,464 $ 470,592
Interest expense.................................... 249,693 215,038 287,256 242,129 192,524
---------- ---------- ---------- ---------- ----------
Net interest income................................. 303,693 252,082 339,239 287,335 278,068
---------- ---------- ---------- ---------- ----------
Provision for loan losses........................... 6,500 6,525 8,625 13,525 9,475
Non-interest income................................. 40,096 30,176 40,153 30,470 29,072
Net securities gains/(losses)....................... 4,532 7,080 6,224 5,886 (8,587)
Other real estate expense........................... 916 1,367 1,448 2,138 5,809
Merger-related restructure charges.................. -- -- 21,613 19,024 14,338
SAIF recapitalization charge........................ -- 17,782 17,782 -- --
Other non-interest expense.......................... 134,882 122,970 167,063 140,533 150,183
---------- ---------- ---------- ---------- ----------
Income before income taxes.......................... 206,023 140,694 169,085 148,471 118,748
Provision for income taxes.......................... 79,665 58,209 74,625 69,567 48,242
---------- ---------- ---------- ---------- ----------
Income before cumulative effect of change in
accounting principle.............................. 126,358 82,485 94,460 78,904 70,506
Cumulative effect of change in accounting for income
taxes............................................. -- -- -- -- 5,685
---------- ---------- ---------- ---------- ----------
Net income.......................................... $ 126,358 $ 82,485 $ 94,460 $ 78,904 $ 76,191
---------- ---------- ---------- ---------- ----------
Weighted average common shares of North Fork
outstanding....................................... 94,625 93,968 93,990 96,153 94,704
Common shares of North Fork outstanding at period
end............................................... 93,592 90,341 92,591 93,508 92,404
CONSOLIDATED PER SHARE DATA:
Net income before cumulative effect of change in
accounting for income taxes....................... $ 1.34 $ .88 $ 1.01 $ .82 $ .74
Net income.......................................... 1.34 .88 1.01 .82 .80
Cash dividends declared............................. .43 .30 .43 .28 .18
Stated book value at period-end..................... 7.88 6.86 6.99 6.23 5.71
Tangible book value at period-end................... 6.77 5.62 5.80 5.93 5.47
CONSOLIDATED BALANCE SHEET DATA AT PERIOD END:
Securities:
Available-for-sale................................ $ 2,161,179 $1,847,310 $1,311,996 $1,423,865 $ 331,377
Held-to-maturity.................................. 1,853,830 1,613,125 1,884,981 1,770,734 2,463,007
Trading account................................... -- -- -- 2,003 12,939
Loans, net of unearned income and fees.............. 5,669,804 4,969,102 5,170,626 4,086,497 3,761,979
Allowance for loan losses........................... 77,046 77,802 77,175 77,899 86,952
Intangible assets................................... 104,126 111,971 109,507 27,893 22,208
Total assets........................................ 10,099,013 8,853,553 8,901,721 7,622,458 6,842,809
Deposits............................................ 6,321,061 6,338,051 6,360,829 5,504,475 5,345,300
Federal funds purchased and securities sold under
agreements to repurchase.......................... 2,171,355 1,187,865 1,075,487 987,229 491,766
Other borrowings.................................... 500,600 592,088 595,088 457,278 409,006
Company-obligated mandatorily redeemable capital
securities of subsidiary trust.................... 99,646 -- 99,637 -- --
Stockholders' equity................................ 737,827 619,810 646,810 582,515 527,212
CONSOLIDATED AVERAGE BALANCE SHEET DATA:
Securities.......................................... $ 3,845,378 $3,428,840 $3,381,980 $2,879,863 $2,781,830
Loans, net of unearned income and fees.............. 5,459,984 4,588,465 4,658,481 3,919,342 3,724,486
Total assets........................................ 9,747,466 8,478,225 8,486,069 7,099,152 6,880,831
Deposits............................................ 6,341,925 6,237,453 6,283,580 5,402,606 5,403,927
Federal funds purchased and securities sold under
agreements to repurchase.......................... 1,987,390 946,137 939,365 658,050 611,114
Other borrowings.................................... 456,482 566,981 536,740 397,830 289,082
Stockholders' equity................................ 691,859 621,139 625,893 558,816 503,491
</TABLE>
See "Pro Forma Condensed Combined Financial Statements (Unaudited)."
19
<PAGE> 32
SELECTED FINANCIAL RATIOS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER
30,(1)(2) YEARS ENDED(1)
------------------ ---------------------------
1997 1996 1996(2) 1995 1994
----- ----- ------- ----- -----
<S> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS:
Return on Average Total Assets:
North Fork............................................. 1.80% 1.42% 1.13% 1.51% 0.97%
New York Bancorp....................................... 1.71 1.16 1.16 0.44 1.35
North Fork Pro Forma................................... 1.73 1.30 1.11 1.11 1.11
Return on Average Total Stockholders' Equity:
North Fork............................................. 23.32 18.28 14.48 17.31 12.70
New York Bancorp....................................... 33.21 20.37 20.26 6.81 20.13
North Fork Pro Forma................................... 24.42 17.74 15.09 14.12 15.13
Total Stockholders' Equity to Total Assets (end of
period):
North Fork............................................. 8.14 7.55 7.96 8.71 8.36
New York Bancorp....................................... 5.21 5.17 5.17 5.73 6.63
North Fork Pro Forma................................... 7.31 7.00 7.27 7.64 7.70
CAPITAL RATIOS:
Tier 1 Risk-Based Capital:
North Fork............................................. 14.34% 11.75% 15.12% 15.64% 14.44%
New York Bancorp....................................... 10.76 10.87 10.87 12.11 14.13
North Fork Pro Forma(3)................................ 13.01 11.34 13.62 14.45 14.33
Regulatory Minimum Requirement......................... 4.00 4.00 4.00 4.00 4.00
Total Risk-Based Capital:
North Fork............................................. 15.59 13.01 16.38 16.90 15.71
New York Bancorp....................................... 11.94 12.24 12.24 13.02 15.74
North Fork Pro Forma(3)................................ 14.24 12.62 14.90 15.59 15.72
Regulatory Minimum Requirement......................... 8.00 8.00 8.00 8.00 8.00
Leverage Ratio:
North Fork............................................. 8.38 6.29 8.61 8.25 7.73
New York Bancorp....................................... 5.18 5.25 5.25 5.76 6.62
North Fork Pro Forma(3)................................ 7.23 5.95 7.44 7.35 7.32
ASSET QUALITY DATA:
Allowance for Loan Losses to Net Loans (end of period):
North Fork............................................. 1.56% 1.84% 1.70% 2.36% 2.66%
New York Bancorp....................................... 0.92 1.04 1.04 1.26 1.76
North Fork Pro Forma................................... 1.36 1.57 1.49 1.91 2.31
Allowance for Loan Losses to Nonperforming Loans
(end of period):
North Fork............................................. 444 219 265 151 109
New York Bancorp....................................... 107 76 76 70 70
North Fork Pro Forma................................... 237 145 158 115 94
Nonperforming Assets to Total Assets:
North Fork............................................. 0.27 0.50 0.39 0.92 1.62
New York Bancorp....................................... 0.58 0.98 0.98 1.18 1.64
North Fork Pro Forma................................... 0.39 0.69 0.61 1.01 1.63
</TABLE>
- ---------------
(1) Ratios for the years reflect the respective fiscal year end of each of North
Fork at December 31 and New York Bancorp at September 30. North Fork Pro
Forma combines North Fork and New York Bancorp at their respective year end
periods. Ratios for the nine months ended September 30, 1997 and 1996
include New York Bancorp for the nine month periods to conform with that of
North Fork.
(2) North Fork Pro Forma ratios for the nine months ended September 30, 1997 and
1996 and for the year ended December 31, 1996 have been adjusted to reflect
North Fork's acquisition of Branford as if it had been consummated as of
January 1, 1996 and was accounted for under the purchase method. The
accounting for the Branford acquisition did not have a material effect on
the historical financial results of North Fork as originally reported.
(3) On December 10, 1997, North Fork issued through its wholly owned business
trust subsidiary North Fork Capital Trust II ("Capital Trust II") $100
million of 8% Capital Trust Pass-Through Securities
20
<PAGE> 33
("Capital Securities II") and received proceeds of $99.6 million. Issuance
costs, consisting principally of underwriting discounts and professional
fees of approximately $1.4 million, will be paid by North Fork. Capital
Trust II was formed on November 14, 1997, with an initial capitalization in
common stock of approximately $3.1 million and for the exclusive purpose of
issuing the Capital Securities II and using the proceeds thereof to acquire
8% Junior Subordinated Debt Securities ("Debt Securities") issued by North
Fork. The Debt Securities are due at maturity on December 15, 2027, are
non-callable, in whole or in part, prior to December 15, 2007, except in
certain circumstances, but may be redeemed at any time thereafter, in whole
or part, at declining premiums to maturity. The Capital Securities II are
subject to redemption contemporaneously with the redemption of the Debt
Securities. The Capital Securities II qualify as Tier I Capital for
regulatory capital purposes. Assuming the foregoing issuance of the Capital
Securities II had occurred as of September 30, 1997, North Fork's total
assets and its obligations under the Mandatorily Redeemable Capital
Securities of Subsidiary Trusts would increase by approximately the
principal amount of the Capital Securities II. Consequently, the North Fork
Pro Forma capital ratios for September 30, 1997 would increase to the
following:
<TABLE>
<S> <C>
Tier I Risk-Based Capital.................................... 14.77%
Total Risk-Based Capital..................................... 15.98%
Leverage Ratio............................................... 8.24%
</TABLE>
21
<PAGE> 34
COMPARATIVE PER SHARE DATA
(UNAUDITED)
The following table sets forth for the periods indicated (i) selected
comparative per share data for each of North Fork and New York Bancorp on an
historical basis and (ii) selected unaudited pro forma comparative per share
data reflecting consummation by North Fork of (a) the Merger, with respect to
information for the years ended 1995 and 1994, and (b) the Merger and the
Branford Merger, with respect to information for September 30, 1997 and 1996 and
the year ended 1996. The unaudited pro forma comparative per share data assume
the Merger had been consummated at the beginning of the periods presented, and
that the Branford Merger had been consummated on January 1, 1996, with the
Merger accounted for under the pooling-of-interests method of accounting and the
Branford Merger accounted for under the purchase method of accounting.
Accordingly, the Branford Merger is not reflected in the unaudited pro forma per
share data for the years ended 1995 and 1994. The New York Bancorp pro forma
equivalent per share amounts are presented with respect to each set of pro forma
information, and have been calculated by multiplying the pro forma combined
amounts per share of North Fork Common Stock by the Exchange Ratio. The data
presented are based upon and derived from, and should be read in conjunction
with, the historical financial statements and related notes thereto of each of
North Fork and New York Bancorp incorporated by reference herein and the
unaudited pro forma financial information included elsewhere herein. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE," "SELECTED HISTORICAL
FINANCIAL INFORMATION," "PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(Unaudited)," and "PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)."
The unaudited pro forma comparative per share data does not reflect any
direct costs, or any potential savings or revenue enhancements that are expected
to result from the consolidation of operations of North Fork and New York
Bancorp, and therefore does not purport to be indicative of the results of
future operations. Results of North Fork and New York Bancorp for the nine
months ended September 30, 1997 are not necessarily indicative of results
expected for the entire year, nor are the pro forma amounts necessarily
indicative of results of operations or combined financial position that would
have resulted had the Merger and the Branford Merger been consummated at the
beginning of the periods indicated. All adjustments, consisting of only normal
recurring adjustments, necessary for a fair statement of results of interim
periods have been included.
22
<PAGE> 35
COMPARATIVE PER SHARE DATA
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED
------------- ---------------------
1997 1996 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
NET INCOME PER SHARE(1):
North Fork............................................ $1.29 $0.90 $0.97 $1.05 $0.69
New York Bancorp...................................... 1.80 1.03 1.34 0.43 1.01
North Fork Pro Forma.................................. 1.34 0.88 1.01 0.82 0.74
New York Bancorp Pro Forma Equivalent................. 1.59 1.04 1.20 0.98 0.89
CASH DIVIDENDS DECLARED PER SHARE(2):
North Fork............................................ $ .43 $ .30 $ .43 $ .28 $ .18
New York Bancorp...................................... .41 .30 .40 .40 .39
North Fork Pro Forma.................................. .43 .30 .43 .28 .18
New York Bancorp Pro Forma Equivalent................. .51 .36 .51 .33 .21
BOOK VALUE PER SHARE AT PERIOD END(3):
Stated:
North Fork............................................ $8.16 $6.88 $7.05 $6.59 $5.84
New York Bancorp...................................... 7.93 6.84 6.84 6.44 6.48
North Fork Pro Forma.................................. 7.88 6.86 6.99 6.23 5.71
New York Bancorp Pro Forma Equivalent................. 9.38 8.16 8.31 7.41 6.79
Tangible:
North Fork............................................ $7.00 $5.53 $5.79 $6.16 $5.48
New York Bancorp...................................... 7.93 6.84 6.84 6.44 6.48
North Fork Pro Forma.................................. 6.77 5.62 5.80 5.93 5.47
New York Bancorp Pro Forma Equivalent................. 8.06 6.69 6.91 7.06 6.50
</TABLE>
- ---------------
(1) New York Bancorp historical net income represents income before the
cumulative effect of the change in accounting principle. North Fork pro
forma net income per share amounts are calculated by totalling the
historical net income for North Fork and New York Bancorp and dividing the
resulting amounts by the average pro forma shares of North Fork and New York
Bancorp outstanding giving effect to the Merger. The average pro forma
shares of North Fork and New York Bancorp combined equals (i) the historical
average shares of North Fork, plus (ii) the historical average shares of New
York Bancorp as adjusted by the Exchange Ratio of 1.19 plus (iii) the
assumed issuance of 1,283,674 shares of North Fork Common Stock as of
January 1, 1996 in connection with the Branford Merger. The New York Bancorp
pro forma equivalent net income per share amounts are computed by
multiplying the North Fork pro forma net income per share amounts by the
Exchange Ratio of 1.19.
(2) North Fork pro forma cash dividends per share represents historical cash
dividends declared by North Fork and assumes no changes in cash dividends
declared per share. New York Bancorp pro forma equivalent cash dividends per
share represent such amounts multiplied by the Exchange Ratio of 1.19.
(3) North Fork pro forma stated and tangible book value per share amounts are
calculated by totalling the historical stated and tangible stockholders'
equity for North Fork and New York Bancorp, as adjusted for the Branford
Merger, and dividing the resulting amounts by the total pro forma common
shares of North Fork and New York Bancorp combined. The total pro forma
common shares of North Fork and New York Bancorp combined equals (i) the
historical common shares of North Fork, plus (ii) the historical common
shares of New York Bancorp multiplied by the Exchange Ratio of 1.19, plus
(iii) the assumed issuance of 1,283,674 shares of North Fork Common Stock as
of January 1, 1996 in connection with the Branford Merger, plus (iv) the
reissuance of approximately 800,000 shares of New York Bancorp Treasury
Stock prior to consummation of the Merger multiplied by the Exchange Ratio
of 1.19. The New York Bancorp pro forma equivalent stated and tangible book
value per share amounts are computed by multiplying the North Fork pro forma
stated and tangible book value per share amounts by the Exchange Ratio of
1.19.
23
<PAGE> 36
MARKET PRICES AND DIVIDEND INFORMATION
North Fork Common Stock is listed and traded principally on the NYSE under
the symbol "NFB." New York Bancorp Common Stock is listed and traded principally
on the NYSE under the symbol "NYB."
The following table sets forth, for the calendar periods indicated, the
high and low sale prices per share for the North Fork Common Stock as reported
on the NYSE, the high and low sale prices per share of the New York Bancorp
Common Stock as reported on the American Stock Exchange through June 20, 1995
and thereafter on the NYSE, and the quarterly cash dividends declared by each of
North Fork and New York Bancorp, for the periods indicated.
<TABLE>
<CAPTION>
NORTH FORK NEW YORK BANCORP
COMMON STOCK(1) COMMON STOCK(2)
--------------------------- -----------------------------
HIGH LOW DIVIDENDS HIGH LOW DIVIDENDS
------ ------ --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
1995
Quarter ended March 31.................. $ 8.25 $ 6.82 $ 0.063 $ 9.56 $ 8.13 $ 0.100
Quarter ended June 30................... 9.19 8.00 0.063 10.19 8.63 0.100
Quarter ended September 30.............. 10.38 8.88 0.075 10.38 9.50 0.100
Quarter ended December 31............... 12.63 10.38 0.075 11.25 9.88 0.100
1996
Quarter ended March 31.................. $12.94 $11.63 $ 0.100 $ 11.75 $ 10.75 $ 0.100
Quarter ended June 30................... 13.06 11.44 0.100 13.06 11.88 0.100
Quarter ended September 30.............. 16.00 13.07 0.100 16.06 12.88 0.100
Quarter ended December 31............... 17.94 15.44 0.125 19.38 16.06 0.113
1997
Quarter ended March 31.................. $21.25 $17.06 $ 0.125 $ 25.13 $ 18.66 $ 0.113
Quarter ended June 30................... 23.00 18.13 0.150 26.16 20.81 0.150
Quarter ended September 30.............. 29.00 22.44 0.150 32.00 26.34 0.150
Fourth quarter (through December 16,
1997)................................ 32.81 28.06 0.150 38.75 30.00 0.150
</TABLE>
- ---------------
(1) North Fork per share amounts for all applicable periods have been restated
to reflect the two-for-one common stock split effective May 15, 1997.
(2) New York Bancorp per share amounts for all applicable periods have been
restated to reflect: (a) the three-for-two common stock split effective
January 23, 1997; and (b) the four-for-three common stock split effective
July 24, 1997.
The following table sets forth the last reported sales price per share of
North Fork Common Stock and New York Bancorp Common Stock and the equivalent per
share price for New York Bancorp Common Stock giving effect to the Merger on (i)
October 6, 1997, the last business day preceding public announcement of the
execution of the Merger Agreement; and (ii) December 16, 1997, the last
practicable trading day prior to the printing of this Joint Proxy
Statement/Prospectus:
<TABLE>
<CAPTION>
NEW YORK EQUIVALENT
BANCORP PRICE PER
NORTH FORK COMMON NEW YORK BANCORP
COMMON STOCK STOCK SHARE(1)
------------ -------- ----------------
<S> <C> <C> <C>
October 6, 1997.................... $31.19 $32.75 $37.12
December 16, 1997.................. 32.81 38.75 39.04
</TABLE>
- ---------------
(1) The equivalent price per share of New York Bancorp Common Stock at each
specified date was determined by multiplying the last reported sale price of
North Fork Common Stock on each specified date by the Exchange Ratio of 1.19
(see "The Merger -- Exchange Ratio").
24
<PAGE> 37
NEW YORK BANCORP AND NORTH FORK STOCKHOLDERS ARE ADVISED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR
NEW YORK BANCORP COMMON STOCK AND NORTH FORK COMMON STOCK. It is expected that
the market price of North Fork Common Stock will fluctuate between the date of
this Joint Proxy Statement/Prospectus and the date on which the Merger is
consummated and thereafter. Because the number of shares of North Fork Common
Stock to be received by New York Bancorp stockholders in the Merger is fixed
(subject to possible increase in certain limited circumstances) and because the
market price of the North Fork Common Stock is subject to fluctuation, the value
of the shares of North Fork Common Stock that holders of New York Bancorp Common
Stock would receive in the Merger may increase or decrease prior to the Merger.
No assurance can be given concerning the market price of North Fork Common Stock
before or after the Effective Time. See "THE MERGER -- Exchange Ratio" and
"-- Waiver and Amendment; Termination."
25
<PAGE> 38
THE COMPANIES
North Fork. North Fork, with its executive headquarters located in
Melville, New York, is a bank holding company organized under the laws of the
State of Delaware in 1980 and registered under the BHC Act. North Fork's primary
subsidiary, North Fork Bank, a New York-chartered, FDIC-insured, stock-form
commercial bank, operates 80 retail banking facilities throughout Suffolk and
Nassau Counties on Long Island, New York, as well as in the New York City
boroughs of Manhattan, Queens and the Bronx and in Westchester and Rockland
Counties north of New York City. North Fork's acquisition of Branford (see
below) represents North Fork's initial acquisition outside the State of New
York.
At September 30, 1997, North Fork had assets of $6.6 billion, deposits of
$4.5 billion and stockholders' equity of $538 million. The principal executive
offices of North Fork are located at 275 Broad Hollow Road, Melville, New York
11747 and its telephone number is (516) 844-1004.
On December 12, 1997, North Fork acquired Branford by merging Branford with
and into a newly formed wholly owned subsidiary of North Fork. As of September
30, 1997, Branford had $183 million in total assets, $162 million in deposits,
$18 million in stockholders' equity and serves customers from five branches in
the Connecticut towns of Branford, North Branford and East Haven and surrounding
communities in New Haven County, Connecticut. The Branford Merger represents
North Fork's initial acquisition outside the State of New York. North Fork
issued approximately 1,283,674 shares of its common stock to the Branford
shareholders and paid cash in the amount of approximately $3,000,000 to the
holders of Branford warrants. The transaction will be accounted for under the
purchase method of accounting. See "PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS."
On December 31, 1996, North Fork completed a business combination with
North Side by merging North Side with and into North Fork Bank. At closing,
North Side had $1.6 billion in total assets, $1.2 billion in deposits, $124.4
million in capital and operated 17 full-service banking locations in the New
York City boroughs of the Bronx and Queens and Nassau and Suffolk Counties.
In March 1996, North Fork Bank completed its purchase of the domestic
commercial banking business of Extebank, which at closing had $387 million in
assets and $348 million in deposits, for $47 million in cash. Additionally,
during March 1996, North Fork Bank completed its acquisition of ten Long Island
branches of First Nationwide Bank, and assumed $572 million in customer deposit
liabilities, for which it paid a deposit premium of 6.35%.
In July 1995, North Fork completed its purchase acquisition of Great Neck
Bancorp, the parent company of Bank of Great Neck, a Long Island based
commercial bank("Great Neck"). Great Neck, with assets of $91 million, including
$49.4 million in net loans, and $90.3 million in deposits, was merged into North
Fork Bank.
In November, 1994, North Fork completed a business combination with Metro,
the parent company of Bayside Federal Savings Bank ("Bayside"), by merging Metro
with and into North Fork. Simultaneously, Bayside (with approximately $1.0
billion in assets, $.9 billion in deposits and $83.5 million in stockholders'
equity, operating through 13 full-service banking locations in the New York City
borough of Queens and Nassau and Suffolk Counties) was merged with and into
North Fork Bank. The merger was accounted for as a pooling of interests.
North Fork, through North Fork Bank, provides a variety of banking and
financial services to middle market and small business organizations, local
governmental units, and retail customers in the metropolitan New York area.
From time to time, North Fork investigates and holds discussions and
negotiations in connection with possible transactions with other banks. As of
the date of this Joint Proxy Statement/Prospectus, North Fork has not entered
into any agreements or understandings with respect to any significant
transactions of the type
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referred to above except for the transactions described herein and in documents
incorporated herein by reference. See "AVAILABLE INFORMATION" and "INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE." Any such transaction would be subject to
stockholder approval only if required under applicable law or the rules of the
NYSE.
For more information about North Fork, reference is made to the 1996 North
Fork Form 10-K which is incorporated herein by reference. See "AVAILABLE
INFORMATION" and "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
New York Bancorp. New York Bancorp, with its executive headquarters
located in Douglaston, New York, is a savings and loan holding company organized
under the laws of the State of Delaware in 1988. New York Bancorp's primary
subsidiary, Home Federal, a federally chartered, FDIC-Insured, stock-form
savings bank, operates 31 full service branch offices throughout Kings, Queens,
Nassau, Westchester and Suffolk Counties of New York.
In January 1995, Hamilton Bancorp Inc. ("Hamilton"), the parent company of
Hamilton Federal Savings F.A. ("Hamilton Savings") was merged with and into New
York Bancorp. Hamilton had approximately $810.6 million in assets and
approximately $84.1 million in shareholders' equity. The merger was accounted
for as a pooling of interests.
New York Bancorp, through Home Federal, engages in the principal business
of attracting deposits from the general public and investing these deposits,
together with funds from ongoing operations and borrowings, in the origination
and purchase of residential and commercial mortgage loans, cooperative
residential loans and consumer loans.
At September 30, 1997, New York Bancorp had assets of approximately $3.2
billion, deposits of approximately $1.7 billion and stockholders' equity of
approximately $169 million. The principal executive offices of New York Bancorp
are located at 241-02 Northern Boulevard, Douglaston, New York 11362 and its
telephone number is (718) 631-8100.
For more information about New York Bancorp, reference is made to the 1996
New York Bancorp Form 10-K which is incorporated herein by reference. See
"AVAILABLE INFORMATION" and "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
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THE SPECIAL MEETINGS
NORTH FORK MEETING
General. This Joint Proxy Statement/Prospectus is being furnished to
stockholders of North Fork in connection with the solicitation of proxies by the
North Fork Board for use at the North Fork Meeting to be held at the Wyndham
Windwatch Hotel, 1717 Vanderbilt Motor Parkway, Hauppauge, New York, on Friday,
January 30, 1998 at 10:00 a.m. local time. At the North Fork Meeting, the
stockholders of North Fork will be asked to: (i) approve and adopt the Merger
Agreement and the consummation of the transactions contemplated thereby, which
are more fully described herein; and (ii) act upon such other matters as may
properly be brought before the North Fork Meeting and at any adjournments or
postponements thereof. A copy of the Merger Agreement is attached as Annex A
hereto.
HOLDERS OF NORTH FORK COMMON STOCK ARE REQUESTED TO PROMPTLY COMPLETE, SIGN
AND DATE THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY TO NORTH FORK IN THE
ENCLOSED POSTAGE-PAID ADDRESSED ENVELOPE.
NORTH FORK STOCKHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES WITH
THEIR PROXY CARDS.
THE NORTH FORK BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND HAS
DETERMINED THAT THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, NORTH FORK
AND ITS STOCKHOLDERS. THE NORTH FORK BOARD THEREFORE UNANIMOUSLY RECOMMENDS THAT
NORTH FORK'S STOCKHOLDERS VOTE FOR APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT. SEE "THE MERGER -- BACKGROUND OF THE MERGER" AND "-- RECOMMENDATION
OF THE BOARDS OF DIRECTORS; REASONS FOR THE MERGER -- NORTH FORK."
Record Date; Voting; Solicitation and Revocation of Proxies. The North
Fork Board has fixed December 16, 1997 as the record date for the determination
of those North Fork stockholders entitled to notice of and to vote at the North
Fork Meeting. Only holders of record of North Fork Common Stock at the close of
business on the North Fork Record Date will be entitled to notice of and to vote
at the North Fork Meeting. As of the North Fork Record Date, there were
67,360,337 shares of North Fork Common Stock outstanding, entitled to vote and
held by approximately 6,832 holders of record. Each holder of record of shares
of North Fork Common Stock on the North Fork Record Date is entitled to cast one
vote per share on the proposal to approve and adopt of the Merger Agreement, and
on any other matter properly submitted for the vote of the North Fork
stockholders at the North Fork Meeting. The presence, either in person or by
properly executed proxy, of the holders of a majority of the outstanding shares
of North Fork Common Stock entitled to vote at the North Fork Meeting is
necessary to constitute a quorum at the North Fork Meeting. Abstentions will be
counted as present for purposes of determining the presence or absence of a
quorum at the North Fork Meeting.
The approval and adoption of the Merger Agreement by North Fork
stockholders will require the affirmative vote of the holders of a majority of
the outstanding shares of North Fork Common Stock entitled to vote thereon. As
described in "THE MERGER -- Conditions to the Merger," such stockholder approval
is a condition to consummation of the Merger. Under applicable Delaware law, in
determining whether the Merger proposal has received the requisite number of
affirmative votes, abstentions and broker non-votes will be counted and will
have the same effect as a vote against the Merger proposal.
As of the North Fork Record Date, directors and executive officers of North
Fork and their affiliates may be deemed to be beneficial owners of 3,812,717
shares of North Fork Common Stock, or approximately 5.66% of the shares of North
Fork Common Stock outstanding as of the North Fork Record Date. Such persons
have informed North Fork that they intend to vote or direct the vote of all such
shares of North Fork Common Stock for approval and adoption of the Merger
Agreement. As of the North Fork Record Date, neither New York Bancorp nor its
subsidiaries, nor any of the directors and executive officers of New York
Bancorp,
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beneficially owned any shares of North Fork Common Stock, except for one
executive officer who beneficially owned 42,870 shares of North Fork Common
Stock as of such date. Such executive officer has indicated a present intent to
vote his shares in favor of the Merger.
All shares of North Fork Common Stock which are entitled to be voted and
are represented at the North Fork Meeting by properly executed proxies received
prior to or at the meeting, and not revoked, will be voted at such meeting and
any adjournments or postponements thereof, in accordance with the instructions
indicated on such proxies. If no instructions are indicated, such proxies will
be voted for: (i) approval and adoption of the Merger Agreement, and (ii)
otherwise in the discretion of the proxy holders as to any other matter which
may come before the North Fork Meeting or any adjournment or postponement
thereof, including, among other things, a motion to adjourn or postpone the
North Fork Meeting to another time and/or place, for the purpose of soliciting
additional proxies or otherwise; provided, however, that no proxy which is voted
against the proposal to approve and adopt the Merger Agreement will be voted in
favor of any such adjournment or postponement.
If any other matters are properly presented at the North Fork Meeting for
consideration, the persons named in the form of proxy enclosed herewith and
acting thereunder will have discretionary authority to vote on such matters in
accordance with their best judgment; provided, however, that such discretionary
authority will only be exercised to the extent possible under applicable federal
and state securities and corporation laws. North Fork does not have any
knowledge of any matters to be presented at the North Fork Meeting other than
the matters set forth above under "-- General."
The presence of a stockholder at the North Fork Meeting will not
automatically revoke such stockholder's proxy. However, any proxy given by a
North Fork stockholder pursuant to this solicitation may be revoked by the
person giving it at any time before it is exercised by (i) delivering to the
Secretary of North Fork a written notice of revocation bearing a later date than
the proxy; (ii) delivering to the Secretary of North Fork a duly executed proxy
bearing a later date; or (iii) attending the North Fork Meeting and voting in
person. Any written notice of revocation or subsequently executed proxy should
be sent so as to be delivered to North Fork Bancorporation, Inc., 275 Broad
Hollow Road, Melville, New York 11747, Attention: Anthony J. Abate, Secretary,
or hand delivered to North Fork's Secretary at such address at or before the
taking of the vote at the North Fork Meeting.
North Fork will bear all expenses of this solicitation of proxies from the
holders of North Fork Common Stock, except that the cost of printing and mailing
this Joint Proxy Statement/Prospectus and all filing and other fees will be
borne equally by New York Bancorp and North Fork. In addition to solicitation by
use of the mails, proxies may be solicited by directors, officers and employees
of North Fork in person or by telephone, telegram or other means of
communication. Such directors, officers and employees will not be additionally
compensated, but may be reimbursed for reasonable out-of-pocket expenses in
connection with such solicitation. North Fork has retained D.F. King & Co., a
proxy soliciting firm, to assist in such solicitation. The fee to be paid to
such firm is not expected to exceed $6,000 plus reasonable out-of-pocket costs
and expenses. In addition, North Fork will make arrangements with brokerage
firms and other custodians, nominees and fiduciaries to send proxy materials to
their principals and will reimburse such parties for their expenses in doing so.
NEW YORK BANCORP MEETING
General. This Joint Proxy Statement/Prospectus is being furnished to
stockholders of New York Bancorp in connection with the solicitation of proxies
by the New York Bancorp Board for use at the New York Bancorp Meeting to be held
at the Adria Conference Center, 220-33 Northern Boulevard, Bayside, New York on
Friday, January 30, 1998 at 10:00 a.m. local time. At the New York Bancorp
Meeting, the stockholders of New York Bancorp will be asked to: (i) approve and
adopt the Merger Agreement between North Fork and New York Bancorp; and (ii) act
upon such other matters as may properly be brought before the New York Bancorp
Meeting. A copy of the Merger Agreement is attached as Annex A hereto. The
Merger Agreement provides for the acquisition of New York Bancorp by North Fork
by means of the Merger of New York Bancorp with and into North Fork. Upon
consummation of the Merger, each share of New York
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Bancorp Common Stock outstanding on the date of the Merger (except for certain
specified shares described herein) will be converted into and exchangeable for
the number of shares of the North Fork Common Stock equal to the Exchange Ratio.
See "THE MERGER -- Exchange Ratio."
HOLDERS OF NEW YORK BANCORP COMMON STOCK ARE REQUESTED TO PROMPTLY
COMPLETE, SIGN AND DATE THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY TO
NEW YORK BANCORP IN THE ENCLOSED POSTAGE-PAID ADDRESSED ENVELOPE.
NEW YORK BANCORP STOCKHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES
WITH THEIR PROXY CARDS.
THE NEW YORK BANCORP BOARD HAS DETERMINED THAT THE MERGER IS FAIR TO, AND
IN THE BEST INTERESTS OF, NEW YORK BANCORP AND ITS STOCKHOLDERS AND HAS
UNANIMOUSLY APPROVED THE MERGER AGREEMENT. THE NEW YORK BANCORP BOARD THEREFORE
UNANIMOUSLY RECOMMENDS THAT NEW YORK BANCORP'S STOCKHOLDERS VOTE FOR APPROVAL
AND ADOPTION OF THE MERGER AGREEMENT. SEE "THE MERGER -- BACKGROUND OF THE
MERGER" AND "-- RECOMMENDATION OF THE BOARDS OF DIRECTORS; REASONS FOR THE
MERGER -- NEW YORK BANCORP."
Record Date; Voting; Solicitation and Revocation of Proxies. The New York
Bancorp Board has fixed December 16, 1997 as the New York Bancorp Record Date
for the determination of those New York Bancorp stockholders entitled to notice
of and to vote at the New York Bancorp Meeting. Only holders of record of New
York Bancorp Common Stock at the close of business on the New York Bancorp
Record Date will be entitled to notice of and to vote at the New York Bancorp
Meeting. As of the New York Bancorp Record Date, there were 21,359,427 shares of
New York Bancorp Common Stock outstanding, entitled to vote and held by
approximately 850 holders of record. Each holder of record of shares of New York
Bancorp Common Stock on the New York Bancorp Record Date is entitled to cast one
vote per share on the proposal to approve and adopt the Merger Agreement, and on
any other matter properly submitted for the vote of the New York Bancorp
stockholders at the New York Bancorp Meeting. The presence, either in person or
by properly executed proxy, of the holders of a majority of the outstanding
shares of New York Bancorp Common Stock entitled to vote at the New York Bancorp
Meeting is necessary to constitute a quorum at the New York Bancorp Meeting.
Abstentions will be counted as present for purposes of determining the presence
or absence of a quorum at the New York Bancorp Meeting.
The approval and adoption of the Merger Agreement by New York Bancorp
stockholders will require the affirmative vote of a majority of the outstanding
shares of New York Bancorp Common Stock entitled to vote thereon. As described
in "THE MERGER -- Conditions to the Merger," such stockholder approval is a
condition to consummation of the Merger. In determining whether approval and
adoption of the Merger Agreement has received the requisite number of
affirmative votes, abstentions and broker non-votes will be counted and will
have the same effect as a vote against the proposal to approve and adopt the
Merger Agreement.
As of the New York Bancorp Record Date, directors and executive officers of
New York Bancorp and their affiliates were the owners of 5,486,320 shares of New
York Bancorp Common Stock, or approximately 26% of the shares of New York
Bancorp Common Stock outstanding as of the New York Bancorp Record Date, and
such persons have indicated a present intent to vote their shares for approval
and adoption of the Merger Agreement. As of the New York Bancorp Record Date,
neither North Fork and its subsidiaries, nor the directors and executive
officers of North Fork, beneficially owned any outstanding shares of New York
Bancorp Common Stock.
All shares of New York Bancorp Common Stock which are entitled to be voted
and are represented at the New York Bancorp Meeting by properly executed proxies
received prior to or at the New York Bancorp Meeting, and not revoked, will be
voted at such meeting and any adjournments or postponements thereof, in
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accordance with the instructions indicated on such proxies. If no instructions
are indicated, such proxies will be voted for approval and adoption of the
Merger Agreement.
If any other matters are properly presented at the New York Bancorp Meeting
for consideration, the persons named in the form of proxy enclosed herewith and
acting thereunder will have discretionary authority to vote on such matters in
accordance with their best judgment; provided, however, that such discretionary
authority will only be exercised to the extent possible under applicable federal
and state securities and banking laws. In addition, no proxy which is voted
against the proposal to approve and adopt the Merger Agreement will be voted in
favor of any adjournment or postponement of the New York Bancorp Meeting. New
York Bancorp does not have any knowledge of any matters to be presented at the
New York Bancorp Meeting other than the matters set forth above under
"-- General."
The presence of a stockholder at the New York Bancorp Meeting will not
automatically revoke such stockholder's proxy. However, any proxy given by a New
York Bancorp stockholder pursuant to this solicitation may be revoked by the
person giving it at any time before it is exercised by (i) delivering to the
Secretary of New York Bancorp a written notice of revocation bearing a later
date than the proxy; (ii) delivering to the Secretary of New York Bancorp a duly
executed proxy bearing a later date; or (iii) attending the New York Bancorp
Meeting and voting in person. Any written notice of revocation or subsequently
executed proxy should be sent so as to be delivered to New York Bancorp Inc.,
241-02 Northern Boulevard, Douglaston, New York 11362, Attention: Linda Bishop,
or hand delivered to New York Bancorp's Secretary at or before the taking of the
vote at the New York Bancorp Meeting.
New York Bancorp will bear all expenses of this solicitation of proxies
from the holders of New York Bancorp Common Stock, except that the cost of
printing and mailing this Joint Proxy Statement/Prospectus and all filing and
other fees will be borne equally by New York Bancorp and North Fork. In addition
to solicitation by use of the mails, proxies may be solicited by directors,
officers and employees of New York Bancorp in person or by telephone, telegram
or other means of communication. Such directors, officers and employees will not
be additionally compensated, but may be reimbursed for reasonable out-of-pocket
expenses in connection with such solicitation. New York Bancorp has retained
Beacon Hill Partners, Inc., a proxy soliciting firm, to assist in such
solicitation. The fee to be paid to such firm is not expected to exceed $7,500
plus reasonable out-of-pocket costs and expenses. In addition, New York Bancorp
will make arrangements with brokerage firms and other custodians, nominees and
fiduciaries to send proxy materials to their principals and will reimburse such
parties for their expenses in doing so.
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THE MERGER
The following information concerning the Merger, insofar as it relates to
matters contained in the Merger Agreement, describes the material aspects of the
Merger but does not purport to be a complete description and is qualified in its
entirety by reference to the Merger Agreement which is incorporated herein by
reference and attached hereto as Annex A. North Fork and New York Bancorp
stockholders are urged to read carefully the Merger Agreement.
EFFECTS OF THE MERGER
Pursuant to the terms of the Merger Agreement, subject to the satisfaction
or waiver (where permissible) of certain conditions, including, among other
things, the receipt of all necessary regulatory approvals, the expiration of all
waiting periods in respect thereof and the approval of the Merger Agreement by
the requisite vote of the stockholders of New York Bancorp and North Fork, New
York Bancorp will be merged with and into North Fork. North Fork will be the
surviving corporation in the Merger, and will continue its corporate existence
under the laws of the State of Delaware. Upon consummation of the Merger, the
separate corporate existence of New York Bancorp will terminate.
Immediately after the consummation of the Merger, Home Federal Savings
Bank, a federally chartered stock savings bank and a wholly owned subsidiary of
New York Bancorp ("Home Federal"), will merge (the "Subsidiary Bank Merger")
with and into North Fork Bank, a New York-chartered stock commercial bank and a
wholly owned subsidiary of North Fork.
EXCHANGE RATIO
At the Effective Time (as defined below), each issued and outstanding share
of New York Bancorp Common Stock, except for shares held directly or indirectly
by New York Bancorp or North Fork (other than shares held by North Fork or New
York Bancorp in a fiduciary capacity ("Trust Account Shares") or in respect of a
debt previously contracted ("DPC Shares")), will be converted into and
exchangeable for 1.19 shares (the "Exchange Ratio") of North Fork Common Stock.
If the Average Closing Price (as defined below) is less than $25.50, either
party may terminate the Merger Agreement by giving written notice to the other
party, within two business days after the Valuation Period (as defined below),
in the case of a termination by North Fork, or within four business days after
the Valuation Period, in the case of a termination by New York Bancorp, unless,
in the case of termination by New York Bancorp, North Fork elects, within two
business days after the Valuation Period, to increase the Exchange Ratio such
that the shares of North Fork Common Stock issued in exchange for each share of
New York Bancorp Common Stock have a value (valued at the Average Closing Price)
of not less than $30.35. The Average Closing Price is the average of the last
reported sale prices per share of the North Fork Common Stock on the NYSE for
the 10 consecutive trading days (the "Valuation Period") prior to the date on
which the last regulatory approval for the Merger, the Subsidiary Bank Merger
and the other transactions contemplated by the Merger Agreement is obtained,
without regard to any requisite waiting period in respect thereof. Each share of
North Fork Common Stock issued in the Merger will include the corresponding
number of rights attached thereto pursuant to North Fork's Rights Agreement (see
"DESCRIPTION OF NORTH FORK CAPITAL STOCK -- Rights Plans").
If the Average Closing Price is less than $25.50 and North Fork elects to
increase the Exchange Ratio, the Exchange Ratio will be equal to the quotient
obtained by dividing (i) $30.35 by (ii) the Average Closing Price. See
"-- Waiver and Amendment; Termination" below. Assuming the Merger is approved by
the holders of New York Bancorp Common Stock, the New York Bancorp Board may
elect not to terminate the Merger Agreement and to consummate the Merger without
resoliciting New York Bancorp stockholders if the Average Closing Price is less
than $25.50 and North Fork does not elect to increase the Exchange Ratio, even
though, as a result of the application of the Exchange Ratio, the value of the
shares of North Fork Common Stock (valued at the Average Closing Price) issued
in exchange for each share of New York Bancorp Common Stock would be less than
$30.35. In such a situation, in considering whether to consummate the Merger
without the resolicitation of New York Bancorp stockholders, the New York
Bancorp Board will take
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into account, consistent with its fiduciary duty, all relevant facts and
circumstances that exist at such time, including, without limitation, the advice
of its financial advisors and legal counsel. New York Bancorp stockholders will
have no vote in the decision of the New York Bancorp Board to either terminate
the Merger Agreement or elect to consummate the Merger in such event.
North Fork is under no obligation to increase the Exchange Ratio, and there
can be no assurance that North Fork would elect to increase the Exchange Ratio
if the Average Closing Price is less than $25.50. Any such decision would be
made by the North Fork Board in light of all relevant facts and circumstances
existing at such time, including, without limitation, the advice of its
financial advisor and legal counsel. If North Fork elects to increase the
Exchange Ratio as set forth in the Merger Agreement and as illustrated above, it
must give New York Bancorp notice of that election within two business days
following the Valuation Period, in which case no termination of the Merger
Agreement would occur as a result of the Average Closing Price being less than
$25.50.
Although North Fork has the right in limited circumstances described above
to increase the Exchange Ratio, under no circumstances may the Exchange Ratio be
decreased. The formula for determining the Exchange Ratio was arrived at through
arm's-length negotiations between New York Bancorp and North Fork. If North Fork
effects a reclassification, recapitalization, split-up, combination, exchange of
shares or readjustment of or to the North Fork Common Stock or declares a stock
dividend on such stock, an appropriate adjustment to the Exchange Ratio will be
made.
It is expected that the market price of North Fork Common Stock will
fluctuate between the date of this Joint Proxy Statement/Prospectus and the date
on which the Merger is consummated and thereafter. Because the number of shares
of North Fork Common Stock to be received by New York Bancorp stockholders in
the Merger is fixed (subject to possible increase in the limited circumstances
described above) and because the market price of the North Fork Common Stock is
subject to fluctuation, the value of the shares of North Fork Common Stock that
holders of New York Bancorp Common Stock would receive in the Merger may
increase or decrease prior to the Merger. No assurance can be given concerning
the market price of North Fork Common Stock before or after the Effective Time.
No fractional shares of North Fork Common Stock will be issued in
connection with the Merger. In lieu of the issuance of fractional shares, North
Fork will make a cash payment to each New York Bancorp stockholder who otherwise
would be entitled to receive a fractional share equal to the product of (i) the
fractional interest which a New York Bancorp stockholder would otherwise receive
and (ii) the average of the last reported sale prices of North Fork Common Stock
on the NYSE for the five trading days immediately preceding the Effective Time.
Upon consummation of the Merger, any shares of New York Bancorp Common
Stock that are owned by New York Bancorp as treasury stock or that are held
directly or indirectly by North Fork other than Trust Account Shares and DPC
Shares will be canceled and retired and no payment will be made with respect
thereto.
In addition, at the Effective Time, each New York Bancorp Option will be
converted automatically into the right to receive such number of shares (rounded
to the nearest whole share) of North Fork Common Stock as is equal in value
(determined by valuing each share of North Fork Common Stock at Option Share
Average Closing Price (as defined below)) to the amount by which (i) the product
of the number of shares of New York Bancorp Common Stock subject to such option,
the Exchange Ratio and the Option Share Average Closing Price exceeds (ii) the
aggregate exercise price of such option, provided, that notwithstanding the
foregoing, at the Effective Time, each outstanding New York Bancorp Option with
respect to which the holder was issued either OSRs under the 1993 Incentive Plan
or Limited Rights under the 1990 Incentive Plan will be converted automatically
into the right to receive the greater of (x) the number of shares of North Fork
Common Stock into which such option would be converted pursuant to the foregoing
formula, and (y) such number of shares (rounded to the nearest whole share) of
North Fork Common Stock as is equal in value (determined by valuing each share
of North Fork Common Stock at the Option Share Average Closing Price) to the
amount of cash which the holder of such New York Bancorp Option would otherwise
be entitled to receive upon exercise of such OSRs or Limited Rights, as the case
may be, at the Effective Time pursuant
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to the terms of the applicable New York Bancorp Option Plan and such holder's
option agreement. As used herein, the term "Option Share Average Closing Price"
means the average of the last reported sale prices per share of North Fork
Common Stock on the NYSE for the 20 consecutive trading days ending on the fifth
business day prior to the date on which the last of all regulatory approvals
required to consummate the transactions contemplated by the Merger Agreement
(including the Merger and the Subsidiary Bank Merger) are obtained, without
regard to any requisite waiting periods in respect thereof. As a result of the
Merger, New York Bancorp Options to purchase a total of 256,416 shares of New
York Bancorp Common Stock, which would otherwise not be vested at the Effective
Time, will be converted at the Effective Time into the right to receive shares
of North Fork Common Stock.
EFFECTIVE TIME
The Merger will become effective as set forth in the certificate of merger
which shall be filed with the Secretary of State of the State of Delaware in
accordance with applicable law (the "Effective Time"). The certificate will be
filed on the first day (the "Closing Date") which is (i) the last business day
of a month and (ii) at least two business days after satisfaction or waiver of
the latest to occur of certain conditions to the Merger specified in the Merger
Agreement, unless another date is agreed to in writing by North Fork and New
York Bancorp. See "-- Conditions to the Merger" below. It is expected that a
period of time will elapse between the Special Meetings and the Effective Time
while the parties seek to obtain the regulatory approvals required to consummate
the Merger. There can be no assurance that such regulatory approvals will be
obtained, and if obtained, there can be no assurance as to the date of any such
approval. There can likewise be no assurance that the United States Department
of Justice or the New York Attorney General will not challenge the Merger or, if
such a challenge is made, as to the result thereof. See "-- Regulatory Approvals
Required for the Merger" below. The Merger Agreement may be terminated by either
party if, among other reasons, the Merger has not been consummated on or before
September 30, 1998. See "-- Waiver and Amendment; Termination" below.
BACKGROUND OF THE MERGER
In November 1996, the Board of Directors of New York Bancorp retained
Sandler O'Neill to advise the directors on strategic alternatives to maximize
the value of New York Bancorp and the New York Bancorp Common Stock. The New
York Bancorp Board asked Sandler O'Neill to explore all possibilities, including
a sale of New York Bancorp, potential acquisitions of financial institutions or
selected assets by New York Bancorp, sales of equity or debt securities or other
financings, capital repurchase programs and any other extraordinary transaction
that could strengthen and enhance the value of New York Bancorp. Following a
thorough review, Sandler O'Neill suggested that New York Bancorp focus on the
possibility of a sale of New York Bancorp and explore the feasibility of a
mutually beneficial business combination with a financial institution. Following
the receipt of this advice, the New York Bancorp Board directed Sandler O'Neill
to contact possible buyers to assess their interest in a business combination
and formed a committee comprised of Messrs. Malloy, McManus, Austin and Goodson
to review any possible transactions identified by Sandler O'Neill and make
recommendations to the full New York Bancorp Board.
In late 1996, Sandler O'Neill contacted a number of financial institutions
to assess their interest in engaging in a business combination with New York
Bancorp. New York Bancorp subsequently executed confidentiality agreements with
each of North Fork and another financial institution for the purpose of
exchanging non-public information and discussing the possibilities for a
transaction. In late 1996 and early 1997 representatives of New York Bancorp and
Sandler O'Neill furnished information to, and held discussions with
representatives of, North Fork. Representatives of Sandler O'Neill also
furnished information to, and held discussions with representatives of, the
other financial institution. These discussions did not result in any agreements
and in January 1997 discussions with both parties terminated over differences of
views concerning the consideration to be paid to the New York Bancorp
stockholders in a business combination.
In late May and early June 1997, representatives of North Fork contacted
representatives of New York Bancorp for the purpose of resuming discussions.
These discussions again ended without any agreement between the parties.
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In late July 1997, the New York Bancorp Board authorized management to
proceed with an offering of convertible trust preferred securities to be
underwritten in part by KBW in an aggregate liquidation amount of $50 million.
The net proceeds from the sale of the trust securities were to be used by New
York Bancorp for general corporate purposes, including, without limitation, the
purchase of outstanding shares of New York Bancorp Common Stock and the making
of advances and capital contributions to Home Federal, as well as in connection
with one or more possible future acquisitions by New York Bancorp. On September
22, 1997, New York Bancorp commenced offering the trust securities to the New
York Bancorp stockholders in a subscription offering.
On October 1, 1997, John Adam Kanas, the Chairman, President and Chief
Executive Officer of North Fork, contacted Mr. Malloy to ascertain New York
Bancorp's interest in resuming discussions regarding a possible business
combination. Messrs. Kanas and Malloy discussed the basis upon which discussions
would proceed, including the exchange ratio that would be used to determine the
number of shares of North Fork Common Stock that New York Bancorp stockholders
would receive for each share of their New York Bancorp Common Stock. Following
consultation with the New York Bancorp directors, Mr. Malloy informed Mr. Kanas
that New York Bancorp would be willing to proceed with discussions, provided
that the business combination would qualify for pooling of interests accounting
treatment, the transaction would provide appropriate downside price protection
for the New York Bancorp stockholders and agreement on the other terms and
provisions of a definitive merger agreement could be reached on a prompt basis.
North Fork and New York Bancorp then instructed their respective legal counsels
to begin preparing and negotiating definitive documentation. The parties and
their respective advisors also commenced negotiation of the business terms of
the Merger and an update of the due diligence review of each other that had been
conducted earlier in the year.
On the evening of October 5, 1997, the New York Bancorp Board met to
discuss and review the terms of the proposed Merger. New York Bancorp's
management and financial and legal advisors made presentations regarding the
background of the proposed Merger, the potential benefits of the Merger, the
strategic alternatives available to New York Bancorp and the potential benefits
of such alternatives relative to the Merger, a financial evaluation and analyses
of the proposed Merger and the terms of the proposed agreements. The New York
Bancorp directors also reviewed with their advisors the remaining issues between
the parties.
On October 6, 1997, the North Fork Board considered and approved, by
unanimous vote, the Merger, the Merger Agreement, the Stock Option Agreement and
the related transactions. Presentations were made by both Goldman Sachs and
North Fork's legal counsel. At the special meeting, members of North Fork's
senior management, together with its legal and financial advisors, reviewed with
the North Fork Board, among other things, the background of the proposed
transaction, the potential benefits of the transaction, including the strategic
rationale for the transaction, a summary of their due diligence findings,
financial and valuation analyses of the transaction and the terms of the
proposed agreements. In addition, Goldman Sachs delivered to the North Fork
Board its oral opinion (which opinion was subsequently delivered to the North
Fork Board in written form dated as of October 7, 1997) to the effect that, as
of such date, the Exchange Ratio pursuant to the Merger Agreement was fair from
a financial point of view to North Fork.
On the morning of October 7, 1997, the New York Bancorp Board met to
consider and approve the Merger, the Merger Agreement, the Stock Option
Agreement and related matters. At that meeting, Sandler O'Neill delivered to the
New York Bancorp Board its oral opinion (subsequently confirmed in writing) to
the effect that, as of such date, the Exchange Ratio was fair, from a financial
point of view, to the New York Bancorp stockholders. KBW also delivered its
written opinion, dated as of October 7, 1997, to the effect that, as of such
date, the Exchange Ratio was fair, from a financial point of view, to the New
York Bancorp stockholders. By unanimous vote, the New York Bancorp directors
approved the Merger Agreement and the Stock Option Agreement and agreed to
recommend adoption and approval of the Merger Agreement to the New York Bancorp
stockholders.
Later in the day on October 7, 1997, the parties finalized, executed and
delivered the Merger Agreement and the Stock Option Agreement and made a joint
public announcement of the Merger.
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RECOMMENDATION OF THE BOARDS OF DIRECTORS; REASONS FOR THE MERGER
North Fork. In reaching its decision to approve the Merger Agreement, the
North Fork Board consulted with its legal advisors regarding the legal terms of
the transaction, its financial advisors regarding the financial aspects and
fairness of the proposed transaction, as well as with management of North Fork,
and, without assigning any relative or specific weights, considered a number of
factors, both from a short-term and a longer-term perspective, including the
following: (i) the North Fork Board's familiarity with and review of North
Fork's business, operations, financial condition, earnings and prospects,
including, but not limited to, its potential growth, development, productivity
and profitability and the business risks associated therewith; (ii) the North
Fork Board's review, based in part on a presentation by North Fork management
regarding its due diligence on New York Bancorp, of the business, operations,
earnings and financial condition of New York Bancorp on an historical,
prospective and pro forma basis, and the enhanced opportunities for growth that
the Merger makes possible; (iii) a variety of factors affecting and relating to
the overall strategic focus of North Fork including, without limitation,
opportunities for growth in deposits, assets and earnings, and opportunities
available to North Fork in the market areas where New York Bancorp conducts
business; (iv) the current and prospective economic, competitive and regulatory
environment facing financial institutions, including North Fork; (v) the terms
of the Merger Agreement, the Stock Option Agreement and the other documents
executed in connection with the Merger; (vi) the anticipated revenue
enhancement, cost savings and efficiencies available from the Merger (see
"MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER -- Consolidation of Operations;
Projected Cost Savings and Revenue Enhancements; Projected Earnings Per Share");
(vii) the expectation that the Merger would be treated as a tax-free
reorganization and accounted for as a pooling of interests; and (viii) the
financial advice rendered by Goldman Sachs and the opinion of Goldman Sachs as
to the fairness to North Fork from a financial point of view of the Exchange
Ratio (see "-- Opinions of Financial Advisors -- North Fork").
The North Fork Board believes that the Merger is fair to, and in the best
interests of, North Fork and its stockholders. ACCORDINGLY, THE NORTH FORK BOARD
HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND RECOMMENDS THAT NORTH FORK'S
STOCKHOLDERS VOTE FOR THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT.
New York Bancorp. The New York Bancorp Board has determined that the
Merger Agreement and the Merger are fair to, and in the best interests of, New
York Bancorp and the holders of New York Bancorp Common Stock. Accordingly, the
New York Bancorp Board unanimously recommends that New York Bancorp stockholders
vote "FOR" approval and adoption of the Merger Agreement.
In reaching its determination, the New York Bancorp Board considered a
number of factors, including the following: (1) New York Bancorp's business,
financial condition, results of operations and prospects; (2) the current and
prospective environment in which New York Bancorp operates, including regional
economic conditions, the competitive environment for savings and other financial
institutions generally and the trend toward consolidation in the financial
services industry; (3) information concerning the business, financial condition,
results of operations and prospects of North Fork, including recent acquisitions
by North Fork and the recent market performance of the North Fork Common Stock;
(4) the value to be received by the holders of New York Bancorp Common Stock
pursuant to the Merger in relation to the historical trading prices and book
value of the New York Bancorp Common Stock; (5) the information presented to the
New York Bancorp Board by Sandler O'Neill and KBW with respect to the Merger and
the respective opinions of Sandler O'Neill and KBW to the effect that, as of the
date of such opinions, the Exchange Ratio was fair, from a financial point of
view, to such holders of New York Bancorp Common Stock (see "-- Opinions of
Financial Advisors -- New York Bancorp"); (6) the material terms of the Merger
Agreement and the Stock Option Agreement; (7) the New York Bancorp Board's
belief that the receipt of North Fork Common Stock by the New York Bancorp
stockholders in the Merger would be on a tax-free basis for federal income tax
purposes and would permit the New York Bancorp stockholders to become
stockholders in North Fork, an institution with strong operations, management,
earnings performance and earnings potential; (8) the future growth prospects of
New York Bancorp and North Fork following the Merger and the potential synergies
expected from the Merger, including potential cost reductions and increases in
efficiency; (9) the expectation that North Fork will continue to provide quality
service to the community and customers served by New York
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Bancorp; and (10) the alternative strategic courses available to New York
Bancorp, including remaining independent and continuing to implement its current
business plan and exploring other potential acquisition transactions.
The New York Bancorp Board did not quantify or assign any particular weight
to the various factors that it considered in connection with its review of the
Merger Agreement and the Merger. After considering the factors described above,
the New York Bancorp Board determined that the Merger and the consideration to
be received by New York Bancorp's stockholders in connection with the Merger was
fair and, consequently, unanimously approved the Merger Agreement as being in
the best interests of New York Bancorp and its stockholders. ACCORDINGLY, THE
NEW YORK BANCORP BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF NEW YORK
BANCORP VOTE FOR APPROVAL AND ADOPTION OF THE MERGER AGREEMENT.
OPINIONS OF FINANCIAL ADVISORS
North Fork
Goldman Sachs was retained by North Fork to act as its financial advisor in
connection with the Merger and related matters. At the October 6, 1997 meeting
of the North Fork Board, Goldman Sachs rendered to the North Fork Board its oral
opinion (which opinion was subsequently delivered to the North Fork Board in
written form dated as of October 7, 1997) to the effect that, as of the date of
such opinion and based on the matters set forth therein, the proposed Exchange
Ratio pursuant to the Merger Agreement was fair from a financial point of view
to North Fork. As described above under the caption "Background of the Merger,"
the Merger Agreement was executed as of October 7, 1997. Goldman Sachs has
confirmed its October 6, 1997 oral opinion (as confirmed in writing on October
7, 1997) by delivery of its written opinion to the North Fork Board, dated the
date of this Joint Proxy Statement/Prospectus, stating that, as of the date
hereof and based on the matters set forth in such opinion, the proposed Exchange
Ratio pursuant to the Merger Agreement is fair from a financial point of view to
North Fork.
Goldman Sachs has consented to the inclusion of its opinion, dated the date
hereof, in this Joint Proxy Statement/Prospectus (the "Goldman Sachs Opinion").
THE FULL TEXT OF THE GOLDMAN SACHS OPINION, DATED THE DATE OF THIS JOINT
PROXY STATEMENT/PROSPECTUS, WHICH SETS FORTH THE ASSUMPTIONS MADE, PROCEDURES
FOLLOWED, MATTERS CONSIDERED AND LIMITS ON THE REVIEW UNDERTAKEN, IS ATTACHED AS
APPENDIX C TO THIS JOINT PROXY STATEMENT/PROSPECTUS AND IS INCORPORATED HEREIN
BY REFERENCE. THE DESCRIPTION OF THE GOLDMAN SACHS OPINION SET FORTH HEREIN IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE GOLDMAN SACHS OPINION ATTACHED AS
APPENDIX C. THE GOLDMAN SACHS OPINION IS SUBSTANTIALLY IDENTICAL TO THE OPINION
RENDERED TO THE NORTH FORK BOARD DATED OCTOBER 6, 1997 (AS CONFIRMED IN WRITING
ON OCTOBER 7, 1997). NORTH FORK STOCKHOLDERS ARE URGED TO READ THE GOLDMAN SACHS
OPINION IN ITS ENTIRETY.
Goldman Sachs' opinions were provided solely for the information and
assistance of the North Fork Board in connection with the Board's consideration
of the Merger and do not constitute a recommendation to any stockholder of North
Fork as to how such stockholder should vote at the North Fork Meeting.
Goldman Sachs is a nationally recognized investment banking firm. North
Fork selected Goldman Sachs because of the firm's reputation and experience in
investment banking in general, its recognized expertise in the valuation of
banking businesses and because of its familiarity with, and prior work for,
North Fork. Goldman Sachs, as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes.
In connection with rendering the Goldman Sachs Opinion and its October 6,
1997 oral opinion (as confirmed in writing on October 7, 1997), Goldman Sachs,
among other things: (i) reviewed the Merger Agreement; (ii) reviewed the Annual
Reports to stockholders and the Annual Reports on Form 10-K of
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North Fork for the five years ended December 31, 1996 and for New York Bancorp
for the five years ended September 30, 1996; (iii) reviewed certain interim
reports to stockholders and Quarterly Reports on Form 10-Q of North Fork and New
York Bancorp; (iv) reviewed certain other communications from North Fork and New
York Bancorp to their respective stockholders; (v) reviewed certain internal
financial analyses and forecasts for North Fork and New York Bancorp prepared by
their respective managements; (vi) reviewed certain internal forecasts for North
Fork and New York Bancorp on a combined basis, after giving effect to the
Merger, prepared by the management of North Fork; (vii) held discussions with
members of the senior managements of North Fork and New York Bancorp regarding
the strategic rationale for, and the potential benefits of, the transaction
contemplated by the Merger Agreement and the past and current business
operations, financial condition and future prospects of their respective
companies; (viii) reviewed the reported price and trading activity for the North
Fork Common Stock and the New York Bancorp Common Stock; (ix) compared certain
financial and stock market information for North Fork and New York Bancorp with
similar information for certain other companies the securities of which are
publicly traded; (x) reviewed the financial terms of certain recent business
combinations in the savings industry specifically and other industries
generally; and (xi) performed such other studies and analyses as Goldman Sachs
deemed appropriate. In addition, in connection with rendering the Goldman Sachs
Opinion, Goldman Sachs reviewed the registration statement of which this Joint
Proxy Statement/Prospectus is a part.
In rendering the Goldman Sachs Opinion, as set forth therein, Goldman Sachs
relied without independent verification upon the accuracy and completeness of
all the financial and other information reviewed by it and assumed such accuracy
and completeness for purposes of such opinion. With North Fork's consent,
Goldman Sachs assumed that the financial forecasts (including, without
limitation, projected cost savings and operating synergies resulting from the
Merger and projections regarding under-performing and non-performing assets and
net charge-offs) were reasonably prepared on a basis reflecting the best
currently available judgments and estimates of North Fork and that such
forecasts will be realized in the amounts and at the times contemplated thereby.
Goldman Sachs is not an expert in the evaluation of loan portfolios for purposes
of assessing the adequacy of the allowances for losses with respect thereto, and
assumed, with North Fork's consent, that such allowances for each of North Fork
and New York Bancorp are in the aggregate adequate to cover all such losses. In
addition, Goldman Sachs has not reviewed individual credit files nor has it made
an independent evaluation or appraisal of the assets and liabilities of North
Fork or New York Bancorp and has not been furnished with any such evaluation or
appraisal.
The following is a summary of the material financial analyses presented by
Goldman Sachs to the North Fork Board in connection with providing its oral
opinion to the North Fork Board on October 6, 1997 (as confirmed in writing on
October 7, 1997), and does not purport to be a complete description of the
analyses performed by Goldman Sachs. Goldman Sachs used substantially the same
types of financial analyses in preparing its written opinion dated as of the
date of this Joint Proxy Statement/Prospectus as it used in providing its oral
opinion to the North Fork Board on October 6, 1997 (as confirmed in writing on
October 7, 1997).
Summary of Terms of the Proposed Merger. Goldman Sachs reviewed, among
other things, the terms of the proposed Merger, including the form of
consideration offered, the expected method of accounting, the Exchange Ratio,
the closing price of North Fork Common Stock as of October 3, 1997, and the
resulting notional price per share of New York Bancorp Common Stock pursuant to
the proposed Merger. The proposed form of consideration offered in connection
with the Merger is North Fork Common Stock and the proposed method of accounting
for the Merger is the pooling method. The notional price per share of New York
Bancorp Common Stock in the Merger was $36.15 (the "Notional Price"), which was
determined by multiplying the Exchange Ratio by the $30.38 closing price of
North Fork Common Stock on October 3, 1997. The Notional Price therefore was
dependent on the closing price of the North Fork Common Stock at a specific
time. Based upon the Notional Price, Goldman Sachs calculated the aggregate
value of the consideration to be received by holders of New York Bancorp Common
Stock in the Merger as approximately $810 million.
In addition to reviewing the Notional Price resulting from the Merger, the
analyses described indicated values resulting from the Merger, expressed as
multiples of New York Bancorp earnings for the 12 months ended September 30,
1997, and of estimates of New York Bancorp's 1998 and 1999 earnings, in each
case, with and without assuming potential after-tax cost savings of $15.3
million and potential revenue enhancement
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of $4.8 million (the "Synergies"), as well as multiples of various measures of
New York Bancorp book value. In performing these analyses, Goldman Sachs used
IBES earnings estimates (IBES is a data service that monitors and publishes
compilations of earnings estimates by selected research analysts regarding
companies of interest to institutional investors). Under these analyses, the
Notional Price reflected (i) a multiple of 16.7 times New York Bancorp earnings
for the 12 months ended September 30, 1997, (ii) a multiple of 15.7 times New
York Bancorp 1998 IBES estimated earnings, and (iii) a multiple of 14.3 times
New York Bancorp 1999 IBES estimated earnings, in each case, without
consideration of potential Synergies. Goldman Sachs compared these multiples to
those assuming potential Synergies, which were, respectively, 11.8x, 11.3x and
10.5x. The Notional Price also reflected (i) a multiple of 4.8 times New York
Bancorp tangible book value as of September 30, 1997, (ii) a multiple of 4.8
times New York Bancorp tangible book value as of such date, and (iii) a multiple
of 4.3 times New York Bancorp adjusted tangible book value as of such date
(adjusted to reflect a 6% tangible common equity/tangible assets). Goldman Sachs
also noted that the Notional Price represented a 38% premium to New York Bancorp
deposits.
Goldman Sachs compared the foregoing multiples to multiples of the $30.38
closing price of North Fork Common Stock as of October 3, 1997 to (i) North Fork
earnings for the 12 months ended September 30, 1997, (ii) North Fork 1998 IBES
estimated earnings, (iii) North Fork 1999 IBES estimated earnings, (iv) North
Fork's stated book value as of September 30, 1997, (v) North Fork's tangible
book value as of such date, and (vi) North Fork's adjusted tangible book value
as of such date of 17.2x, 15.3x, 13.9x, 3.8x, 4.6x and 4.8x, respectively.
Goldman Sachs also noted that the $30.38 October 3, 1997 closing price of North
Fork represented a 36% premium to North Fork deposits.
Selected Transaction Analysis. Goldman Sachs reviewed certain information
relating to 37 selected thrift mergers in the Northeast that were announced
between April 14, 1993 and September 4, 1997, in which the aggregate
consideration paid was in excess of $100 million (the "Northeast Selected Thrift
Mergers"). Goldman Sachs divided the Northeast Selected Thrift Mergers according
to the year in which each respective merger was announced. The Northeast
Selected Thrift Mergers consisted of (buyer/seller): People's Bank/ Norwich
Financial, Charter One Financial/RCSB Financial, Astoria Financial Corp./Greater
New York Savings Bank, Provident Bankshares/First Citizens Financial, Summit
Bancorp./Collective Bancorp, CFX Corp./Portsmouth Bank Shares, and Sovereign
Bancorp/Bankers Corp. in 1997; Webster Financial Corp./ DS Bancorp, Inc., UST
Corp./Walden Bancorp, Inc., HSBC Holdings PLC/First FSLA-Rochester, North Fork
Bancorp./North Side Savings Bank, First Union Corp./Center Financial Corp., and
Peoples Heritage Financial/Family Bancorp in 1996; Dime Savings Bank
Williamsburgh/Conestoga Bancorp, BankBoston Corp./Boston Bancorp, Republic New
York/Brooklyn Bancorp, Reliance Bancorp Inc./Sunrise Bancorp Inc., Independence
Community/Bay Ridge Bancorp, Crestar Financial/Loyola Capital Corp., and Valley
National Bancorp/Lakeland First Financial in 1995; Summit Bancorp/Bankers Corp.,
Astoria Financial Corp./Fidelity New York, Dime Bancorp/Anchor Bancorp, Inc.,
New York Bancorp/Hamilton Bancorp, North Fork Bancorp./Metro Bancshares,
Citizens Financial Group/Quincy Savings Bank, Shawmut National/Northeast Federal
Corp., Fleet Financial Group/NBB Bancorp, Inc., Corestates Financial/Germantown
Savings, and BankBoston Corp./Pioneer Financial Cooperative Bank in 1994; and
Shawmut National/Gateway Financial Corp., Citizens Financial Group/Newworld
Bancorp, Fleet Financial Group/Sterling Bancshares, BankBoston
Corp./BankWorcester Corp., Shawmut National/Peoples Bancorp, PNC Bank
Corp./United Federal Bancorp, and First Fidelity Bancorp/Peoples Westchester in
1993. Such analysis indicated that the mean and median multiples of premium to
deposits and price to book value, to tangible book value, to adjusted tangible
book value and to the latest 12 months earnings per share for the Northeast
Selected Thrift Mergers in 1997 were 14.2% and 16.1%, 1.89x and 1.89x, 1.97x and
2.03x, 3.26x and 2.63x, and 20.6x and 18.3x, respectively; in 1996 were 7.5% and
7.1%, 1.61x and 1.64x, 1.71x and 1.68x, 1.97x and 1.88x, and 14.0x and 13.9x,
respectively; in 1995 were 8.2% and 7.8%, 1.52x and 1.41x, 1.53x and 1.41x,
2.77x and 3.07x, and 16.1x and 14.7x, respectively; in 1994 were 9.4% and 9.2%,
1.82x and 1.75x, 1.93x and 1.86x, 2.47x and 2.77x, and 13.6x and 14.0x,
respectively; and in 1993 were 8.8% and 8.9%, 1.6x and 1.6x, 1.7x and 1.7x, 2.6x
and 2.4x, and 20.8x and 17.0x, respectively.
Goldman Sachs also reviewed certain information relating to 18 selected
thrift mergers that were announced between April 14, 1994, and September 15,
1997, in which the aggregate consideration paid was in
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excess of $500 million (the "Selected Thrift Mergers"). Goldman Sachs divided
the Selected Thrift mergers according to the year in which each respective
merger was announced. The Selected Thrift Mergers consisted of (buyer/seller):
Star Banc Corp./Great Financial Corp., Charter One Financial Corp., Marshall &
Ilsley/ Security Capital Corp., Washington Mutual/Great Western Financial, and
Summit Bancorp./Collective Bancorp in 1997; Mercantile Bancorp/Roosevelt
Financial, ABN AMRO Holdings/Standard Federal Bank, HSBC Holdings PLC/First
FSLA-Rochester, MacAndrews & Forbes/Cal Fed Bancorp, Washington Mutual/Keystone
Holdings, and Union Planters Corp./Leader Financial Corp. in 1996; Republic New
York/ Brooklyn Bancorp, NationsBank Corp./CSF Holdings, Charter One
Financial/FirstFed Michigan, and First Union Corp./Coral Gables Fedcorp in 1995;
and U.S. Bancorp/Metropolitan Financial, and MacAndrews & Forbes/First
Nationwide FSB in 1994. Such analysis indicated that the mean and median
multiples of premium to deposits and price to book value, to tangible book
value, to adjusted tangible book value and to the latest 12 month earnings per
share for the Selected Thrift Mergers in 1997 were 18.1% and 16.8%, 2.17x and
2.15x, 2.33x and 2.23x, 3.15x and 2.78x, and 22.3x and 20.4x, respectively; in
1996 were 10.8% and 11.0%, 2.16x and 2.16x, 1.91x and 1.81x, 1.85x and 1.78x,
and 20.8x and 1.31x, respectively; in 1995 were 2.16x and 2.16x, 1.55x and
1.41x, 2.39x and 2.07x, and 13.7x and 14.4x, respectively; and in 1994 were
2.16x and 4.8% and 4.8%, 2.16x, 1.59x and 1.59x, 1.43x and 1.43x, and 13.2x and
13.2x, respectively.
In addition, Goldman Sachs reviewed certain information relating to 41
selected bank mergers that were announced between January 28, 1994, and August
29, 1997, in which the aggregate consideration paid was in excess of $350
million for 1997 and 1996 and was in excess of $500 million for 1995 and 1994
(the "Selected Bank Mergers"). Goldman Sachs divided the Selected Bank Mergers
according to the year in which each respective merger was announced. Such
analysis indicated that the mean and median multiples of premium to deposits and
price to book value, to tangible book value and to the latest 12 months earnings
per share for the Selected Bank Mergers in 1997 were 25.5% and 25.8%, 2.9x and
2.9x, 3.3x and 3.2x, and 23.8x and 22.4x, respectively; in 1996 were 18.1% and
17.9%, 2.5x and 2.6x, 2.6x and 2.8x, and 17.8x and 18.8x, respectively; in 1995
were 12.6% and 12.6%, 1.9x and 1.9x, 2.1x and 2.1x, and 14.4x and 12.6x,
respectively; and in 1994 were 9.2% and 9.1%, 1.8x and 1.9x, 1.9x and 2.0x, and
11.1x and 11.8x, respectively.
Goldman Sachs compared the foregoing multiples to the premium to deposits
of New York Bancorp represented by the Notional Price and to multiples of the
Notional Price to book value, to tangible book value, to adjusted tangible book
value and to earnings per share for the 12 months ended September 30, 1997 for
New York Bancorp of 38%, 4.8x, 4.8x, 4.3x and 16.7x (11.8x with Synergies),
respectively.
Selected Company Analysis. Based on publicly available information and
IBES earnings estimates, Goldman Sachs reviewed and compared actual and
estimated selected financial, operating and stock market information and
financial ratios of New York Bancorp, a group of 7 publicly traded, comparable
banks consisting of Commerce Bancshares, First Empire State, First Tennessee
National, Mercantile Bankshares, Old Kent Financial, ONBANCorp, and HUBCO Inc.
(the "Selected Banks"), and a group of 10 additional publicly traded, comparable
thrifts consisting of Astoria Financial, Dime Bancorp, GreenPoint Financial,
Long Island Bancorp, People's Bank (MHC), Sovereign Bancorp, TCF Financial,
Washington Federal, Washington Mutual, and Webster Financial Corp. (the
"Selected Thrifts"). Such information and ratios included, among other things,
equity market capitalization, price to earnings ratios, price to book value
ratios, price to tangible book value ratios, dividend yields premium to deposits
and certain profitability data.
Goldman Sachs noted for the North Fork Board that, among other things: (i)
North Fork had a ratio of market price to 1997 and 1998 IBES estimated earnings
of 17.4x and 15.3x, respectively, as compared with mean and median ratios of
market price to 1997 and 1998 IBES estimated earnings of 17.3x and 17.0x, and
15.7x and 15.5x, respectively, for the Selected Banks; (ii) North Fork had a
ratio of market price to book value, as of October 3, 1997, of 3.90x, as
compared with mean and median ratios of market price to book value for Selected
Banks, as of October 3, 1997, of 2.99x and 2.87x, respectively; (iii) North Fork
had a ratio of market price to tangible book value, as of October 3, 1997, of
4.45x, as compared with mean and median ratios of market price to tangible book
value for the Selected Banks, as of October 3, 1997, of 3.29x and 2.93x,
respectively and (iv) the $30.38 October 3, 1997 closing price of North Fork
represented a 36% premium to North Fork deposits, as compared with mean and
median premiums to deposits for the Selected Banks, as of October 3, 1997, of
21.1% and 21.1%, respectively.
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Goldman Sachs also noted for the North Fork Board that, among other things:
(i) New York Bancorp had a ratio of market price to 1997 and 1998 IBES estimated
earnings of 14.1x and 13.3x, respectively, as compared with mean and median
ratios of market price to 1997 and 1998 IBES estimated earnings of 17.9x and
17.7x, and 15.6x and 15.x, respectively, for the Selected Thrifts; (ii) New York
Bancorp had a ratio of market price to book value, as of October 3, 1997, of
3.90x, as compared with mean and median ratios of market price to book value for
the Selected Thrifts, as of October 3, 1997, of 2.56x and 2.27x, respectively;
(iii) New York Bancorp had a ratio of market price to tangible book value, as of
October 3, 1997, of 3.90x, as compared with mean and median ratios of market
price to tangible book value for the Selected Thrifts, as of October 3, 1997, of
2.99x and 2.89x, respectively and (iv) the Notional Price represented a 38%
premium to New York Bancorp deposits, as compared with mean and median premiums
to deposits for the Selected Thrifts, as of October 3, 1997, of 20.1% and 18.5%,
respectively.
Pro Forma Analysis. Goldman Sachs also performed a pro forma analysis of
certain other financial aspects of the Merger, calculating, among other things,
the pro forma impact on IBES estimated 1998 and 1999 earnings per share of the
combined entity, on a GAAP basis, of 7.0% and 8.1% accretion, respectively. The
pro forma analysis was calculated based on the Notional Price and assumed, among
other things, the phase-in of Synergies at 75% and 100% in 1998 and 1999,
respectively.
Other Analyses. Goldman Sachs also reviewed, among other things, selected
investment research reports on, and earnings estimates for, New York Bancorp
Common Stock and North Fork Common Stock. Goldman Sachs examined the implied
premiums to market price and to deposits. Goldman Sachs prepared a summary of
the historical financial and market performance of New York Bancorp and North
Fork, summarized New York Bancorp and North Fork management estimates of
financial performance, and, based on publicly available information, analyzed
New York Bancorp deposit market share and branch presence in the region in which
it operates.
The summary set forth above describes the material analyses that Goldman
Sachs performed and presented to the North Fork Board on October 6, 1997, and
does not purport to be a complete description of such analyses. The preparation
of a fairness opinion is a complex process involving various subjective
determinations as to the most appropriate and relevant methods of financial
analysis and the application of these methods to the particular circumstances,
and, therefore, such an opinion is not readily susceptible to a partial analysis
or summary description.
Accordingly, notwithstanding the separate factors summarized above, Goldman
Sachs believes that its analyses must be considered in their entirety and that
selecting portions of its analyses and factors considered by it, without
considering all analyses and factors, or attempting to ascribe relative weights
to some or all such analyses and factors, could create an incomplete view of the
evaluation process underlying Goldman Sachs' opinions.
In its analyses, Goldman Sachs relied upon numerous assumptions made by
North Fork and New York Bancorp with respect to industry performance, general
business and economic conditions, and other matters, many of which are beyond
the control of North Fork or New York Bancorp. Analyses based upon forecasts of
future results are not necessarily indicative of actual values, which may be
significantly more or less favorable than that suggested by such analyses. No
company used as a comparison in the analyses is identical to North Fork or New
York Bancorp and no transaction used as a comparison is identical to the Merger.
Additionally, estimates of the value of businesses do not purport to be
appraisals or necessarily to reflect the prices at which businesses actually may
be sold. Because such estimates are inherently subject to uncertainty, none of
the North Fork Board, Goldman Sachs, New York Bancorp, or any other person
assumes responsibility for the accuracy of such estimates. Goldman Sachs'
analyses were prepared solely for purposes of its opinions, rendered on October
6, 1997 (and as confirmed in writing on October 7, 1997) and on the date of this
Joint Proxy Statement/Prospectus, which it provided to the North Fork Board
regarding the fairness of the Exchange Ratio pursuant to the Merger Agreement to
North Fork, and do not purport to be appraisals or necessarily to reflect the
prices at which New York Bancorp or New York Bancorp's securities actually may
be sold.
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For the services of Goldman Sachs as financial advisor to North Fork in
connection with the Merger, pursuant to an engagement letter dated September 30,
1997, North Fork has agreed to pay Goldman Sachs $1.975 million. North Fork has
also agreed to pay Goldman Sachs its reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of its counsel, and to indemnify
Goldman Sachs against certain liabilities, including certain liabilities arising
under the federal securities laws. Goldman Sachs may provide in the future
certain investment banking and advisory services to North Fork from time to
time, for which it has received, and will receive, customary compensation. In
addition, Goldman Sachs has provided certain investment banking and advisory
services to New York Bancorp, for which it has received customary compensation.
Goldman Sachs has advised North Fork that, in the ordinary course of its
business as a full-service securities firm, Goldman Sachs may, subject to
certain restrictions, actively trade the equity and/or debt securities of North
Fork or New York Bancorp for its own account or for the accounts of its
customers, and, accordingly, may at any time hold a long or short position in
such securities.
New York Bancorp.
Sandler O'Neill & Partners, L.P. Pursuant to an engagement letter dated as
of November 18, 1996 (the "Sandler O'Neill Agreement"), New York Bancorp
retained Sandler O'Neill as an independent financial advisor in connection with
New York Bancorp's consideration of possible business combinations with a second
party. Sandler O'Neill is a nationally recognized investment banking firm whose
principal business specialty is banks and savings institutions and is regularly
engaged in the valuation of such businesses and their securities in connection
with mergers and acquisitions and other corporate transactions.
Pursuant to the terms of the Sandler O'Neill Agreement, Sandler O'Neill
acted as financial advisor to New York Bancorp in connection with the Merger. In
connection therewith, the New York Bancorp Board requested Sandler O'Neill to
render its opinion as to the fairness, from a financial point of view, of the
Exchange Ratio to the holders of New York Bancorp Common Stock. At the October
7, 1997 meeting at which the New York Bancorp Board approved and adopted the
Merger Agreement, Sandler O'Neill delivered to the New York Bancorp Board its
oral opinion, subsequently confirmed in writing, that, as of such date, the
Exchange Ratio was fair, from a financial point of view, to the holders of
shares of the New York Bancorp Common Stock (the "Sandler October Opinion").
Sandler O'Neill has also delivered to the New York Bancorp Board a written
opinion dated as of the date of this Joint Proxy Statement/Prospectus (the
"Sandler Fairness Opinion") which is substantially identical to the Sandler
October Opinion. THE FULL TEXT OF THE SANDLER FAIRNESS OPINION, WHICH SETS FORTH
THE PROCEDURES FOLLOWED, ASSUMPTIONS MADE, MATTERS CONSIDERED AND QUALIFICATIONS
AND LIMITATIONS ON THE REVIEW UNDERTAKEN IN CONNECTION WITH SUCH OPINION, IS
ATTACHED AS ANNEX D TO THIS JOINT PROXY STATEMENT/PROSPECTUS AND IS INCORPORATED
HEREIN BY REFERENCE. THE DESCRIPTION OF THE OPINION SET FORTH HEREIN IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO ANNEX D. HOLDERS OF SHARES OF NEW YORK
BANCORP COMMON STOCK ARE URGED TO READ THE SANDLER FAIRNESS OPINION IN ITS
ENTIRETY IN CONNECTION WITH THEIR CONSIDERATION OF THE PROPOSED MERGER.
THE SANDLER FAIRNESS OPINION WAS PROVIDED TO THE NEW YORK BANCORP BOARD FOR
ITS INFORMATION AND IS DIRECTED ONLY TO THE FAIRNESS, FROM A FINANCIAL POINT OF
VIEW, OF THE EXCHANGE RATIO TO HOLDERS OF SHARES OF NEW YORK BANCORP COMMON
STOCK. IT DOES NOT ADDRESS THE UNDERLYING BUSINESS DECISION OF NEW YORK BANCORP
TO ENGAGE IN THE MERGER OR ANY OTHER ASPECT OF THE MERGER AND DOES NOT
CONSTITUTE A RECOMMENDATION TO ANY HOLDER OF SHARES OF NEW YORK BANCORP COMMON
STOCK AS TO HOW SUCH STOCKHOLDER SHOULD VOTE AT THE NEW YORK BANCORP MEETING
WITH RESPECT TO THE MERGER AGREEMENT OR ANY OTHER MATTER RELATED THERETO.
In connection with rendering the Sandler October Opinion, Sandler O'Neill
performed a variety of financial analyses. The following is a summary of the
material analyses performed by Sandler O'Neill, but does not purport to be a
complete description of all the analyses underlying Sandler O'Neill's opinion.
The preparation of a fairness opinion is a complex process involving subjective
judgments and is not necessarily susceptible to a partial analysis or summary
description. Sandler O'Neill believes that its analyses must be considered as a
whole and that selecting portions of such analyses and the factors considered
therein, without considering all factors and analyses, could create an
incomplete view of the analyses and processes underlying
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its opinion. In performing its analyses, Sandler O'Neill made numerous
assumptions with respect to industry performance, business and economic
conditions and various other matters, many of which cannot be predicted and are
beyond the control of New York Bancorp, North Fork and Sandler O'Neill. Any
estimates contained in Sandler O'Neill's analyses are not necessarily indicative
of future results or values, which may be significantly more or less favorable
than such estimates. Estimates on the values of companies do not purport to be
appraisals or necessarily reflect the prices at which companies or their
securities may actually be sold. Because such estimates are inherently subject
to uncertainty, neither New York Bancorp nor Sandler O'Neill assumes
responsibility for their accuracy.
Stock Trading History. Sandler O'Neill reviewed the history of the
reported trading prices and volume of the New York Bancorp Common Stock and the
North Fork Common Stock, and the relationship between the movements in the
prices of the New York Bancorp Common Stock and the North Fork Common Stock,
respectively, to movements in certain stock indices, including the Standard &
Poor's 500 Index, the NASDAQ Banking Index and composite groups of publicly
traded savings institutions (in the case of New York Bancorp) and publicly
traded commercial banks (in the case of North Fork) in geographic proximity and
of similar asset size to New York Bancorp and North Fork, respectively.
Analysis of Selected Publicly Traded Companies. Sandler O'Neill used
publicly available information to compare selected financial and market trading
information, including balance sheet composition, asset quality ratios, loan
loss reserve levels, profitability, capital adequacy, dividends and trading
multiples for New York Bancorp and two different groups of savings institutions.
The first group consisted of New York Bancorp and the following 10 publicly
traded regional savings institutions (the "Regional Group"): Astoria Financial
Corp., Long Island Bancorp Inc., ALBANK Financial Corp., TR Financial Corp.,
Roslyn Bancorp Inc., Commonwealth Bancorp Inc., ML Bancorp Inc., Reliance
Bancorp Inc., Haven Bancorp Inc., and JSB Financial Inc. Sandler O'Neill also
compared New York Bancorp to a group of 12 publicly-traded savings institutions
which had a return on average equity (based on last quarter annualized earnings)
of greater than 14.9% and a price to tangible book value of greater than 197%
(the "Highly Valued Group"). The Highly Valued Group included New York Bancorp
and the following institutions: Webster Financial Corp., TR Financial Corp., MAF
Bancorp Inc., BankAtlantic Bancorp Inc., Anchor BanCorp Wisconsin, D&N Financial
Corp., Commercial Federal Corp., Washington Federal Inc., Peoples Heritage
Financial Group, InterWest Bancorp Inc., WSFS Financial Corporation, and First
Federal Capital Corp. The analysis compared publicly available financial
information for New York Bancorp and each of the groups as of and for each of
the years ended December 31, 1992 through December 31, 1996 and as of and for
the twelve months (and, in certain cases, the three months) ended June 30, 1997.
Sandler O'Neill also used publicly available information to perform a
similar comparison of selected financial and market trading information for
North Fork and two different groups of commercial banks. The first group
consisted of North Fork and the following 11 publicly traded commercial banks
(the "Peer Group"): European American Bank, Keystone Financial Inc., Mercantile
Bankshares Corp., Wilmington Trust Corp., ONBANCorp Inc., Riggs National Corp.,
Valley National Bancorp, Fulton Financial Corp., Commerce Bancorp Inc., U.S.
Trust Corp., and Susquehanna Bancshares Inc. Sandler O'Neill also compared North
Fork to a group of 12 publicly traded commercial banks which had a return on
average equity (based on last twelve months' earnings) of greater than 16.25%
and a price to tangible book value of greater than 274% (the "Commercial Highly
Valued Group"). The Commercial Highly Valued Group included North Fork and the
following institutions: Star Banc Corp., First Commerce Corp., Synovus Financial
Corp., Zions Bancorp, TCF Financial Corp., Provident Financial Group Inc.,
Colonial BancGroup Inc., Wilmington Trust Corp., BOK Financial Corp., Valley
National Bancorp, National Commerce Bancorp and Commerce Bancorp Inc. The
analysis compared publicly available financial information for North Fork and
each of the groups as of and for each of the years ended December 31, 1992
through December 31, 1996 and as of and for the twelve months ended June 30,
1997.
Analysis of Selected Merger Transactions. Sandler O'Neill reviewed 42
transactions announced from January 1, 1997 to October 2, 1997 involving public
savings institutions nationwide as targets with transaction values over $15
million ("Nationwide Transactions"), 8 transactions announced from January 1,
1997 to October 2, 1997 involving public savings institutions in the
Mid-Atlantic region (Delaware, District of
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Columbia, Pennsylvania, Maryland, New Jersey, New York and Puerto Rico) as
targets with transaction values over $15 million ("Mid-Atlantic Transactions"),
14 transactions announced from January 1, 1996 to October 2, 1997 involving
public savings institutions as targets with transaction values greater than $400
million ("Large Nationwide Transactions"), 4 transactions announced from January
1, 1996 to October 2, 1997 involving public savings institutions in the
Mid-Atlantic as targets with transaction values greater than $400 million
("Large Mid-Atlantic Transactions") and 9 transactions announced from January 1,
1996 to October 2, 1997 involving public savings institutions as targets with
last twelve months' return on average equity greater than 15% ("Highly-Valued
Transactions"). Sandler O'Neill reviewed the ratios of price to last twelve
months' earnings, price to book value, price to tangible book value, price to
deposits, price to assets and deposit premium paid in each such transaction and
computed high, low, mean, and median ratios and premiums for the respective
groups of transactions. These multiples were applied to New York Bancorp's
financial information as of and for the twelve months ended September 30, 1997.
Based upon the median multiples of Nationwide Transactions, Sandler O'Neill
derived an imputed range of values per share of the New York Bancorp Common
Stock of $14.63 to $44.93. Based upon the median multiples for Mid-Atlantic
Transactions, Sandler O'Neill derived an imputed range of values per share of
the New York Bancorp Common Stock of $15.21 to $49.20. Based upon the median
multiples for Large Nationwide Transactions, Sandler O'Neill derived an imputed
range of values per share of the New York Bancorp Common Stock of $15.71 to
$41.92. Based upon the median multiples for Large Mid-Atlantic Transactions,
Sandler O'Neill derived an imputed range of values per share of the New York
Bancorp Common Stock of $15.78 to $36.05. Based upon the median multiples for
Highly-Valued Transactions, Sandler O'Neill derived an imputed range of values
per share of the New York Bancorp Common Stock of $13.43 to $26.46.
Discounted Dividend Stream and Terminal Value Analysis. Sandler O'Neill
also performed an analysis which estimated the future stream of after-tax
dividend flows of New York Bancorp through 2002 under various circumstances,
assuming New York Bancorp performed in accordance with information regarding
potential future earnings provided by its management and certain variations
thereof (including variations with respect to the levels of assets, net interest
spread, non-interest income, non-interest expense and dividend payout ratio). To
approximate the terminal value of the New York Bancorp Common Stock at the end
of the five-year period, Sandler O'Neill applied price to earnings multiples
ranging from 6x to 30x and applied multiples of tangible book value ranging from
100% to 600%. The dividend income streams and terminal values were then
discounted to present values using different discount rates (ranging from 6% to
22%) chosen to reflect different assumptions regarding required rates of return
of holders or prospective buyers of the New York Bancorp Common Stock. This
analysis, assuming the current dividend payout ratio, indicated an imputed range
of values per share of the New York Bancorp Common Stock of between $7.93 and
$64.42 when applying the price to earnings multiples, and an imputed range of
values per share of the New York Bancorp Common Stock of between $8.00 and
$77.50 when applying multiples of tangible book value. In connection with its
analysis, Sandler O'Neill extensively used sensitivity analyses to illustrate
the effects changes in the underlying assumptions would have on the resulting
present value, and discussed these changes with the New York Bancorp Board.
Pro Forma Merger Analysis. Based upon earnings forecasts of New York
Bancorp and North Fork, expected one-time merger related charges, projected cost
savings and certain other assumptions discussed with New York Bancorp's and
North Fork's respective managements, Sandler O'Neill analyzed certain potential
pro forma effects of the Merger on North Fork. This analysis indicated that the
Merger would be accretive to earnings per share and minimally dilutive to
tangible book value per share of North Fork Common Stock for all periods
analyzed. The actual results achieved by North Fork may vary from projected
results and the variations may be material.
Contribution Analysis. Sandler O'Neill reviewed the relative contributions
to, among other things, total assets, total loans, total deposits, total equity,
last twelve months' ("LTM") net income and market capitalization to be made by
New York Bancorp and North Fork to the combined institution based on data at and
for the twelve months ended June 30, 1997. This analysis indicated that New York
Bancorp's implied contribution was 32.9% of total assets, 36.9% of total loans,
27.4% of total deposits, 23.9% of total equity, 31.1% of LTM net income and
24.5% of market capitalization. Based upon an Exchange Ratio of 1.19, holders
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of the New York Bancorp Common Stock would own approximately 28.3% of the
outstanding shares of the combined institution.
In connection with rendering the Sandler October Opinion, Sandler O'Neill
reviewed, among other things: (i) the Merger Agreement and exhibits thereto;
(ii) the Stock Option Agreement; (iii) New York Bancorp's audited consolidated
financial statements and management's discussion and analysis of the financial
condition and results of operations as contained in its annual report to
shareholders for the year ended September 30, 1996; (iv) North Fork's audited
consolidated financial statements and management's discussion and analysis of
the financial condition and results of operations as contained in its annual
report to shareholders for the year ended December 31, 1996; (v) New York
Bancorp's unaudited consolidated financial statements and management's
discussion and analysis of the financial condition and results of operations
contained in its Quarterly Report on Form 10-Q for the quarters ended December
31, 1996 and March 31 and June 30, 1997, respectively; (vi) North Fork's
unaudited consolidated financial statements and management's discussion and
analysis of the financial condition and results of operations contained in its
Quarterly Report on Form 10-Q for the quarters ended March 31 and June 30, 1997,
respectively; (vii) certain internal preliminary financial information regarding
the financial condition and results of operations of New York Bancorp as of and
for the quarter ended September 30, 1997; (viii) certain internal preliminary
financial information regarding the financial condition and results of
operations of North Fork as of and for the quarter ended September 30, 1997;
(ix) certain financial analyses and forecasts of New York Bancorp prepared by
and reviewed with management of New York Bancorp and the views of senior
management of New York Bancorp regarding New York Bancorp's past and current
business operations, results thereof, financial condition and future prospects;
(x) certain financial analyses and forecasts of North Fork prepared by and
reviewed with management of North Fork and the views of senior management of
North Fork regarding North Fork's past and current business operations, results
thereof, financial condition and future prospects; (xi) the pro forma impact of
the Merger on North Fork; (xii) the publicly reported historical price and
trading activity for the New York Bancorp Common Stock and the North Fork Common
Stock, respectively, including a comparison of certain financial and stock
market information for New York Bancorp and North Fork with similar publicly
available information for certain other companies the securities of which are
publicly traded; (xiii) the financial terms of recent business combinations in
the savings institution industry, to the extent publicly available; (xiv) the
current market environment generally and the banking environment in particular;
and (xv) such other information, financial studies, analyses and investigations
and financial, economic and market criteria as Sandler O'Neill considered
relevant. In connection with rendering its opinion, Sandler O'Neill was not
asked to, and did not solicit indications of interest in a potential transaction
from other third parties.
In performing its reviews and analyses, Sandler O'Neill assumed and relied
upon, without independent verification, the accuracy and completeness of all the
financial information, analyses and other information that was publicly
available or otherwise furnished to, reviewed by or discussed with it, and
Sandler O'Neill does not assume any responsibility or liability therefor.
Sandler O'Neill did not make an independent evaluation or appraisal of the
specific assets, the collateral securing assets or the liabilities of New York
Bancorp or North Fork or any of their respective subsidiaries, or the
collectibility of any such assets, nor was it furnished with any such
evaluations or appraisals (relying, where relevant, on the analyses and
estimates of New York Bancorp and North Fork). With respect to the information
regarding potential future financial performance provided by each company's
management, Sandler O'Neill assumed that they have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
respective managements of the respective future financial performances of New
York Bancorp and North Fork and that such performances will be achieved. Sandler
O'Neill also assumed that there has been no material change in New York
Bancorp's or North Fork's assets, financial condition, results of operations,
business or prospects since June 30, 1997, the date of the last financial
statements noted above, that New York Bancorp and North Fork will remain as
going concerns for all periods relevant to its analyses, that the Merger will be
accounted for as a pooling of interests and that the conditions precedent in the
Merger Agreement are not waived.
In connection with rendering the Sandler Fairness Opinion, Sandler O'Neill
confirmed the appropriateness of its reliance on the analyses used to render the
Sandler October Opinion by performing procedures to
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update certain of such analyses and by reviewing the assumptions upon which such
analyses were based and the factors considered in connection therewith.
Under the Sandler O'Neill Agreement, New York Bancorp has agreed to pay
Sandler O'Neill a transaction fee in connection with the Merger, a substantial
portion of which is contingent upon the consummation of the Merger. Under the
terms of the Sandler O'Neill Agreement, New York Bancorp has agreed to pay
Sandler O'Neill a transaction fee equal to 0.50% of the aggregate transaction
price, less $300,000, of which 25% has been paid and the remainder is payable
upon closing of the transaction. Sandler O'Neill has also received a fee of
$100,000 for rendering its fairness opinion, which amount will be credited
against the balance of the transaction fee which will be payable to Sandler
O'Neill. New York Bancorp has also agreed to reimburse Sandler O'Neill for its
reasonable out-of-pocket expenses incurred in connection with its engagement and
to indemnify Sandler O'Neill and its affiliates and their respective partners,
directors, officers, employees, agents, and controlling persons against certain
expenses and liabilities, including liabilities under securities laws. It is
expected that Sandler O'Neill will act as one of the underwriters in connection
with the offering of the New York Bancorp Treasury Stock and, in connection
therewith, will receive customary underwriting discounts and commissions and
will be indemnified by New York Bancorp (and following consummation of the
Merger, by North Fork) against certain liabilities.
Sandler O'Neill has in the past provided certain other investment banking
services to New York Bancorp and has received its customary compensation for
such services. In the ordinary course of its business, Sandler O'Neill may
actively trade the debt and/or equity securities of New York Bancorp and North
Fork and their respective affiliates for its own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.
Keefe, Bruyette & Woods, Inc. On October 5, 1997, at a meeting of the New
York Bancorp Board held to evaluate the proposed Merger, KBW delivered to the
New York Bancorp Board an oral opinion (which opinion was subsequently confirmed
by delivery of a written opinion, dated October 7, 1997) to the effect that, as
of the date of such opinion and based upon and subject to certain matters stated
therein, the Exchange Ratio was fair, from a financial point of view, to the
holders of the New York Bancorp Common Stock.
KBW has delivered to the New York Bancorp Board its updated written opinion
dated the date of this Joint Proxy Statement/Prospectus to the effect that as of
such date the Exchange Ratio is fair, from a financial point of view, to the
holders of New York Bancorp Common Stock. KBW's opinion is addressed to the New
York Bancorp Board and does not constitute a recommendation as to how any
stockholder of New York Bancorp should vote with respect to the Merger
Agreement.
THE FULL TEXT OF THE OPINION OF KBW, WHICH SETS FORTH A DESCRIPTION OF THE
PROCEDURES FOLLOWED, ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITS ON THE
REVIEW UNDERTAKEN, IS ATTACHED TO THIS JOINT PROXY STATEMENT/PROSPECTUS AS ANNEX
E AND IS INCORPORATED HEREIN BY REFERENCE. STOCKHOLDERS ARE URGED TO READ THE
OPINION IN ITS ENTIRETY. THE FOLLOWING SUMMARY OF THE OPINION IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION.
In rendering its opinion, KBW (i) reviewed, among other things, the Merger
Agreement, Annual Reports to stockholders and Annual Reports on Form 10-K of New
York Bancorp and Annual Reports on Form 10-K of North Fork for the four years
ended December 31, 1996, certain interim reports to stockholders and Quarterly
Reports on Form 10-Q of New York Bancorp and Quarterly Reports on Form 10-Q of
North Fork and certain internal financial analyses and forecasts for New York
Bancorp prepared by management; (ii) held discussions with members of senior
management of New York Bancorp and North Fork regarding past and current
business operations, regulatory relationships, financial condition and future
prospects of the respective companies; (iii) compared certain financial and
stock market information for New York Bancorp and North Fork with similar
information for certain other companies the securities of which are publicly
traded; (iv) reviewed the financial terms of certain recent business
combinations in the banking industry; and (v) performed such other studies and
analyses as it considered appropriate.
In conducting its review and arriving at its opinion, KBW relied upon and
assumed the accuracy and completeness of all of the financial and other
information provided to it or publicly available, and KBW did
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not attempt to verify such information independently. KBW relied upon the
management of New York Bancorp as to the reasonableness and achievability of the
financial and operating forecasts and projections (and assumptions and bases
therefor) provided to KBW and assumed that such forecasts and projections
reflected the best available estimates and judgments of such management and that
such forecasts and projections will be realized in the amounts and in the time
periods estimated by such management. KBW also assumed, without independent
verification, that the aggregate allowances for loan losses for New York Bancorp
and North Fork are adequate to cover such losses. KBW did not make or obtain any
evaluations or appraisals of the property of New York Bancorp or North Fork, nor
did KBW examine any individual credit files.
The following is a summary of the material financial analyses employed by
KBW in connection with providing its oral opinion to the New York Bancorp Board
on October 5, 1997 (as confirmed in its written opinion dated October 7, 1997).
(a) Financial Summary of the North Fork Offer. KBW calculated multiples
which were based on the assumed per share purchase price of $36.15 (derived by
multiplying the Exchange Ratio of 1.19 by $30.38, the last reported sale price
for the North Fork Common Stock on October 3, 1997. New York Bancorp's June 30,
1997 stated and tangible book value was $7.73, and its 1997 and 1998 earnings
per share estimates (provided by New York Bancorp) were $2.25 and $2.34 per
share, respectively, and its trailing 12 months (June 30, 1996 to June 30, 1997)
earnings per share was $1.88. Based on this data, the price to stated and fully
diluted tangible book value multiple was 4.68 times, and the price to the 1997
and 1998 earnings estimates per share was 16.07 and 15.45 times, respectively,
and the multiple of price to the trailing 12 months earnings was 19.23 times.
(b) Analysis of Selected Merger Transactions. KBW reviewed certain
financial data related to a set of recent comparable bank and thrift holding
company acquisitions in the New York region, nationwide transactions of high
performing thrifts, and nationwide thrifts with transaction values greater than
$100 million.
KBW calculated an average of the New York comparable group's multiple of
price to the targets' earnings (trailing 12 months) of 16.68 times compared to a
multiple of 19.23 times for the Merger; an average premium to the targets'
stated book value of 158% compared to a premium of 468% associated with the
Merger; an average premium to the targets' tangible book value of 162% compared
to a premium of 468% associated with the Merger; an average premium to the
targets' core deposits (net of tangible equity) of 8.34% compared to 38.00%
associated with the Merger and an average price to assets of 14.59% compared to
24.65% associated with the Merger.
For the nationwide transactions of high performing thrifts, KBW calculated
an average multiple of price to the targets' earnings (trailing 12 months) of
12.57 times compared to a multiple of 19.23 times associated with the Merger; an
average premium to the targets' stated book value of 180% compared to a premium
of 468% associated with the Merger; an average premium to the targets' tangible
book value of 188% compared to a premium of 468% associated with the Merger; an
average premium to the targets' core deposits (net of tangible equity) of 15.30%
compared to 38.00% associated with the Merger; and an average price to assets of
19.84% compared to 24.65% associated with the Merger.
For the nationwide thrift transactions, KBW calculated an average multiple
of price to the targets' earnings (trailing 12 months) of 21.55 times compared
to a multiple of 19.23 times associated with the Merger; an average premium to
the targets' stated book value of 182% compared to a premium of 468% associated
with the Merger; an average premium to the targets' tangible book value of 194%
compared to a premium of 468% associated with the Merger; an average premium to
the targets' core deposits (net of tangible equity) of 24.19% compared to 38.00%
associated with the Merger and an average price to assets of 16.31% compared to
24.65% associated with the Merger.
No company or transaction used as a comparison in the above analysis is
identical to New York Bancorp, North Fork or the Merger. Accordingly, an
analysis of the results of the foregoing is not mathematical; rather, it
involves complex considerations and judgments concerning differences in
financial and operating character-
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istics of the companies and other factors that could affect the public trading
value of the companies to which they are being compared.
(c) Selected Peer Group Analysis. KBW compared the financial performance
and market performance of North Fork based on various financial measures of
earnings performance, operating efficiency, capital adequacy and asset quality
and various measures of market performance, including market/book values, price
to earnings and dividend yields to those of a group of comparable holding
companies. For purposes of such analysis, the financial information used by KBW
was as of and for the quarter ending June 30, 1997 and the market price
information was as of October 6, 1997. The companies in the peer group were
nationwide banks which had total assets ranging from approximately $1 billion to
$5 billion.
KBW's analysis showed the following concerning North Fork and New York
Bancorp's financial performance: that its return on equity on an annualized
basis was 24.83% and 32.37%, respectively, compared with an average of 16.66%
for the peer group; that its return on assets on an annualized basis was 1.82%
and 1.64%, respectively, compared with an average of 1.43% for the group; that
its net interest margin on an annualized basis was 4.67% and 3.91%,
respectively, compared with an average of 4.64%; that its efficiency ratio on an
annualized basis was 38.01% and 34.36%, respectively, compared with an average
of 59.29%; that its equity to assets ratio was 8.87% and 5.08%, respectively,
compared to an average of 8.72%; that its ratio of nonperforming assets to total
loans and other real estate owned was 0.98% and 1.77% respectively, compared to
an average of 0.65%; that its ratio of loan loss reserve to nonperforming loans
was 180% and 58%, respectively, compared to an average of 362%.
KBW's analysis further showed the following concerning North Fork and New
York Bancorp's market performance: that North Fork and New York Bancorp's price
to earnings multiple based on 1997 estimated earnings was 17.36 and 13.09 times,
respectively, compared to an average for the group of 18.07 times; that their
price to book value multiples were 3.97 and 3.95 times, respectively, compared
to a group average of 2.95 times; and their dividend yields were 1.98% and
1.97%, respectively, compared to an average for the group of 1.98%. For purposes
of the above calculations, all earnings estimates are based upon the published
estimates of KBW's equity research department for North Fork and management's
estimates for New York Bancorp.
(d) Contribution Analysis. KBW analyzed the relative contribution of each
of North Fork and New York Bancorp to the pro forma balance sheet and income
statement items of the combined entity, including assets, common equity, market
capitalization, deposits and estimated 1998 net income. KBW compared the
relative contribution of such balance sheet and income statement items with the
estimated pro forma ownership of the combined entity of 29% for New York Bancorp
stockholders based on an Exchange Ratio of 1.19 and the assumption that New York
Bancorp will reissue approximately 800,000 shares of New York Bancorp Common
Stock before the Effective Time. The contribution showed that New York Bancorp
would contribute approximately 33% of the combined assets, 27% of the combined
common equity (assuming the reissuance of shares), 27% of the combined deposits,
and 28% of the combined estimated 1998 net income.
(e) Financial Impact Analysis. KBW performed pro forma merger analysis
that combined projected income statement and balance sheet information.
Assumptions regarding the accounting treatment, acquisition adjustments, cost
savings, revenue enhancements and treatment of New York Bancorp employee stock
options were used to calculate the financial impact that the Merger would have
on certain projected financial results of North Fork. This analysis indicated
that the Merger is expected to increase estimated earnings in 1998 (excluding
the effect of a non-recurring merger and restructuring charge to be incurred in
connection with the Merger), increase estimated return on equity in 1998 and
decrease the fully diluted and tangible book value and the leverage ratio. This
analysis was based on analyst and the respective managements' estimates of North
Fork and New York Bancorp's 1998 earnings per share and on North Fork
management's estimates of expected cost savings, revenue enhancements and a
non-recurring merger and restructuring charge to be realized or incurred by
North Fork in connection with the Merger. These projections were discussed with
the management of each of North Fork and New York Bancorp. The actual results
which will be achieved by North Fork following the Merger will vary from the
projected results, and the variations may be material.
(f) Discounted Cash Flow Analysis. KBW estimated the present value of the
future cash flows that would accrue to a holder of a share of New York Bancorp
Common Stock assuming the stockholder held the
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stock through the year 2002 and then sold it at the end of year 2002. The
analysis was based on several assumptions, including an earnings per share of
$2.34 in 1998 and an 8% earnings per share growth rate. A 30% dividend payout
ratio was assumed for New York Bancorp through the year 2002. A terminal value
was calculated for 2002 by multiplying New York Bancorp's projected 2002
earnings by a price/earnings multiple of 14 times trailing earnings. The
terminal valuation and the estimated dividends were discounted at a rate of 12%,
producing a present value of $28.21. KBW also presented a table showing the
foregoing analysis with a range of discount rates from 12% to 14% and a range of
price-to-earnings multiples of 12x to 20x, resulting in a range of present
values for a share of New York Bancorp Common Stock of $22.61 to $39.05. These
values were determined by adding (i) the present value of the estimated future
dividend stream that New York Bancorp could generate over the period beginning
January 1998 and ending in December 2002, and (ii) the present value of the
"terminal value" of the New York Bancorp Common Stock.
KBW repeated this analysis using an earnings growth rate of 10% for New
York Bancorp. The result of this analysis was a present value of $30.24 at a 14
times trailing earnings terminal multiple and a 12% discount rate. KBW also
presented a table showing the foregoing analysis with a range of discount rates
from 12% to 14% and a range of price-to-earnings multiples of 12x to 20x,
resulting in a range of present values for a share of New York Bancorp Common
Stock of $24.22 to $41.90.
KBW also estimated the present value of future cash flows that would accrue
to a holder of a share of North Fork Common Stock pro forma for the Merger,
assuming the stockholder held the stock through the year 2002 and then sold it
at the end of 2002. This analysis was based on several assumptions, including a
pro forma 1998 EPS of $2.09. A 30% dividend payout ratio was assumed for North
Fork pro forma through the year 2002. A terminal value was calculated for 2002
by multiplying North Fork's pro forma projected 2002 earnings by a
price/earnings multiple of 16 times trailing earnings. The terminal valuation
and the estimated dividends were discounted at a rate of 12%. This analysis was
also applied to the New York Bancorp equivalent using the 1.19 Exchange Ratio.
The result of this analysis was present values of $28.50 and $33.91,
respectively, at a 16 times trailing earnings terminal multiple and a 12%
discount rate. KBW also presented a table showing the New York Bancorp
equivalent analysis with a range of discount rates from 12% to 14% and a range
of price-to-earnings multiples of 12x to 20x, resulting in a range of present
values for the New York Bancorp equivalent of $24.10 to $41.61.
KBW repeated this analysis assuming that all common stock which produced
capital in excess of a 7.5% leverage ratio in 1998 and above 7% from 1999 to
2002 was repurchased, giving a North Fork pro forma of $2.11 EPS in 1998. The
same analysis was applied to the New York Bancorp equivalent using the 1.19
Exchange Ratio. The result of this analysis was present values of $31.27 and
$37.21, respectively, at a 16 times trailing earnings terminal multiple and a
12% discount rate. KBW also presented a table showing the New York Bancorp
equivalent analysis with a range of discount rates from 12% to 14% and a range
of price-to-earnings multiples of 12x to 20x, resulting in a range of present
values for the New York Bancorp equivalent of $26.41 to $45.70.
KBW stated that the discounted cash flow analysis is a widely-used
valuation methodology but noted that it relies on numerous assumptions,
including asset and earnings growth rates, dividend payout rates, terminal
values and discount rates. The analysis did not purport to be indicative of the
actual values or expected values of New York Bancorp Common Stock.
(g) Other Analysis. KBW also reviewed selected investment research
reports, earnings estimates, historical stock price performance relative to the
S&P 500 and to an index of bank and thrift stocks, and other financial data for
New York Bancorp and North Fork.
The summary contained herein provides a description of the material
analyses prepared by KBW in connection with the rendering of its oral opinion to
the New York Bancorp Board on October 5, 1997 (as confirmed in its written
opinion dated October 7, 1997). The summary set forth above does not purport to
be a complete description of the analyses performed by KBW in connection with
the rendering of its opinion. The preparation of a fairness opinion is not
necessarily susceptible to partial analysis or summary description. KBW believes
that its analyses and the summary set forth above must be considered as a whole
and that selecting portions of its analyses without considering all analyses, or
selecting part of the above summary,
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without considering all factors and analyses, would create an incomplete view of
the processes underlying the analyses set forth in KBW's presentations and
opinion. The ranges of valuations resulting from any particular analysis
described above should not be taken to be KBW's view of the actual value of New
York Bancorp and North Fork. The fact that any specific analysis has been
referred to in the summary above is not meant to indicate that such analysis was
given greater weight than any other analyses.
In performing its analyses, KBW made numerous assumptions with respect to
industry performance, general business and economic conditions and other
matters, many of which are beyond the control of New York Bancorp and North
Fork. The analyses performed by KBW are not necessarily indicative of actual
values or actual future results which may be significantly more or less
favorable than suggested by such analyses. Such analyses were prepared solely as
part of KBW's analysis of the fairness, from a financial point of view, of the
Exchange Ratio in the Merger. These analyses were provided to the New York
Bancorp Board in connection with the delivery of KBW's opinion. The analyses do
not purport to be appraisals or to reflect the prices at which a company
actually might be sold or the prices at which any securities may trade at the
present time or at any time in the future. In addition, as described above,
KBW's opinion, along with its presentation to the New York Bancorp Board, was
just one of many factors taken into consideration by the New York Bancorp Board
in unanimously approving the Merger Agreement.
In connection with rendering its opinion dated the date of this Joint Proxy
Statement/Prospectus, KBW confirmed the appropriateness of its reliance on the
analyses used to render its October 5, 1997 oral opinion (as confirmed in its
written opinion dated October 7, 1997) by performing procedures to update
certain of such analyses and by reviewing the assumptions upon which such
analyses were based and the factors considered in connection therewith.
KBW as part of its investment banking business, is continually engaged in
the valuation of banking businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. As specialists in the
securities of banking companies, KBW has experience in, and knowledge of, the
valuation of banking enterprises. In the ordinary course of its business as a
broker-dealer, KBW may, from time to time, purchase securities from, and sell
securities to, New York Bancorp and North Fork and as a market maker in
securities KBW may from time to time have a long or short position in, and buy
or sell, debt or equity securities of New York Bancorp and North Fork for KBW's
own account and for the accounts of its customers.
New York Bancorp paid KBW at the signing of the engagement agreement
between KBW and New York Bancorp a cash fee of $375,000. An additional cash fee
of $325,000 was paid to KBW upon the mailing of this Joint Proxy
Statement/Prospectus. Pursuant to the KBW engagement agreement, New York Bancorp
also agreed to reimburse KBW for reasonable out-of-pocket expenses and
disbursements incurred in connection with its retention and to indemnify KBW
against certain liabilities, including liabilities under the federal securities
laws. It is expected that KBW will act as one of the underwriters in connection
with the offering of the New York Bancorp Treasury Stock and, in connection
therewith, will receive customary underwriting discounts and commissions and
will be indemnified by New York Bancorp (and following consummation of the
Merger, by North Fork) against certain liabilities.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of New York Bancorp's management and the New York Bancorp
Board may be deemed to have certain interests in the Merger that are in addition
to their interests as stockholders of New York Bancorp generally. The New York
Bancorp Board was aware of these interests and considered them, among other
matters, in approving the Merger Agreement and the transactions contemplated
thereby.
Board of Directors. Pursuant to the terms of the Merger Agreement, at the
Effective Time North Fork will cause the North Fork Board to include Patrick E.
Malloy, III (or any other person designated by the New York Bancorp Board and
acceptable to North Fork).
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Consulting Agreement. Pursuant to the terms of the Merger Agreement, at
the Effective Time, North Fork will enter into a consulting agreement (the
"Consulting Agreement") with Patrick E. Malloy, III. The Consulting Agreement
will (i) be for a period of one year commencing on the Effective Time, (ii)
provide for an annual fee of $750,000 for services to be rendered by Mr. Malloy,
and (iii) contain a non-compete provision for the term of the Consulting
Agreement.
Options. The Merger Agreement provides that at the Effective Time, each
New York Bancorp Option which was granted under any of the New York Bancorp
Option Plans will be converted automatically into the right to receive such
number of shares (rounded to the nearest whole share) of North Fork Common Stock
as is equal in value (determined by valuing each share of North Fork Common
Stock at the Option Share Average Closing Price) to the amount by which (i) the
product of the number of shares of New York Bancorp Common Stock subject to such
option, the Exchange Ratio and the Option Share Average Closing Price exceeds
(ii) the aggregate exercise price of such option, provided, that notwithstanding
the foregoing, at the Effective Time, each outstanding New York Bancorp Option
with respect to which the holder was issued either OSRs under the 1993 Incentive
Plan or Limited Rights under the 1990 Incentive Plan will be converted
automatically into the right to receive the greater of (x) the number of shares
of North Fork Common Stock into which such option would be converted pursuant to
the foregoing formula, and (y) such number of shares (rounded to the nearest
whole share) of North Fork Common Stock as is equal in value (determined by
valuing each share of North Fork Common Stock at the Option Share Average
Closing Price) to the amount of cash which the holder of such New York Bancorp
Option would otherwise be entitled to receive upon exercise of such OSRs or
Limited Rights, as the case may be, at the Effective Time pursuant to the terms
of the applicable New York Bancorp Option Plan and such holder's option
agreement. The "Option Share Average Closing Price" means the average of the
last reported sale prices per share of North Fork Common Stock on the NYSE for
the 20 consecutive NYSE trading days ending on the fifth business day prior to
the date on which the last of all regulatory approvals required to consummate
the transactions contemplated by the Merger Agreement (including the Merger and
the Subsidiary Bank Merger) are obtained, without regard to any requisite
waiting periods in respect thereof. As a result of the Merger, New York Bancorp
Options to purchase a total of 256,416 shares of New York Bancorp Common Stock,
which would otherwise not be vested at the Effective Time, will be converted at
the Effective Time into the right to receive shares of North Fork Common Stock.
See "THE MERGER -- Exchange Ratio."
The directors and executive officers of New York Bancorp hold, as of the
date of this Joint Proxy Statement/Prospectus, New York Bancorp Options to
purchase an aggregate of 1,300,739 shares of New York Bancorp Common Stock.
Assuming (i) all of such New York Bancorp Options remain unexercised at the
Effective Time, (ii) all holders of New York Bancorp Options having OSRs or
Limited Rights receive shares of North Fork Common Stock as provided in clause
(x) of the preceding paragraph, and (iii) an Option Share Average Closing Price
of $32.8125 (the last reported sale price of North Fork Common Stock on the NYSE
on December 16, 1997, the most recent practicable date prior to the date of this
Joint Proxy Statement/Prospectus), the directors and executive officers of New
York Bancorp would be entitled to receive at the Effective Time shares of North
Fork Common Stock with an aggregate value of $38,024,732.
Employee Retention/Severance Program. As part of the Merger, New York
Bancorp adopted an employee retention/severance program to help ensure that key
employees remain in the employ of New York Bancorp pending consummation of the
Merger. Pursuant to the program, certain officers of New York Bancorp who remain
in their respective capacities until the Effective Time will be entitled to
retention bonuses, in amounts ranging from six months to one year of
compensation, based on the sum of such officers' respective fiscal 1998 salary
and fiscal 1997 bonus. The retention bonuses will be paid by New York Bancorp
immediately prior to the Effective Time, subject, in certain cases, to a period
of continued employment with North Fork of up to three or six months following
the Effective Time, in which case the retention bonus will be paid by North Fork
at the end of such period. The executive officers of New York Bancorp would be
entitled to receive an aggregate of $3,338,965 pursuant to this program.
Pursuant to the retention/severance program, all officers of New York Bancorp
who are not included in the retention bonus program and all other employees of
New York Bancorp will be entitled to severance pay in the case of termination of
their employment within one year of the Effective Time, in amounts ranging from
one month to one year of
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compensation, based on their respective service time and the sum of such
officers' or employees' respective fiscal 1998 salary and fiscal 1997 bonus.
Annual Incentive Bonus Plan. Pursuant to New York Bancorp's annual
incentive bonus plan, certain employees of New York Bancorp, including the
executive officers of New York Bancorp, are entitled to bonus compensation based
upon the achievement of personal and corporate performance goals established at
the beginning of the applicable year. Pursuant to the Merger Agreement, New York
Bancorp may accrue under its annual incentive bonus plan an aggregate maximum
amount of $2.16 million and may pay such bonuses to its officers from and after
January 1, 1998 but not later than immediately prior to the Effective Time.
Indemnification; Insurance. The Merger Agreement provides that, in the
event of any threatened or actual claim, action, suit, proceeding or
investigation in which any person who is or has been a director, officer or
employee of New York Bancorp is, or is threatened to be, made a party based in
whole or in part on, or pertaining to (i) the fact that such person was a
director, officer or employee of New York Bancorp, or (ii) the Merger Agreement
or the transactions contemplated thereby, North Fork will, subject to the
conditions set forth in the Merger Agreement, indemnify such person to the
fullest extent permitted by law against any liability or expense incurred in
connection with any such claim or proceeding. In addition, pursuant to the
Merger Agreement, North Fork will be required to maintain directors' and
officers' liability insurance for the benefit of persons serving as officers and
directors of New York Bancorp immediately prior to the Effective Time for a
period of three (3) years following the Effective Time with respect to acts or
omissions occurring prior to the Effective Time which were committed by such
officers and directors in their capacity as such, provided that in no event
shall North Fork be required to expend on an annual basis more than 200% of the
amount which New York Bancorp currently expends for such insurance.
EMPLOYEE MATTERS
Pursuant to the terms of the Merger Agreement, employees of New York
Bancorp will become entitled, as soon as practicable following the Merger, to
participate in the benefit plans maintained by North Fork on the same terms and
conditions as applicable to similarly situated employees of North Fork and will
be granted credit for service with New York Bancorp for certain purposes under
certain of such plans. Pursuant to the terms of the Merger Agreement, North Fork
has agreed to honor in accordance with their terms, certain compensation
agreements and arrangements between New York Bancorp and certain of its
directors, officers and employees. North Fork intends to continue each of the
existing New York Bancorp employee benefit plans to which there exists a
corresponding North Fork employee benefit plan until the date on which the
inclusion of New York Bancorp employees in North Fork's corresponding plan
occurs.
CONVERSION OF SHARES; PROCEDURES FOR EXCHANGE OF CERTIFICATES; FRACTIONAL SHARES
New York Bancorp. As promptly as practicable after the Effective Time, and
in no event more than three business days thereafter, a bank or trust company
selected by North Fork and reasonably satisfactory to New York Bancorp, acting
in the capacity of exchange agent (the "Exchange Agent"), will mail to each
former holder of record of New York Bancorp Common Stock a form of letter of
transmittal, together with instructions for the exchange of such holder's
certificates representing shares of New York Bancorp Common Stock for
certificates representing shares of North Fork Common Stock and cash in lieu of
fractional shares.
HOLDERS OF NEW YORK BANCORP COMMON STOCK SHOULD NOT SEND IN THEIR
CERTIFICATES UNTIL THEY RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS
FROM THE EXCHANGE AGENT, AND SHOULD NOT RETURN SUCH STOCK CERTIFICATES WITH THE
ENCLOSED PROXY.
Upon surrender to the Exchange Agent of one or more certificates
representing shares of New York Bancorp Common Stock, together with a properly
completed letter of transmittal, there will be issued and mailed to the holder
of New York Bancorp Common Stock surrendering such items a certificate or
certificates representing the number of shares of North Fork Common Stock to
which such holder is entitled, if any, and, where applicable, a check for the
amount representing any fractional share determined in the manner
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described below, without interest. The New York Bancorp certificate or
certificates so surrendered will be cancelled.
No dividend or other distribution declared after the Effective Time with
respect to North Fork Common Stock will be paid to the holder of any
unsurrendered New York Bancorp certificate until the holder surrenders such
certificate, at which time the holder will be entitled to receive all previously
withheld dividends and distributions, without interest.
After the Effective Time, there will be no transfers on the stock transfer
books of New York Bancorp of shares of New York Bancorp Common Stock issued and
outstanding immediately prior to the Effective Time. If certificates
representing shares of New York Bancorp Common Stock are presented for transfer
after the Effective Time, they will be cancelled and exchanged for certificates
representing shares of North Fork Common Stock.
None of the Exchange Agent, North Fork or New York Bancorp, or any other
person, will be liable to any former holder of New York Bancorp Common Stock for
any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
If a certificate for New York Bancorp Common Stock has been lost, stolen or
destroyed, the Exchange Agent will issue the consideration properly payable in
accordance with the Merger Agreement upon receipt of appropriate evidence as to
such loss, theft or destruction, appropriate evidence as to the ownership of
such certificate by the claimant, and appropriate and customary indemnification.
No fractional shares of North Fork Common Stock will be issued in the
Merger. Instead, the Merger Agreement provides that each holder of shares of New
York Bancorp Common Stock exchanged pursuant to the Merger who would otherwise
have been entitled to receive a fraction of a share of North Fork Common Stock
will receive, in lieu thereof, cash in an amount equal to such fractional part
of a share of North Fork Common Stock multiplied by the average of the last
reported sale prices of North Fork Common Stock on the NYSE for the five trading
days immediately preceding the Effective Time. No such holder will be entitled
to dividends, voting rights or any other rights as a stockholder in respect of
any fractional share which such holder would otherwise have been entitled to
receive.
North Fork. Shares of North Fork capital stock (including North Fork
Common Stock) issued and outstanding immediately prior to the Effective Time
will remain issued and outstanding and be unaffected by the Merger, and holders
of such stock will not be required to exchange the certificates representing
such stock or take any other action by reason of the consummation of the Merger.
CONDITIONS TO THE MERGER
The respective obligations of North Fork and New York Bancorp to effect the
Merger are subject to the satisfaction of the following conditions at or prior
to the Effective Time: (i) approval of the Merger Agreement by the affirmative
votes of the holders of a majority of the outstanding shares of New York Bancorp
Common Stock and North Fork Common Stock entitled to vote thereon; (ii) the
shares of North Fork Common Stock issuable to holders of New York Bancorp Common
Stock pursuant to the Merger shall have been authorized for listing on the NYSE,
subject to official notice of issuance; (iii) approval of the Merger Agreement
and the transactions contemplated thereby (including the Merger and the
Subsidiary Bank Merger) by the appropriate governmental authorities (all such
governmental authorities being referred to as the "Governmental Entities"), and
the expiration of any statutory waiting periods in respect thereof
(collectively, the "Requisite Regulatory Approvals") (see "-- Regulatory
Approvals Required for the Merger" below); (iv) the Registration Statement of
which this Joint Proxy Statement/Prospectus forms a part will have become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement will have been issued and no
proceedings for that purpose will have been initiated or threatened by the
Commission; (v) no order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition (an "Injunction")
which prohibits the consummation of the Merger or any of the other transactions
contemplated by the Merger Agreement will be in effect and (vi) no
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statute, rule, regulation, order, injunction or decree will have been enacted,
entered, promulgated or enforced by any Governmental Entity which prohibits,
restricts or makes illegal consummation of the Merger.
The obligations of North Fork to effect the Merger are further subject to
the satisfaction, or waiver by North Fork, of the following conditions: (i)(x)
certain representations and warranties of New York Bancorp contained in the
Merger Agreement shall be true and correct in all material respects as of the
date of the Merger Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as though made on
and as of the Closing Date; provided, however, that for purposes of determining
the satisfaction of the condition described in this clause (i)(x), such
representations and warranties will be deemed to be true and correct unless the
failure or failures of such representations and warranties to be so true and
correct, individually or in the aggregate, has had or would have a Material
Adverse Effect (as defined below) on New York Bancorp and (y) certain other
representations and warranties of New York Bancorp contained in the Merger
Agreement shall be true and correct in all material respects as of the date of
the Merger Agreement and (except to the extent that such representations and
warranties relate to an earlier date) as of the Closing Date as though made on
and as of the Closing Date; (ii) New York Bancorp shall have duly performed in
all material respects all obligations required to be performed by it under the
Merger Agreement at or prior to the Closing Date; (iii) no proceeding initiated
by a Governmental Entity seeking an Injunction shall be pending; (iv) North Fork
shall have received an opinion of its counsel, in form and substance reasonably
satisfactory to North Fork, dated as of the Effective Time, to the effect that,
on the basis of facts, representations and assumptions set forth in such
opinion, which are consistent with the state of facts existing at the Effective
Time, the Merger and the Subsidiary Bank Merger will be treated as
reorganizations within the meaning of Section 368(a) of the Code and that,
accordingly, for federal income tax purposes no gain or loss will be recognized
by North Fork, New York Bancorp, North Fork Bank or Home Federal as a result of
the Merger and Subsidiary Bank Merger (except to the extent any income may be
required to be recognized due to the recapture of Home Federal's bad debt
reserves as a result of the Subsidiary Bank Merger) (see "-- Certain Federal
Income Tax Consequences of the Merger" below); and (v) North Fork shall have
received a letter addressed to North Fork, dated as of the Effective Time, from
North Fork's independent public accountants to the effect that the Merger will
qualify for pooling of interests accounting treatment.
The Merger Agreement defines a "Material Adverse Effect," when applied to a
party to the Merger Agreement, as a material adverse effect on (i) the business,
results of operations or financial condition of such party and its subsidiaries
taken as whole, other than any such effect attributable to or resulting from a
change in law, rule, regulation, generally accepted accounting principles,
regulatory accounting principles, or the prevailing level of interest rates,
which in each case affects banking institutions or their holding companies
generally, except to the extent any such condition or change affects the
referenced party to a materially greater extent than banking institutions or
their holding companies generally or (ii) the ability of such party to
consummate the transactions contemplated by the Merger Agreement.
The obligations of New York Bancorp to effect the Merger are further
subject to the satisfaction, or waiver by New York Bancorp of the following
conditions: (i)(x) certain representations and warranties of North Fork
contained in the Merger Agreement shall be true and correct in all material
respects as of the date of the Merger Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date; provided, however, that for
purposes of determining the satisfaction of the condition described in this
clause (i)(x), such representations and warranties will be deemed to be true and
correct unless the failure or failures of such representations and warranties to
be so true and correct, individually or in the aggregate, has had or would have
a Material Adverse Effect on North Fork and (y) certain other representations
and warranties of North Fork contained in the Merger Agreement shall be true and
correct in all material respects as of the date of the Merger Agreement and
(except to the extent that such representations and warranties relate to an
earlier date) as of the Closing Date as though made on and as of the Closing
Date; (ii) North Fork shall have performed in all material respects all
obligations required to be performed by it under the Merger Agreement at or
prior to the Effective Time; (iii) no proceeding initiated by any Governmental
Entity seeking an Injunction shall be pending; (iv) New York Bancorp shall have
received from its counsel an opinion, in form and substance
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reasonably satisfactory to New York Bancorp, dated as of the Closing Date, to
the effect that on the basis of facts, representations and assumptions set forth
in such opinion which are consistent with the state of facts existing at the
Closing Date, the Merger will be treated as a reorganization within the meaning
of Section 368(a) of the Code and that, accordingly, for federal income tax
purposes (A) no gain or loss will be recognized by New York Bancorp as a result
of the Merger; and (B) no gain or loss will be recognized by the stockholders of
New York Bancorp who exchange all of their New York Bancorp Common Stock solely
for North Fork Common Stock pursuant to the Merger (except with respect to cash
received in lieu of a fractional share interest in North Fork Common Stock and
the payment of any real property transfer taxes, if any, on behalf of
stockholders of New York Bancorp) (see "-- Certain Federal Income Tax
Consequences of the Merger" below); and (v) New York Bancorp shall have received
a letter addressed to North Fork, dated as of the Effective Time, from North
Fork's independent public accountants to the effect that the Merger will qualify
for pooling of interests accounting treatment.
No assurance can be provided as to when, or whether, the regulatory
consents and approvals necessary to consummate the Merger will be obtained or
whether all of the other conditions precedent to the Merger will be satisfied or
waived by the party permitted to do so. See "-- Regulatory Approvals Required
for the Merger" below. If the Merger is not effected on or before September 30,
1998, the Merger Agreement may be terminated by a vote of a majority of the
Board of Directors of either North Fork or New York Bancorp unless the failure
to effect the Merger by such date is due to the breach of the Merger Agreement
by the party seeking to terminate the Merger Agreement.
REGULATORY APPROVALS REQUIRED FOR THE MERGER
Consummation of the Merger and the Subsidiary Bank Merger is subject to a
number of regulatory approvals and consents.
The Subsidiary Bank Merger is subject to the prior approval of the FDIC
under the Bank Merger Act. In reviewing applications under the Bank Merger Act,
the FDIC must consider, among other factors, the financial and managerial
resources and future prospects of the existing and proposed institutions, and
the convenience and needs of the communities to be served. In addition, the FDIC
may not approve a transaction that will result in a monopoly or be in
furtherance of any combination or conspiracy to monopolize or to attempt to
monopolize the business of banking in any part of the United States, or if its
effect in any section of the country may be substantially to lessen competition
or to tend to create a monopoly, or if it would in any other manner be a
restraint of trade, unless the FDIC finds that the anticompetitive effects of
the transaction are clearly outweighed by the public interests and the probable
effect of the transaction on meeting the convenience and needs of the
communities to be served. Any transaction approved by the FDIC may not be
consummated until 30 days after such approval, during which time the Department
of Justice may challenge such transaction on antitrust grounds and seek the
divestiture of certain assets and liabilities. With the approval of the FDIC and
the Department of Justice, the waiting period may be reduced to no less than 15
days. North Fork filed its application with the FDIC on November 28, 1997, and
the FDIC accepted this application for processing on December 3, 1997.
The Merger is also subject to the prior approval of the Federal Reserve
Board under the BHC Act and regulations of the Federal Reserve Board. In
reviewing applications under the BHC Act, the Federal Reserve Bank will consider
whether the Merger can reasonably be expected to produce benefits to the public
that outweigh possible adverse effects, and will evaluate the financial and
managerial resources of North Fork, including its subsidiaries, and any company
to be acquired, and the effect of the Merger on those resources. North Fork
filed its notice with the Federal Reserve Bank of New York on December 10, 1997.
The Subsidiary Bank Merger is subject to the notification requirements of
the OTS under the Home Owners' Loan Act of 1933, as amended, and OTS regulations
governing merger or conversions by a savings association since a savings bank is
not the resulting institution from the merger. Home Federal filed its
notification with the OTS on November 28, 1997, and the notification was
accepted on December 2, 1997.
In addition, the Subsidiary Bank Merger is also subject to the prior
approval of the New York State Banking Department (the "Banking Department")
under certain provisions of the New York Banking Law
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(the "NYBL"). In determining whether to approve the application for the merger
of Home Federal with and into North Fork Bank, the Banking Department will
consider, among other factors, whether the Subsidiary Bank Merger would be
consistent with adequate or sound banking and would not result in concentration
of assets beyond limits consistent with effective competition, and whether the
Subsidiary Bank Merger would result in such a lessening of competition as to be
injurious to the interest of the public or tend toward monopoly. The Banking
Department will also consider the public interest and the needs and convenience
thereof. Further, it is the policy of the State of New York to ensure the safe
and sound conduct of banking organizations, to conserve assets of banking
organizations, to prevent hoarding of money, to eliminate unsound and
destructive competition among banking organizations, and to maintain public
confidence in the business of banking and protect the public interest and the
interests of depositors, creditors, and stockholders, and such factors will be
considered by the Banking Department in connection with North Fork's
application. North Fork filed its application with the Banking Department on
December 16, 1997.
Under the Community Reinvestment Act of 1977, as amended (the "CRA") and
the comparable provisions of the NYBL, the FDIC and the Banking Department must
also take into account the record of performance of each of North Fork Bank and
Home Federal in meeting the credit needs of the entire community, including low
and moderate income neighborhoods, served by each institution. As part of the
review process, the banking agencies frequently receive comments and protests
from community groups and others.
North Fork is not aware of any other regulatory approvals that would be
required for consummation of the Merger or the Subsidiary Bank Merger, except as
described above. Should any other approvals be required, it is presently
contemplated that such approvals would be sought. There can be no assurance that
any other approvals, if required, will be obtained.
The Merger cannot proceed in the absence of the requisite regulatory
approvals. See "-- Conditions to the Merger" and "-- Waiver and Amendment;
Termination." There can be no assurance that such regulatory approvals will be
obtained, and if obtained, there can be no assurance as to the date of any such
approval. There can likewise be no assurance that the Department of Justice or
the New York State Attorney General will not challenge the Merger or, if such a
challenge is made, as to the result thereof.
CONDUCT OF BUSINESS PENDING THE MERGER
Pursuant to the Merger Agreement, New York Bancorp has agreed that until
the Effective Time, except as provided in the Merger Agreement, the Stock Option
Agreement (as defined below) or with the prior consent of North Fork, New York
Bancorp and its subsidiaries will carry on their respective businesses in the
ordinary course consistent with past practice and consistent with prudent
banking practices. New York Bancorp has agreed to use its reasonable best
efforts to (x) preserve its business organization and that of its subsidiaries
intact, (y) keep available to itself and North Fork the present services of its
and its subsidiaries' employees and (z) preserve for itself and North Fork the
goodwill of its and its subsidiaries' customers and others with whom business
relationships exist.
The Merger Agreement also contains certain restrictions on the conduct of
New York Bancorp's business pending consummation of the Merger. In particular,
the Merger Agreement provides that, except as provided in the Merger Agreement
or with the prior written consent of North Fork, New York Bancorp and its
subsidiaries may not, among other things, (i) solely in the case of New York
Bancorp, declare or pay any dividends on, or make other distributions in respect
of, any of its capital stock, other than normal quarterly dividends in an amount
of no more than $0.15 per share of New York Bancorp Common Stock, (ii)(a)
subject to certain exceptions, split, combine or reclassify any shares of its
capital stock or (b) repurchase, redeem or otherwise acquire (except for the
acquisition of Trust Account Shares and DPC Shares) any shares of the capital
stock of New York Bancorp or any of its subsidiaries or securities convertible
into or exercisable therefor, (iii) subject to certain exceptions, issue,
deliver or sell, or authorize or propose the issuance, delivery or sale of, any
shares of its capital stock or securities convertible into or exchangeable
therefor, (iv) amend its Restated Certificate of Incorporation, By-laws or other
similar governing documents, (v) make any capital expenditures other than those
which are in the ordinary course of business or as
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necessary to maintain existing assets in good repair, and in any event are in an
amount of no more than $250,000 in the aggregate, (vi) enter into any new line
of business other than the expansion of New York Bancorp's consumer and
residential business, (vii) subject to certain exceptions, acquire or agree to
acquire any business or entity or otherwise acquire any assets which would be
material to New York Bancorp, (viii) take any action that is intended or may
reasonably be expected to result in any of its representations and warranties
set forth in the Merger Agreement being or becoming untrue in any material
respect, or in any of the conditions to the Merger not being satisfied, (ix)
change its methods of accounting in effect at June 30, 1997, subject to certain
exceptions, (x)(a) subject to certain exceptions, adopt, amend or terminate
(except as may be required by law) any employee benefit plan or agreement,
arrangement, plan or policy between New York Bancorp or any of its subsidiaries
and any of its current or former directors, officers and employees or (b) except
for normal increases in the ordinary course of business consistent with past
practice or except as required by applicable law, increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by any plan or agreement as in effect as of the date of the
Merger Agreement (including, without limitation, the granting of stock options,
stock appreciation rights, restricted stock, restricted stock units or
performance units or shares), it being agreed that New York Bancorp may accrue
under its current incentive bonus plan an aggregate maximum amount of $2.16
million and may pay such amounts, from and after January 1, 1998 but not later
than immediately prior to the Effective Time, to any officer, (xi) take or cause
to be taken any action that would cause the Merger to fail to qualify (a) for
pooling of interests accounting treatment or (b) as a tax-free reorganization
under Section 368(a) of the Code, provided, however, that nothing contained in
the Merger Agreement will limit the ability of North Fork to exercise its rights
under the Stock Option Agreement, (xii) other than in the ordinary course of
business consistent with past practice, dispose of or encumber or agree to
dispose of or encumber its material assets, properties or other rights or
agreements, (xiii) other than in the ordinary course of business consistent with
past practice, incur any indebtedness for borrowed money, or assume, guarantee,
endorse or otherwise become responsible for the obligations of any other entity,
(xiv) file any application to relocate or terminate the operations of any of its
banking offices, (xv) subject to certain exceptions, invest or commit to invest
in real estate or any real estate development project, (xvi) create, renew,
amend or terminate or give notice to do the same with respect to any material
contract, agreement or lease for goods, services or office space to which New
York Bancorp or any of its subsidiaries is a party or by which New York Bancorp
or any of its subsidiaries or their respective properties is bound, (xvii) other
than in prior consultation with North Fork, restructure or materially change its
investment securities portfolio or its gap position, through purchases, sales or
otherwise, or the manner in which the portfolio is classified or reported, or
(xviii) agree to do any of the foregoing.
New York Bancorp also has agreed in the Merger Agreement that neither it
nor any of its subsidiaries will authorize or permit any of its officers,
directors, employees or agents to directly or indirectly solicit, initiate or
encourage any inquiries relating to, or the making of any proposal which
constitutes, a "takeover proposal" (as defined below), or, except to the extent
legally required for the discharge of the fiduciary duties of the New York
Bancorp Board as advised by such board's counsel, (i) recommend or endorse any
takeover proposal, (ii) participate in any discussions or negotiations, or
provide third parties with any non-public information, relating to any such
inquiry or proposal, or (iii) otherwise facilitate any effort or attempt to make
or implement a takeover proposal, provided that New York Bancorp may communicate
information about any such takeover proposal to its stockholders if, in the
judgment of the New York Bancorp Board, based upon the advice of outside
counsel, such communication is required under applicable law. New York Bancorp
agreed to immediately cease any activities, discussions or negotiations
previously conducted with any parties other than North Fork with respect to any
of the foregoing. New York Bancorp also agreed that it will notify North Fork
immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, New York Bancorp, and will promptly
inform North Fork in writing of the relevant details with respect to the
foregoing. As used in the Merger Agreement, "takeover proposal" means any tender
or exchange offer, proposal for a merger, consolidation or other business
combination involving New York Bancorp or any subsidiary of New York Bancorp or
any proposal or offer to acquire in any manner a substantial equity interest in,
or a substantial portion of the assets of, New York Bancorp or any subsidiary of
New York Bancorp other than the transactions contemplated or permitted by the
Merger Agreement and the Stock Option Agreement.
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Pursuant to the Merger Agreement, North Fork has also agreed that until the
Effective Time, except as provided in the Merger Agreement or with the prior
written consent of New York Bancorp, neither North Fork nor any of its
subsidiaries will (i) solely in the case of North Fork, declare or pay any
dividends on or make any other distributions in respect of its capital stock
other than its current quarterly dividend, except that nothing contained in the
Merger Agreement will prohibit North Fork from increasing the quarterly cash
dividend on the North Fork Common Stock, (ii) take any action that is intended
or may reasonably be expected to result in any of its representations and
warranties set forth in the Merger Agreement being or becoming untrue in any
material respect, or in any of the conditions to the Merger not being satisfied,
(iii) change its method of accounting in effect at June 30, 1997, subject to
certain exceptions, (iv) take or cause to be taken any action that would cause
the Merger to fail to qualify (a) for pooling of interests accounting treatment
or (b) as a tax-free reorganization under Section 368(a) of the Code, except
that nothing contained in the Merger Agreement will limit the ability of North
Fork to exercise its rights under the Stock Option Agreement, or (v) agree to do
any of the foregoing.
North Fork also has agreed in the Merger Agreement that it will, and will
cause its subsidiaries to, conduct its banking business in substantially the
same manner as conducted prior to the date of the Merger Agreement, it being
understood that North Fork will not be prevented from acquiring another bank or
thrift institution or entering into new lines of business, whether through
acquisition or otherwise.
WAIVER AND AMENDMENT; TERMINATION
Prior to the Effective Time, any provision of the Merger Agreement may be
waived by the party benefitted by the provision or, subject to applicable law,
amended or modified by an agreement in writing approved by the Boards of
Directors of North Fork and New York Bancorp provided that, after the vote of
the stockholders of New York Bancorp, the Merger Agreement may not be amended,
without further approval of such stockholders, to reduce the amount or change
the form of the consideration to be received by New York Bancorp stockholders
other than as contemplated by the Merger Agreement.
The Merger Agreement may be terminated at any time prior to the Effective
Time, either before or after approval of the matters presented in connection
with the Merger by the stockholders of both New York Bancorp and North Fork, as
follows: (i) by the mutual consent of North Fork and New York Bancorp if the
Boards of Directors of each so determines by a vote of a majority of the members
of the entire Board of Directors; (ii) by either North Fork or New York Bancorp
upon written notice to the other (a) 60 days after the date on which any request
or application for a regulatory approval required for consummation of the
transactions contemplated by the Merger Agreement is denied or withdrawn at the
request of the Governmental Entity which must grant such approval, unless within
such 60-day period a petition for rehearing or an amended application has been
filed with the applicable Governmental Entity (or unless the failure to obtain
the necessary regulatory approval is due to the failure of the party seeking to
terminate the Merger Agreement to perform or observe its covenants and
agreements set forth in the Merger Agreement) or (b) if any Governmental Entity
of competent jurisdiction issues a final nonappealable order enjoining or
otherwise prohibiting the consummation of any of the transactions contemplated
by the Merger Agreement; (iii) by either North Fork or New York Bancorp in the
event that the Merger has not been consummated by September 30, 1998, unless the
failure to consummate the Merger is due to a breach of the Merger Agreement by
the party seeking to terminate the Merger Agreement; (iv) by either North Fork
or New York Bancorp (provided that the terminating party is not in breach of its
obligations in the Merger Agreement with respect to the meeting of its
stockholders to approve the Merger Agreement) if any approval of the
stockholders of either of North Fork or New York Bancorp required for
consummation of the Merger Agreement has not been obtained; (v) by either North
Fork or New York Bancorp (provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other agreement
contained herein) in the event of (a) a material breach by the other of any of
its representations or warranties contained in the Merger Agreement which is not
cured within 30 days after written notice of such breach is given to the
breaching party or which breach, by its nature, cannot be cured prior to the
Closing or (b) a material breach of any of the covenants or agreements contained
in the Merger Agreement by the other which is not cured within 30 days after
written notice of such breach is given to the breaching party; (vi) by either
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North Fork or New York Bancorp by action of its Board of Directors, by giving
written notice of such election within two business days after the Valuation
Period, in the case of North Fork, or within four business days after the
Valuation Period, in the case of New York Bancorp, in the event the Average
Closing Price is less than $25.50, provided that no right of termination in
favor of New York Bancorp will arise under this provision if North Fork elects
within two business days after the Valuation Period to increase the Exchange
Ratio such that the value of the North Fork Common Stock (valued at the Average
Closing Price) to be paid in respect of each share of New York Bancorp Common
Stock is not less than $30.35 (see "-- Exchange Ratio" above); (vii) by North
Fork if the New York Bancorp Board has withdrawn, modified or amended in any
respect materially adverse to North Fork its recommendation to the stockholders
of New York Bancorp that they approve and adopt the Merger Agreement; or (viii)
by New York Bancorp upon the execution of a definitive agreement relating to a
takeover proposal, provided that (a) New York Bancorp has complied with its
covenant relating to the solicitation of takeover proposals as discussed herein,
(b) the New York Bancorp Board determines, after receiving advice of its
financial advisors and outside legal counsel, that such action is necessary for
the New York Bancorp Board to act in a manner consistent with its fiduciary
duties under applicable law and (c) concurrent with its notification of
termination New York Bancorp has made an irrevocable and unconditional written
offer to North Fork to repurchase the Option from North Fork at any time, within
thirty days following the date of such offer, at a price equal to the greater of
(x) the Option Repurchase Price (as defined herein) and (y) the Surrender Price
(as defined herein), provided, however, if New York Bancorp exercises this
termination right following the approval by the New York Bancorp stockholders of
the Merger Agreement, New York Bancorp will pay North Fork $40 million upon such
termination in full satisfaction of its obligations under the applicable
sections of the Merger Agreement and the Stock Option Agreement.
In the event of the termination of the Merger Agreement by either North
Fork or New York Bancorp, neither North Fork nor New York Bancorp will have any
further obligations under the Merger Agreement except (i) for certain specified
provisions of the Merger Agreement relating to confidentiality and expenses and
(ii) that no party will be relieved or released from any liabilities or damages
arising out of its willful breach of any provisions of the Merger Agreement,
except that, in the event that concurrently with or following a termination of
the Merger Agreement, North Fork realizes a "Total Profit" (as defined herein)
of $32 million or greater pursuant to its rights under the Stock Option
Agreement, then North Fork's receipt of such Total Profit will constitute the
sole and exclusive remedy for North Fork under the Merger Agreement and there
will be no further liability under the Merger Agreement on the part of New York
Bancorp to North Fork other than as a result of any breach by New York Bancorp
of its confidentiality obligations under the Merger Agreement.
RESALES OF NORTH FORK COMMON STOCK RECEIVED IN THE MERGER
The shares of North Fork Common Stock to be issued in the Merger will be
registered under the Securities Act and will be freely transferable under the
Securities Act, except for shares issued to any New York Bancorp stockholder who
may be deemed to be an "affiliate" of New York Bancorp for purposes of Rule 145
under the Securities Act. Affiliates may not sell their shares of North Fork
Common Stock acquired in connection with the Merger except pursuant to an
effective registration statement under the Securities Act covering such shares
or in compliance with Rule 145 or another applicable exemption from the
registration requirements of the Securities Act. This Joint Proxy
Statement/Prospectus does not cover any resales of North Fork Common Stock
received in the Merger by persons who may deemed to be affiliates of New York
Bancorp. Persons who may be deemed to be affiliates of New York Bancorp
generally include individuals or entities that control, are controlled by or are
under common control with New York Bancorp, and may include certain officers and
directors as well as principal stockholders of New York Bancorp.
Commission guidelines regarding qualifying for the pooling of interests
method of accounting also limit sales by affiliates of the acquiring and
acquired company in a business combination. Commission guidelines indicate
further that the pooling of interests method of accounting will generally not be
challenged on the basis of sales by affiliates of the acquiring or acquired
company if they do not dispose of any of the shares of the corporation they own
or shares of a corporation they receive in connection with a merger during the
period
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beginning 30 days before the effective date of the merger and ending when
financial results covering at least 30 days of post-merger operations of the
combined entity have been published.
North Fork and New York Bancorp have each agreed in the Merger Agreement to
use their best efforts to cause each person who is an affiliate (for purposes of
Rule 145 of the Securities Act and for purposes of qualifying the Merger for
pooling of interests accounting treatment) of such party to deliver to the other
party a written agreement intended to ensure compliance with the Securities Act
and preserve the ability to treat the Merger as a pooling of interests. In
addition, North Fork has agreed in the Merger Agreement to use all reasonable
efforts to publish, not later than 21 days after the end of the first full
calendar month following the Effective Time, financial results covering at least
30 days of post-Merger combined operations.
STOCK EXCHANGE LISTING
The North Fork Common Stock is listed on the NYSE. North Fork has agreed to
use all reasonable efforts to cause the shares of North Fork Common Stock to be
issued in the Merger to be approved for listing on the NYSE, subject to official
notice of issuance, as of the Effective Time. The obligations of the parties to
consummate the Merger are subject to approval for listing by the NYSE of such
shares. See "-- Conditions to the Merger" above.
ANTICIPATED ACCOUNTING TREATMENT
The Merger is expected to qualify as a pooling of interests for accounting
and financial reporting purposes. Under this method of accounting, the recorded
amount of assets and liabilities of North Fork and New York Bancorp will be
combined at the Effective Time and carried forward at their previously recorded
amounts and the stockholders' equity accounts of North Fork and New York Bancorp
will be combined on North Fork's consolidated balance sheet. Income and other
financial statements of North Fork issued after the Effective Time will be
restated retroactively to reflect the consolidated operations of North Fork and
New York Bancorp as if North Fork and New York Bancorp have always been
combined.
The Merger Agreement provides that a condition to each of North Fork's and
New York Bancorp's obligation to consummate the Merger is the receipt of a
letter addressed to North Fork from North Fork's independent accountants to the
effect that the Merger qualifies for pooling of interests accounting treatment.
See "-- Conditions to the Merger" above.
Pursuant to the Merger Agreement, New York Bancorp must use all reasonable
efforts to reissue approximately 800,000 shares of New York Bancorp Treasury
Stock prior to consummation of the Merger in order that the Merger will not fail
to qualify for pooling of interests accounting treatment by virtue of the number
of shares of New York Bancorp Treasury Stock. It is currently expected that New
York Bancorp will reissue the shares of New York Bancorp Treasury Stock on or
about the Effective Time.
For information concerning certain restrictions to be imposed on the
transferability of North Fork Common Stock to be received by affiliates in
order, among other things, to ensure the availability of pooling of interests
accounting treatment, see "-- Resales of North Fork Common Stock Received in the
Merger" above.
The unaudited pro forma condensed combined financial information contained
in this Joint Proxy Statement/Prospectus has been prepared using the pooling of
interests accounting method to account for the Merger. See "PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS (Unaudited)."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following is a discussion of certain federal income tax consequences of
the Merger and the Subsidiary Bank Merger to North Fork, New York Bancorp and
holders of New York Bancorp Common Stock. The discussion is based upon the Code,
Treasury regulations, Internal Revenue Service ("IRS") rulings, and judicial and
administrative decisions in effect as of the date hereof, all of which are
subject to change at any time, possibly with retroactive effect. This discussion
assumes that the New York Bancorp Common Stock is held as a "capital asset"
within the meaning of Section 1221 of the Code (i.e., property
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generally held for investment). In addition, this discussion does not address
all of the tax consequences that may be relevant to a holder of New York Bancorp
Common Stock in light of his or her particular circumstances or to holders
subject to special rules, such as foreign persons, financial institutions,
tax-exempt organizations, dealers in securities or foreign currencies or
insurance companies. The opinions of such counsel referred to in this section
will be based on facts existing at the Effective Time, and in rendering such
opinions, such counsel will require and rely upon representations contained in
certificates of officers of North Fork, New York Bancorp, North Fork Bank, Home
Federal and others.
HOLDERS OF NEW YORK BANCORP COMMON STOCK SHOULD CONSULT THEIR TAX ADVISORS
AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND
OTHER TAX LAWS.
It is a condition to the obligation of North Fork to consummate the Merger
that North Fork shall have received an opinion of Skadden, Arps, Slate, Meagher
& Flom LLP, counsel to North Fork, dated as of the Effective Time, in form and
substance reasonably satisfactory to North Fork, to the effect that the Merger
and the Subsidiary Bank Merger will each be treated as a reorganization within
the meaning of Section 368(a) of the Code and that, accordingly, for federal
income tax purposes, no gain or loss will be recognized by North Fork, New York
Bancorp, North Fork Bank or Home Federal as a result of the Merger and the
Subsidiary Bank Merger except, with respect to the Subsidiary Bank Merger, to
the extent any income may be required to be recognized due to the recapture of
Home Federal's bad debt reserves. It is a condition to the obligation of New
York Bancorp to consummate the Merger that New York Bancorp shall have received
an opinion of Weil, Gotshal & Manges LLP, counsel to New York Bancorp, dated as
of the Effective Time, in form and substance reasonably satisfactory to New York
Bancorp, to the effect that the Merger will be treated as a reorganization
within the meaning of Section 368(a) of the Code and that, accordingly, for
federal income tax purposes:
i) no gain or loss will be recognized by New York Bancorp as a result
of the Merger; and
ii) no gain or loss will be recognized by the stockholders of New York
Bancorp who exchange all of their New York Bancorp Common Stock solely for
North Fork Common Stock pursuant to the Merger (except with respect to cash
received in lieu of a fractional share interest in North Fork Common Stock
and the payment of any real property transfer taxes, if any, on behalf of
stockholders of New York Bancorp).
Based on the foregoing opinion of counsel to New York Bancorp, a holder of
New York Bancorp Common Stock (i) will have an aggregate tax basis in the shares
of North Fork Common Stock received in the Merger equal to its aggregate
adjusted tax basis in the shares of New York Bancorp Common Stock surrendered in
exchange therefor (reduced by any such tax basis allocable to fractional shares
for which cash is received), and (ii) will have a holding period in the shares
of North Fork Common Stock that will include its holding period in the shares of
New York Bancorp Common Stock surrendered in exchange therefor.
Based upon the current ruling position of the IRS, cash received by a
holder of New York Bancorp Common Stock in lieu of a fractional share interest
in North Fork Common Stock will be treated as received in exchange for such
fractional share interest, and gain or loss will be recognized for federal
income tax purposes measured by the difference between the amount of cash
received and the portion of the basis of the share of New York Bancorp Common
Stock allocable to such fractional share interest. Such gain or loss should be
long-term capital gain or loss if such share of New York Bancorp Common Stock
has been held for more than one year at the Effective Time. The recently enacted
Taxpayer Relief Act of 1997 reduces the maximum rate of federal income tax
imposed on capital gains with respect to capital assets held for more than
eighteen months by noncorporate taxpayers.
New York State and City impose certain taxes on the transfer of an interest
in real property (including leaseholds) located in New York State or City (the
"Transfer Taxes"). The Transfer Taxes are also imposed in connection with
certain changes of ownership of an entity owning a real property interest in New
York State or City. The Merger is expected to result in the imposition of
Transfer Taxes. North Fork will be responsible
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for any Transfer Taxes resulting from the Merger. For federal income tax
purposes, the payment of such taxes by North Fork may result in the deemed
receipt of additional consideration or the imputation of income to each such
stockholder in proportion to the number of shares of New York Bancorp Common
Stock owned by such stockholder, although a stockholder may be entitled to
increase its tax basis in the North Fork Common Stock by the amount of any such
additional consideration or imputed income.
Under prior law, Home Federal accounted for bad debts using the reserve
method under Section 593 of the Code. Recent amendments to the Code (the
"Amendments") eliminated the reserve method under Section 593 effective for
taxable years beginning after December 31, 1995. The Amendments require thrift
institutions that are treated as large banks, such as Home Federal, to recapture
their post-1987 bad debt reserves ratably over the six taxable year period
beginning after 1995. Since Home Federal's bad debt reserves at December 31,
1995 did not exceed its bad debt reserves at December 31, 1987, Home Federal
will experience no recapture with respect to its post-1987 bad debt reserves.
The Amendments do not generally require the recapture of pre-1988 bad debt
reserves other than under Section 593(e) of the Code in the case of certain
excess distributions to, and redemptions of, shareholders.
Prior to the Amendments, the entire amount of Home Federal's bad debt
reserve would have been recaptured as a result of the Subsidiary Bank Merger.
Under the Amendments, however, whether any or all of Home Federal's pre-1988 bad
debt reserves would have to be recaptured as a result of the Subsidiary Bank
Merger have been left to be specified in Treasury regulations. Under the
legislative history to the Amendments, however, such Treasury regulations are to
provide that "if an institution with a pre-1988 reserve is merged or liquidated
tax-free into a commercial bank that never was a thrift institution, the
pre-1988 reserve should not be restored to income by reason of the merger or
liquidation." Although there can be no assurance as to the content or the
operation of such Treasury regulations or as to when such Treasury regulations
might be issued, based on the legislative history to the Amendments it appears
that the Subsidiary Bank Merger should not trigger the recapture of Home
Federal's pre-1988 reserves and that, instead, North Fork Bank should succeed to
such reserves. Nevertheless, such reserves could be subject to future recapture,
including under Section 593(e) of the Code. Moreover, bad debt reserves may be
subject to recapture in connection with the Merger under certain state and local
tax laws. See "MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER -- Merger and
Restructuring Charges."
NO APPRAISAL RIGHTS
Pursuant to Section 262(b) of the Delaware General Corporation Law, the
stockholders of a constituent corporation in a merger generally are not entitled
to appraisal rights if the shares of stock they own are, as of the record date
fixed to determine stockholders entitled to notice of and to vote at the meeting
to act upon the agreement providing for such merger, either listed on a national
securities exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc. (a "NASDAQ/NMS Security"), or held of record by more than 2,000
stockholders. However, stockholders that would otherwise not have appraisal
rights pursuant to the provisions described in the previous sentence are
entitled to appraisal rights if such stockholders are required by the terms of
the merger to accept for their stock anything except (i) shares of the
corporation surviving the merger, (ii) shares of stock which are either listed
on a national securities exchange or designated as a NASDAQ/NMS Security or held
of record by more than 2,000 stockholders, or (iii) cash in lieu of fractional
shares of stock described in (i) and (ii) above or any combination thereof. New
York Bancorp stockholders are not entitled to appraisal rights in connection
with the Merger because, as of the New York Bancorp Record Date, the shares of
New York Bancorp Common Stock were listed on the NYSE, and because the shares of
North Fork Common Stock to be issued in the Merger are shares of the surviving
corporation in the Merger and will be listed on the NYSE at the Effective Time,
subject to official notice of issuance. In addition, there are more than 2,000
holders of record of North Fork Common Stock.
STOCK OPTION AGREEMENT
The following is a summary of the material provisions of the Stock Option
Agreement, dated as of October 7, 1997 (the "Stock Option Agreement"), by and
between New York Bancorp and North Fork,
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which is attached hereto as Annex B. The following summary is qualified in its
entirety by reference to the Stock Option Agreement.
Execution of the Stock Option Agreement was a condition to North Fork's
merger proposal. Pursuant to the Stock Option Agreement, New York Bancorp
granted to North Fork an option (the "Option") to purchase up to 4,261,000
shares (the "Option Shares") of New York Bancorp Common Stock (representing
approximately 19.9% of the issued and outstanding shares of such New York
Bancorp Common Stock without giving effect to the shares that may be issued upon
exercise of such option) at an exercise price of $30.50 per share (the "Exercise
Price"), subject to the terms and conditions set forth therein.
The Stock Option Agreement provides that North Fork may exercise the
Option, in whole or in part, subject to regulatory approval, if both an Initial
Triggering Event (as defined below) and a Subsequent Triggering Event (as
defined below) shall have occurred prior to the occurrence of an Exercise
Termination Event (as defined below); provided that North Fork shall have sent
to New York Bancorp written notice of such exercise within six months following
such Subsequent Triggering Event (subject to extension as provided in the Stock
Option Agreement). The terms Initial Triggering Event and Subsequent Triggering
Event generally relate to attempts by one or more third parties to acquire a
significant interest in New York Bancorp. Any exercise of the Stock Option will
be deemed to occur on the date such notice is sent. Notwithstanding anything to
the contrary contained in the Stock Option Agreement, the Option may not be
exercised at any time when North Fork is in willful breach of any of its
covenants or agreements contained in the Merger Agreement under circumstances
that would entitle New York Bancorp to terminate the Merger Agreement.
For purposes of the Stock Option Agreement:
(a) The term "Initial Triggering Event" means the occurrence of any of
the following events or transactions after October 7, 1997: (i) New York
Bancorp or any subsidiary of New York Bancorp, without North Fork's prior
written consent, shall have entered into an agreement to engage in, or the
New York Bancorp Board authorizes, recommends or proposes (or publicly
announces its intention to take any of the foregoing actions) an
Acquisition Transaction (as defined below) with any person or group (other
than as contemplated by the Merger Agreement); (ii) any person, other than
North Fork, any subsidiary of North Fork, Patrick E. Malloy, III, Valer and
Josiah T. Austin or Findim Investments S.A., acquires beneficial ownership,
or the right to acquire beneficial ownership, of 10% of more of the
outstanding shares of the New York Bancorp Common Stock or any person other
than North Fork or any subsidiary of North Fork shall have commenced (as
such term is defined under the rules and regulations of the Commission), or
shall have filed or publicly disseminated a registration statement or
similar disclosure statement with respect to, a tender offer or exchange
offer to purchase any shares of New York Bancorp Common Stock such that,
upon consummation of such offer, such person would own or control 10% or
more of the then outstanding shares of New York Bancorp Common Stock (such
an offer being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively); (iii)(A) the holders of New York Bancorp Common
Stock shall not have approved the Merger Agreement and the transactions
contemplated thereby at the meeting of such stockholders held for the
purpose of voting on such agreement, (B) such meeting shall not have been
held or shall have been cancelled prior to termination of the Merger
Agreement, or (C) the New York Bancorp Board shall have publicly withdrawn
or modified, or publicly announced its intent to withdraw or modify, in any
manner adverse to North Fork, its recommendation that the stockholders of
New York Bancorp approve the transactions contemplated by the Merger
Agreement, in each case after it shall have been publicly announced that
any person other than North Fork or any subsidiary of North Fork shall have
(x) made, or disclosed an intention to make, a proposal to engage in an
Acquisition Transaction, (y) commenced a Tender Offer, or filed or publicly
disseminated a registration statement or similar disclosure statement with
respect to an Exchange Offer, or (z) filed an application (or given a
notice), whether in draft or final form, under any federal or state banking
laws seeking regulatory approval to engage in an Acquisition Transaction;
or (iv) after an overture is made by any person other than North Fork or
any subsidiary of North Fork to New York Bancorp or its stockholders to
engage in an Acquisition Transaction, New York Bancorp shall have breached
any covenant or obligation contained in the Merger Agreement and such
breach would entitle
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North Fork to terminate the Merger Agreement and shall have not have been
cured prior to the date on which North Fork sends notice to New York
Bancorp that it wishes to exercise the Option;
(b) The term "Acquisition Transaction" means (i) a merger or
consolidation, or any similar transaction, involving New York Bancorp or
any of its subsidiaries (other than internal mergers, reorganizations,
consolidations or dissolutions involving only existing subsidiaries), (ii)
a purchase, lease or other acquisition of all or a substantial portion of
the assets or deposits of New York Bancorp or its significant subsidiaries,
or (iii) a purchase or other acquisition (including by way of merger,
consolidation, share exchange or otherwise) of securities representing 10%
or more of the voting power of New York Bancorp; and
(c) The term "Subsequent Triggering Event" means the occurrence of
either of the following events or transactions after October 7, 1997: (i)
the acquisition by any person of beneficial ownership of 25% or more of the
then outstanding shares of New York Bancorp Common Stock; or (ii) the
occurrence of the Initial Triggering Event described above in clause
(a)(i), except that the percentage referred to in subclause (iii) of the
definition of "Acquisition Transaction" set forth above shall be 25%.
The Option will expire upon the occurrence of an "Exercise Termination
Event," defined as: (i) the Effective Time; (ii) termination of the Merger
Agreement in accordance with the provisions thereof if such termination occurs
prior to the occurrence of an Initial Triggering Event except a termination by
North Fork as a result of New York Bancorp's breach of a covenant set forth in
the Merger Agreement (unless the breach by New York Bancorp giving rise to such
right of termination is non-volitional); or (iii) twelve months after the
termination of the Merger Agreement if such termination occurs after the
occurrence of an Initial Triggering Event or is a termination by North Fork as a
result of New York Bancorp's breach of a covenant set forth in the Merger
Agreement (unless the breach by New York Bancorp giving rise to such right of
termination is non-volitional). In addition, in the event New York Bancorp
exercises its right to terminate the Merger Agreement upon execution by New York
Bancorp of a definitive agreement relating to a takeover proposal, then
immediately upon North Fork's receipt of the repurchase price payable by New
York Bancorp in connection with such termination, the Stock Option Agreement
will terminate and will become void and of no further force and effect and North
Fork will surrender the Stock Option Agreement to New York Bancorp.
The closing of a purchase of shares pursuant to the Stock Option Agreement
is subject to the obtaining of all necessary governmental approvals, provided,
however, that if the Option cannot be exercised because of an injunction, order
or similar restraint issued by a court of competent jurisdiction, the Option
shall expire no earlier than on the 10th business day after such injunction,
order or restraint shall have been dissolved or shall have become permanent and
no longer subject to appeal, as the case may be.
As of the date of this Joint Proxy/Statement Prospectus, to the best
knowledge of North Fork and New York Bancorp, no Initial Triggering Event or
Subsequent Triggering Event has occurred.
The number and type of securities subject to the Option and the purchase
price of shares will be adjusted for any change in or distribution in respect of
the New York Bancorp Common Stock by reason of a stock dividend, stock split,
split-up, recapitalization, combination, exchange of shares or similar
transaction so as to fully preserve the economic benefits provided under the
Stock Option Agreement. The number of shares of New York Bancorp Common Stock
subject to the Option will also be adjusted in the event New York Bancorp issues
additional shares of New York Bancorp Common Stock such that the number of
shares of New York Bancorp Common Stock subject to the Option, together with
shares previously purchased pursuant thereto, represents 19.9% of the New York
Bancorp Common Stock then issued and outstanding, without giving effect to
shares subject to or issuable pursuant to the Option. In no event will the
number of Option Shares for which the Option is exercisable exceed 19.9% of New
York Bancorp Common Stock then issued and outstanding, without giving effect to
the shares subject to or issuable pursuant to the Option.
Immediately prior to the occurrence of a Repurchase Event (as defined
below), (i) following a request of the holder or holders of the Option (the
"Holder"), delivered prior to an Exercise Termination Event, New York Bancorp
(or any successor thereto) will repurchase the Option from the Holder at a price
(the "Option Repurchase Price") equal to the amount by which (A) the
Market/Offer Price (as defined below) exceeds
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(B) the Option Price, multiplied by the number of shares for which the Option
may then be exercised and (ii) at the request of the owner of Option Shares from
time to time (the "Owner"), delivered within 90 days of such occurrence (or such
later period as provided in the Option Agreements), New York Bancorp will
repurchase such number of the Option Shares from the Owner as the Owner
designates at a price equal to the Market/Offer Price multiplied by the number
of Option Shares so designated.
A "Repurchase Event" will be deemed to have occurred upon (a) the
consummation of any merger, consolidation or similar transaction involving New
York Bancorp or any purchase, lease or other acquisition of all or a substantial
portion of the assets of New York Bancorp (other than internal mergers,
reorganizations, consolidations or dissolutions involving only existing
subsidiaries) or (b) the acquisition by any person of beneficial ownership of
50% or more of the then outstanding shares of New York Bancorp Common Stock.
The term "Market/Offer Price" means the highest of (i) the price per share
of New York Bancorp Common Stock at which a Tender Offer or Exchange Offer
therefor has been made, (ii) the price per share of New York Bancorp Common
Stock to be paid by any third party pursuant to an agreement with New York
Bancorp, (iii) the highest closing price for shares of New York Bancorp Common
Stock within the six-month period immediately preceding the date the Holder or
the Owner, as the case may be, gives notice of the required repurchase of this
Option or any Option Shares, as the case may be, or (iv) in the event of a sale
of all or a substantial portion of New York Bancorp's assets, the sum of the
price paid in such sale for such assets and the current market value of the
remaining assets of New York Bancorp as determined by a nationally recognized
investment banking firm selected by the Holder or the Owner, as the case may be,
and reasonably acceptable to New York Bancorp, divided by the number of shares
of New York Bancorp Common Stock outstanding at the time of such sale. In
determining the Market/Offer Price, the value of consideration other than cash
will be determined by a nationally recognized investment banking firm selected
by the Holder or the Owner, as the case may be, and reasonably acceptable to New
York Bancorp.
North Fork may, at any time following a Repurchase Event and prior to the
occurrence of an Exercise Termination Event, relinquish the Option (together
with any Option Shares issued to and then owned by North Fork) to New York
Bancorp in exchange for a cash fee equal to the Surrender Price (as defined
below), provided, however, that North Fork may not so relinquish the Option or
Option Shares in exchange for the Surrender Price if New York Bancorp has
repurchased the Option (or any portion thereof) or any Option Shares as set
forth above. The "Surrender Price" is defined as an amount equal to $32 million
(i) plus, if applicable, North Fork's purchase price with respect to any Option
Shares and (ii) minus, if applicable, the sum of (A) the excess, if any, of (x)
the net cash amounts, if any, received by North Fork pursuant to the arms'
length sale of Option Shares (or any other securities into which such Option
Shares were converted or exchanged) to any unaffiliated party, over (y) North
Fork's purchase price of such Option Shares and (B) the net cash amounts, if
any, received by North Fork pursuant to an arms' length sale of a portion of the
Option to any unaffiliated party.
Pursuant to the terms of the Stock Option Agreement, North Fork's "Total
Profit" (as hereinafter defined) may not exceed $40 million. If North Fork's
Total Profit would exceed such amount, North Fork would be required, at its sole
election, to (a) reduce the number of Option Shares subject to the Option, (b)
deliver Option Shares to New York Bancorp for cancellation, (c) pay cash to New
York Bancorp or (d) any combination of the foregoing so that North Fork's actual
realized Total Profit will not exceed $40 million. "Total Profit" is defined to
mean the aggregate (before taxes) of (i) any amount received pursuant to New
York Bancorp's repurchase of the Option (or any portion thereof) pursuant to the
terms of the Stock Option Agreement or the Merger Agreement, (ii) any amount
received pursuant to New York Bancorp's repurchase of the Option Shares (less
the purchase price of such Option Shares), (iii) any net cash received pursuant
to the sale of Option Shares to any third party (less the purchase price of such
Option Shares), (iv) any amounts received on transfer of the Option or any
portion thereof to a third party and (v) any equivalent amounts received with
respect to the Substitute Option (as hereinafter defined). In addition, North
Fork may not exercise the Option for a number of Option Shares as would, as of
the date of such exercise, result in North Fork (if it were immediately to sell
such Option Shares, together with all other Option Shares held by North Fork and
its affiliates as of such date, at the closing market price of New York
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Bancorp Common Stock on the immediately preceding trading day) realizing a net
gain in excess of $40 million.
The Stock Option Agreement provides that neither party may assign any of
its rights or obligations thereunder without the written consent of the other
party, except that if a Subsequent Triggering Event occurs prior to an Exercise
Termination Event, North Fork may, subject to certain limitations, assign its
rights and obligations thereunder in whole or in part within six months
following such Subsequent Triggering Event (subject to extension as described
the Stock Option Agreement).
In the event that, prior to an Exercise Termination Event, New York Bancorp
enters into any agreement (i) to merge into or consolidate with any person other
than North Fork or one of its subsidiaries such that New York Bancorp is not the
surviving corporation, (ii) to permit any person, other than North Fork or one
of its subsidiaries, to merge into New York Bancorp and New York Bancorp is the
surviving corporation, but, in connection with such merger, the then outstanding
shares of New York Bancorp Common Stock are changed into or exchanged for stock
or other securities of New York Bancorp or any other person or cash or any other
property or the outstanding shares of New York Bancorp Common Stock prior to
such merger shall after such merger represent less than 50% of the outstanding
voting shares and voting share equivalents of the merged company, or (iii) to
sell or otherwise transfer all or substantially all of its assets to any person
other than North Fork or one of its subsidiaries, then, and in each such case,
the agreement governing the transaction must provide that, upon consummation of
the transaction, the Option will be converted into or exchanged for an option
("the Substitute Option") to purchase securities of either the acquiring person,
any person that controls the acquiring person or New York Bancorp (if New York
Bancorp is the surviving entity), in all cases at the election of North Fork.
New York Bancorp has granted North Fork certain registration rights with
respect to the Option and any Option Shares. These rights include requiring New
York Bancorp to file up to two registration statements under the Securities Act
in order to permit the sale or other disposition of the Option and any Option
Shares. In addition, in the event that at the time of any request by North Fork
for registration, New York Bancorp is in registration with respect to an
underwritten public offering of shares of New York Bancorp Common Stock, New
York Bancorp will allow North Fork to participate in such registration, subject
to certain limitations. In connection with any registration described above, New
York Bancorp and North Fork will provide to each other and any underwriter of
the offering customary representations, warranties, covenants, indemnifications
and contributions.
Certain rights and obligations of the parties under the Stock Option
Agreement are subject to receipt of required regulatory approvals. The approval
of the Federal Reserve Board is required for the acquisition by North Fork of
more than 5% of the outstanding shares of New York Bancorp Common Stock.
Accordingly, North Fork has included or will include in its applications with
the Federal Reserve Board a request for approval of its right to exercise the
Option, including its right to purchase more than 5% of the outstanding shares
of New York Bancorp Common Stock. See "-- Regulatory Approvals Required for the
Merger."
Effect of Stock Option Agreement. The Stock Option Agreement is intended
to increase the likelihood that the Merger will be consummated in accordance
with the terms of the Merger Agreement. Consequently, certain aspects of the
Stock Option Agreement may have the effect of discouraging persons who might now
or prior to the Effective Time be interested in acquiring all of or a
significant interest in New York Bancorp from considering or proposing such an
acquisition, even if such persons were prepared to pay a higher price per share
for New York Bancorp Common Stock than the price per share implicit in the
Exchange Ratio. The acquisition of New York Bancorp or an interest in New York
Bancorp, or an agreement to do either, could cause the Option to become
exercisable. The existence of the Option could significantly increase the cost
to a potential acquiror of acquiring New York Bancorp compared to its cost had
the Stock Option Agreement and the Merger Agreement not been entered into. Such
increased cost might discourage a potential acquiror from considering or
proposing an acquisition or might result in a potential acquiror proposing to
pay a lower per share price to acquire New York Bancorp than it might otherwise
have proposed to pay. Moreover, following consultation with New York Bancorp's
independent accountants, the management of New York Bancorp believes that the
exercise of the Option is likely to prohibit any acquiror of New York Bancorp
from
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accounting for any acquisition of New York Bancorp using the pooling of
interests accounting method for a period of two years. Accordingly, the
existence of the Stock Option Agreement may deter significantly, or completely
preclude, an acquisition of New York Bancorp by certain other banking
organizations.
EXPENSES
All costs and expenses incurred in connection with the Merger Agreement,
the Stock Option Agreement and the transactions contemplated thereby will be
paid by the party incurring such expense, except that the expenses incurred in
connection with printing and mailing this Joint Proxy Statement/Prospectus to
the stockholders of North Fork and New York Bancorp, and all filing and other
fees paid to the Commission or any other governmental entity in connection with
the Merger, the Subsidiary Bank Merger and the other transactions contemplated
thereby will be shared equally by North Fork and New York Bancorp.
MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER
THIS JOINT PROXY STATEMENT/PROSPECTUS CONTAINS CERTAIN FORWARD LOOKING
STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
BUSINESS OF NORTH FORK FOLLOWING THE CONSUMMATION OF THE MERGER, INCLUDING
STATEMENTS RELATING TO: (A) THE COST SAVINGS AND REVENUE ENHANCEMENTS THAT ARE
EXPECTED TO BE REALIZED FROM THE MERGER, (B) THE IMPACT ON REVENUES OF THE
MERGER (C) PROJECTED EARNINGS PER SHARE OF THE COMBINED COMPANY, AND (D) THE
RESTRUCTURING CHARGES EXPECTED TO BE INCURRED IN CONNECTION WITH THE MERGER. SEE
"SUMMARY," "MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER -- CONSOLIDATION OF
OPERATIONS; PROJECTED COST SAVINGS AND REVENUE ENHANCEMENTS; PROJECTED EARNINGS
PER SHARE" AND "PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)."
FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE
FOLLOWING POSSIBILITIES: (1) EXPECTED COST SAVINGS FROM THE MERGER CANNOT BE
FULLY REALIZED WITHIN THE EXPECTED TIME FRAME OR THEREAFTER; (2) REVENUES
FOLLOWING THE MERGER ARE LOWER THAN EXPECTED; (3) COMPETITIVE PRESSURE AMONG
DEPOSITORY INSTITUTIONS INCREASES SIGNIFICANTLY; (4) COSTS OR DIFFICULTIES
RELATED TO THE INTEGRATION OF THE BUSINESSES OF NORTH FORK AND NEW YORK BANCORP
ARE GREATER THAN EXPECTED; (5) CHANGES IN THE INTEREST RATE ENVIRONMENT REDUCE
INTEREST MARGINS; (6) GENERAL ECONOMIC CONDITIONS, EITHER NATIONALLY OR IN THE
MARKETS IN WHICH THE COMBINED COMPANY WILL BE DOING BUSINESS, ARE LESS FAVORABLE
THAN EXPECTED; OR (7) LEGISLATION OR REGULATORY REQUIREMENTS OR CHANGES
ADVERSELY AFFECT THE BUSINESSES IN WHICH THE COMBINED COMPANY WOULD BE ENGAGED.
BOARD OF DIRECTORS AND MANAGEMENT FOLLOWING THE MERGER
Pursuant to the terms of the Merger Agreement, at the Effective Time, North
Fork will cause the North Fork Board to be expanded by one member and Mr.
Patrick E. Malloy, III, Chairman of the New York Bancorp Board (or any other
person designated by the New York Bancorp Board and acceptable to North Fork)
will be appointed to fill the new board seat.
CONSOLIDATION OF OPERATIONS; PROJECTED COST SAVINGS AND REVENUE ENHANCEMENTS;
PROJECTED EARNINGS PER SHARE
North Fork expects to achieve significant cost savings subsequent to the
Merger. The cost savings are expected to be derived from reductions in
personnel, elimination of selected branches located in communities in which both
North Fork and New York Bancorp branches are located, the integration of New
York
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Bancorp's data processing operations with those of North Fork, and the
integration of other facilities and back office operations. Further, the
separate corporate existence of both New York Bancorp and Home Federal will
cease with the consummation of the Merger and the Subsidiary Bank Merger.
Consequently, the costs associated with New York Bancorp's operating as a
separate publicly held entity will also be eliminated. The aggregate annual
pre-tax cost savings to be achieved in connection with the Merger are estimated
to be $25 million. Management of North Fork believes that these cost savings
will be substantially phased in before the end of the first full quarter
following consummation of the Merger. There can be no assurance that all of the
potential cost savings will be realized or that they will be realized in the
time frame currently estimated or thereafter. Such realization will depend upon,
among other things, the regulatory and economic environment, business changes
implemented by North Fork management and other factors, certain of which are
beyond the control of North Fork. A summary of the expected cost savings are as
follows:
<TABLE>
<CAPTION>
EXPECTED COST
SAVINGS
-------------
(in
thousands)
<S> <C>
Compensation....................................... $15,000
Occupancy and Equipment............................ 3,500
Other Operating Expense............................ 6,500
-------
Total Expected Pre-tax Cost Savings................ $25,000
=======
</TABLE>
A merger integration task force consisting of senior management members of North
Fork is in the process of refining North Fork's cost estimates and establishing
a definitive plan, including a timetable, to achieve the cost savings.
Following the Subsidiary Bank Merger, North Fork will convert the former
operations of Home Federal to a full service commercial bank. As such, North
Fork believes, based on its previous experience in acquiring savings banks and
branches of savings banks, that revenue enhancement opportunities exist with the
offering of commercial bank products to Home Federal's customers and the
communities Home Federal serves. These products include but are not limited to a
variety of demand deposit accounts, discount brokerage, investment management
and trust services, cash management, annuity and mutual fund products and
commercial and installment loans to small and midsize businesses. Management of
North Fork estimates that revenue enhancements resulting from the Merger could
approximate $5.0 million after tax for 1998 and $6.7 million after tax for 1999.
The amounts and realization of any additional revenues will depend upon a number
of factors including, but not limited to, competition, the economic environment
and regulatory requirements, all of which are beyond the control of North Fork.
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Based on the synergies anticipated, North Fork believes that the Merger
will result in earnings accretion of approximately $.14 per share in 1998 and
approximately $.19 per share in 1999. The table below sets forth in more detail
North Fork's estimated 1998 and 1999 earnings per share.
<TABLE>
<CAPTION>
PRO FORMA 1998 1999
SHARES EARNINGS(1) EARNINGS
--------- ----------- --------
(in thousands, except per share
amounts)
<S> <C> <C> <C>
North Fork Earnings per Share(2).......................... $ 1.98 $ 2.18
North Fork Base Net Income(2)............................. 67,606 $ 133,860 $147,246
New York Bancorp Base Net income(2)....................... 27,633(5) $ 51,398 $ 56,538
Cost Savings (after tax)(3)(4)............................ $ 11,438 $ 15,250
Revenue Enhancements (after tax)(3)(4):
Demand Deposit Generation............................... $ 2,475 $ 3,300
Additional Service Charge Income........................ 1,500 2,000
Increase in Other Fee Income............................ 1,050 1,400
-------- --------
Projected Revenue Growth.................................. $ 5,025 $ 6,700
-------- --------
Total Net Income with Projected Cost Savings and Revenue
Growth.................................................. $ 201,721 $225,734
======== ========
Projected Earnings per Share.............................. 95,239 $ 2.12 $ 2.37
Projected Accretion in North Fork Earnings per Share...... $ 0.14 $ 0.19
</TABLE>
- ---------------
(1) Excludes the effect of the merger and restructuring charge anticipated in
the first quarter of 1998.
(2) Based on the mean of IBES analyst projections.
(3) Assumes cost savings and revenue enhancements are phased in 75% and 100% in
1998 and 1999, respectively.
(4) Assumes an effective tax rate of 39%.
(5) Assumes the reissuance of 800,000 shares of New York Bancorp Common Stock
immediately prior to the consummation of the Merger. See "THE
MERGER -- Anticipated Accounting Treatment."
MERGER AND RESTRUCTURING CHARGE
A non-recurring merger and restructuring charge of approximately $34.4
million, net of income tax, will be incurred upon consummation of the Merger.
The restructuring charge includes merger related compensation, severance and
employee related expenses, facility and system costs and other merger costs
resulting from the Merger. A summary of the estimated merger and restructuring
charges follows:
<TABLE>
<CAPTION>
TYPE OF COST EXPECTED COSTS
------------------------------------------------------------------------ --------------
(in thousands)
<S> <C>
Merger Expense.......................................................... $ 9,700
Restructuring Charge:
Merger Related Compensation and Severance Costs....................... 15,172
Facility and System Costs............................................. 11,814
Other Merger Related Costs............................................ 890
-------
Total Pre-Tax Merger and Restructuring Charge........................... 37,576
Less: Related Tax Benefit............................................. (12,149)
Add: State and Local Tax Bad Debt Recapture, Net of Federal Tax
Benefit............................................................ 9,000
-------
Total After-Tax Merger and Restructuring Charge......................... $ 34,427
=======
</TABLE>
69
<PAGE> 82
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF
NORTH FORK AND NEW YORK BANCORP
BENEFICIAL OWNERSHIP OF SHARES OF NORTH FORK COMMON STOCK
Set forth below is certain information concerning beneficial ownership of
North Fork Common Stock, as of the North Fork Record Date, by (i) each director
of North Fork, (ii) each executive officer of North Fork, and (iii) all
executive officers and directors of North Fork as a group. As of the North Fork
Record Date there was no person known by the North Fork Board to be the
beneficial owner of more than 5% of the outstanding shares of North Fork Common
Stock.
<TABLE>
<CAPTION>
PERCENTAGE
NAME NUMBER OF SHARES BENEFICIALLY OWNED
- -------------------------------------------------------------- ---------------- ------------------
<S> <C> <C>
John Adam Kanas(2)............................................ 1,569,152 2.33%
John Bohlsen(3)............................................... 568,850 *
Thomas O'Brien(4)............................................. 793,464 *
Daniel M. Healy(5)............................................ 407,056 *
Allan C. Dickerson(6)......................................... 31,734 *
Lloyd A. Gerard(7)............................................ 112,543 *
James F. Reeve(8)............................................. 110,467 *
James H. Rich, Jr.(9)**....................................... 23,998 *
George H. Rowsom(10).......................................... 15,857 *
Kurt R. Schmeller(11)......................................... 65,460 *
Raymond W. Terry, Jr.(12)..................................... 72,000 *
Irvin L. Cherashore........................................... 42,136 *
All executive officers and directors as a group (12
persons)(13)................................................ 3,812,717 5.66%
</TABLE>
- ---------------
* Less than 1%
** Retired as of October 21, 1997
(1) Beneficial ownership of shares, as determined in accordance with applicable
Commission rules, includes shares as to which a person directly or
indirectly has or shares voting power and/or investments power (which
includes the power to dispose) and all shares which the person has a right
to acquire within 60 days of the reporting date. Further, with respect to
Messrs. Kanas, Bohlsen and Healy, the number of shares beneficially owned
includes shares held in North Fork's 401(k) plan as of December 31, 1996.
(2) Includes 433,424 shares of restricted stock and options to purchase 582,102
shares previously granted to Mr. Kanas under North Fork's compensatory
stock plans, 50,200 shares held by him in joint tenancy with his wife,
41,882 shares held by his wife, and 9,400 shares held by his dependent
children.
(3) Includes 143,266 shares of restricted stock and options to purchase 145,024
shares previously granted to Mr. Bohlsen under North Fork's compensatory
stock plans, 1,580 shares held by his wife, and 20,486 shares held by his
dependent children.
(4) Includes 25,000 shares of restricted stock, 179,070 shares held in joint
tenancy with his wife, 864 shares in his name as custodian for his sons and
options to purchase 105,764 shares of North Fork Common Stock.
(5) Includes 73,990 shares of restricted stock and options to purchase 202,776
shares previously granted to Mr. Healy under North Fork's compensatory
stock options, 6,000 shares held by his wife and 4,000 shares held in his
name as custodian for a daughter.
(6) Includes 15,492 shares held by Mr. Dickerson's wife.
(7) Includes 3,786 shares held by Mr. Gerard in joint tenancy with his
daughter, 2,000 shares held by his wife and 200 shares held by his wife in
her capacity as custodian for a granddaughter.
(8) Includes 36,635 shares held by Mr. Reeve's wife.
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<PAGE> 83
(9) Includes 13,576 shares held by Mr. Rich in joint tenancy with his wife and
300 shares held by his wife.
(10) Includes 2,000 shares held by Mr. Rowsom in joint tenancy with his wife,
614 shares held by his wife and 6,000 shares held by the S.T. Preston &
Sons, Inc. Profit Sharing Trust, in which Mr. Rowsom shares voting power
with two others.
(11) Includes options to purchase 27,496 shares of North Fork Common Stock.
(12) Includes 30,000 shares held by Mr. Terry in joint tenancy with his wife.
(13) Includes 570,680 shares of restricted stock and options to purchase an
aggregate of 983,162 shares previously granted to such persons under North
Fork's compensatory stock plans.
BENEFICIAL OWNERSHIP OF SHARES OF NEW YORK BANCORP COMMON STOCK
The following table sets forth the only stockholders known by New York
Bancorp to own beneficially or of record more than 5% of New York Bancorp Common
Stock and the nature of their stockholdings. This information has been obtained
from reports filed pursuant to Sections 13(d) and 13(g) of the Exchange Act.
Unless otherwise indicated, each stockholder listed in the table has sole voting
and dispositive powers as of the New York Bancorp Record Date with respect to
the shares owned beneficially or of record by such person.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ----------------------------------------------------------------- ----------------- -------
<S> <C> <C>
Patrick E. Malloy, III........................................... 3,389,771(1)(2) 15.36%
Michael A. McManus, Jr.
c/o Malloy Enterprises, Inc.
Bay Street at the Waterfront
Sag Harbor, New York 11963
Valer and Josiah T. Austin....................................... 2,530,733(3) 11.82%
El Coronado Ranch
Star Route Box 395
Pearce, Arizona 85625
</TABLE>
- ---------------
(1) Mr. Malloy beneficially owns and has sole power to vote and dispose of
2,803,664 shares. Does not include 117,442 shares held by two separate
trusts established for the benefit of Mr. Malloy's children, as to which Mr.
Malloy disclaims beneficial ownership. Mr. McManus beneficially owns and has
sole power to vote and dispose of 585,943 shares as well as 164 shares held
in his name as custodian for his son. Messrs. Malloy and McManus each
disclaims beneficial ownership of the shares of New York Bancorp Common
Stock beneficially owned by the other.
(2) Includes 389,866 shares which may be acquired by Mr. Malloy and 340,326
shares which may be acquired by Mr. McManus pursuant to New York Bancorp
stock option plans through January 1998.
(3) Mr. and Mrs. Austin beneficially own and have shared power to vote and
dispose of 2,481,233 shares. Includes 49,500 shares which may be acquired
pursuant to currently exercisable options by Mr. Austin pursuant to New York
Bancorp stock option plans for Outside Directors. Does not include 27,949
shares of New York Bancorp Common Stock that are beneficially owned by the
Clark Family Foundation, Inc. and 7,800 shares of New York Bancorp Common
Stock that are beneficially owned by three separate trusts for which Mr.
Austin serves as trustee and for which he disclaims beneficial ownership.
71
<PAGE> 84
The following table sets forth certain information with respect to the
beneficial ownership of New York Bancorp Common Stock of the directors of New
York Bancorp, certain executive officers and the directors and current executive
officers of New York Bancorp as a group. Unless indicated otherwise, ownership
figures are as of the New York Bancorp Record Date, and each indicated person
has sole voting and dispositive power over the shares owned beneficially by such
person.
<TABLE>
<CAPTION>
NUMBER PERCENTAGE
NAME OF SHARES BENEFICIALLY OWNED
- ----------------------------------------------------------------- ---------- ------------------
<S> <C> <C>
Patrick E. Malloy, III(1)........................................ 2,803,664 12.89%
Josiah T. Austin(1).............................................. 2,530,733 11.82%
Michael A. McManus, Jr.(1)....................................... 586,107 2.70%
Stan I. Cohen(2)................................................. 257,810 1.20%
John E. D. Grunow, Jr.(3)........................................ 109,500 *
Walter E. Ruddy(4)............................................... 43,374 *
Peter D. Goodson................................................. -- --
Geraldine A. Ferraro(5).......................................... 49,500 *
Gene A. Washington(6)............................................ 49,500 *
Robert J. Anrig(7)............................................... 13,491 *
Edward J. Steube(8).............................................. 33,115 *
All executive officers and directors as a group (17
persons)(9).................................................... 6,596,386 29.36%
</TABLE>
- ---------------
* Less than 1%
(1) See first table in "-- Beneficial Ownership of Shares of New York Bancorp
Common Stock."
(2) Includes 138,858 shares which may be acquired pursuant to New York Bancorp
stock option plans through January 1998.
(3) Includes 49,500 shares which may be acquired pursuant to presently
exercisable stock options under the New York Bancorp stock option plan for
Outside Directors.
(4) Does not include 18,546 shares owned by Mr. Ruddy's wife and 7,380 shares
held by Mr. Ruddy's children and grandchildren as to all of which Mr. Ruddy
disclaims beneficial ownership.
(5) Includes 36,166 shares which may be acquired pursuant to presently
exercisable stock options under the New York Bancorp stock option plan for
Outside Directors.
(6) Represents shares which may be acquired pursuant to presently exercisable
stock options under the New York Bancorp stock option plan for Outside
Directors.
(7) Includes 7,333 shares which may be acquired pursuant to presently
exercisable options under New York Bancorp stock option plans through
January 1998. Options to acquire an additional 2,556 shares will vest in
February 1998.
(8) Includes 8,667 shares which may be acquired pursuant to New York Bancorp
stock option plans through January 1998. Options to acquire an additional
3,111 shares will vest in February 1998.
(9) Includes options to purchase 1,130,066 shares of New York Bancorp Common
Stock. Options to acquire an additional 19,666 shares will vest in February
1998.
72
<PAGE> 85
CERTAIN REGULATORY CONSIDERATIONS
GENERAL
North Fork is a bank holding company subject to supervision and regulation
by the Federal Reserve Board under the BHC Act. As a bank holding company, North
Fork's activities and those of its banking and nonbanking subsidiaries are
limited to the business of banking and activities closely related or incidental
to banking, and North Fork may not directly or indirectly acquire the ownership
or control of more than five percent of any class of voting shares or
substantially all of the assets of any company, including a bank, without the
prior approval of the Federal Reserve Board.
North Fork Bank, as a New York-chartered FDIC insured depository
institution, is subject to the supervision, regulation, and examination of the
Banking Department and the FDIC. The FDIC has broad enforcement authority over
federally-insured depository institutions, including the power to terminate
deposit insurance, to appoint a conservator or receiver if any of a number of
conditions are met, and to impose substantial fines and other civil penalties.
Almost every aspect of the operations and financial condition of North Fork Bank
is subject to extensive regulation and supervision and to various requirements
and restrictions under federal and state law, including requirements governing
capital adequacy, liquidity, earnings, dividends, reserves against deposits,
management practices, branching, loans, investments, and the provision of
services. Various consumer protection laws and regulations also affect the
operations of North Fork Bank. The deposits of North Fork Bank are insured up to
applicable limits by the FDIC.
Supervision and regulation of bank holding companies and their subsidiaries
is intended primarily for the protection of depositors, the deposit insurance
funds of the FDIC and the banking system as a whole, not for the protection of
bank holding company stockholders or creditors.
The following description summarizes some of the laws to which North Fork,
North Fork Bank, New York Bancorp and Home Federal are subject. To the extent
statutory or regulatory provisions or proposals are described, the description
is qualified in its entirety by reference to the particular statutory or
regulatory provisions or proposals.
PAYMENT OF DIVIDENDS
North Fork is a legal entity separate and distinct from its subsidiaries.
The principle source of North Fork's cash revenues is dividends from North Fork
Bank and there are various legal and regulatory limitations under federal and
state law on the extent to which banking subsidiaries can finance or otherwise
supply funds to their holding company.
Under federal law, a depository institution is prohibited from paying a
dividend if the depository institution would thereafter be "undercapitalized" as
determined by the federal bank regulatory agencies.
Among other things, dividends from a New York-chartered bank, such as North
Fork Bank, are limited by the regulations of the Banking Department to an amount
equal to the bank's net profits for the current year plus its prior two years'
retained net profits, less any required transfer to surplus or a fund for the
retirement of any preferred stock. In addition, Federal Reserve Board policy
provides that, as a matter of prudent banking, a bank holding company generally
should not maintain a rate of cash dividends unless its net income available to
common stockholders has been sufficient to fully fund the dividends, and the
prospective rate of earnings retention appears to be consistent with the holding
company's capital needs, asset quality and overall financial condition.
The relevant federal and state regulatory agencies also have authority to
prohibit a bank or bank holding company from engaging in what, in the opinion of
such regulatory body, constitutes an unsafe or unsound practice in conducting
its business. The payment of dividends could, depending upon the financial
condition of North Fork Bank, be deemed to constitute such an unsafe or unsound
practice.
In addition, the provisions of the Note Purchase Agreement, between North
Fork and Allstate Life Insurance Company (the "Note Purchase Agreement"), impose
certain limitations on the payment of
73
<PAGE> 86
dividends by North Fork. As of September 30, 1997 (after giving effect to the
dividend declared on the North Fork Common Stock on September 23, 1997 of $.15
per share), North Fork's dividend capability under the Note Purchase Agreement
was $17.7 million. North Fork's dividend capability under the Note Purchase
Agreement will increase by an amount equal to the sum of 30% of the cumulative
Consolidated Net Income (as defined therein) for North Fork plus the net cash
proceeds to North Fork from the issuance of any common stock, and will decrease
by, among other things, an amount equal to a specified percentage of the
purchase price of certain Restricted Assets (as defined therein). North Fork's
dividend payout ratio for the year ended December 31, 1996 and for the
nine-month period ended September 30, 1997 was 36% and 33%, respectively. While
there can be no assurance as to the future payment of dividends on the North
Fork Common Stock, North Fork does not currently expect the provisions of the
Note Purchase Agreement to impede North Fork's ability to pay future dividends
in accordance with past practice.
TRANSACTIONS WITH AFFILIATES
North Fork Bank is subject to restrictions under federal law which limit
certain transactions with North Fork and its nonbanking subsidiaries; including
loans, other extensions of credit, investments or asset purchases. Such
transactions by a banking subsidiary with any one affiliate are limited in
amount to ten percent of a bank's capital and surplus and, with all affiliates
together, to an aggregate of twenty percent of such bank's capital and surplus.
Furthermore, such loans and extensions of credit, as well as certain other
transactions, are required to be secured in specified amounts. These and certain
other transactions, including any payment of money to North Fork, must be on
terms and conditions that are or in good faith would be offered to nonaffiliated
companies.
HOLDING COMPANY LIABILITY
Under Federal Reserve Board policy, a bank holding company is expected to
act as a source of financial strength to each of its banking subsidiaries and
commit resources to their support. Such support may be required at times when,
absent this Federal Reserve Board policy, a holding company may not be inclined
to provide it. As discussed below under "Prompt Corrective Action," a bank
holding company in certain circumstances could be required to guarantee the
capital plan of an undercapitalized banking subsidiary.
In the event of a bank holding company's bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code, the trustee will be deemed to have assumed and is required
to cure immediately any deficit under any commitment by the debtor holding
company to any of the federal banking agencies to maintain the capital of an
insured depository institution, and any claim for breach of such obligation will
generally have priority over most other unsecured claims.
PROMPT CORRECTIVE ACTION
Under the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), the federal banking agencies must take prompt supervisory and
regulatory actions against undercapitalized depository institutions. Depository
institutions are assigned one of five capital categories: "well capitalized,"
"adequately capitalized," "undercapitalized," "significantly undercapitalized,"
and "critically undercapitalized," and subjected to differential regulation
corresponding to the capital category within which the institution falls. Under
certain circumstances, a well capitalized, adequately capitalized or
undercapitalized institution may be treated as if the institution were in the
next lower capital category. A depository institution is generally prohibited
from making capital distributions (including paying dividends) or paying
management fees to a holding company if the institution would thereafter be
undercapitalized. Adequately capitalized institutions cannot accept, renew or
roll over brokered deposits except with a waiver from the FDIC, and are subject
to restrictions on the interest rates that can be paid on such deposits.
Undercapitalized institutions may not accept, renew, or roll over brokered
deposits.
The banking regulatory agencies are permitted or, in certain cases,
required to take certain actions with respect to institutions falling within one
of the three undercapitalized categories. Depending on the level of an
institution's capital, the agency's corrective powers include, among other
things: prohibiting the payment of
74
<PAGE> 87
principal and interest on subordinated debt; prohibiting the holding company
from making distributions without prior regulatory approval; placing limits on
asset growth and restrictions on activities; placing additional restrictions on
transactions with affiliates; restricting the interest rate the institution may
pay on deposits; prohibiting the institution from accepting deposits from
correspondent banks; and in the most severe cases, appointing a conservator or
receiver for the institution. A banking institution that is undercapitalized is
required to submit a capital restoration plan, and such a plan will not be
accepted unless, among other things, the banking institution's holding company
guarantees the plan up to a certain specified amount. Any such guarantee from a
depository institution's holding company is entitled to a priority of payment in
bankruptcy. As of September 30, 1997, North Fork Bank exceeded the required
capital ratios for classification as "well capitalized." See "-- Capital
Adequacy."
CAPITAL ADEQUACY
RISK-BASED CAPITAL AND LEVERAGE RATIOS
<TABLE>
<CAPTION>
RISK-BASED RATIOS
-------------------
TIER I TOTAL LEVERAGE
AS OF SEPTEMBER 30, 1997 CAPITAL CAPITAL RATIO(1)
-------------------------------------------------------- ------- ------- --------
<S> <C> <C> <C>
North Fork(2)........................................... 14.34% 15.59% 8.38%
North Fork Bank......................................... 11.67 12.92 6.66
New York Bancorp(3)..................................... 10.76 11.94 5.18
Home Federal............................................ 10.65 11.83 5.11
Minimum required ratio.................................. 4.0% 8.0% 3.0%
"Well capitalized" minimum ratio........................ 6.0% 10.0% 5.0%
</TABLE>
- ---------------
(1) For all but the most highly-rated bank holding companies and banks, the
leverage ratio is 3 percent plus an additional percentage of at least 100 to
200 basis points.
(2) On December 10, 1997, North Fork issued through Capital Trust II $100
million of Capital Securities II and received proceeds of $99.6 million.
Issuance costs, consisting principally of underwriting discounts and
professional fees of approximately $1.4 million, will be paid by North Fork.
Capital Trust II was formed on November 14, 1997, with an initial
capitalization in common stock of approximately $3.1 million and for the
exclusive purpose of issuing the Capital Securities II and using the
proceeds thereof to acquire Debt Securities issued by North Fork. The Debt
Securities are due at maturity on December 15, 2027, are non-callable, in
whole or in part, prior to December 15, 2007, except in certain
circumstances, but, may be redeemed at any time thereafter, in whole or
part, at declining premiums to maturity. The Capital Securities II are
subject to redemption contemporaneously with the redemption of the Debt
Securities. Capital Securities II qualify as Tier I Capital for regulatory
capital purposes. See "PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS"
included elsewhere herein for the effect the issuance of the Capital
Securities II would have upon the pro forma combined financial statements
and the related regulatory capital ratios assuming the foregoing issuance
occurred as of September 30, 1997.
(3) New York Bancorp, as a unitary thrift holding company, is not subject to any
minimum required risk-based and leverage ratios.
The Federal Reserve Board has adopted risk-based capital guidelines for
bank holding companies. The minimum ratio of total capital to risk-weighted
assets (which are the credit risk equivalents of balance sheet assets and
certain off balance sheet items such as standby letters of credit) is 8 percent.
At least half of the total capital must be composed of common stockholders'
equity (including retained earnings), qualifying non-cumulative perpetual
preferred stock (and, for bank holding companies only, a limited amount of
qualifying cumulative perpetual preferred stock), and minority interests in the
equity accounts of consolidated subsidiaries, less goodwill, other disallowed
intangibles and disallowed deferred tax assets, among other items ("Tier 1
capital"). The remainder may consist of a limited amount of subordinated debt,
other perpetual preferred stock, hybrid capital instruments, mandatory
convertible debt securities that meet certain require-
75
<PAGE> 88
ments, as well as a limited amount of reserves for loan losses ("Tier 2
capital"). The Federal Reserve has also adopted a minimum leverage ratio for
bank holding companies, requiring Tier 1 capital of at least 3 percent of
average total consolidated assets.
The FDIC has also established risk-based and leverage capital guidelines
which state non-members banks are required to meet. These regulations are
generally similar to those established by the Federal Reserve Board for bank
holding companies. The capital ratios for North Fork, North Fork Bank, New York
Bancorp and Home Federal are provided in the chart above.
The federal banking agencies' risk-based and leverage ratios are minimum
supervisory ratios generally applicable to banking organizations that meet
certain specified criteria, assuming that they have the highest regulatory
rating. Banking organizations not meeting these criteria are expected to operate
with capital positions well above the minimum ratios. The federal bank
regulatory agencies may set capital requirements for a particular banking
organization that are higher than the minimum ratios when circumstances warrant.
Federal Reserve Board guidelines also provide that banking organizations
experiencing internal growth or making acquisitions will be expected to maintain
strong capital positions substantially above the minimum supervisory levels,
without significant reliance on intangible assets. In addition, the regulations
of the Federal Reserve Board provide that concentration of credit risk, interest
rate risk and certain risks arising from nontraditional activities, as well as
an institution's ability to manage these risks, are important factors to be
taken into account by regulatory agencies in assessing an organization's overall
capital adequacy. The agencies have also adopted an adjustment to the risk-based
capital calculations to cover market risk in trading accounts of certain
institutions. The compliance by affected institutions with the market rate
adjustment is not mandatory until 1998.
The federal banking agencies recently adopted amendments to their
risk-based capital regulations to provide for the consideration of interest rate
risk in the agencies' determination of a banking institution's capital adequacy.
The amendments require such institutions to effectively measure and monitor
their interest rate risk and to maintain capital adequate for that risk.
As discussed below under "Enforcement Powers of the Federal Banking
Agencies," failure to meet the minimum regulatory capital requirements could
subject a banking institution to a variety of enforcement remedies available to
federal regulatory authorities, including, in the most severe cases, the
termination of deposit insurance by the FDIC and placing the institution into
conservatorship or receivership.
ENFORCEMENT POWERS OF THE FEDERAL BANKING AGENCIES
The federal banking agencies have broad enforcement powers, including the
power to terminate deposit insurance, impose substantial fines and other civil
and criminal penalties and appoint a conservator or receiver. Failure to comply
with applicable laws, regulations and supervisory agreements could subject North
Fork, North Fork Bank, New York Bancorp, Home Federal, as well as officers,
directors and other institution-affiliated parties of these organizations, to
administrative sanctions and potentially substantial civil money penalties. In
addition to the grounds discussed under "Prompt Corrective Action," the
appropriate federal banking agency may appoint the FDIC as conservator or
receiver for a banking institution (or the FDIC may appoint itself, under
certain circumstances) if any one or more of a number of circumstances exist,
including, without limitation, the fact that the banking institution is
undercapitalized and has no reasonable prospect of becoming adequately
capitalized; fails to become adequately capitalized when required to do so;
fails to submit a timely and acceptable capital restoration plan; or materially
fails to implement an accepted capital restoration plan.
FDIC INSURANCE ASSESSMENTS
The deposits of North Fork Bank are primarily insured by the Bank Insurance
Fund (the "BIF") of the FDIC to the extent provided by law. In addition, certain
deposits of North Fork Bank that are related to the bank's prior acquisitions of
a savings association and branches of a federal savings bank are insured by the
FDIC's Savings Association Insurance Fund (the "SAIF").
76
<PAGE> 89
The FDIC has adopted a risk-based assessment system under which the
assessment rate for an insured depository institution varies according to the
level of risk involved in its activities. Under this risk based insurance
system, BIF-insured deposits are assessed at a rate of between 0 to 27 cents per
$100 of eligible deposits. Until recently, SAIF-deposits generally were assessed
at a rate above that assessed on BIF-insured deposits.
In response to concerns that the insurance premium disparity between BIF-
and SAIF-insured deposits would have a negative effect on SAIF-insured
institutions and the SAIF, Congress recently passed legislation that was signed
by the President on September 30, 1997 that, among other things, imposed a
special one-time assessment on SAIF member institutions to recapitalize the
SAIF. The new legislation also spread the obligations for payment of the
Financing Corporation ("FICO") bonds across all SAIF and BIF members. BIF
deposits are currently assessed a FICO payment of 1.3 basis points, while SAIF
deposits are assessed a FICO payment of 6.48 basis points. Full pro rata sharing
of the FICO payments between BIF and SAIF members will occur on the earlier of
January 1, 2000 or the date the BIF and SAIF are merged. The legislation
specified that the BIF and SAIF will be merged on January 1, 1999, provided no
savings associations remain as of that time. FICO payments are to be paid
directly by SAIF and BIF institutions in addition to deposit insurance
assessments.
In addition, the FDIC has lowered the rates on SAIF-assessable deposits to
a rate ranging from 0 to 27 cents per $100 of eligible deposits. Future SAIF
assessment rates are expected to depend primarily on the rate of any new losses
from the SAIF. Under the recent legislation, however, the FDIC is not permitted
to establish SAIF assessment rates that are lower than comparable BIF assessment
rates.
CONTROL ACQUISITIONS
The Change in Bank Control Act (the "CBCA") prohibits a person or group of
persons from acquiring "control" of a bank holding company unless the Federal
Reserve Board has been notified and has not objected to the transaction. Under a
rebuttable presumption established by the Federal Reserve, the acquisition of
10% or more of a class of voting stock of a bank holding company with a class of
securities registered under Section 12 of the Exchange Act, such as North Fork,
would, under the circumstances set forth in the presumption, constitute
acquisition of control of North Fork.
In addition, any company is required to obtain the approval of the Federal
Reserve under the BHC Act before acquiring 25% (5% in the case of an acquiror
that is a bank holding company) or more of the outstanding Common Stock of North
Fork, or otherwise obtaining control or a "controlling influence" over North
Fork.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
permits an adequately capitalized and adequately managed bank holding company,
with Federal Reserve Board approval, to acquire banking institutions located in
states other than the bank holding company's home state without regard to
whether the transaction is prohibited under state law. In addition, effective
June 1, 1997, national banks and state banks with different home states are
permitted to merge across state lines, with the approval of the appropriate
federal banking agency, unless the home state of a participating banking
institution have passed legislation prior to that date that expressly prohibits
interstate mergers. De novo interstate branching is permitted if the laws of the
host state so authorizes.
FUTURE LEGISLATION
Various legislation, including proposals to overhaul the bank regulatory
system, expand the powers of banking institutions and bank holding companies and
limit the investments that a depository institution may make with insured funds,
is from time to time introduced in Congress. Such legislation may change banking
statutes and the operating environment of North Fork and its subsidiaries in
substantial and unpredictable ways. North Fork cannot determine the ultimate
effect that potential legislation, if enacted, or implementing regulations,
would have upon the financial condition or results of operations of North Fork
or its subsidiaries.
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DESCRIPTION OF NORTH FORK CAPITAL STOCK
GENERAL
The authorized capital stock of North Fork consists of 200,000,000 shares
of North Fork Common Stock and 10,000,000 shares of preferred stock, par value
$1.00 per share ("North Fork Preferred Stock"), issuable in one or more series
with such terms and at such times and for such consideration as the North Fork
Board determines. As of the North Fork Record Date, 67,418,033 shares of North
Fork Common Stock (including 57,696 shares of treasury stock) and no shares of
North Fork Preferred Stock had been issued.
As of October 7, 1997, approximately 1,808,702 shares of North Fork Common
Stock had been reserved for issuance upon the exercise of outstanding stock
options under various employee stock option plans and, 837,968 shares of North
Fork Common Stock were reserved for issuance pursuant to North Fork's dividend
reinvestment and stock purchase plans and 401(k) plan. In addition, 2,000,000
shares of a series of North Fork Preferred Stock designated as Series A Junior
Participating Preferred Stock, par value $1.00 per share (the "Series A
Preferred"), were reserved for issuance as provided in the Rights Plan described
below.
The following description contains a summary of all the material features
of the capital stock of North Fork but does not purport to be complete and is
subject in all respects to the applicable provisions of the Delaware General
Corporate Law (the "DGCL") and is qualified in its entirety by reference to the
Certificate of Incorporation of North Fork (the "North Fork Certificate"), and
the terms of the Rights Agreement (the "North Fork Rights Agreement"), between
North Fork and North Fork Bank, as Rights Agent, dated as of February 28, 1989,
described below.
COMMON STOCK
The outstanding shares of North Fork Common Stock are fully paid and
nonassessable. Holders of North Fork Common Stock are entitled to one vote for
each share held of record on all matters submitted to a vote of the stockholders
and have no preemptive rights. Holders of North Fork Common Stock are not
entitled to cumulative voting rights with respect to the election of directors.
The North Fork Common Stock is neither redeemable nor convertible into other
securities, and there are no sinking fund provisions.
Subject to the preferences applicable to any shares of North Fork Preferred
Stock outstanding at the time, holders of North Fork Common Stock are entitled
to dividends when and as declared by the North Fork Board from funds legally
available therefor and are entitled, in the event of liquidation, to share
ratably in all assets remaining after payment of liabilities.
The North Fork Certificate and North Fork's Bylaws provide that the North
Fork Board is to be divided into three classes which shall be as nearly equal in
number as possible. Directors are elected by classes to three year terms, so
that approximately one-third of the directors of North Fork are elected at each
annual meeting of the stockholders. In addition, North Fork's Bylaws provide
that the power to fill vacancies is vested in the North Fork Board. The overall
effect of such provisions may be to prevent a person or entity from seeking to
acquire control of North Fork through an increase in the number of directors on
the North Fork Board and the election of designated nominees to fill such newly
created vacancies.
RIGHTS PLAN
On February 28, 1989, the North Fork Board declared a dividend distribution
of one right (a "Right") for each outstanding share of North Fork Common Stock
to stockholders of record at the close of business on March 13, 1989. Each Right
entitles the registered holder to purchase from North Fork a unit consisting of
one one-hundredth of a share (a "Unit") of Series A Preferred at a Purchase
Price of $70 per Unit, subject to adjustment. The description and terms of the
Rights are set forth in the North Fork Rights Agreement. Unless otherwise
defined herein, all capitalized terms used herein shall have the meanings set
forth in the North Fork Rights Agreement.
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Initially, the Rights will be attached to all North Fork Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the North Fork
Common Stock and a Distribution Date will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
North Fork Common Stock (the "Stock Acquisition Date"), (ii) 10 business days
following the commencement of a tender offer or exchange offer that would result
in a person or group beneficially owning 20% or more of such outstanding shares
of North Fork Common Stock or (iii) 10 days after the North Fork Board
determines that any person, alone or together with its affiliates and
associates, has become the Beneficial Owner of an amount of North Fork Common
Stock which such directors determine to be substantial (which amount shall in no
event be less than 10% of the shares of North Fork Common Stock outstanding) and
such directors, after reasonable inquiry and investigation, including
consultation with such persons as such directors shall seem appropriate, shall
determine that (a) such beneficial ownership by such person is intended to cause
North Fork to repurchase the North Fork Common Stock beneficially owned by such
person or to cause pressure on North Fork to take action or enter into a
transaction or series of transactions intended to provide such person with
financial gain under circumstances where the North Fork Board determines that
the best interests of North Fork and its stockholders would not be served by
taking such action or entering into such transactions or series of transactions
at that time or (b) such beneficial ownership is causing or reasonably likely to
cause a material adverse impact (including, but not limited to, impairment of
relationships with customers or impairment of North Fork's ability to maintain
its competitive position) on the business or prospects of North Fork (any such
person being referred to herein and in the North Fork Rights Agreement as an
"Adverse Person"). Pursuant to the North Fork Rights Agreement, North Fork
reserves the right to require prior to the occurrence of a Triggering Event (as
defined below) that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on March 13, 1999, unless earlier redeemed by North
Fork as described below.
In the event that (i) a person becomes the beneficial owner of 20% or more
of the then outstanding shares of North Fork Common Stock (except pursuant to an
offer for all outstanding shares of North Fork Common Stock which the
independent directors determine to be fair to and otherwise in the best
interests of North Fork and its stockholders) or (ii) the North Fork Board
determines that a person is an Adverse Person (any of such events being referred
to herein as a "Flip-in Event"), each holder of a Right will thereafter have the
right to receive, upon exercise, North Fork Common Stock (or, in certain
circumstances, cash, property or other securities of North Fork) having a value
equal to two times the exercise price of the Right. Notwithstanding any of the
foregoing, following the occurrence of either of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person or Adverse
Person will be null and void. However, Rights are not exercisable following the
occurrence of the event set forth above until such time as the Rights are no
longer redeemable by North Fork as set forth below.
In the event that, at any time following the Stock Acquisition Date or the
date on which the North Fork Board determines that a person is an Adverse
Person, (i) North Fork is acquired in a merger or other business combination
transaction in which North Fork is not the surviving corporation (other than a
merger which follows an offer described in the preceding paragraph), or (ii) 50%
or more of North Fork's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the exercise price of
the Right. The events set forth in this paragraph and in the preceding paragraph
are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of Series A Preferred
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Series A Preferred, (ii) if holders of the Series A Preferred are granted
certain rights or warrants to subscribe for Series A Preferred or convertible
securities at less than the current market price of the Series A Preferred, or
(iii) upon the
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distribution to holders of the Series A Preferred of evidences of indebtedness
or assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Series A Preferred on the
last trading date prior to the date of exercise.
In general, at any time until ten days following the Stock Acquisition
Date, North Fork may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (payable in cash, North Fork Common Stock or other consideration
deemed appropriate by the North Fork Board). Under certain circumstances set
forth in the North Fork Rights Agreement, the decision to redeem shall require
the concurrence of a majority of the Continuing Directors (as defined below).
North Fork may not redeem the Rights if the North Fork Board has previously
declared a person to be an Adverse Person. Immediately upon the action of the
North Fork Board ordering redemption of the Rights, with, where required, the
concurrence of the Continuing Directors, the Rights will terminate and the only
right of the holders of Rights will be to receive the $.01 redemption price.
The term "Continuing Directors" means any member of the North Fork Board
who was a member of the North Fork Board prior to the date of the North Fork
Rights Agreement, and any person who is subsequently elected to the North Fork
Board if such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, an Adverse Person, or an
affiliate or associate of an Acquiring Person or an Adverse Person, or any
representative of the foregoing entities.
At any time after the occurrence of a Flip-in Event, the North Fork Board
may exchange the Rights (other than Rights owned by an Acquiring Person or an
Adverse Person, which have become void), in whole or in part, at any exchange
ratio of one share of North Fork Common Stock per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of North Fork, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders of North Fork or to North Fork, stockholders of North
Fork may, depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for North Fork Common Stock (or other
consideration) of North Fork or for common stock of the acquiring company as set
forth above, or are exchanged as provided in the preceding paragraph.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the North Fork Rights Agreement may be amended
by the North Fork Board prior to the Distribution Date. After the Distribution
Date, the provisions of the North Fork Rights Agreement may be amended by the
North Fork Board (in certain circumstances, with the concurrence of the
Continuing Directors) in order to cure any ambiguity, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person or Adverse Person), or to shorten or lengthen any time
period under the North Fork Rights Agreement; provided, however, that no
amendment to adjust the time period governing redemption shall be made at such
time as the Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire North Fork in
a manner which causes the Rights to become discount Rights unless the offer is
conditional on a substantial number of Rights being acquired. The Rights,
however, should not affect any prospective offeror willing to make an offer at a
fair price and otherwise in the best interests of North Fork and its
stockholders as determined by the North Fork Board or willing to negotiate with
the North Fork Board. The Rights should not interfere with any merger or other
business combination approved by the North Fork Board since the North Fork Board
may, at its option, at any time until ten days following the Stock Acquisition
Date (unless the North Fork Board has previously declared a person to be an
Adverse Person), redeem all but not less than all the then outstanding Rights at
the redemption price.
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COMPARISON OF STOCKHOLDER RIGHTS
North Fork and New York Bancorp are incorporated under the laws of the
State of Delaware. If the merger is consummated, the holders of New York Bancorp
Common Stock, whose rights as stockholders are currently governed by the DGCL,
the New York Bancorp Restated Certificate of Incorporation (the "New York
Bancorp Certificate") and the Amended and Restated Bylaws of New York Bancorp
(the "New York Bancorp Bylaws") will, upon the exchange of their New York
Bancorp Common Stock pursuant to the Merger Agreement, become holders of shares
of North Fork Common Stock, and their rights as such will be governed by the
DGCL, the North Fork Certificate and the bylaws of North Fork (the "North Fork
Bylaws"). The material differences between the rights of holders of New York
Bancorp Common Stock and the rights of holders of North Fork Common Stock,
resulting from the differences in their governing documents, are summarized
below.
The following summary does not purport to be a complete statement of the
rights of holders of North Fork Common Stock under applicable Delaware laws, the
North Fork Certificate and the North Fork Bylaws or the rights of the holders of
New York Bancorp Common Stock under applicable Delaware laws, the New York
Bancorp Certificate and the New York Bancorp Bylaws, or a complete description
of the specific provisions referred to herein. This summary contains a list of
the material differences but is not meant to be relied upon as an exhaustive
list or a detailed description of the provisions discussed and is qualified in
its entirety by reference to the DGCL and the governing corporate instruments of
North Fork (including the North Fork Rights Agreement) and the governing
corporate instruments of New York Bancorp, to which the holders of New York
Bancorp Common Stock are referred. Copies of such governing corporate
instruments of North Fork and New York Bancorp are available, without charge, to
any person, including any beneficial owner to whom this Joint Proxy
Statement/Prospectus is delivered, by following the instructions listed under
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
STOCKHOLDER ACTION BY WRITTEN CONSENT
North Fork. Under the DGCL, unless otherwise provided in the certificate
of incorporation, any action which may be taken at an annual or special meeting
of stockholders may be taken without a meeting and without prior notice, if a
consent in writing, setting forth the action so taken, is signed by the holders
of outstanding shares, having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted. The North Fork
Certificate does not contain any provision to the contrary.
New York Bancorp. The New York Bancorp Certificate states that any action
required or permitted to be taken by the stockholders of New York Bancorp must
be effected at a duly called annual or special meeting of stockholders and may
not be effected by such stockholders by written consent.
STOCKHOLDER NOMINATIONS AND PROPOSALS FOR BUSINESS
North Fork. The North Fork Bylaws establish procedures that must be
followed for stockholders to nominate individuals to the North Fork Board or to
propose business at an annual meeting of stockholders.
In order to nominate individuals to the North Fork Board, a stockholder
must provide timely notice of such nomination in writing to the Secretary of
North Fork. A stockholder's notice must set forth (a) as to each person whom the
stockholder proposed to nominate for election as a director (i) the name, age,
business address and residence address of each person, (ii) the principal
occupation or employment of the person, (iii) the class or series and number of
shares of North Fork held by the person and (iv) any other information relating
to the person that is required to be made in connection with solicitations of
proxies for election of directors pursuant to Section 14 of the Exchange Act,
and the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving such notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
North Fork which are owned beneficially or of record by such stockholder, (iii)
a description of all arrangements or understandings between such stockholder and
each proposed nominee and any other person or persons (including their names)
pursuant to which the nomination(s) are to be made by such stockholder, (iv) a
representation that such stockholder intends to
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appear in person or by proxy at the annual meeting to nominate the persons named
in its notice, and (v) any other information relating to such stockholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a director if
elected.
In order to properly propose that an item of business come before the
annual meeting of stockholders, a stockholder must provide timely notice in
writing to the Secretary of North Fork, which notice must include (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name,
record address, class and number of shares of North Fork capital stock
beneficially owned by the stockholder giving such notice, (iii) a description of
all arrangements or understandings between such stockholder and any other person
or persons (including their names) in connection with the proposal of such
business by such stockholder and any material interest of such stockholder in
such business, and (iv) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such business before the
meeting.
To be timely, a stockholder's notice of a nominee or proposed item of
business to the Secretary must be delivered to or mailed and received at the
principal executive offices of North Fork not less than 60 days nor more than 90
days prior to the anniversary date of the immediately preceding annual meeting
of stockholders; provided, however, that in the event that the annual meeting is
called for a date that is not within 30 days before or after such anniversary
date, notice by the stockholder in order to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure of
the date of the annual meeting was made, whichever first occurs.
New York Bancorp. The New York Bancorp Bylaws establish similar procedures
that must be followed for stockholders to nominate individuals to the New York
Bancorp Board or to propose business at the annual meeting of stockholders. The
information required to be furnished by a New York Bancorp stockholder in order
to advance nominations to the New York Bancorp Board or to propose items of
business for consideration at an annual meeting of stockholders is not
materially different from that required to be furnished pursuant to the North
Fork Bylaws; however, the time requirements under the New York Bancorp Bylaws
are different. Under the New York Bancorp Bylaws, in order to be timely, notice
must be delivered to and received by New York Bancorp not less than 30 days
prior to the meeting at which directors are to be elected or the proposed
business is to be conducted, or, if New York Bancorp gives less than 40 days'
notice or prior public disclosure of the meeting date, then notice by the
stockholder must be received by the close of business on the 10th day following
the date on which notice of the meeting was mailed to stockholders or such
public disclosure was made.
BUSINESS COMBINATIONS INVOLVING INTERESTED STOCKHOLDERS
North Fork. Section 203 the DGCL prohibits a corporation from engaging in
any business combination with an interested stockholder (defined as a 15%
stockholder) for a period of three years after the date that stockholder became
an interested stockholder unless (i) before that date, the board of directors of
the corporation approved the business combination or the transaction
transforming the stockholder into an interested stockholder, (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, that stockholder owned at least 85% of the outstanding
voting stock (excluding shares owned by directors, officers and certain employee
stock ownership plans) or (iii) on or after the date the stockholder became
"interested," the business combination received the approval of both the
corporation's directors and two-thirds of the outstanding voting shares not
owned by the interested stockholder voted at a meeting and not by written
consent. A Delaware corporation may opt out of this provision through an
amendment to its certificate of incorporation or bylaws adopted by a majority of
the outstanding voting shares. North Fork has not adopted any such amendment.
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New York Bancorp. As a Delaware corporation, New York Bancorp is also
subject to Section 203 of the DGCL and has not opted out of such statute through
an amendment to its governing documents.
In addition, the New York Bancorp Certificate provides that any Business
Combination (as defined herein) involving New York Bancorp and any New York
Bancorp Interested Stockholder (as defined herein) must be approved by the
holders of at least 80% of the voting power (the "80% Voting Requirement") of
the then outstanding New York Bancorp capital stock entitled to vote generally
in the election of directors (the "New York Bancorp Voting Stock"), voting
together as a single class. The 80% Voting Requirement will not apply to a
Business Combination if either (i) the Business Combination has been approved by
a majority of the Disinterested Directors (defined generally to include any
director on the New York Bancorp Board who is unaffiliated with the New York
Bancorp Interested Stockholder and who either was a director immediately prior
to the time the New York Bancorp Interested Stockholder became such or was
recommended or elected to succeed such a Disinterested Director by a majority of
the New York Bancorp Disinterested Directors), or (ii) certain "fair price" and
other criteria are met. In the event that the 80% Voting Requirement is not
required, the Business Combination will only require approval by the affirmative
vote of holders of a majority of the outstanding shares of New York Bancorp
Voting Stock.
As defined in the New York Bancorp Certificate, a Business Combination
includes, among other things, (i) any merger or consolidation of New York
Bancorp or any subsidiary with any New York Bancorp Interested Stockholder or
any other corporation which is or after such merger or consolidation would be,
an affiliate of a New York Bancorp Interested Stockholder, (ii) any sale or
other disposition by New York Bancorp of assets having a value of 25% or more of
the combined assets of New York Bancorp and its subsidiaries to a New York
Bancorp Interested Stockholder or any affiliate thereof, (iii) the issuance or
transfer by New York Bancorp or any subsidiary of any securities of New York
Bancorp or any subsidiary to any New York Bancorp Interested Stockholder or any
affiliate thereof in exchange for cash, securities, or other property having an
aggregate fair market value equaling or exceeding 25% of the combined assets of
New York Bancorp and its subsidiaries, (iv) the adoption of any plan or proposal
for the liquidation or dissolution of New York Bancorp proposed by or on behalf
of a New York Bancorp Interested Stockholder or any affiliate thereof or (v) any
transaction that has the effect of increasing the proportionate amount of the
outstanding shares of any class of equity or convertible securities of New York
Bancorp or any subsidiary that is directly or indirectly owned by a New York
Bancorp Interested Stockholder or any affiliate thereof.
As defined in the New York Bancorp Certificate, a New York Bancorp
Interested Stockholder is generally defined as any person (other than New York
Bancorp or any holding company or subsidiary thereof) who or which: (1) is the
beneficial owner, directly or indirectly, of more than 10% of the outstanding
New York Bancorp Voting Stock, (2) is an affiliate of New York Bancorp and at
any time within the two year period immediately prior to the date in question
was the beneficial owner of 10% or more of the outstanding New York Bancorp
Voting Stock, or (3) is an assignee of or has otherwise succeeded to any shares
of New York Bancorp Voting Stock which were at any time within the two year
period immediately prior to the date in question beneficially owned by any New
York Bancorp Interested Stockholder, if such assignment or succession shall have
occurred in the course of a transaction not involving a public offering as
defined in the Securities Act.
REMOVAL OF DIRECTORS
North Fork. The DGCL provides that, unless the certificate of
incorporation provides otherwise, in the case of a corporation whose board of
directors is classified (as is the North Fork Board), stockholders may remove a
director only for cause by a vote of the majority of the then-outstanding shares
of the corporation entitled to vote thereon. Further, stockholders may not
remove a director without cause. The North Fork Certificate does not contain any
provision concerning the removal of directors.
New York Bancorp. The New York Bancorp Board, like the North Fork Board,
is classified. The New York Bancorp Certificate provides that any director of
New York Bancorp, or the entire New York Bancorp Board, may be removed from
office only for cause and only by the affirmative vote of the holders of at
least 80% of the New York Bancorp Voting Stock, voting together as a single
class. The New York Bancorp
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Certificate defines "cause" as a breach of fiduciary duty involving personal
dishonesty, intentional failure to perform stated duties as a director which
results in substantial loss to New York Bancorp or willful violation of any law,
rule, regulation or final cease and desist order which results in substantial
loss to New York Bancorp.
CONSIDERATION OF OTHER CONSTITUENCIES
North Fork. The North Fork Certificate does not contain any provision
specifically authorizing or requiring the North Fork Board of Directors to
consider the interests of any constituencies of North Fork other than its
stockholders in considering whether to approve or oppose any corporate action,
including without limitation any proposal to acquire North Fork by means of a
merger, tender offer or similar business combination. However, pursuant to case
law interpreting the provisions of the DGCL, the board of directors of a
Delaware corporation such as North Fork generally may consider the impact of
such a proposal on North Fork's other constituencies, provided that doing so
bears some reasonable relationship to general stockholder interests.
New York Bancorp. The New York Bancorp Certificate provides that when
evaluating any offer of another person to (i) make a tender or exchange offer
for any equity security of New York Bancorp, (ii) merge or consolidate New York
Bancorp with another corporation or entity or (iii) purchase or otherwise
acquire all or substantially all of the properties and assets of New York
Bancorp, the New York Bancorp Board shall, in connection with the exercise of
its judgment in determining what is in the best interest of New York Bancorp and
its stockholders, give due consideration to all relevant factors, including,
without limitation, the social and economic effect of acceptance of the offer on
the current and future customers and employees of New York Bancorp and its
subsidiaries, on the communities in which New York Bancorp and its subsidiaries
operate, on the ability of New York Bancorp to fulfill its objectives as a bank
holding company and on the ability of Home Federal to fulfill the objectives of
a federally-chartered stock form savings bank under applicable statues and
regulations.
PERSONAL LIABILITY OF DIRECTORS
North Fork. The North Fork Certificate provides, subject only to the
express prohibitions on elimination or limitation of liability of directors set
forth in the DGCL, as it exists or may hereafter be amended, that the personal
liability of each of its directors to North Fork or its stockholders for
monetary damages for breach of his fiduciary duty as a director is limited to
$25,000 per occurrence. The DGCL allows a corporation, through its certificate
of incorporation, to limit or eliminate the personal liability of directors to
the corporation and its stockholders for monetary damages for breach of
fiduciary duty. However, this provision excludes any limitation on liability (i)
for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (iii) for willful or
negligent violation of the laws governing the payment of dividends or the
purchase or redemption of stock or (iv) for any transaction from which the
director derives an improper personal benefit.
New York Bancorp. The New York Bancorp Certificate limits the personal
liability of a director of New York Bancorp for monetary damages for a breach of
fiduciary duty as to the fullest extent permitted by the DGCL.
RIGHTS PLANS
North Fork. On February 28, 1989, the North Fork Board of Directors
declared a dividend distribution of one right for each outstanding share of
North Fork Common Stock to stockholders of record at the close of business on
March 13, 1989. For a description of the Rights and the related North Fork
Rights Agreement, see "DESCRIPTION OF NORTH FORK CAPITAL STOCK -- Rights Plans."
New York Bancorp. The New York Bancorp Board has not adopted a shareholder
rights plan.
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AMENDMENT OF BY-LAWS
North Fork. The DGCL provides that the stockholders have the power to
adopt, amend, or repeal the Bylaws of a corporation, subject to any limitations
provided in the Certificate of Incorporation. There are no such limitations in
the North Fork Certificate and accordingly, the North Fork Bylaws may be amended
by a majority of the then-outstanding shares of North Fork capital stock present
and voting at a meeting at which a quorum is present.
New York Bancorp. The New York Bancorp Certificate provides that the New
York Bancorp Board is empowered to adopt, amend or repeal the New York Bancorp
Bylaws, by a vote of the majority of the total number of authorized directors
(regardless of any vacancies existing at such time). The New York Bancorp
Certificate further provides that New York Bancorp's stockholders may adopt,
amend or repeal the New York Bancorp Bylaws, by the affirmative vote of the
holders of at least 80% of the New York Bancorp Voting Stock, voting together as
a single class.
AMENDMENT OF CERTIFICATE
North Fork. The DGCL provides that amendments to a corporation's
certificate of incorporation generally require a resolution by the corporation's
board of directors setting forth the amendment proposed and declaring its
advisability and the affirmative vote of the holders of a majority of the
corporation's outstanding stock entitled to vote thereon. The North Fork
Certificate contains no further provisions concerning the amendment of the North
Fork Certificate.
New York Bancorp. The New York Bancorp Certificate provides that, in
addition to the requirements imposed by the DGCL and discussed above, the
affirmative vote of the holders of at least 80% of the New York Bancorp Voting
Stock, voting together as a single class, shall be required to amend or repeal
those provisions of the New York Bancorp Certificate relating to, among other
things, (i) the amendment of any provisions of the New York Bancorp Certificate
or the New York Bancorp Bylaws, (ii) the prohibition on stockholder action by
written consent, (iii) the persons authorized to call special meetings of
stockholders, (iv) the classification of the New York Bancorp Board and the
election and removal of directors, (v) the requirements for authorization of a
Business Combination or (vi) the indemnification of New York Bancorp's directors
and officers.
SPECIAL MEETING OF STOCKHOLDERS
North Fork. Under the DGCL, special stockholder meetings of a corporation
may be called by its board of directors and by any person or persons authorized
to do so by its certificate of incorporation or bylaws. Under the North Fork
Bylaws, special meetings of North Fork stockholders may be called by the North
Fork Board, by the Chairman or by the President.
New York Bancorp. Under the New York Bancorp Certificate and the New York
Bancorp Bylaws, special meetings of New York Bancorp stockholders may be called
by the New York Bancorp Board pursuant to a resolution adopted by a majority of
the total number of authorized directors (regardless of any vacancies existing
at such time).
85
<PAGE> 98
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
The following pro forma condensed combined financial statements set forth
certain selected condensed financial information for North Fork, Branford and
New York Bancorp on an unaudited combined basis. The Pro Forma Condensed
Combined Balance Sheets give effect to the Merger and the Branford Merger as if
such transactions had become effective as of September 30, 1997. The Pro Forma
Condensed Combined Statements of Income give effect to the Merger and Branford
Merger as if the Merger had become effective as of the first day of the periods
for which information is presented and the Branford Merger had become effective
as of January 1, 1996. The pro forma information assumes that the Merger is
accounted for using the pooling of interests method of accounting (See "THE
MERGER -- Anticipated Accounting Treatment") and the Branford Merger is
accounted for under the purchase method of accounting. New York Bancorp's annual
reporting periods are as of and for the year ended September 30, whereas North
Fork and Branford utilize a calendar year basis. All consolidated financial
results for prior full year periods combine the results of operation of the
entities indicated utilizing their respective reporting periods. New York
Bancorp financial results for the nine months ended September 30, 1997 have been
conformed to the calendar year reporting period of North Fork and Branford.
These statements should be read in conjunction with, and are qualified in their
entirety by, the historical financial statements, including the notes thereto,
of North Fork and New York Bancorp incorporated by reference herein. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
The pro forma condensed combined financial statements do not give effect to
the anticipated cost savings and revenue enhancement opportunities that could
result from the Merger (see "MANAGEMENT AND OPERATIONS FOLLOWING THE
MERGER -- Consolidation of Operations; Projected Cost Savings and Revenue
Enhancements; Projected Earnings Per Share") or the Branford Merger, and do not
purport to be indicative of the combined financial position or results of
operations of future periods or indicative of the results that would have
occurred had the relevant transaction(s) been consummated on September 30, 1997
or at the beginning of the periods indicated.
86
<PAGE> 99
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
COMBINED WITH BRANFORD SAVINGS BANK
PRO FORMA CONDENSED COMBINED BALANCE SHEETS
(UNAUDITED)
SEPTEMBER 30, 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
NORTH FORK/ ALL COMBINED
PRO FORMA BRANFORD NEW YORK PRO FORMA TRANSACTIONS
NORTH FORK BRANFORD ADJUSTMENTS PRO FORMA BANCORP ADJUSTMENTS PRO FORMA
---------- -------- ----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and Due from Banks...... $ 106,760 $ 4,237 $(2,710)(1) $ 108,287 $ 26,305 -- $ 134,592
Federal Funds Sold........... 35,000 9,875 -- 44,875 -- -- 44,875
Securities:
Available-for-Sale......... 1,633,737 5,132 -- 1,638,869 495,910 $ 26,400(4) 2,161,179
Held-to-Maturity........... 1,166,329 42,661 -- 1,208,990 644,840 -- 1,853,830
---------- -------- -------- ---------- ---------- --------- -----------
Total Securities........... 2,800,066 47,793 0 2,847,859 1,140,750 26,400 4,015,009
---------- -------- -------- ---------- ---------- --------- -----------
Loans, net of Unearned Income
and Fees................... 3,509,722 120,971 -- 3,630,693 2,039,111 -- 5,669,804
Allowance for Loan Losses.... 54,611 3,740 -- 58,351 18,695 -- 77,046
---------- -------- -------- ---------- ---------- --------- -----------
Net Loans.................... 3,455,111 117,231 0 3,572,342 2,020,416 0 5,592,758
---------- -------- -------- ---------- ---------- --------- -----------
Premises and Equipment,
Net........................ 63,717 1,893 -- 65,610 12,711 -- 78,321
Accrued Interest
Receivable................. 45,649 1,272 -- 46,921 21,590 -- 68,511
Intangibles.................. 76,692 -- 27,434(1)(2)(3) 104,126 -- -- 104,126
Other Real Estate............ 5,499 110 -- 5,609 1,363 -- 6,972
Other Assets................. 27,126 457 2,052(3) 29,635 21,065 3,149(5) 53,849
---------- -------- -------- ---------- ---------- --------- -----------
Total Assets......... $6,615,620 $182,868 $26,776 $6,825,264 $3,244,200 $ 29,549 $10,099,013
========== ======== ======== ========== ========== ========= ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Demand Deposits.............. $ 836,020 $10,753 -- $ 846,773 $ 42,808 -- $ 889,581
Savings N.O.W. and Money
Market Deposits............ 1,895,804 62,749 -- 1,958,553 1,000,873 -- 2,959,426
Time Deposits................ 1,726,825 88,162 -- 1,814,987 657,067 -- 2,472,054
---------- -------- -------- ---------- ---------- --------- -----------
Total Deposits....... 4,458,649 161,664 0 4,620,313 1,700,748 0 6,321,061
---------- -------- -------- ---------- ---------- --------- -----------
Federal Funds Purchased and
Securities Sold under
Agreements to Repurchase... 1,331,024 -- -- 1,331,024 840,331 -- 2,171,355
Other Borrowings............. 85,000 2,000 -- 87,000 413,600 -- 500,600
Accrued Expenses and Other
Liabilities................ 103,020 1,592 5,878(3) 110,490 120,458 37,576(5) 268,524
---------- -------- -------- ---------- ---------- --------- -----------
Total Liabilities.... $5,977,693 $165,256 $ 5,878 $6,148,827 $3,075,137 $ 37,576 $ 9,261,540
---------- -------- -------- ---------- ---------- --------- -----------
Company-Obligated Mandatorily
Redeemable Capital
Securities of Subsidiary
Trust...................... 99,646 -- -- 99,646 -- -- 99,646
STOCKHOLDERS' EQUITY
Preferred Stock.............. -- -- -- -- -- -- --
Common Stock................. 165,111 1,557 1,652(1) 168,320 295 65,508(4) 234,123
Additional Paid in Capital... 109,640 31,227 4,074(1) 144,941 66,495 (120,200)(4) 91,236
Retained Earnings............ 263,931 (15,185) 15,185(1) 263,931 181,851 (34,427)(5) 411,355
Unrealized Gain on Securities
Available-for-Sale, net of
taxes...................... 13,476 13 (13)(1) 13,476 1,514 -- 14,990
Deferred Compensation........ (13,009) -- -- (13,009) -- -- (13,009)
Treasury Stock............... (868) -- -- (868) (81,092) 81,092(4) (868)
---------- -------- -------- ---------- ---------- --------- -----------
Total Stockholders'
Equity............. 538,281 17,612 20,898 576,791 169,063 (8,027) 737,827
---------- -------- -------- ---------- ---------- --------- -----------
Total Liabilities and
Stockholders'
Equity............. $6,615,620 $182,868 $26,776 $6,825,264 $3,244,200 $ 29,549 $10,099,013
========== ======== ======== ========== ========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
ALL COMBINED
NEW YORK TRANSACTIONS
SELECTED CAPITAL RATIOS(9) NORTH FORK BANCORP PRO FORMA
---------- -------- ------------
<S> <C> <C> <C>
Tier 1 Capital Ratio................................................................... 14.34% 10.76% 13.01%
Risk Adjusted Capital Ratio............................................................ 15.59 11.94 14.24
Leverage Ratio......................................................................... 8.38 5.18 7.23
</TABLE>
See "Notes to Pro Forma Condensed Combined Financial Statements (Unaudited)."
87
<PAGE> 100
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
COMBINED WITH BRANFORD SAVINGS BANK
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
ALL COMBINED
PRO FORMA NORTH FORK NEW YORK TRANSACTIONS
NORTH FORK BRANFORD ADJUSTMENTS PRO FORMA BANCORP PRO FORMA
---------- -------- ----------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Interest Income............... $359,458 $ 10,496 $369,954 $183,432 $553,386
Interest Expense.............. 151,977 4,621 156,598 93,095 249,693
-------- ------- ------- -------- -------- --------
Net Interest Income........... 207,481 5,875 -- 213,356 90,337 303,693
Provision for Loan Losses..... 4,500 200 4,700 1,800 6,500
-------- ------- ------- -------- -------- --------
Net Interest Income after
Provision for Loan Losses... 202,981 5,675 -- 208,656 88,537 297,193
Non-Interest Income........... 26,032 418 26,450 13,646 40,096
Net Securities Gains.......... 2,273 -- 2,273 2,259 4,532
Other Real Estate Expense..... 163 98 261 655 916
Non-Interest Expense.......... 91,174 4,446 $ 1,372(2) 96,992 37,890 134,882
-------- ------- ------- -------- -------- --------
Income before Income Taxes.... 139,949 1,549 (1,372) 140,126 65,897 206,023
Provision for Income Taxes.... 54,670 45 -- 54,715 24,950 79,665
-------- ------- ------- -------- -------- --------
Net Income.................... $ 85,279 $ 1,504 $(1,372) $ 85,411 $ 40,947 $126,358
======== ======= ======= ======== ======== ========
Weighted Average Shares
Outstanding(6).............. 66,215 7,005 -- 67,499 22,795 94,625
Earnings Per Share............ $ 1.29 $ 0.21 -- $ 1.27 $ 1.80 $ 1.34
</TABLE>
See "Notes to Pro Forma Condensed Combined Financial Statements (Unaudited)."
88
<PAGE> 101
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
COMBINED WITH BRANFORD SAVINGS BANK
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1996 FOR NORTH FORK AND BRANFORD AND
SEPTEMBER 30, 1996 FOR NEW YORK BANCORP
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
ALL COMBINED
PRO FORMA NORTH FORK NEW YORK TRANSACTIONS
NORTH FORK BRANFORD ADJUSTMENTS PRO FORMA BANCORP PRO FORMA
---------- -------- ----------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Interest Income............... $405,307 $ 13,697 $419,004 $207,491 $626,495
Interest Expense.............. 174,361 6,149 180,510 106,746 287,256
-------- ------- ------- -------- -------- --------
Net Interest Income........... 230,946 7,548 -- 238,494 100,745 339,239
Provision for Loan Losses..... 6,800 625 7,425 1,200 8,625
-------- ------- ------- -------- -------- --------
Net Interest Income after
Provision for Loan Losses... 224,146 6,923 -- 231,069 99,545 330,614
Non-Interest Income........... 29,245 587 29,832 10,321 40,153
Net Securities Gains.......... 1,878 -- 1,878 4,346 6,224
Other Real Estate Expense..... 753 232 985 463 1,448
SAIF Recapitalization
Charge...................... 8,350 -- 8,350 9,432 17,782
Merger Related Restructure
Charge...................... 21,613 -- 21,613 -- 21,613
Non-Interest Expense.......... 112,281 5,418 $ 1,829(2) 119,528 47,535 167,063
-------- ------- ------- -------- -------- --------
Income before Income Taxes.... 112,272 1,860 (1,829) 112,303 56,782 169,085
Provision for Income Taxes.... 49,830 19 -- 49,849 24,776 74,625
-------- ------- ------- -------- -------- --------
Net Income.................... $ 62,442 $ 1,841 $(1,829) $ 62,454 $ 32,006 $ 94,460
======== ======= ======= ======== ======== ========
Weighted Average Shares
Outstanding(6).............. 64,278 6,898 -- 65,562 23,889 93,990
Earnings Per Share............ $ 0.97 $ 0.27 -- $ 0.95 $ 1.34 $ 1.01
</TABLE>
See "Notes to Pro Forma Condensed Combined Financial Statements (Unaudited)."
89
<PAGE> 102
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1995 FOR NORTH FORK AND
SEPTEMBER 30, 1995 FOR NEW YORK BANCORP
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
NORTH NEW YORK NORTH FORK
FORK BANCORP PRO FORMA
-------- -------- ----------
<S> <C> <C> <C>
Interest Income............................................ $332,492 $196,972 $ 529,464
Interest Expense........................................... 140,399 101,730 242,129
-------- -------- --------
Net Interest Income........................................ 192,093 95,242 287,335
Provision for Loan Losses.................................. 11,825 1,700 13,525
-------- -------- --------
Net Interest Income after Provision for Loan Losses........ 180,268 93,542 273,810
Non-Interest Income........................................ 23,010 7,460 30,470
Net Securities Gains/(Losses).............................. 6,734 (848) 5,886
Other Real Estate Expense.................................. 1,255 883 2,138
Merger Related Restructure Charge.......................... -- 19,024 19,024
Non-Interest Expense....................................... 91,565 48,968 140,533
-------- -------- --------
Income before Income Taxes................................. 117,192 31,279 148,471
Provision for Income Taxes................................. 49,850 19,717 69,567
-------- -------- --------
Net Income................................................. $ 67,342 $ 11,562 $ 78,904
-------- -------- --------
Weighted Average Shares Outstanding(6)..................... 64,432 26,656 96,153
Earnings Per Share......................................... $ 1.05 $ 0.43 $ 0.82
</TABLE>
See "Notes to Pro Forma Condensed Combined Financial Statements (Unaudited)."
90
<PAGE> 103
NORTH FORK BANCORPORATION, INC. -- NEW YORK BANCORP INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1994 FOR NORTH FORK AND
SEPTEMBER 30, 1994 FOR NEW YORK BANCORP
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
NORTH NEW YORK NORTH FORK
FORK BANCORP PRO FORMA
-------- -------- ----------
<S> <C> <C> <C>
Interest Income............................................ $295,062 $175,530 $ 470,592
Interest Expense........................................... 112,576 79,948 192,524
-------- -------- --------
Net Interest Income........................................ 182,486 95,582 278,068
Provision for Loan Losses.................................. 6,825 2,650 9,475
-------- -------- --------
Net Interest Income after Provision for Loan Losses........ 175,661 92,932 268,593
Non-Interest Income........................................ 21,674 7,398 29,072
Net Security (Losses)/Gains................................ (9,189) 602 (8,587)
Other Real Estate Expense.................................. 4,929 880 5,809
Merger Related Restructure Charge.......................... 14,338 -- 14,338
Non-Interest Expense....................................... 99,338 50,845 150,183
-------- -------- --------
Income before Income Taxes................................. 69,541 49,207 118,748
Provision for Income Taxes................................. 26,502 21,740 48,242
-------- -------- --------
Income before Cumulative Effect of Accounting Changes...... $ 43,039 $ 27,467 $ 70,506
======== ======== ========
Weighted Average Shares Outstanding(6)..................... 62,312 27,220 94,704
Earnings Per Share before Cumulative Effect of Accounting
Changes.................................................. $ 0.69 $ 1.01 $ 0.74
</TABLE>
See "Notes to Pro Forma Condensed Combined Financial Statements (Unaudited)."
91
<PAGE> 104
NORTH FORK BANCORPORATION, INC. AND
NEW YORK BANCORP INC.
BRANFORD SAVINGS BANK
NOTES TO PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS (UNAUDITED)
(1) Reflects the issuance of 1,283,674 shares of North Fork Common Stock
utilizing an exchange ratio of 0.1957 shares of North Fork Common Stock for
each voting and non-voting share of Branford common stock outstanding at
September 30, 1997 (5,179,863 shares and 1,379,533 shares, respectively),
and a cash payment to the holder of all outstanding Branford Warrants (who
has exercised a cash election right) of $2,709,700 representing the excess
of the market price as of October 22, 1997 of shares of North Fork Common
Stock that such holder would receive in the Branford Merger if Branford
Warrants were exercised immediately prior to the consummation, over the
total exercise price of the Branford Warrants.
(2) Reflects the excess of the Branford Merger consideration over the fair value
of the net assets acquired, as follows:
<TABLE>
<S> <C>
North Fork Common Stock (1,283,674 shares at $30.00 per share).... $ 38,510
Cash payments for the Branford Warrants........................... 2,710
Transaction Costs, net of taxes................................... 3,826
--------
Total consideration............................................... $ 45,046
Branford stockholders' equity at September 30, 1997............... (17,612)
--------
Intangible asset.................................................. $ 27,434
========
</TABLE>
The intangible assets will be amortized utilizing the straight line method
over a fifteen year period. Included in non-interest expense for the nine
month period ended September 30, 1997 and for the year ended December 31,
1996 is $1,372,000 and $1,829,000, respectively, of intangible amortization
expense.
(3) Transaction Costs of approximately $3.8 million, net of taxes, will be
incurred upon consummation of the Branford Merger and will be accounted for
as part of the purchase price for financial reporting purposes. A summary of
the estimated transaction costs are as follow:
<TABLE>
<CAPTION>
TYPE OF COST EXPECTED COSTS
--------------------------------------------------------------- --------------
(in thousands)
<S> <C>
Professional Fees.............................................. $ 1,747
Merger Related Compensation and Severance Costs................ 1,792
Facility and System Costs...................................... 859
Other Merger Related Costs..................................... 1,480
-------
Total Pre-Tax Transaction Costs................................ 5,878
Less: Related Tax Benefit...................................... (2,052)
-------
Total Transaction Costs, Net of Taxes.......................... $ 3,826
=======
</TABLE>
Refinements to the foregoing estimates may occur subsequent to
the completion of the Branford Merger.
(4) Pro forma adjustments to common stock and additional paid-in capital, at
September 30, 1997, reflect the Merger accounted for as a
pooling-of-interests through: (a) the reissuance of 800,000 shares of New
York Bancorp common stock from New York Bancorp's treasury, with an average
cost basis of $9.92, at $33.00 per share (which approximated the market
price of the New York Bancorp common stock on or about October 22, 1997),
with transaction proceeds of $26.4 million assumed to be reinvested in
securities available-for-sale; (b) the retirement of the remaining 7,374,522
shares of New York Bancorp common stock held in treasury, with an average
cost basis of $9.92, as of September 30, 1997 and (c) the exchange of
26,321,186 shares of North Fork common stock at September 30, 1997 (using
the Exchange Ratio of 1.19) for the 22,118,644 adjusted outstanding shares
of New York Bancorp common stock.
92
<PAGE> 105
NOTES TO PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
Pro forma adjustments do not include any shares of North Fork Common Stock
to be received upon consummation of the Merger by holders of New York
Bancorp Options.
(5) The pro forma condensed combined balance sheet reflects a non-recurring
merger and restructuring charge of approximately $34.4 million, net of
taxes, which will be recognized upon consummation of the Merger. Such charge
will reduce earnings per share for the period in which such charge is
recognized by approximately $.36 (based on pro forma weighted average shares
outstanding of 94,624,522 on September 30, 1997). A summary of the estimated
merger and restructuring charges are as follows:
<TABLE>
<CAPTION>
TYPE OF COST EXPECTED COSTS
--------------------------------------------------------------- --------------
(in thousands)
<S> <C>
Merger Expense................................................. $ 9,700
Restructuring Charge:
Merger Related Compensation and Severance Costs.............. 15,172
Facility and System Costs.................................... 11,814
Other Merger Related Costs................................... 890
--------
Total Pre-Tax Merger and Restructuring Charge.................. 37,576
Less: Related Tax Benefit.................................... (12,149)
Add: State and Local Tax Bad Debt Recapture, Net of Federal
Benefit................................................. 9,000
--------
Total After-Tax Merger and Restructuring Charge................ $ 34,427
========
</TABLE>
Merger expenses consist primarily of investment banking, legal and
other professional fees, and expenses associated with shareholder
notification. Restructure related compensation and severance costs consist
primarily of employee severance, compensation arrangements, transitional
staffing and the related employee benefits expenses. Facility and system
costs consist primarily of lease termination charges and equipment
write-offs resulting from the consolidation of overlapping branch locations
and duplicate headquarters and operational facilities. Also reflected are
the costs associated with the cancellation of certain data and item
processing contracts and the deconversion of existing New York Bancorp
computer systems.
The effect of the proposed charge has been reflected in the pro forma
condensed combined balance sheet as of September 30, 1997; however, since
this charge is non-recurring, it has not been reflected in the pro forma
combined statements of income. Although no assurance can be given, North
Fork expects that cost savings will be achieved at an annual rate of
approximately $25 million on a pre-tax basis by the end of 1998 as a result
of steps to be taken to integrate operations and to achieve efficiencies in
certain combined lines of business. These anticipated merger cost savings
were determined based upon preliminary estimates provided by the management
of North Fork. The pro forma financial information does not give effect to
these expected cost savings, nor does it include any estimates of revenue
enhancements that could be realized with the Merger.
(6) The pro forma weighted average shares outstanding for the nine-month period
ended September 30, 1997 and for the year ended 1996 reflect the assumed
issuance of 0.1957 shares of North Fork Common Stock for each voting and
non-voting share average equivalent of Branford common stock outstanding
during such periods (all Branford warrants having been retired under the
cash election), and the pro forma weighted average shares outstanding for
all periods presented reflect the assumed issuance of 1.19 shares of North
Fork Common Stock for each average equivalent share of New York Bancorp
Common Stock outstanding during such periods.
(7) North Fork is currently reviewing the investment securities portfolios of
New York Bancorp to determine the classification of such securities as
either available-for-sale or held-to-maturity in connection with North
Fork's existing interest-rate risk position. As a result of this review,
certain reclassifications of New York Bancorp's investment securities may
result. No adjustments have been made to either the available-for-sale or
the held-to-maturity portfolios in the accompanying pro forma condensed
combined balance
93
<PAGE> 106
NOTES TO PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
sheet to reflect any such reclassification as a final determination has not
been made with respect to such matters. Any such reclassification will be
accounted for in accordance with Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities,"
which requires that securities transferred from held-to-maturity to
available-for-sale to be transferred at fair value with any unrealized gain
or loss, net of taxes, at the date of transfer recognized as a separate
component of stockholders' equity.
(8) The pro forma financial information presented has been prepared in
conformity with generally accepted accounting principles and prevailing
practices within the financial services industry. In accounting for the
Merger, under generally accepted accounting principles, the assets and
liabilities of New York Bancorp will be combined with those of North Fork at
book value. In addition, the statements of income for New York Bancorp will
be combined with North Fork as of the earliest period presented. Certain
reclassifications have been included in the pro forma financial statements
to conform to North Fork's presentation. North Fork utilizes a fiscal year
which ends on December 31 for reporting purposes, whereas New York Bancorp
uses a fiscal year which ends on September 30 for such purposes. The
unaudited condensed combined statements of income for 1996, 1995, 1994
combine North Fork and New York Bancorp at their respective year-end
periods. The unaudited condensed combined statements of income for the nine
month periods ended September 30, 1997 and 1996 include New York Bancorp for
the nine months then ended to conform with the reporting periods of North
Fork. Summary unaudited operating results for the three-months ended
December 31, 1996 and 1995 have not been included in the unaudited pro forma
condensed combined financial statements and are presented in the following
table:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-------------------
1996 1995
------- -------
<S> <C> <C>
(UNAUDITED)
<CAPTION>
(in thousands,
except
per share amounts)
<S> <C> <C>
Interest income.......................................... $55,417 $50,659
Interest expense......................................... 27,538 26,991
Net interest income...................................... 27,879 23,668
Net income............................................... 10,264 7,828
Earnings per share....................................... $ 0.45 $ 0.32
</TABLE>
(9) On December 10, 1997, North Fork issued through Capital Trust II $100
million of Capital Securities II and received proceeds of $99.6 million.
Issuance costs, consisting principally of underwriting discounts and
professional fees of approximately $1.4 million, will be paid by North Fork.
Capital Trust II was formed on November 14, 1997, with an initial
capitalization in common stock of approximately $3.1 million and for the
exclusive purpose of issuing the Capital Securities II and using the
proceeds thereof to acquire Debt Securities issued by North Fork. The Debt
Securities are due at maturity on December 15, 2027, are non-callable, in
whole or in part, prior to December 15, 2007, except in certain
circumstances, but, may be redeemed at any time thereafter, in whole or
part, at declining premiums to maturity. The Capital Securities II are
subject to redemption contemporaneously with the redemption of the Debt
Securities. Capital Securities II qualify as Tier I Capital for regulatory
capital purposes. Assuming the foregoing issuance of the Capital Securities
II had occurred as of September 30, 1997, North Fork's total assets and its
obligations under the Mandatorily Redeemable Capital Securities of
Subsidiary Trusts would increase by approximately the principal amount of
the Capital Securities II. Consequently, the North Fork Pro Forma selected
capital ratios for September 30, 1997 would increase to the following:
<TABLE>
<S> <C>
Tier I Risk-Based Capital............................................ 14.77%
Total Risk-Based Capital............................................. 15.98%
Leverage Ratio....................................................... 8.24%
</TABLE>
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LEGAL MATTERS
The validity of the shares of North Fork Common Stock which will be issued
in the Merger and other legal matters in connection with the Merger will be
passed upon for North Fork by Skadden, Arps, Slate, Meagher & Flom LLP.
Legal matters in connection with the Merger will be passed upon for New
York Bancorp by Weil, Gotshal & Manges LLP.
EXPERTS
The consolidated financial statements of North Fork Bancorporation, Inc.
and subsidiaries as of December 31, 1996 and 1995 and for each of the years in
the three year period ended December 31, 1996, included in North Fork's 1996
Form 10-K incorporated by reference into this Joint Proxy Statement/Prospectus,
have been incorporated by reference herein and in the Registration Statement of
which this Joint Proxy Statement/Prospectus is a part in reliance upon the
report of KPMG Peat Marwick LLP, independent auditors, included in North Fork's
1996 Form 10-K and incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing. The report of KPMG Peat Marwick
LLP refers to various changes in accounting as discussed in the notes to these
statements.
The consolidated financial statements of New York Bancorp Inc. and
subsidiaries as of September 30, 1996 and 1995 and for each of the years in the
three-year period ended September 30, 1996, incorporated by reference in New
York Bancorp's 1996 Form 10-K and incorporated by reference into this Joint
Proxy Statement/Prospectus, have been incorporated by reference herein and in
the Registration Statement of which the Joint Proxy Statement/Prospectus is a
part in reliance upon the report of KPMG Peat Marwick LLP, independent auditors,
incorporated by reference in New York Bancorp's 1996 Form 10-K and incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing. The report of KPMG Peat Marwick LLP refers to a change
in accounting as discussed in the notes to these statements.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders of North Fork must have been received by North Fork no
later than November 18, 1997 for inclusion in North Fork's Proxy Statement and
Form of Proxy relating to that meeting.
New York Bancorp's intention is to hold a 1998 Annual Meeting of
stockholders only if the Merger is not consummated. In such event, any
stockholder who wishes to present a proposal to be considered for inclusion in
the proxy materials for New York Bancorp's 1998 Annual Meeting of stockholders
must comply with the rules and regulations of the Commission then in effect. In
the event that such meeting is held on or before February 27, 1998, stockholder
proposals must have been received at New York Bancorp's principal executive
offices no later than August 21, 1997. In the event that such meeting is held
after February 27, 1998, stockholder proposals must be received at New York
Bancorp's principal executive offices a reasonable time before the solicitation
of proxies for such annual meeting is made.
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ANNEX A
================================================================================
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BETWEEN
NORTH FORK BANCORPORATION, INC.
AND
NEW YORK BANCORP INC.
DATED AS OF OCTOBER 7, 1997
================================================================================
<PAGE> 109
TABLE OF CONTENTS
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ARTICLE I
THE MERGER.............................................................................. 1
1.1. The Merger.................................................................... 1
1.2. Effective Time................................................................ 1
1.3. Effects of the Merger......................................................... 1
1.4. Conversion of Company Common Stock............................................ 1
1.5. Stock Options................................................................. 2
1.6. Buyer Common Stock............................................................ 3
1.7. Certificate of Incorporation.................................................. 3
1.8. By-Laws....................................................................... 3
1.9. Directors and Officers........................................................ 3
1.10. Tax Consequences.............................................................. 3
ARTICLE II
EXCHANGE OF SHARES...................................................................... 3
2.1. Buyer to Make Shares Available................................................ 3
2.2. Exchange of Shares............................................................ 3
ARTICLE II-A
DISCLOSURE SCHEDULES; STANDARDS FOR REPRESENTATIONS AND WARRANTIES......................
5
2A.1 Disclosure Schedules.......................................................... 5
2A.2 Standards..................................................................... 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................... 5
3.1. Corporate Organization........................................................ 5
3.2. Capitalization................................................................ 6
3.3. Authority; No Violation....................................................... 7
3.4. Consents and Approvals........................................................ 7
3.5. Reports....................................................................... 8
3.6. Financial Statements.......................................................... 8
3.7. Broker's Fees................................................................. 9
3.8. Absence of Certain Changes or Events.......................................... 9
3.9. Legal Proceedings............................................................. 9
3.10. Taxes......................................................................... 9
3.11. Employees..................................................................... 10
3.12. SEC Reports................................................................... 11
3.13. Company Information........................................................... 11
3.14. Compliance with Applicable Law................................................ 11
3.15. Certain Contracts............................................................. 11
3.16. Agreements with Regulatory Agencies........................................... 12
3.17. Investment Securities......................................................... 12
3.18. Intellectual Property......................................................... 12
3.19. State Takeover Laws........................................................... 12
3.20. Administration of Fiduciary Accounts.......................................... 12
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3.21. Environmental Matters......................................................... 13
3.22. Derivative Transactions....................................................... 13
3.23. Opinion....................................................................... 13
3.24. Approvals..................................................................... 14
3.25. Loan Portfolio................................................................ 14
3.26. Property...................................................................... 14
3.27. Accounting for the Merger; Reorganization..................................... 14
3.28. Stock Repurchases............................................................. 14
3.29. Deposits...................................................................... 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER................................................. 15
4.1. Corporate Organization........................................................ 15
4.2. Capitalization................................................................ 15
4.3. Authority; No Violation....................................................... 16
4.4. Consents and Approvals........................................................ 17
4.5. Reports....................................................................... 17
4.6. Financial Statements.......................................................... 17
4.7. Broker's Fees................................................................. 18
4.8. Absence of Certain Changes or Events.......................................... 18
4.9. Legal Proceedings............................................................. 18
4.10. Taxes......................................................................... 18
4.11. Employees..................................................................... 19
4.12. SEC Reports................................................................... 19
4.13. Buyer Information............................................................. 20
4.14. Compliance with Applicable Law................................................ 20
4.15. Ownership of Company Common Stock; Affiliates and Associates.................. 20
4.16. Agreements with Regulatory Agencies........................................... 20
4.17. Approvals..................................................................... 20
4.18. Accounting for the Merger; Reorganization..................................... 20
4.19. Intellectual Property......................................................... 20
4.20. Environmental Matters......................................................... 21
4.21. Derivative Transactions....................................................... 21
4.22. Opinion....................................................................... 21
4.23. Loan Portfolio................................................................ 21
4.24. Property...................................................................... 22
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS............................................... 23
5.1. Covenants of the Company...................................................... 23
5.2. Covenants of Buyer............................................................ 25
5.3. Conduct of Buyer's Business................................................... 25
ARTICLE VI
ADDITIONAL AGREEMENTS................................................................... 25
6.1. Regulatory Matters............................................................ 25
6.2. Access to Information......................................................... 26
</TABLE>
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6.3. Stockholder Meetings.......................................................... 26
6.4. Legal Conditions to Merger.................................................... 27
6.5. Affiliates.................................................................... 27
6.6. Stock Exchange Listing........................................................ 27
6.7. Employee Benefit Plans; Existing Agreements................................... 27
6.8. Indemnification............................................................... 28
6.9. Subsequent Interim and Annual Financial Statements............................ 29
6.10. Additional Agreements......................................................... 29
6.11. Advice of Changes............................................................. 29
6.12. Current Information........................................................... 29
6.13. Execution and Authorization of Bank Merger Agreement.......................... 29
6.14. Directorship.................................................................. 30
6.15. Coordination of Dividends..................................................... 30
6.16. Issuance of Treasury Shares................................................... 30
6.17. Loans......................................................................... 30
6.18. SERP Amendment................................................................ 30
6.19. Consulting Agreement.......................................................... 30
ARTICLE VII
CONDITIONS PRECEDENT.................................................................... 30
7.1. Conditions to Each Party's Obligation To Effect the Merger.................... 30
7.2. Conditions to Obligations of Buyer............................................ 31
7.3. Conditions to Obligations of the Company...................................... 32
ARTICLE VIII
TERMINATION AND AMENDMENT............................................................... 32
8.1. Termination................................................................... 32
8.2. Effect of Termination; Expenses............................................... 34
8.3. Amendment..................................................................... 34
8.4. Extension; Waiver............................................................. 34
ARTICLE IX
GENERAL PROVISIONS...................................................................... 35
9.1. Closing....................................................................... 35
9.2. Nonsurvival of Representations, Warranties and Agreements..................... 35
9.3. Expenses...................................................................... 35
9.4. Notices....................................................................... 35
9.5. Interpretation................................................................ 36
9.6. Counterparts.................................................................. 36
9.7. Entire Agreement.............................................................. 36
9.8. Governing Law................................................................. 36
9.9. Enforcement of Agreement...................................................... 36
9.10. Severability.................................................................. 36
9.11. Publicity..................................................................... 36
9.12. Assignment; No Third Party Beneficiaries...................................... 36
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of October 7,
1997, between NORTH FORK BANCORPORATION, INC., a Delaware corporation ("Buyer"),
and NEW YORK BANCORP INC., a Delaware corporation (the "Company"). (Buyer and
the Company are herein sometimes collectively referred to herein as the
"Constituent Corporations".)
WHEREAS, the Boards of Directors of Buyer and the Company have determined
that it is in the best interests of their respective companies and their
shareholders to consummate the business combination transaction provided for
herein in which the Company will, subject to the terms and conditions set forth
herein, merge (the "Merger") with and into Buyer; and
WHEREAS, as soon as practicable after the execution and delivery of this
Agreement, North Fork Bank, a New York-chartered stock commercial bank and a
wholly owned subsidiary of Buyer ("Buyer Bank", and sometimes referred to herein
as the "Surviving Bank"), and Home Federal Savings Bank, a federally chartered
stock savings bank and a wholly owned subsidiary of the Company (the "Company
Bank"), will enter into a Subsidiary Agreement and Plan of Merger (the "Bank
Merger Agreement") providing for the merger (the "Subsidiary Merger") of the
Company Bank with and into Buyer Bank, and it is intended that the Subsidiary
Merger be consummated immediately following the consummation of the Merger; and
WHEREAS, the parties desire to make certain representations, warranties and
agreements in connection with the Merger and also to prescribe certain
conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Subject to the terms and conditions of this Agreement,
in accordance with the Delaware General Corporation Law (the "DGCL"), at the
Effective Time (as defined in Section 1.2 hereof), the Company shall merge with
and into Buyer. Buyer shall be the surviving corporation (hereinafter sometimes
called the "Surviving Corporation") in the Merger, and shall continue its
corporate existence under the laws of the State of Delaware. The name of the
Surviving Corporation shall continue to be North Fork Bancorporation, Inc. Upon
consummation of the Merger, the separate corporate existence of the Company
shall terminate.
1.2. Effective Time. The Merger shall become effective as set forth in
the certificate of merger (the "Certificate of Merger") which shall be filed
with the Secretary of State of the State of Delaware (the "Secretary") on the
Closing Date (as defined in Section 9.1 hereof). The term "Effective Time" shall
be the date and time when the Merger becomes effective, as set forth in the
Certificate of Merger.
1.3. Effects of the Merger. At and after the Effective Time, the Merger
shall have the effects set forth in Sections 259 and 261 of the DGCL.
1.4. Conversion of Company Common Stock.
(a) At the Effective Time, subject to Section 2.2(e) hereof, each share of
the common stock, par value $0.01 per share, of the Company (the "Company Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than shares of Company Common Stock held (x) in the Company's treasury or (y)
directly or indirectly by Buyer or the Company or any of their respective
Subsidiaries (as defined below) (except for Trust Account Shares and DPC shares,
as such terms are defined in Section 1.4(b) hereof)) shall, by virtue of this
Agreement and without any action on the part of the holder thereof, be converted
into and exchangeable for 1.19 shares (the "Exchange Ratio") of the common
stock, par value $2.50 per share, of Buyer ("Buyer Common Stock") (together with
the number of Buyer Rights (as defined in Section 4.2 hereof) associated
therewith). All of the shares of Company Common Stock converted into Buyer
Common
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<PAGE> 113
Stock pursuant to this Article I shall no longer be outstanding and shall
automatically be cancelled and shall cease to exist, and each certificate (each
a "Certificate") previously representing any such shares of Company Common Stock
shall thereafter only represent the right to receive (i) the number of whole
shares of Buyer Common Stock and (ii) the cash in lieu of fractional shares into
which the shares of Company Common Stock represented by such Certificate have
been converted pursuant to this Section 1.4(a) and Section 2.2(e) hereof.
Certificates previously representing shares of Company Common Stock shall be
exchanged for certificates representing whole shares of Buyer Common Stock and
cash in lieu of fractional shares issued in consideration therefor upon the
surrender of such Certificates in accordance with Section 2.2 hereof, without
any interest thereon. If, between the date of this Agreement and the Effective
Time, the shares of Buyer Common Stock shall be changed into a different number
or class of shares by reason of any reclassification, recapitalization,
spilt-up, combination, exchange of shares or readjustment, or a stock dividend
thereon shall be declared with a record date within said period, the Exchange
Ratio shall be adjusted accordingly.
(b) At the Effective Time, all shares of Company Common Stock that are
owned by the Company as treasury stock and all shares of Company Common Stock
that are owned directly or indirectly by Buyer or the Company or any of their
respective Subsidiaries (other than shares of Company Common Stock (x) held
directly or indirectly in trust accounts, managed accounts and the like or
otherwise held in a fiduciary capacity that are beneficially owned by third
parties (any such shares, and shares of Buyer Common Stock which are similarly
held, whether held directly or indirectly by Buyer or the Company, as the case
may be, being referred to herein as "Trust Account Shares") and (y) held by
Buyer or the Company or any of their respective Subsidiaries in respect of a
debt previously contracted (any such shares of Company Common Stock, and shares
of Buyer Common Stock which are similarly held, whether held directly or
indirectly by Buyer or the Company, being referred to herein as "DPC Shares"))
shall be cancelled and shall cease to exist and no stock of Buyer or other
consideration shall be delivered in exchange therefor. All shares of Buyer
Common Stock that are owned by the Company or any of its Subsidiaries (other
than Trust Account Shares and DPC Shares) shall become treasury stock of Buyer.
1.5. Stock Options. At the Effective Time, each holder of an option
granted by the Company (a "Company Option") to purchase shares of Company Common
Stock which is outstanding and unexercised immediately prior thereto and which
was granted under the Company's Incentive Stock Option Plan dated February 4,
1988 (the "1988 Incentive Plan"), 1990 Incentive Stock Option Plan (the "1990
Incentive Plan"), 1990 Stock Option Plan for Outside Directors (the "1990
Directors Plan"), 1993 Long-Term Incentive Plan (the "1993 Incentive Plan"), and
1993 Stock Option Plan for Outside Directors (the "1993 Directors Plan" and,
together with the 1988 Incentive Plan, the 1990 Incentive Plan, the 1990
Directors Plan and the 1993 Incentive Plan, the "Company Option Plans") shall be
converted automatically into the right to receive such number of shares (rounded
to the nearest whole share) of Buyer Common Stock as is equal in value
(determined by valuing each share of Buyer Common Stock at the Average Closing
Price (as defined below)) to the amount by which (i) the product of (A) the
number of shares of Company Common Stock subject to such option, (B) the
Exchange Ratio and (C) the Average Closing Price, exceeds (ii) the aggregate
exercise price of such option, provided, however, that, notwithstanding the
foregoing, at the Effective Time, each outstanding Company Option with respect
to which the holder thereof was issued option surrender rights ("OSRs") under
the 1993 Incentive Plan or limited rights ("Limited Rights") under the 1990
Incentive Plan shall be converted automatically into the right to receive the
greater of (x) the number of shares of Buyer Common Stock into which such option
would be converted pursuant to the formula set forth in this Section 1.5 above,
and (y) such number of shares (rounded to the nearest whole share) of Buyer
Common Stock as is equal in value (determined by valuing each share of Buyer
Common Stock at the Average Closing Price) to the amount of cash which the
holder of such Company Option would otherwise be entitled to receive upon
exercise of such OSRs or Limited Rights, as the case may be, at the Effective
Time pursuant to the terms of the applicable Company Option Plan and such
holder's option agreement. As used herein, the term "Average Closing Price"
means the average of the last reported sale prices per share of Buyer Common
Stock on the New York Stock Exchange ("NYSE") (as reported by The Wall Street
Journal or, if not reported thereby, another authoritative source) for the 20
consecutive NYSE trading days ending on the fifth business day prior to the date
on which the last of all regulatory approvals required to consummate the
transactions contemplated hereby (including the Merger and the Subsidiary
Merger) are obtained, without
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regard to any requisite waiting periods in respect thereof. Set forth on Section
1.5 of the Company Disclosure Schedule (as defined herein) is a list of all
holders of New York Bancorp Options with OSRs or Limited Rights."
1.6. Buyer Common Stock. Except for shares of Buyer Common Stock owned by
the Company or any of its Subsidiaries (other than Trust Account Shares and DPC
Shares), which shall be converted into treasury stock of Buyer as contemplated
by Section 1.4 hereof, the shares of Buyer Common Stock issued and outstanding
immediately prior to the Effective Time shall be unaffected by the Merger and
such shares shall remain issued and outstanding.
1.7. Certificate of Incorporation. At the Effective Time, the Certificate
of Incorporation of Buyer, as in effect at the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation.
1.8. By-Laws. At the Effective Time, the By-Laws of Buyer, as in effect
immediately prior to the Effective Time, shall be the By-Laws of the Surviving
Corporation until thereafter amended in accordance with applicable law.
1.9. Directors and Officers. Except as provided in Section 6.14 hereof,
the directors and officers of Buyer immediately prior to the Effective Time
shall be the directors and officers of the Surviving Corporation, each to hold
office in accordance with the Certificate of Incorporation and By-Laws of the
Surviving Corporation until their respective successors are duly elected or
appointed and qualified.
1.10. Tax Consequences. It is intended that the Merger and the Subsidiary
Merger each constitute a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), and that this
Agreement shall constitute a "plan of reorganization" for the purposes of
Section 368 of the Code.
ARTICLE II
EXCHANGE OF SHARES
2.1. Buyer to Make Shares Available. At or prior to the Effective Time,
Buyer shall deposit, or shall cause to be deposited, with a bank or trust
company (which may be a Subsidiary of Buyer) (the "Exchange Agent"), selected by
Buyer and reasonably satisfactory to the Company, for the benefit of the holders
of Certificates, for exchange in accordance with this Article II, certificates
representing the shares of Buyer Common Stock and the cash in lieu of fractional
shares (such cash and certificates for shares of Buyer Common Stock, together
with any dividends or distributions with respect thereto, being hereinafter
referred to as the "Exchange Fund") to be issued pursuant to Section 1.4 and
paid pursuant to Section 2.2(a) in exchange for outstanding shares of Company
Common Stock.
2.2. Exchange of Shares. (a) As soon as practicable after the Effective
Time, and in no event more than three business days thereafter, the Exchange
Agent shall mail to each holder of record of a Certificate or Certificates a
form letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent) and instructions for use in effecting
the surrender of the Certificates in exchange for certificates representing the
shares of Buyer Common Stock and the cash in lieu of fractional shares into
which the shares of Company Common Stock represented by such Certificate or
Certificates shall have been converted pursuant to this Agreement. The Company
shall have the right to review both the letter of transmittal and the
instructions prior to the Effective Time and provide reasonable comments
thereon. Upon surrender of a Certificate for exchange and cancellation to the
Exchange Agent, together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor (x)
a certificate representing that number of whole shares of Buyer Common Stock to
which such holder of Company Common Stock shall have become entitled pursuant to
the provisions of Article I hereof and (y) a check representing the amount of
cash in lieu of fractional shares, if any, which such holder has the right to
receive in respect of the Certificate surrendered pursuant to the provisions of
this Article II, and the Certificate so surrendered shall
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forthwith be cancelled. No interest will be paid or accrued on the cash in lieu
of fractional shares and unpaid dividends and distributions, if any, payable to
holders of Certificates.
(b) No dividends or other distributions declared after the Effective Time
with respect to Buyer Common Stock and payable to the holders of record thereof
shall be paid to the holder of any unsurrendered Certificate until the holder
thereof shall surrender such Certificate in accordance with this Article II.
After the surrender of a Certificate in accordance with this Article II, the
record holder thereof shall be entitled to receive any such dividends or other
distributions, without any interest thereon, which theretofore had become
payable with respect to shares of Buyer Common Stock represented by such
Certificate. No holder of an unsurrendered Certificate shall be entitled, until
the surrender of such Certificate, to vote the shares of Buyer Common Stock into
which his Company Common Stock shall have been converted.
(c) If any certificate representing shares of Buyer Common Stock is to be
issued in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it shall be a condition of the issuance thereof
that the Certificate so surrendered shall be properly endorsed (or accompanied
by an appropriate instrument of transfer) and otherwise in proper form for
transfer, and that the person requesting such exchange shall pay to the Exchange
Agent in advance any transfer or other taxes required by reason of the issuance
of a certificate representing shares of Buyer Common Stock in any name other
than that of the registered holder of the Certificate surrendered, or required
for any other reason, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no transfers on the stock
transfer books of the Company of the shares of Company Common Stock which were
issued and outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates representing such shares are presented for transfer
to the Exchange Agent, they shall be cancelled and exchanged for certificates
representing shares of Buyer Common Stock as provided in this Article II.
(e) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of Buyer Common Stock shall
be issued upon the surrender for exchange of Certificates, no dividend or
distribution with respect to Buyer Common Stock shall be payable on or with
respect to any fractional share, and such fractional share interests shall not
entitle the owner thereof to vote or to any other rights of a shareholder of
Buyer. In lieu of the issuance of any such fractional share, Buyer shall pay to
each former stockholder of the Company who otherwise would be entitled to
receive a fractional share of Buyer Common Stock an amount in cash determined by
multiplying (i) the average of the closing sale prices of Buyer Common Stock on
the New York Stock Exchange as reported by The Wall Street Journal for the five
trading days immediately preceding the date on which the Effective Time shall
occur by (ii) the fraction of a share of Buyer Common Stock to which such holder
would otherwise be entitled to receive pursuant to Section 1.4 hereof.
(f) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of the Company for six months after the Effective Time shall be
paid to Buyer. Any stockholders of the Company who have not theretofore complied
with this Article II shall thereafter look only to Buyer for payment of their
shares of Buyer Common Stock, cash in lieu of fractional shares and unpaid
dividends and distributions on the Buyer Common Stock deliverable in respect of
each share of Company Common Stock such stockholder holds as determined pursuant
to this Agreement, in each case, without any interest thereon. Notwithstanding
the foregoing, none of Buyer, the Company, the Exchange Agent or any other
person shall be liable to any former holder of shares of Company Common Stock
for any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(g) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if required by Buyer, the
posting by such person of a bond in such amount as Buyer may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the shares of Buyer Common Stock and cash in lieu of fractional
shares deliverable in respect thereof pursuant to this Agreement.
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ARTICLE II-A
DISCLOSURE SCHEDULES; STANDARDS
FOR REPRESENTATIONS AND WARRANTIES
2A.1 Disclosure Schedules. Prior to the execution and delivery hereof,
the Company has delivered to Buyer, and Buyer has delivered to the Company, a
schedule (in the case of the Company, the "Company Disclosure Schedule," and in
the case of Buyer, the "Buyer Disclosure Schedule") setting forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more of such party's representations or warranties
contained in Article III, in the case of the Company, or Article IV, in the case
of Buyer, or to one or more of its covenants contained in Article V; provided,
however, that (a) no such item is required to be set forth in the Disclosure
Schedule as an exception to a representation or warranty if its absence would
not result in the related representation or warranty being deemed untrue or
incorrect under the standard established by Section 2A.2, and (b) the mere
inclusion of an item in a Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by a party that such
item represents a material exception or fact, event or circumstance or that such
item is reasonably likely to result in a Material Adverse Effect (as defined
herein) with respect to either the Company or Buyer, respectively.
2A.2 Standards. (a) No representation or warranty of the Company
contained in Article III or of Buyer contained in Article IV shall be deemed
untrue or incorrect, and no party hereto shall be deemed to have breached a
representation or warranty, as a consequence of the existence or absence of any
fact, circumstance or event unless such fact, circumstance or event,
individually or when taken together with all other facts, circumstances or
events inconsistent with any representations or warranties contained in Article
III, in the case of the Company, or Article IV, in the case of Buyer, has had or
would have a Material Adverse Effect with respect to the Company or Buyer,
respectively.
(b) As used in this Agreement, the term "Material Adverse Effect" means,
with respect to Buyer or the Company, as the case may be, a material adverse
effect on (i) the business, results of operations or financial condition of such
party and its Subsidiaries taken as a whole, other than any such effect
attributable to or resulting from a change in law, rule, regulation, GAAP (as
defined below), regulatory accounting principles, or the prevailing level of
interest rates, which in each case affects banking institutions or their holding
companies generally, except to the extent any such condition or change affects
the referenced party to a materially greater extent than banking institutions or
their holding companies generally or (ii) the ability of such party and its
Subsidiaries to consummate the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject to Sections 2A.1 and 2A.2, the Company hereby represents and
warrants to Buyer as follows:
3.1. Corporate Organization. (a) The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has the corporate power and authority to own or lease all
of its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary. The Company is duly registered as a unitary savings and
loan holding company under the Home Owners' Loan Act of 1933, as amended. The
Restated Certificate of Incorporation and By-laws of the Company, copies of
which have previously been made available to Buyer, are true, complete and
correct copies of such documents as in effect as of the date of this Agreement.
As used in this Agreement, the word "Subsidiary" when used with respect to any
party means any corporation, partnership or other organization, whether
incorporated or unincorporated, which is consolidated with such party for
financial reporting purposes.
(b) The Company Bank is a savings bank duly organized, validly existing and
in good standing under the laws of the United States of America. The deposit
accounts of the Company Bank are insured by the Federal
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Deposit Insurance Corporation (the "FDIC") through the Bank Insurance Fund and
the Savings Association Insurance Fund to the fullest extent permitted by law,
and all premiums and assessments required to be paid in connection therewith
have been paid when due by the Company Bank. Each of the Company's other
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization.
Each of the Company's Subsidiaries has the corporate power and authority to own
or lease all of its properties and assets and to carry on its business as it is
now being conducted and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or the location of the properties and assets owned or leased by it
makes such licensing or qualification necessary. Except as set forth on Section
3.1(b) of the Company Disclosure Schedule, the articles of incorporation,
by-laws and similar governing documents of each Subsidiary of the Company,
copies of which have previously been made available to Buyer, are true, complete
and correct copies of such documents as in effect as of the date of this
Agreement.
(c) The minute books of the Company and each of its Subsidiaries contain
true, complete and accurate records of all meetings and other corporate actions
held or taken since December 31, 1994 of their respective stockholders and
Boards of Directors (including committees of their respective Boards of
Directors).
3.2. Capitalization. (a) The authorized capital stock of the Company
consists of 30,000,000 shares of Company Common Stock and 2,000,000 shares of
preferred stock, par value $.01 per share (the "Company Preferred Stock"). As of
September 30, 1997, there were 21,318,644 shares of Company Common Stock
outstanding and 8,174,522 shares of Company Common Stock held in the Company's
treasury. As of the date of this Agreement, there were no shares of Company
Common Stock reserved for issuance upon exercise of outstanding stock options or
otherwise except for (i) 1,501,394 shares of Company Common Stock reserved for
use from the Company's treasury pursuant to the Company Option Plans and
described in Section 3.2(a) of the Company Disclosure Schedule and (ii)
4,261,000 shares of Company Common Stock reserved for use from the Company's
treasury upon exercise of the option (the "Option") issued to Buyer pursuant to
the Stock Option Agreement, dated October 7, 1997, between Buyer and the Company
(the "Company Option Agreement") and (z) no shares of Company Preferred Stock
issued or outstanding, held in the Company's treasury or reserved for issuance
upon exercise of outstanding stock options or otherwise. All of the issued and
outstanding shares of Company Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. Except as referred to
above or reflected in Section 3.2(a) of the Company Disclosure Schedule, and
except for the Company Option Agreement, the Company does not have and is not
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of Company Common Stock or Company Preferred Stock or any other equity security
of the Company or any securities representing the right to purchase or otherwise
receive any shares of Company Common Stock or any other equity security of the
Company. The names of the optionees, the date of each option to purchase Company
Common Stock granted, the number of shares subject to each such option, the
expiration date of each such option, and the price at which each such option may
be exercised under the Company Plans are set forth in Section 3.2(a) of the
Company Disclosure Schedule.
(b) Section 3.2(b) of the Company Disclosure Schedule sets forth a true and
correct list of all of the Subsidiaries of the Company. Except as set forth in
Section 3.2(b) of the Company Disclosure Schedule, the Company owns, directly or
indirectly, all of the issued and outstanding shares of the capital stock of
each of such Subsidiaries, free and clear of all liens, charges, encumbrances
and security interests whatsoever, and all of such shares are duly authorized
and validly issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof. No
Subsidiary of the Company has or is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the purchase or issuance of any shares of capital stock or any other equity
security of such Subsidiary or any securities representing the right to purchase
or otherwise receive any shares of capital stock or any other equity security of
such Subsidiary. Assuming compliance by Buyer with Section 1.5 hereof, and
except as provided in Section 3.2(b) of the Company Disclosure Schedule, at the
Effective Time, there will not be any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character by
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which the Company or any of its Subsidiaries will be bound calling for the
purchase or issuance of any shares of the capital stock of the Company or any of
its Subsidiaries.
3.3. Authority; No Violation. (a) The Company has full corporate power
and authority to execute and deliver this Agreement and the Company Option
Agreement (this Agreement and the Company Option Agreement, collectively, the
"Company Documents") and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of each of the Company Documents and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly approved by the Board of Directors of the Company. The Board of
Directors of the Company has directed that this Agreement and the transactions
contemplated hereby be submitted to the Company's stockholders for approval at a
meeting of such stockholders and, except for the adoption of this Agreement by
the requisite vote of the Company's stockholders, no other corporate proceedings
on the part of the Company are necessary to approve the Company Documents and to
consummate the transactions contemplated hereby and thereby. Each of the Company
Documents has been duly and validly executed and delivered by the Company and
(assuming due authorization, execution and delivery by Buyer) this Agreement
constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforcement may be limited
by general principles of equity whether applied in a court of law or a court of
equity and by bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally.
(b) The Company Bank has full corporate power and authority to execute and
deliver the Bank Merger Agreement and to consummate the transactions
contemplated thereby. The execution and delivery of the Bank Merger Agreement
and the consummation of the transactions contemplated thereby will be duly and
validly approved by the Board of Directors of the Company Bank. Upon the due and
valid approval of the Bank Merger Agreement by the Company as the sole
stockholder of the Company Bank and by the Board of Directors of the Company
Bank, no other corporate proceedings on the part of the Company Bank will be
necessary to consummate the transactions contemplated thereby. The Bank Merger
Agreement, upon execution and delivery by the Company Bank, will be duly and
validly executed and delivered by the Company Bank and will (assuming due
authorization, execution and delivery by Buyer Bank) constitute a valid and
binding obligation of the Company Bank, enforceable against the Company Bank in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally.
(c) Except as set forth in Section 3.3(c) of the Company Disclosure
Schedule, neither the execution and delivery of the Company Documents by the
Company or the Bank Merger Agreement by the Company Bank, nor the consummation
by the Company or the Company Bank, as the case may be, of the transactions
contemplated hereby or thereby, nor compliance by the Company or the Company
Bank, as the case may be, with any of the terms or provisions hereof or thereof,
will (i) violate any provision of the Restated Certificate of Incorporation or
By-Laws of the Company or the certificate of incorporation, by-laws or similar
governing documents of any of its Subsidiaries, or (ii) assuming that the
consents and approvals referred to in Section 3.4 hereof are duly obtained, (x)
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to the Company or any of its Subsidiaries, or
any of their respective properties or assets, or (y) violate, conflict with,
result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of the Company or
any of its Subsidiaries under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the Company or any of its Subsidiaries
is a party, or by which they or any of their respective properties or assets may
be bound or affected.
3.4. Consents and Approvals. Except for (a) the filing of applications
and notices, as applicable, with the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") under the Bank Holding Company Act of 1956,
as amended (the "BHC Act") and approval of such applications and notices, (b)
the filing of applications with the FDIC under the Bank Merger Act and approval
of such applications,
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(c) the filing of applications and notices with the Office of Thrift Supervision
(the "OTS") and approval of such applications and notices, (d) the filing of an
application with the New York State Banking Department (the "Banking
Department"), (e) the filing with the Securities and Exchange Commission (the
"SEC") of a joint proxy statement in definitive form relating to the meetings of
the Company's stockholders and Buyer's stockholders to be held in connection
with this Agreement and the transactions contemplated hereby (the "Proxy
Statement") and the filing and declaration of effectiveness of the registration
statement on Form S-4 (the "S-4") in which the Proxy Statement will be included
as a prospectus, (f) the approval of this Agreement by the requisite vote of the
stockholders of the Company, (g) the filing of the Certificate of Merger with
the Secretary pursuant to the DGCL, (h) the filings required by the Bank Merger
Agreement, (i) the approval of the Bank Merger Agreement by the Company as the
sole stockholder of the Company Bank, (j) approval of the listing of the Buyer
Common Stock to be issued in the Merger on the NYSE, (k) any filings required
pursuant to state or local transfer tax laws, and (l) such filings,
authorizations or approvals as may be set forth in Section 3.4 of the Company
Disclosure Schedule, no consents or approvals of or filings or registrations
with any court, administrative agency or commission or other governmental
authority or instrumentality (each a "Governmental Entity") or with any third
party are necessary in connection with (1) the execution and delivery by the
Company of the Company Documents, (2) the consummation by the Company of the
Merger and the other transactions contemplated hereby and thereby, (3) the
execution and delivery by the Company Bank of the Bank Merger Agreement, and (4)
the consummation by the Company Bank of the Subsidiary Merger and the
transactions contemplated thereby.
3.5. Reports. The Company and each of its Subsidiaries have timely filed
all reports, registrations and statements, together with any amendments required
to be made with respect thereto, that they were required to file since December
31, 1995 with (i) the OTS, (ii) the FDIC, (iii) any state banking commissions or
any other state regulatory authority (each a "State Regulator") and (iv) any
other self-regulatory organization ("SRO") (collectively with the Federal
Reserve Board, the "Regulatory Agencies"), and all other reports and statements
required to be filed by them since December 31, 1995, including, without
limitation, any report or statement required to be filed pursuant to the laws,
rules or regulations of the United States, the OTS, the FDIC, any State
Regulator or any SRO, and have paid all fees and assessments due and payable in
connection therewith. Except for normal examinations conducted by a Regulatory
Agency in the regular course of the business of the Company and its
Subsidiaries, and except as set forth in Section 3.5 of the Company Disclosure
Schedule, no Regulatory Agency has initiated any proceeding or, to the best
knowledge of the Company, investigation into the business or operations of the
Company or any of its Subsidiaries since December 31, 1995. There is no
unresolved violation, criticism, or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of the Company
or any of its Subsidiaries.
3.6. Financial Statements. The Company has previously made available to
Buyer copies of (a) the consolidated statements of financial condition of the
Company and its Subsidiaries as of September 30 for the fiscal years 1995 and
1996, and the related consolidated statements of income, changes in
shareholders' equity and cash flows for the fiscal years 1994 through 1996,
inclusive, as reported in the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1996 filed with the SEC under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in each case accompanied
by the audit report of KPMG Peat Marwick LLP, independent public accountants
with respect to the Company, and (b) the unaudited consolidated statements of
financial condition of the Company and its Subsidiaries as of June 30, 1997 and
June 30, 1996 and the related unaudited consolidated statements of income, cash
flows and changes in stockholders' equity for the nine-month periods then ended
as reported in the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1997 filed with the SEC under the Exchange Act. The September 30, 1996
consolidated statement of financial condition of the Company (including the
related notes, where applicable) fairly presents the consolidated financial
position of the Company and its Subsidiaries as of the date thereof, and the
other financial statements referred to in this Section 3.6 (including the
related notes, where applicable) fairly present, and the financial statements
referred to in Section 6.9 hereof will fairly present (subject, in the case of
the unaudited statements, to recurring audit adjustments normal in nature and
amount), the results of the consolidated operations and consolidated financial
position of the Company and its Subsidiaries for the respective fiscal periods
or as of the respective dates therein set forth; each of such statements
(including the related notes, where applicable) comply, and the financial
statements referred to in
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Section 6.9 hereof will comply, in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto; and each of such statements (including the related notes,
where applicable) has been, and the financial statements referred to in Section
6.9 hereof will be, prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied during the periods involved, except as
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q. The books and records of the Company and its
Subsidiaries have been, and are being, maintained in all material respects in
accordance with GAAP and any other applicable legal and accounting requirements.
3.7. Broker's Fees. Neither the Company nor any Subsidiary of the Company
nor any of their respective officers or directors has employed any broker or
finder or incurred any liability for any broker's fees, commissions or finder's
fees in connection with any of the transactions contemplated by the Company
Documents or the Bank Merger Agreement, except that the Company has engaged, and
will pay a fee or commission to, Sandler O'Neill & Partners, L.P. ("Sandler
O'Neill") and Keefe, Bruyette & Woods, Inc. ("Keefe Bruyette") in accordance
with the terms of letter agreements between Sandler O'Neill and the Company and
Keefe Bruyette and the Company, respectively, true, complete and correct copies
of which have been previously made available by the Company to Buyer.
3.8. Absence of Certain Changes or Events. (a) Except as may be set forth
in Section 3.8(a) of the Company Disclosure Schedule, or as disclosed in the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (a
true, complete and correct copy of which has previously been made available to
Buyer), since September 30, 1996, (i) neither the Company nor any of its
Subsidiaries has incurred any liability, except in the ordinary course of their
business consistent with their past practices, and (ii) there has been no change
or development or combination of changes or developments which, individually or
in the aggregate, has had or would have a Material Adverse Effect on the
Company.
(b) Except as set forth in Section 3.8(b) of the Company Disclosure
Schedule, since September 30, 1996, the Company and its Subsidiaries have
carried on their respective businesses in the ordinary course consistent with
their past practices.
(c) Except as set forth in Section 3.8(c) of the Company Disclosure
Schedule, since June 30, 1997, neither the Company nor any of its Subsidiaries
has (i) increased the wages, salaries, compensation, pension, or other fringe
benefits or perquisites payable to any executive officer, employee, or director
from the amount thereof in effect as of June 30, 1997 (which amounts have been
previously disclosed to Buyer), granted any severance or termination pay,
entered into any contract to make or grant any severance or termination pay, or
paid any bonus (except (x) for salary increases and normal monthly cross-selling
and performance bonus payments made to lending and depository personnel in the
ordinary course of business consistent with past practices and (y) the Company
may adopt the severance plan described in Section 5.1(k) of the Company
Disclosure Schedule), (ii) suffered any strike, work stoppage, slow-down, or
other labor disturbance, (iii) been a party to a collective bargaining
agreement, contract or other agreement or understanding with a labor union or
organization, or (iv) had any union organizing activities.
3.9. Legal Proceedings. (a) Except as set forth in Section 3.9 of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is
a party to any, and there are no pending or, to the best of the Company's
knowledge, threatened, legal, administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory investigations of any nature
against the Company or any of its Subsidiaries or challenging the validity or
propriety of the transactions contemplated by any of the Company Documents or
the Bank Merger Agreement.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction imposed upon the Company, any of its Subsidiaries or the assets of
the Company or any of its Subsidiaries.
3.10. Taxes. (a) Except as set forth in Section 3.10(a) of the Company
Disclosure Schedule, each of the Company and its Subsidiaries has (i) duly and
timely filed (including applicable extensions granted without penalty) all Tax
Returns (as hereinafter defined) required to be filed at or prior to the
Effective Time, and such Tax Returns are true, correct and complete, and (ii)
paid in full or made adequate provision in the
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financial statements of the Company (in accordance with GAAP) for all Taxes (as
hereinafter defined). Except as set forth in Section 3.10(a) of the Company
Disclosure Schedule, no deficiencies for any Taxes have been proposed, asserted,
assessed or, to the best knowledge of the Company, threatened against or with
respect to the Company or any of its Subsidiaries. Except as set forth in
Section 3.10(a) of the Company Disclosure Schedule, (i) there are no liens for
Taxes upon the assets of either the Company or its Subsidiaries except for
statutory liens for current Taxes not yet due or which are being contested in
good faith by appropriate proceedings, (ii) as of the date hereof neither the
Company nor any of its Subsidiaries has requested any extension of time within
which to file any Tax Returns in respect of any fiscal year which have not since
been filed and no request for waivers of the time to assess any Taxes are
pending or outstanding, (iii) as of the date hereof, the federal and state
income Tax Returns of the Company and its Subsidiaries have been audited by the
Internal Revenue Service as set forth in such Section of the Company Disclosure
Schedule and the Company has not agreed to extend the time for assessing and
collecting income Tax with respect to such taxable period, (iv) neither the
Company nor any of its Subsidiaries has filed or been included in a combined,
consolidated or unitary income Tax Return other than one in which the Company
was the parent of the group filing such Tax Return, (v) neither the Company nor
any of its Subsidiaries is a party to any agreement providing for the allocation
or sharing of Taxes (other than the allocation of federal income taxes as
provided by Regulation 1.1552-1(a)(1) under the Code), (vi) neither the Company
nor any of its Subsidiaries is required to include in income any adjustment
pursuant to Section 481(a) of the Code (or any similar or corresponding
provision or requirement of state, local or foreign income Tax law), by reason
of the voluntary change in accounting method (nor has any taxing authority
proposed in writing any such adjustment or change of accounting method), (vii)
neither the Company nor any of its Subsidiaries has filed a consent pursuant to
Section 341(f) of the Code, and (viii) neither the Company nor any of its
Subsidiaries has made any payment or will be obligated to make any payment (by
contract or otherwise) which will not be deductible by reason of Section 280G of
the Code.
(b) For the purposes of this Agreement, "Taxes" shall mean all taxes,
charges, fees, levies, penalties or other assessments imposed by any United
States federal, state, local or foreign taxing authority, including, but not
limited to income, excise, property, sales, transfer, franchise, payroll,
withholding, social security or other taxes, including any interest, penalties
or additions attributable thereto.
For purposes of this Agreement, "Tax Return" shall mean any return, report,
information return or other document (including any related or supporting
information) with respect to Taxes.
3.11. Employees. (a) Section 3.11(a) of the Company Disclosure Schedule
sets forth a true and complete list of each deferred compensation plan,
incentive compensation plan, equity compensation plan, "welfare" plan, fund or
program (within the meaning of section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"); "pension" plan, fund or program
(within the meaning of section 3(2) of ERISA); each employment, termination or
severance agreement; and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, that is sponsored, maintained or
contributed to or required to be contributed to (the "Plans") by the Company,
any of its Subsidiaries or by any trade or business, whether or not incorporated
(an "ERISA Affiliate"), all of which together with the Company would be deemed a
"single employer" within the meaning of Section 4001 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), for the benefit of any
employee or former employee of the Company, any Subsidiary or any ERISA
Affiliate.
(b) The Company has heretofore made available to Buyer with respect to each
of the Plans true and complete copies of each of the following documents if
applicable: (i) the Plan document; (ii) the actuarial report for such Plan for
each of the last two years, (iii) the most recent determination letter from the
Internal Revenue Service for such Plan and (iv) the most recent summary plan
description and related summaries of material modifications.
(c) Except as set forth in Section 3.11(c) of the Company Disclosure
Schedule, (i) each of the Plans has been operated and administered in accordance
with its terms and applicable law, including but not limited to ERISA and the
Code, (ii) each of the Plans intended to be "qualified" within the meaning of
Section 401(a) of the Code either (1) has received a favorable determination
letter from the IRS, or (2) is or
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will be the subject of an application for a favorable determination letter, and
the Company is not aware of any circumstances reasonably likely to result in the
revocation or denial of any such favorable determination letter, (iii) no Plan
provides post-employment benefit coverage for death or medical benefits (whether
or not insured) with respect to current or former employees of the Company, its
Subsidiaries or any ERISA Affiliate beyond the last day of the month following
the date of any such employee's termination of employment, other than (w)
coverage mandated by applicable law, (x) death benefits or retirement benefits
under any "employee pension plan," as that term is defined in Section 3(2) of
ERISA, (y) deferred compensation benefits accrued as liabilities on the books of
the Company, its Subsidiaries or the ERISA Affiliates or (z) benefits the full
cost of which is borne by the current or former employee (or his beneficiary),
(iv) no liability under Title IV of ERISA (other than premiums payable to the
Pension Benefit Guaranty Corporation) has been incurred by the Company, its
Subsidiaries or any ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a risk to the Company, its Subsidiaries or an
ERISA Affiliate of incurring a liability under such Title, (v) no Plan is a
"multiemployer pension plan," as such term is defined in Section 3(37) of ERISA,
(vi) neither the Company, its Subsidiaries nor any ERISA Affiliate has engaged
in a transaction in connection with the Plans which the Company, its
Subsidiaries or any ERISA Affiliate would or would be reasonably likely to be
subject to either a civil penalty assessed pursuant to Section 409 or 502(i) of
ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code, (vii) there
are no pending, or, to the best knowledge of the Company, threatened or
anticipated claims (other than routine claims for benefits) by, on behalf of or
against any of the Plans or any trusts related thereto and (viii) other than in
respect of equity and other incentive compensation plans set forth in Section
3.11(a) of the Company Disclosure Schedule, the consummation of the transactions
contemplated by this Agreement or the Bank Merger Agreement will not (y) entitle
any current or former employee or officer of the Company or any ERISA Affiliate
to severance pay, termination pay or any other payment or benefit, except as
expressly provided in this Agreement or (z) accelerate the time of payment or
vesting or increase the amount or value of compensation or benefits due any such
employee or officer.
3.12. SEC Reports. The Company has previously made available to Buyer an
accurate and complete copy of each (a) final registration statement, prospectus,
report, schedule and definitive proxy statement filed since September 30, 1995
by the Company with the SEC pursuant to the Securities Act of 1933, as amended
(the "Securities Act") or the Exchange Act (the "Company Reports") and (b)
communication mailed by the Company to its stockholders since September 30,
1995, and no such registration statement, prospectus, report, schedule, proxy
statement or communication contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading, except that information as of a later date shall
be deemed to modify information as of an earlier date. The Company has timely
filed all Company Reports and other documents required to be filed by it under
the Securities Act and the Exchange Act, and, as of their respective dates, all
Company Reports complied with the published rules and regulations of the SEC
with respect thereto.
3.13. Company Information. The information relating to the Company and
its Subsidiaries to be contained in the Proxy Statement and the S-4, or in any
other document filed with any other regulatory agency in connection herewith,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading. The Proxy Statement
(except for such portions thereof that relate only to Buyer or any of its
Subsidiaries) will comply with the provisions of the Exchange Act and the rules
and regulations thereunder.
3.14. Compliance with Applicable Law. The Company and each of its
Subsidiaries hold, and have at all times held, all licenses, franchises, permits
and authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to all, and have complied with and are not in
default in any respect under any, applicable law, statute, order, rule,
regulation, policy and/or guideline of any Governmental Entity relating to the
Company or any of its Subsidiaries, and neither the Company nor any of its
Subsidiaries has received notice of any violations of any of the above.
3.15. Certain Contracts. (a) Except as set forth in Section 3.15(a) of
the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries
is a party to or bound by any contract (whether
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written or oral) (i) with respect to the employment of any directors or
consultants, (ii) which, upon the consummation of the transactions contemplated
by this Agreement or the Bank Merger Agreement, will (either alone or upon the
occurrence of any additional acts or events) result in any payment or benefits
(whether of severance pay or otherwise) becoming due, or the acceleration or
vesting of any rights to any payment or benefits, from Buyer, the Company, the
Surviving Corporation, the Surviving Bank or any of their respective
Subsidiaries to any director or consultant thereof, (iii) which is a material
contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC) to be
performed after the date of this Agreement that has not been filed or
incorporated by reference in the Company Reports, (iv) which is a consulting
agreement (including data processing, software programming and licensing
contracts) not terminable on 60 days or less notice involving the payment of
more than $250,000 per annum, or (v) which materially restricts the conduct of
any line of business by the Company or any of its Subsidiaries. Each contract,
arrangement, commitment or understanding of the type described in this Section
3.15(a), whether or not set forth in Section 3.15(a) of the Company Disclosure
Schedule, is referred to herein as a "Company Contract". The Company has
previously delivered or made available to Buyer true and correct copies of each
Company Contract.
(b) Except as set forth in Section 3.15(b) of the Company Disclosure
Schedule, (i) each Company Contract is valid and binding and in full force and
effect, (ii) the Company and each of its Subsidiaries have performed all
obligations required to be performed by it to date under each Company Contract,
(iii) no event or condition exists which constitutes or, after notice or lapse
of time or both, would constitute, a default on the part of the Company or any
of its Subsidiaries under any such Company Contract, and (iv) no other party to
such Company Contract is, to the best knowledge of the Company, in default in
any respect thereunder.
3.16. Agreements with Regulatory Agencies. Except as set forth in Section
3.16 of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is subject to any cease-and-desist or other order issued by, or is
a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any board resolutions
at the request of (each, whether or not set forth on Section 3.16 of the Company
Disclosure Schedule, a "Regulatory Agreement"), any Regulatory Agency or other
Governmental Entity that restricts the conduct of its business or that in any
manner relates to its capital adequacy, its credit policies, its management or
its business, nor has the Company or any of its Subsidiaries been advised by any
Regulatory Agency or other Governmental Entity that it is considering issuing or
requesting any Regulatory Agreement.
3.17. Investment Securities. Section 3.17 of the Company Disclosure
Schedule sets forth the book and estimated market value as of September 30, 1997
of the investment securities, mortgage backed securities and securities held for
sale of the Company and its Subsidiaries. Section 3.17 of the Company Disclosure
Schedule sets forth, with respect to such securities, descriptions thereof,
CUSIP numbers, pool face values and coupon rates.
3.18. Intellectual Property. The Company and each of its Subsidiaries
owns or possesses valid and binding licenses and other rights to use without
payment all patents, copyrights, trade secrets, trade names, servicemarks and
trademarks used in its businesses; and neither the Company nor any of its
Subsidiaries has received any notice of conflict with respect thereto that
asserts the right of others.
3.19. State Takeover Laws. The provisions of Section 203 of the DGCL and
Article Eighth of the Company's Restated Certificate of Incorporation will not,
assuming the accuracy of the representations contained in Section 4.15 hereof,
apply to this Agreement, the Bank Merger Agreement or the Company Option
Agreement or any of the transactions contemplated hereby or thereby.
3.20. Administration of Fiduciary Accounts. The Company and each of its
Subsidiaries has properly administered all accounts for which it acts as a
fiduciary, including but not limited to accounts for which it serves as a
trustee, agent, custodian, personal representative, guardian, conservator or
investment advisor, in accordance with the terms of the governing documents and
applicable state and federal law and regulation and common law. Neither the
Company nor any of its Subsidiaries nor any of their respective directors,
officers or employees has committed any breach of trust with respect to any such
fiduciary account, and the accountings for each such fiduciary account are true
and correct and accurately reflect the assets of such fiduciary account.
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3.21. Environmental Matters. Except as set forth in Section 3.21 of the
Company Disclosure Schedule:
(a) Each of the Company, its Subsidiaries, the Participation
Facilities and the Loan Properties (each as hereinafter defined) are in
compliance with all applicable federal, state and local laws including
common law, regulations and ordinances and with all applicable decrees,
orders and contractual obligations relating to pollution or the discharge
of, or exposure to Hazardous Materials (as hereinafter defined) in the
environment or workplace ("Environmental Laws");
(b) There is no suit, claim, action or proceeding, pending or, to the
best knowledge of the Company, threatened, before any Governmental Entity
or other forum in which the Company, any of its Subsidiaries, any
Participation Facility or any Loan Property, has been or, with respect to
threatened proceedings, may be, named as a defendant (x) for alleged
noncompliance (including by any predecessor), with any Environmental Laws,
or (y) relating to the release, threatened release or exposure to any
Hazardous Material whether or not occurring at or on a site owned, leased
or operated by the Company or any of its Subsidiaries, any Participation
Facility or any Loan Property;
(c) To the best knowledge of the Company, during the period of (x) the
Company's or any of its Subsidiaries' ownership or operation of any of
their respective current or former properties, (y) the Company's or any of
its Subsidiaries' participation in the management of any Participation
Facility, or (z) the Company's or any of its Subsidiaries' holding of a
security interest in a Loan Property, there has been no release of
Hazardous Materials in, on, under or affecting any such property. To the
best knowledge of the Company, prior to the period of (x) the Company's or
any of its Subsidiaries' ownership or operation of any of their respective
current or former properties, (y) the Company's or any of its Subsidiaries'
participation in the management of any Participation Facility, or (z) the
Company's or any of its Subsidiaries' holding of a security interest in a
Loan Property, there was no release or threatened release of Hazardous
Materials in, on, under or affecting any such property, Participation
Facility or Loan Property; and
(d) The following definitions apply for purposes of this Section 3.21:
(x) "Hazardous Materials" means any chemicals, pollutants, contaminants,
wastes, toxic substances, petroleum or other regulated substances or
materials, (y) "Loan Property" means any property in which the Company or
any of its Subsidiaries holds a security interest, and, where required by
the context, said term means the owner or operator of such property; and
(z) "Participation Facility" means any facility in which the Company or any
of its Subsidiaries participates in the management and, where required by
the context, said term means the owner or operator of such property.
3.22. Derivative Transactions. Except as set forth in Section 3.22 of the
Company Disclosure Schedule, since September 30, 1996, neither Company nor any
of its Subsidiaries has engaged in transactions in or involving forwards,
futures, options on futures, swaps or other derivative instruments except (i) as
agent on the order and for the account of others, or (ii) as principal for
purposes of hedging interest rate risk on U.S. dollar-denominated securities and
other financial instruments. None of the counterparties to any contract or
agreement with respect to any such instrument is in default with respect to such
contract or agreement and no such contract or agreement, were it to be a Loan
(as defined below) held by the Company or any of its Subsidiaries, would be
classified as "Other Loans Specially Mentioned", "Special Mention",
"Substandard", "Doubtful", "Loss", "Classified", "Criticized", "Credit Risk
Assets", "Concerned Loans" or words of similar import. The financial position of
the Company and its Subsidiaries on a consolidated basis under or with respect
to each such instrument has been reflected in the books and records of the
Company and such Subsidiaries in accordance with GAAP consistently applied, and
except as disclosed in such books and records, no open exposure of the Company
or any of its Subsidiaries with respect to any such instrument (or with respect
to multiple instruments with respect to any single counterparty) exceeds
$500,000.
3.23. Opinion. The Company has received an opinion, dated the date
hereof, from each of Sandler O'Neill and Keefe Bruyette to the effect that as of
the date thereof and based upon and subject to the matters set forth therein,
the consideration to be received by the stockholders of the Company pursuant to
this
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Agreement is fair to such stockholders from a financial point of view. Such
opinion has not been amended or rescinded as of the date of this Agreement.
3.24. Approvals. As of the date of this Agreement, the Company knows of
no reason why all regulatory approvals required for the consummation of the
transactions contemplated hereby (including, without limitation, the Merger and
the Subsidiary Merger) should not be obtained.
3.25. Loan Portfolio. (a) Except as set forth in Section 3.25 of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is
a party to any written or oral (i) loan agreement, note or borrowing arrangement
(including, without limitation, leases, credit enhancements, commitments,
guarantees and interest-bearing assets) (collectively, "Loans"), other than
Loans the unpaid principal balance of which does not exceed $50,000, under the
terms of which the obligor is, as of the date of this Agreement, over 90 days
delinquent in payment of principal or interest or in default of any other
provision, or (ii) Loan with any director, executive officer or five percent or
greater stockholder of the Company or any of its Subsidiaries, or to the best
knowledge of the Company, any person, corporation or enterprise controlling,
controlled by or under common control with any of the foregoing. Section 3.25 of
the Company Disclosure Schedule sets forth (i) all of the Loans in original
principal amount in excess of $50,000 of the Company or any of its Subsidiaries
that as of the date of this Agreement are classified by any bank examiner
(whether regulatory or internal) as "Other Loans Specially Mentioned", "Special
Mention", "Substandard", "Doubtful", "Loss", "Classified", "Criticized", "Credit
Risk Assets", "Concerned Loans", "Watch List" or words of similar import,
together with the principal amount of and accrued and unpaid interest on each
such Loan and the identity of the borrower thereunder, (ii) by category of Loan
(i.e., commercial, consumer, etc.), all of the other Loans of the Company and
its Subsidiaries that as of the date of this Agreement are classified as such,
together with the aggregate principal amount of and accrued and unpaid interest
on such Loans by category and (iii) each asset of the Company that as of the
date of this Agreement is classified as "Other Real Estate Owned" and the book
value thereof. The Company shall promptly inform Buyer in writing of any Loan
that becomes classified in the manner described in the previous sentence, or any
Loan the classification of which is changed, at any time after the date of this
Agreement.
(b) Each Loan in original principal amount in excess of $50,000 (i) is
evidenced by notes, agreements or other evidences of indebtedness which are
true, genuine and what they purport to be, (ii) to the extent secured, has been
secured by valid liens and security interests which have been perfected and
(iii) is the legal, valid and binding obligation of the obligor named therein,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
3.26. Property. Each of the Company and its Subsidiaries has good and
marketable title free and clear of all liens, encumbrances, mortgages, pledges,
charges, defaults or equitable interests to all of the properties and assets,
real and personal, tangible or intangible, which are reflected on the
consolidated statement of financial condition of the Company as of June 30, 1997
or acquired after such date, except (i) liens for taxes not yet due and payable
or contested in good faith by appropriate proceedings, (ii) pledges to secure
deposits and other liens incurred in the ordinary course of banking business,
(iii) such imperfections of title, easements and encumbrances, if any, as are
not material in character, amount or extent or (iv) for dispositions and
encumbrances of, or on, such properties or assets for adequate consideration in
the ordinary course of business. All leases pursuant to which the Company or any
Subsidiary of the Company, as lessee, leases real or personal property are valid
and enforceable in accordance with their respective terms and neither the
Company nor any of its Subsidiaries nor any other party thereto is in default
thereunder.
3.27. Accounting for the Merger; Reorganization. As of the date of this
Agreement, except as set forth in Section 3.27 of the Company Disclosure
Schedule, the Company has no reason to believe that the Merger will fail to
qualify (i) for pooling-of-interests treatment under GAAP or (ii) as a
reorganization under Section 368(a) of the Code.
3.28. Stock Repurchases. Set forth in Section 3.28 of the Company
Disclosure Schedule is a true, correct and complete list of all purchases of
Company Common Stock by the Company or any of its Subsidiaries since July 1,
1995, including the date of each such purchase, the number of shares purchased
and
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the price paid, and all such information is appropriately adjusted to reflect
all stock splits and stock dividends with respect to the Company Common Stock
since July 1, 1995.
3.29. Deposits. No person or entity, either alone or when taken together
with its affiliates and related parties, has deposits in Company Bank in an
aggregate amount greater than $20,000,000.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Subject to Sections 2A.1 and 2A.2, Buyer hereby represents and warrants to
the Company as follows:
4.1. Corporate Organization. (a) Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Buyer has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted,
and is duly licensed or qualified to do business in each jurisdiction in which
the nature of the business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary. Buyer is duly registered as a bank holding company
under the BHC Act. The Certificate of Incorporation and By-laws of Buyer, copies
of which have previously been made available to the Company, are true, complete
and correct copies of such documents as in effect as of the date of this
Agreement.
(b) Buyer Bank is a bank duly organized, validly existing and in good
standing under the laws of the State of New York. The deposit accounts of Buyer
Bank are insured by the FDIC through the Bank Insurance Fund to the fullest
extent permitted by law, and all premiums and assessments required in connection
therewith have been paid by Buyer Bank. Each of Buyer's other Subsidiaries is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each Subsidiary of Buyer has the corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary.
The articles of organization and by-laws of Buyer Bank, copies of which have
previously been made available to the Company, are true, complete and correct
copies of such documents as in effect as of the date of this Agreement.
(c) The minute books of Buyer and each of its Subsidiaries contain true,
complete and accurate records of all meetings and other corporate actions held
or taken since December 31, 1994 of their respective stockholders and Boards of
Directors (including committees of their respective Boards of Directors).
4.2. Capitalization. (a) As of the date of this Agreement, the authorized
capital stock of Buyer consists of 200,000,000 shares of Buyer Common Stock and
10,000,000 shares of preferred stock, par value $1.00 per share ("Buyer
Preferred Stock"). As of September 30, 1997, there were 66,044,201 shares of
Buyer Common Stock and no shares of Buyer Preferred Stock issued and
outstanding, and 57,268 shares of Buyer Common Stock held in Buyer's treasury.
As of the date of this Agreement, no shares of Buyer Common Stock or Buyer
Preferred Stock were reserved for issuance, except that (i) 624,763 shares of
Buyer Common Stock were reserved for issuance pursuant to the Buyer's dividend
reinvestment and stock purchase plans, (ii) 1,827,502 shares of Buyer Common
Stock were reserved for issuance upon the exercise of stock options pursuant to
the Buyer 1985 Incentive Stock Option Plan and the Buyer 1987 Long Term
Incentive Plan; the Buyer's 1989 Executive Stock Option Plan and the Buyer's
1994 Key Employee Stock Plan (collectively, the "Buyer Stock Plans"), (iii)
1,350,000 shares of Buyer Common Stock were reserved for issuance upon
consummation of the acquisition of Branford Savings Bank and (iv) not more than
2,000,000 shares of Buyer Series A Junior Participating Preferred Stock were
reserved for issuance upon exercise of the rights (the "Buyer Rights")
distributed to holders of Buyer Common Stock pursuant to the Shareholder Rights
Agreement, dated as of February 28, 1989, between Buyer and The North Fork Bank,
as Rights Agent (the "Buyer Shareholder Rights Agreement"). All of the issued
and outstanding shares of Buyer Common Stock and Buyer Preferred Stock have been
duly authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. As of the date of this Agreement, except as referred to above or
reflected in Section 4.2(a) of the Buyer Disclosure Schedule and
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the Buyer Shareholder Rights Agreement, Buyer does not have and is not bound by
any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of Buyer Common Stock or Buyer Preferred Stock or any other equity securities of
Buyer or any securities representing the right to purchase or otherwise receive
any shares of Buyer Common Stock or Buyer Preferred Stock. The shares of Buyer
Common Stock to be issued pursuant to the Merger will be duly authorized and
validly issued and, at the Effective Time, all such shares will be fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof.
(b) Section 4.2(b) of the Buyer Disclosure Schedule sets forth a true and
correct list of all of the Buyer Subsidiaries as of the date of this Agreement.
Except as set forth in Section 4.2(b) of the Buyer Disclosure Schedule, as of
the date of this Agreement, Buyer owns, directly or indirectly, all of the
issued and outstanding shares of capital stock of each of the Subsidiaries of
Buyer, free and clear of all liens, charges, encumbrances and security interests
whatsoever, and all of such shares are duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. As of the date of this Agreement,
no Subsidiary of Buyer has or is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character with any
party that is not a direct or indirect Subsidiary of Buyer calling for the
purchase or issuance of any shares of capital stock or any other equity security
of such Subsidiary or any securities representing the right to purchase or
otherwise receive any shares of capital stock or any other equity security of
such Subsidiary.
4.3. Authority; No Violation. (a) Buyer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the Board of Directors of Buyer. The Board of Directors of
Buyer has directed that this Agreement and the transactions contemplated hereby
be submitted to Buyer's stockholders for approval at a meeting of such
stockholders and, except for the adoption of this Agreement by the requisite
vote of Buyer's stockholders, no other corporate proceedings on the part of
Buyer are necessary to approve this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Buyer and (assuming due authorization, execution and delivery by
the Company) this Agreement constitutes a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except as enforcement
may be limited by general principles of equity whether applied in a court of law
or a court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally.
(b) Buyer Bank has full corporate power and authority to execute and
deliver the Bank Merger Agreement and to consummate the transactions
contemplated thereby. The execution and delivery of the Bank Merger Agreement
and the consummation of the transactions contemplated thereby will be duly and
validly approved by the Board of Directors of Buyer Bank. Upon the due and valid
approval of the Bank Merger Agreement by Buyer as the sole stockholder of Buyer
Bank, and by the Board of Directors of Buyer Bank, no other corporate
proceedings on the part of Buyer Bank will be necessary to consummate the
transactions contemplated thereby. The Bank Merger Agreement, upon execution and
delivery by Buyer Bank, will be duly and validly executed and delivered by Buyer
Bank and will (assuming due authorization, execution and delivery by the Company
Bank) constitute a valid and binding obligation of Buyer Bank, enforceable
against Buyer Bank in accordance with its terms, except as enforcement may be
limited by general principles of equity whether applied in a court of law or a
court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally.
(c) Except as set forth in Section 4.3(c) of the Buyer Disclosure Schedule,
neither the execution and delivery of this Agreement by Buyer or the Bank Merger
Agreement by Buyer Bank, nor the consummation by Buyer or Buyer Bank, as the
case may be, of the transactions contemplated hereby or thereby, nor compliance
by Buyer or Buyer Bank, as the case may be, with any of the terms or provisions
hereof or thereof, will (i) violate any provision of the Certificate of
Incorporation or By-Laws of Buyer, or the articles of incorporation or by-laws
or similar governing documents of any of its Subsidiaries or (ii) assuming that
the consents and approvals referred to in Section 4.4 are duly obtained, (x)
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to Buyer or any of its Subsidiaries or
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any of their respective properties or assets, or (y) violate, conflict with,
result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of Buyer or any of
its Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Buyer or any of its Subsidiaries is a party,
or by which they or any of their respective properties or assets may be bound or
affected.
4.4. Consents and Approvals. Except for (a) the filing of applications
and notices, as applicable, with the Federal Reserve Board under the BHC Act,
and approval of such applications and notices, (b) the filing of applications
with the FDIC under the Bank Merger Act and approval of such applications, (c)
the filing of applications and notices with the OTS and approval of such
applications and notices, (d) the State Banking Approvals, (e) the filing with
the SEC of the Proxy Statement and the filing and declaration of effectiveness
of the S-4, (f) the approval of this Agreement by the requisite vote of the
stockholders of Buyer, (g) the filing of the Certificate of Merger with the
Secretary, (h) such filings and approvals as are required to be made or obtained
under the securities or "Blue Sky" laws of various states in connection with the
issuance of the shares of Buyer Common Stock pursuant to this Agreement, (i)
filings required by the Bank Merger Agreement, (j) the approval of the Bank
Merger Agreement by the stockholder of Buyer Bank, (k) approval of the listing
of the Buyer Common Stock to be issued in the Merger on the NYSE, and (l) such
filings, authorizations or approvals as may be set forth in Section 4.4 of the
Buyer Disclosure Schedule, no consents or approvals of or filings or
registrations with any Governmental Entity or with any third party are necessary
in connection with (1) the execution and delivery by Buyer of this Agreement,
(2) the consummation by Buyer of the Merger and the other transactions
contemplated hereby, (3) the execution and delivery by Buyer Bank of the Bank
Merger Agreement, and (4) the consummation of Buyer Bank of the transactions
contemplated by the Bank Merger Agreement.
4.5. Reports. Buyer and each of its Subsidiaries have timely filed all
reports, registrations and statements, together with any amendments required to
be made with respect thereto, that they were required to file since December 31,
1995 with any Regulatory Agency, and all other reports and statements required
to be filed by them since December 31, 1995, including, without limitation, any
report or statement required to be filed pursuant to the laws, rules or
regulations of the United States, the Federal Reserve Board, the FDIC, any State
Regulator or any SRO, and have paid all fees and assessments due and payable in
connection therewith. Except for normal examinations conducted by a Regulatory
Agency in the regular course of the business of Buyer and its Subsidiaries, and
except as set forth in Section 4.5 of Buyer Disclosure Schedule, no Regulatory
Agency has initiated any proceeding or, to the best knowledge of Buyer,
investigation into the business or operations of Buyer or any of its
Subsidiaries since December 31, 1995. There is no unresolved violation,
criticism, or exception by any Regulatory Agency with respect to any report or
statement relating to any examinations of Buyer or any of its Subsidiaries.
4.6. Financial Statements. Buyer has previously made available to the
Company copies of (a) the consolidated balance sheets of Buyer and its
Subsidiaries as of December 31 for the fiscal years 1995 and 1996 and the
related consolidated statements of income, changes in shareholders' equity and
cash flows for the fiscal years 1994 through 1996, inclusive, as reported in
Buyer's Annual Report on Form 10-K for the fiscal year ended December 31, 1996
filed with the SEC under the Exchange Act, in each case accompanied by the audit
report of KPMG Peat Marwick LLP, independent public accountants with respect to
Buyer, and (b) the unaudited consolidated balance sheet of Buyer and its
Subsidiaries as of June 30, 1997 and June 30, 1996 and the related unaudited
consolidated statements of income, changes in shareholders' equity and cash
flows for the six-month periods then ended as reported in Buyer's Quarterly
Report on Form 10-Q for the period ended June 30, 1997 filed with the SEC under
the Exchange Act. The December 31, 1996 consolidated balance sheet of Buyer
(including the related notes, where applicable) fairly presents the consolidated
financial position of Buyer and its Subsidiaries as of the date thereof, and the
other financial statements referred to in this Section 4.6 (including the
related notes, where applicable) fairly present and the financial statements
referred to in Section 6.9 hereof will fairly present (subject, in the case of
the unaudited statements, to
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recurring audit adjustments normal in nature and amount), the results of the
consolidated operations and changes in shareholders' equity and consolidated
financial position of Buyer and its Subsidiaries for the respective fiscal
periods or as of the respective dates therein set forth; each of such statements
(including the related notes, where applicable) comply, and the financial
statements referred to in Section 6.9 hereof will comply, in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto; and each of such statements
(including the related notes, where applicable) has been, and the financial
statements referred to in Section 6.9 hereof will be, prepared in accordance
with GAAP consistently applied during the periods involved, except as indicated
in the notes thereto or, in the case of unaudited statements, as permitted by
Form 10-Q. The books and records of Buyer and its Subsidiaries have been, and
are being, maintained in all material respects in accordance with GAAP and any
other applicable legal and accounting requirements.
4.7. Broker's Fees. Neither Buyer nor any Subsidiary of Buyer, nor any of
their respective officers or directors, has employed any broker or finder or
incurred any liability for any broker's fees, commissions or finder's fees in
connection with any of the transactions contemplated by this Agreement, the
Company Option Agreement or the Bank Merger Agreement, except that Buyer has
engaged, and will pay a fee or commission to, Goldman, Sachs & Co. ("Goldman
Sachs").
4.8. Absence of Certain Changes or Events. Except as may be set forth in
Section 4.8 of the Buyer Disclosure Schedule, or as disclosed in Buyer's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (a true,
complete and correct copy of which has previously been made available to the
Company), since December 31, 1996, (i) neither Buyer nor any of its Subsidiaries
has incurred any liability, except in the ordinary course of their business
consistent with their past practices, and (ii) there has been no change or
development or combination of changes or developments which, individually or in
the aggregate, has had or would have a Material Adverse Effect on Buyer.
4.9. Legal Proceedings. (a) Except as set forth in Section 4.9 of the
Buyer Disclosure Schedule or in Buyer's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, neither Buyer nor any of its Subsidiaries is a
party to any and there are no pending or, to the best of Buyer's knowledge,
threatened, legal, administrative, arbitral or other proceedings, claims,
actions or governmental or regulatory investigations of any nature against Buyer
or any of its Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement or the Bank Merger Agreement.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction imposed upon Buyer, any of its Subsidiaries or the assets of Buyer
or any of its Subsidiaries.
4.10. Taxes. Except as set forth in Section 4.10 of the Buyer Disclosure
Schedule, each of Buyer and its Subsidiaries has (i) duly and timely filed
(including applicable extensions granted without penalty) all Tax Returns
required to be filed at or prior to the Effective Time, and such Tax Returns are
true, correct and complete, and (ii) paid in full or made adequate provision in
the financial statements of Buyer (in accordance with GAAP) for all Taxes. No
deficiencies for any Taxes have been proposed, asserted, assessed or, to the
best knowledge of Buyer, threatened against or with respect to Buyer or any of
its Subsidiaries. Except as set forth in Section 4.10 of the Buyer Disclosure
Schedule, (i) there are no liens for Taxes upon the assets of either Buyer or
its Subsidiaries except for statutory liens for current Taxes not yet due or
which are being contested in good faith by appropriate proceedings, (ii) as of
the date hereof, neither Buyer nor any of its Subsidiaries has requested any
extension of time within which to file any Tax Returns in respect of any fiscal
year which have not since been filed and no request for waivers of the time to
assess any Taxes are pending or outstanding, (iii) as of the date hereof, with
respect to each taxable period of Buyer and its Subsidiaries, the federal and
state income Tax Returns of Buyer and its Subsidiaries have been audited by the
Internal Revenue Service or appropriate state tax authorities or the time for
assessing and collecting income Tax with respect to such taxable period has
closed and such taxable period is not subject to review, (iv) neither Buyer nor
any of its Subsidiaries has filed or been included in a combined, consolidated
or unitary income Tax Return other than one in which Buyer was the parent of the
group filing such Tax Return, (v) neither Buyer nor any of its Subsidiaries is a
party to any agreement providing for the allocation or sharing of Taxes (other
than the allocation of federal income taxes as provided by Regulation
1.1552-1(a)(1) under the Code), (vi) neither
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Buyer nor any of its Subsidiaries is required to include in income any
adjustment pursuant to Section 481(a) of the Code (or any similar or
corresponding provision or requirement of state, local or foreign income Tax
law), by reason of the voluntary change in accounting method (nor has any taxing
authority proposed in writing any such adjustment or change of accounting
method), (vii) neither Buyer nor any of its Subsidiaries has filed a consent
pursuant to Section 341(f) of the Code, and (viii) neither Buyer nor any of its
Subsidiaries has made any payment or will be obligated to make any payment (by
contract or otherwise) which will not be deductible by reason of Section 280G of
the Code.
4.11. Employees. (a) Section 4.11(a) of the Buyer Disclosure Schedule
sets forth a true and complete list of each deferred compensation plan,
incentive compensation plan, equity compensation plan, "welfare" plan, fund or
program (within the meaning of section 3(1) of the ERISA); "pension" plan, fund
or program (within the meaning of section 3(2) of ERISA); each employment,
termination or severance agreement; and each other employee benefit plan, fund,
program, agreement or arrangement, in each case, that is sponsored, maintained
or contributed to or required to be contributed to as of the date of this
Agreement (the "Buyer Plans") by Buyer, any of its Subsidiaries or by any trade
or business, whether or not incorporated (a "Buyer ERISA Affiliate"), all of
which together with Buyer would be deemed a "single employer" within the meaning
of Section 4001 of ERISA, for the benefit of any employee or former employee of
Buyer, any Subsidiary or any ERISA Affiliate.
(b) Except as set forth in Section 4.11(b) of the Buyer Disclosure
Schedule, (i) each of the Buyer Plans has been operated and administered in
accordance with its terms and applicable law, including but not limited to ERISA
and the Code, (ii) each of the Buyer Plans intended to be "qualified" within the
meaning of Section 401(a) of the Code has either (1) received a favorable
determination letter from the IRS, or (2) is or will be the subject of an
application for a favorable determination letter, and Buyer is not aware of any
circumstances reasonably likely to result in the revocation or denial of any
such favorable determination letter, (iii) with respect to each Buyer Plan which
is subject to Title IV of ERISA, the present value of accrued benefits under
such Buyer Plan, based upon the actuarial assumptions used for funding purposes
in the most recent actuarial report prepared by such Buyer Plan's actuary with
respect to such Buyer Plan, did not, as of its latest valuation date, exceed the
then current value of the assets of such Buyer Plan allocable to such accrued
benefits, (iv) no Plan provides benefits, including without limitation death or
medical benefits (whether or not insured), with respect to current or former
employees of Buyer, its Subsidiaries or any ERISA Affiliate beyond their
retirement or other termination of service, other than (w) coverage mandated by
applicable law, (x) death benefits or retirement benefits under any "employee
pension plan," as that term is defined in Section 3(2) of ERISA, (y) deferred
compensation benefits accrued as liabilities on the books of Buyer, its
Subsidiaries or the ERISA Affiliates or (z) benefits the full cost of which is
borne by the current or former employee (or his beneficiary), (v) no liability
under Title IV of ERISA has been incurred by Buyer, its Subsidiaries or any
Buyer ERISA Affiliate that has not been satisfied in full, (vi) no Buyer Plan is
a "multiemployer pension plan," as such term is defined in Section 3(37) of
ERISA, (vii) all contributions or other amounts payable by Buyer, its
Subsidiaries or any ERISA Affiliate as of the Effective Time with respect to
each Plan in respect of current or prior plan years have been paid or accrued in
accordance with generally accepted accounting practices and Section 412 of the
Code, (viii) neither Buyer, its Subsidiaries nor any ERISA Affiliate has engaged
in a transaction in connection with which Buyer, its Subsidiaries or any ERISA
Affiliate could be subject to either a civil penalty assessed pursuant to
Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section 4975 or 4976
of the Code, (ix) there are no pending, or, to the best knowledge of Buyer,
threatened or anticipated claims (other than routine claims for benefits) by, on
behalf of or against any of the Buyer Plans or any trusts related thereto and
(x) the consummation of the transactions contemplated by this Agreement or the
Bank Merger Agreement will not (y) entitle any current or former employee or
officer of Buyer or any ERISA Affiliate to severance pay, termination pay or any
other payment or benefit, except as expressly provided in this Agreement or (z)
accelerate the time of payment or vesting or increase in the amount or value of
compensation or benefits due any such employee or officer.
4.12. SEC Reports. Buyer has previously made available to the Company an
accurate and complete copy of each (a) final registration statement, prospectus,
report, schedule and definitive proxy statement filed since January 1, 1995 by
Buyer with the SEC pursuant to the Securities Act or the Exchange Act (the
"Buyer
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Reports") and (b) communication mailed by Buyer to its shareholders since
January 1, 1995, and no such registration statement, prospectus, report,
schedule, proxy statement or communication contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading, except that information
as of a later date shall be deemed to modify information as of an earlier date.
Buyer has timely filed all Buyer Reports and other documents required to be
filed by it under the Securities Act and the Exchange Act, and, as of their
respective dates, all Buyer Reports complied with the published rules and
regulations of the SEC with respect thereto.
4.13. Buyer Information. The information relating to Buyer and its
Subsidiaries to be contained in the Proxy Statement and the S-4, or in any other
document filed with any other regulatory agency in connection herewith, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances in which
they are made, not misleading. The S-4 (except for such portions thereof that
relate only to the Company or any of its Subsidiaries) will comply with the
provisions of the Exchange Act and the rules and regulations thereunder.
4.14. Compliance with Applicable Law. Buyer and each of its Subsidiaries
holds, and has at all times held, all licenses, franchises, permits and
authorizations necessary for the lawful conduct of their respective businesses
under and pursuant to all, and have complied with and are not in default in any
respect under any, applicable law, statute, order, rule, regulation, policy
and/or guideline of any Governmental Entity relating to Buyer or any of its
Subsidiaries and neither Buyer nor any of its Subsidiaries knows of, or has
received notice of violation of, any violations of any of the above.
4.15. Ownership of Company Common Stock; Affiliates and
Associates. (a) Except for the Company Option Agreement, neither Buyer nor any
of its affiliates or associates (as such terms are defined under the Exchange
Act), (i) beneficially owns, directly or indirectly, or (ii) is a party to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of, in each case, any shares of capital stock of the Company
(other than Trust Account Shares and DPC Shares); and
(b) Neither Buyer nor any of its Subsidiaries is an "affiliate" (as such
term is defined in DGCL sec. 203(c)(1)) or an "associate" (as such term is
defined in DGCL sec. 203(c)(2)) of the Company or an "Interested Stockholder"
(as such term is defined in Article Eighth of the Company's Restated Certificate
of Incorporation).
4.16. Agreements with Regulatory Agencies. Except as set forth in Section
4.16 of the Buyer Disclosure Schedule or as disclosed in Buyer's Annual Report
on Form 10-K for the year ended December 31, 1996, neither Buyer nor any of its
Subsidiaries is subject to any cease-and-desist or other order issued by, or is
a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any board resolutions
at the request of (each, whether or not set forth in Section 4.16 of the Buyer
Disclosure Schedule, a "Buyer Regulatory Agreement"), any Regulatory Agency or
other Governmental Entity that restricts the conduct of its business or that in
any manner relates to its capital adequacy, its credit policies, its management
or its business, nor has Buyer or any of its Subsidiaries been advised by any
Regulatory Agency or other Governmental Entity that it is considering issuing or
requesting any Regulatory Agreement.
4.17. Approvals. As of the date of this Agreement, Buyer knows of no
reason why all regulatory approvals required for the consummation of the
transactions contemplated hereby (including, without limitation, the Merger and
the Subsidiary Merger) should not be obtained.
4.18. Accounting for the Merger; Reorganization. As of the date hereof,
Buyer has no reason to believe that the Merger will fail to qualify (i) for
pooling-of-interests treatment under GAAP or (ii) as a reorganization under
Section 368(a) of the Code.
4.19. Intellectual Property. Buyer and each of its Subsidiaries owns or
possesses valid and binding licenses and other rights to use without payment all
patents, copyrights, trade secrets, trade names,
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servicemarks and trademarks used in its businesses; and neither Buyer nor any of
its Subsidiaries has received any notice of conflict with respect thereto that
asserts the right of others.
4.20. Environmental Matters. Except as set forth in Section 4.20 of the
Buyer Disclosure Schedule:
(a) Each of Buyer, its Subsidiaries, the Participation Facilities and
the Loan Properties (each as hereinafter defined) are in compliance with
all Environmental Laws;
(b) There is no suit, claim, action or proceeding, pending or, to the
best knowledge of Buyer, threatened, before any Governmental Entity or
other forum in which Buyer, any of its Subsidiaries, any Participation
Facility or any Loan Property, has been or, with respect to threatened
proceedings, may be, named as a defendant (x) for alleged noncompliance
(including by any predecessor), with any Environmental Laws, or (y)
relating to the release, threatened release or exposure to any Hazardous
Material whether or not occurring at or on a site owned, leased or operated
by Buyer or any of its Subsidiaries, any Participation Facility or any Loan
Property;
(c) To the best knowledge of Buyer during the period of (x) Buyer's or
any of its Subsidiaries' ownership or operation of any of their respective
current or former properties, (y) Buyer's or any of its Subsidiaries'
participation in the management of any Participation Facility, or (z)
Buyer's or any of its Subsidiaries' holding of a security interest in a
Loan Property, there has been no release of Hazardous Materials in, on,
under or affecting any such property. To the best knowledge of Buyer, prior
to the period of (x) Buyer's or any of its Subsidiaries' ownership or
operation of any of their respective current or former properties, (y)
Buyer's or any of its Subsidiaries' participation in the management of any
Participation Facility, or (z) Buyer's or any of its Subsidiaries' holding
of a security interest in a Loan Property, there was no release or
threatened release of Hazardous Materials in, on, under or affecting any
such property, Participation Facility or Loan Property; and
(d) The following definitions apply for purposes of this Section 4.20:
(x) "Loan Property" means any property in which Buyer or any of its
Subsidiaries holds a security interest, and, where required by the context,
said term means the owner or operator of such property; and (y)
"Participation Facility" means any facility in which Buyer or any of its
Subsidiaries participates in the management and, where required by the
context, said term means the owner or operator of such property.
4.21. Derivative Transactions. Except as set forth in Section 4.21 of the
Buyer Disclosure Schedule, as of the date hereof, neither Buyer nor any of its
Subsidiaries is a party to any transaction in or involving forwards, futures,
options on futures, swaps or other derivative instruments except (i) as agent on
the order and for the account of others, or (ii) as principal for purposes of
hedging interest rate risk on U.S. dollar-denominated securities and other
financial instruments. None of the counterparties to any contract or agreement
with respect to any such instrument is in default with respect to such contract
or agreement and no such contract or agreement, were it to be a Loan held by
Buyer or any of its Subsidiaries, would be classified as "Other Loans Specially
Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss", "Classified",
"Criticized", "Credit Risk Assets", "Concerned Loans" or words of similar
import. As of the date hereof, the financial position of Buyer and its
Subsidiaries on a consolidated basis under or with respect to each such
instrument has been reflected in the books and records of Buyer and such
Subsidiaries in accordance with GAAP consistently applied, and except as
disclosed in such books and records, no open exposure of Buyer or any of its
Subsidiaries with respect to any such instrument (or with respect to multiple
instruments with respect to any single counterparty) exceeds $500,000.
4.22. Opinion. Buyer has received an opinion, dated the date hereof, from
Goldman Sachs to the effect that as of the date thereof and based upon and
subject to the matters set forth therein, the Exchange Ratio pursuant to this
Agreement is fair from a financial point of view to Buyer. Such opinion has not
been amended or rescinded as of the date of this Agreement.
4.23. Loan Portfolio. (a) Except as set forth in Section 4.23 of Buyer
Disclosure Schedule, neither Buyer nor any of its Subsidiaries is a party to any
written or oral (i) Loan, other than Loans the unpaid principal balance of which
does not exceed $100,000, under the terms of which the obligor is, as of the
date of this Agreement, over 90 days delinquent in payment of principal or
interest or in default of any other provision,
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or (ii) Loan with any director, executive officer or five percent or greater
stockholder of Buyer or any of its Subsidiaries, or to the best knowledge of
Buyer, any person, corporation or enterprise controlling, controlled by or under
common control with any of the foregoing. Section 4.23 of Buyer Disclosure
Schedule sets forth (i) all of the Loans in original principal amount in excess
of $100,000 of Buyer or any of its Subsidiaries (other than 1-to-4 family
residential mortgage loans and consumer loans) that as of the date of this
Agreement are classified by any bank examiner (whether regulatory or internal)
as "Other Loans Specially Mentioned", "Special Mention", "Substandard",
"Doubtful", "Loss", "Classified", "Criticized", "Credit Risk Assets", "Concerned
Loans", "Watch List" or words of similar import, together with the principal
amount of and accrued and unpaid interest on each such Loan and the identity of
the borrower thereunder, (ii) by category of Loan (i.e., commercial, consumer,
etc.), all of the other Loans of Buyer and its Subsidiaries that as of the date
of this Agreement are classified as such, together with the aggregate principal
amount of and accrued and unpaid interest on such Loans by category and (iii)
each asset of Buyer that as of the date of this Agreement is classified as
"Other Real Estate Owned" and the book value thereof.
(b) Each Loan in original principal amount in excess of $100,000 (i) is
evidenced by notes, agreements or other evidences of indebtedness which are
true, genuine and what they purport to be, (ii) to the extent secured, has been
secured by valid liens and security interests which have been perfected and
(iii) is the legal, valid and binding obligation of the obligor named therein,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
4.24. Property. Each of Buyer and its Subsidiaries has good and
marketable title free and clear of all liens, encumbrances, mortgages, pledges,
charges, defaults or equitable interests to all of the properties and assets,
real and personal, tangible or intangible, and which are reflected on the
consolidated statement of financial condition of Buyer as of June 30, 1997 or
acquired after such date, except (i) liens for taxes not yet due and payable or
contested in good faith by appropriate proceedings, (ii) pledges to secure
deposits and other liens incurred in the ordinary course of banking business,
(iii) such imperfections of title, easements and encumbrances, if any, or (iv)
for dispositions and encumbrances of, or on, such properties or assets for
adequate consideration in the ordinary course of business. All leases pursuant
to which Buyer or any Subsidiary of Buyer, as lessee, leases real or personal
property are valid and enforceable in accordance with their respective terms and
neither Buyer nor any of its Subsidiaries nor any other party thereto is in
default thereunder.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1. Covenants of the Company. During the period from the date of this
Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement, the Bank Merger Agreement or the
Company Option Agreement or with the prior written consent of Buyer, the Company
and its Subsidiaries shall carry on their respective businesses in the ordinary
course consistent with past practice and consistent with prudent banking
practice. The Company will use its reasonable best efforts consistent with past
practice to (x) preserve its business organization and that of its Subsidiaries
intact, (y) keep available to itself and Buyer the present services of the
employees of the Company and its Subsidiaries and (z) preserve for itself and
Buyer the goodwill of the customers of the Company and its Subsidiaries and
others with whom business relationships exist. Without limiting the generality
of the foregoing, and except as set forth on Section 5.1 of the Company
Disclosure Schedule or as otherwise contemplated by this Agreement or consented
to in writing by Buyer, the Company shall not, and shall not permit any of its
Subsidiaries to:
(a) solely in the case of the Company, declare or pay any dividends
on, or make other distributions in respect of, any of its capital stock,
other than normal quarterly dividends in an amount of no more than $0.15
per share of Company Common Stock;
(b) (i) split, combine or reclassify any shares of its capital stock
or issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock
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except upon the exercise or fulfillment of rights or options issued or
existing pursuant to employee benefit plans, programs or arrangements, all
to the extent outstanding and in existence on the date of this Agreement
and in accordance with their present terms, and except pursuant to the
Company Option Agreement, or (ii) repurchase, redeem or otherwise acquire
(except for the acquisition of Trust Account Shares and DPC Shares, as such
terms are defined in Section 1.4(b) hereof) any shares of the capital stock
of the Company or any Subsidiary of the Company, or any securities
convertible into or exercisable for any shares of the capital stock of the
Company or any Subsidiary of the Company;
(c) except as set forth on Section 5.1(c) of the Company Disclosure
Schedule, issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any shares of its capital stock or any securities
convertible into or exercisable for, or any rights, warrants or options to
acquire, any such shares, or enter into any agreement with respect to any
of the foregoing, other than (i) the issuance of Company Common Stock
pursuant to stock options or similar rights to acquire Company Common Stock
granted pursuant to the Company Plans and outstanding prior to the date of
this Agreement, in each case in accordance with their present terms and
(ii) pursuant to the Company Option Agreement;
(d) amend its Restated Certificate of Incorporation, By-laws or other
similar governing documents;
(e) authorize or permit any of its officers, directors, employees or
agents to directly or indirectly solicit, initiate or encourage any
inquiries relating to, or the making of any proposal which constitutes, a
"takeover proposal" (as defined below), or, except to the extent legally
required for the discharge of the fiduciary duties of the Board of
Directors of the Company as advised by such board's counsel, recommend or
endorse any takeover proposal, or participate in any discussions or
negotiations, or provide third parties with any nonpublic information,
relating to any such inquiry or proposal or otherwise facilitate any effort
or attempt to make or implement a takeover proposal; provided, however,
that the Company may communicate information about any such takeover
proposal to its stockholders if, in the judgment of the Company's Board of
Directors, based upon the advice of outside counsel, such communication is
required under applicable law. The Company will immediately cease and cause
to be terminated any existing activities, discussions or negotiations
previously conducted with any parties other than Buyer with respect to any
of the foregoing. The Company will take all actions necessary or advisable
to inform the appropriate individuals or entities referred to in the first
sentence hereof of the obligations undertaken in this Section 5.1(e). The
Company will notify Buyer immediately if any such inquiries or takeover
proposals are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated or continued
with, the Company, and the Company will promptly inform Buyer in writing of
all of the relevant details with respect to the foregoing. As used in this
Agreement, "takeover proposal" shall mean any tender or exchange offer,
proposal for a merger, consolidation or other business combination
involving the Company or any Subsidiary of the Company or any proposal or
offer to acquire in any manner a substantial equity interest in, or a
substantial portion of the assets of, the Company or any Subsidiary of the
Company other than the transactions contemplated or permitted by this
Agreement, the Bank Merger Agreement and the Company Option Agreement;
(f) make any capital expenditures other than those which (i) are made
in the ordinary course of business or are necessary to maintain existing
assets in good repair and (ii) in any event are in an amount of no more
than $250,000 in the aggregate;
(g) enter into any new line of business, which prohibition shall not
apply to the expansion of Company's consumer and residential businesses, as
to which the Company will consult with Buyer;
(h) acquire or agree to acquire, by merging or consolidating with, or
by purchasing a substantial equity interest in or a substantial portion of
the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof
or otherwise acquire any assets, which would be material, individually or
in the aggregate, to the Company, other than in connection with
foreclosures, settlements in lieu of foreclosure or troubled loan or debt
restructurings in the ordinary course of business consistent with prudent
banking practices;
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(i) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect, or in any of
the conditions to the Merger set forth in Article VII not being satisfied;
(j) change its methods of accounting in effect at June 30, 1997,
except as required by changes in GAAP or regulatory accounting principles
as concurred to by the Company's independent auditors;
(k) (i) except as required by applicable law or to maintain
qualification pursuant to the Code, adopt, amend, or terminate any employee
benefit plan (including, without limitation, any Plan) or any agreement,
arrangement, plan or policy between the Company or any Subsidiary of the
Company and one or more of its current or former directors, officers or
employees except that the Company may adopt the severance and retention
policy described in Section 5.1(k) of the Company Disclosure Schedule or
(ii) except for normal increases in the ordinary course of business
consistent with past practice or except as required by applicable law,
increase in any manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by any Plan or
agreement as in effect as of the date hereof (including, without
limitation, the granting of stock options, stock appreciation rights,
restricted stock, restricted stock units or performance units or shares),
it being agreed that the Company may accrue under its current incentive
bonus plan an aggregate maximum amount of $2.16 million and may pay such
amounts, from and after January 1, 1998 but not later than immediately
prior to the Effective Time, to any officer;
(l) take or cause to be taken any action which would disqualify the
Merger as a "pooling of interests" for accounting purposes or a tax free
reorganization under Section 368(a) of the Code, provided, however, that
nothing contained herein shall limit the ability of Buyer to exercise its
rights under the Company Option Agreement;
(m) other than activities in the ordinary course of business
consistent with past practice, sell, lease, encumber, assign or otherwise
dispose of, or agree to sell, lease, encumber, assign or otherwise dispose
of, any of its material assets, properties or other rights or agreements;
(n) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money or assume, guarantee,
endorse or otherwise as an accommodation become responsible for the
obligations of any other individual, corporation or other entity (it being
understood that loans by the Company to its directors in connection with
liabilities resulting from the exercise of stock options shall not be
prohibited by the terms of this Agreement provided that such loans are made
in accordance with the Company's customary underwriting standards and any
applicable banking regulations);
(o) file any application to relocate or terminate the operations of
any banking office of it or any of its Subsidiaries;
(p) make any equity investment or commitment to make such an
investment in real estate or in any real estate development project, other
than in connection with foreclosures, settlements in lieu of foreclosure or
troubled loan or debt restructurings in the ordinary course of business
consistent with prudent banking practices;
(q) create, renew, amend or terminate or give notice of a proposed
renewal, amendment or termination of, any material contract, agreement or
lease for goods, services or office space to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or their respective properties is bound;
(r) other than in prior consultation with Buyer, restructure or
materially change its investment securities portfolio or its gap position,
through purchases, sales or otherwise, or the manner in which the portfolio
is classified or reported; or
(s) agree to do any of the foregoing.
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5.2. Covenants of Buyer. Except as set forth on Section 5.2 of the Buyer
Disclosure Schedule or as otherwise contemplated by this Agreement or consented
to in writing by the Company, Buyer shall not, and shall not permit any of its
Subsidiaries to:
(a) solely in the case of Buyer, declare or pay any dividends on or
make any other distributions in respect of any of its capital stock other
than its current quarterly dividend; provided, however, that nothing
contained herein shall prohibit Buyer from increasing the quarterly cash
dividend on the Buyer Common Stock;
(b) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect, or in any of
the conditions to the Merger set forth in Article VII not being satisfied;
(c) change its methods of accounting in effect at June 30, 1997,
except in accordance with changes in GAAP or regulatory accounting
principles as concurred to by Buyer's independent auditors;
(d) take or cause to be taken any action which would disqualify the
Merger as a "pooling of interests" for accounting purposes or a tax free
reorganization under Section 368(a) of the Code, provided, however, that
nothing contained herein shall limit the ability of Buyer to exercise its
rights under the Company Option Agreement; or
(e) agree to do any of the foregoing.
5.3. Conduct of Buyer's Business. Buyer shall, and Buyer shall cause
Buyer Bank to, conduct its banking business in substantially the same manner as
heretofore conducted, it being understood and agreed that nothing contained
herein shall prevent Buyer from acquiring another bank or thrift institution or
entering into new lines of business, whether through acquisition or otherwise.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1. Regulatory Matters. (a) Buyer and the Company shall promptly prepare
and file with the SEC the Proxy Statement and Buyer shall promptly prepare and
file with the SEC the S-4, in which the Proxy Statement will be included as a
prospectus. Each of the Company and Buyer shall use all reasonable efforts to
have the S-4 declared effective under the Securities Act as promptly as
practicable after such filing, and each of the Company and Buyer shall
thereafter mail the Proxy Statement to each of its respective stockholders.
Buyer shall also use all reasonable efforts to obtain all necessary state
securities law or "Blue Sky" permits and approvals required to carry out the
transactions contemplated by this Agreement and the Bank Merger Agreement, and
the Company shall furnish all information concerning the Company and the holders
of Company Common Stock as may be reasonably requested in connection with any
such action.
(b) The parties hereto shall cooperate with each other and use their best
efforts to promptly prepare and file all necessary documentation, to effect all
applications, notices, petitions and filings, and to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all third
parties and Governmental Entities which are necessary or advisable to consummate
the transactions contemplated by this Agreement (including without limitation
the Merger and the Subsidiary Merger) (it being understood that any amendments
to the S-4 or a resolicitation of proxies as consequence of a subsequent
proposed merger, stock purchase or similar acquisition by Buyer or any of its
Subsidiaries shall not violate this covenant). The Company and Buyer shall have
the right to review in advance, and to the extent practicable each will consult
the other on, in each case subject to applicable laws relating to the exchange
of information, all the information relating to the Company or Buyer, as the
case may be, and any of their respective Subsidiaries, which appears in any
filing made with, or written materials submitted to, any third party or any
Governmental Entity in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of the parties hereto shall
act reasonably and as promptly as practicable. The parties hereto agree that
they will consult with each other with respect to the obtaining of all permits,
consents, approvals and authorizations of all third parties and Governmental
Entities necessary or advisable to consummate the
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transactions contemplated by this Agreement and each party will keep the other
apprised of the status of matters relating to completion of the transactions
contemplated herein.
(c) Buyer and the Company shall, upon request, furnish each other with all
information concerning themselves, their Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with the Proxy Statement, the S-4 or any other statement, filing,
notice or application made by or on behalf of Buyer, the Company or any of their
respective Subsidiaries to any Governmental Entity in connection with the Merger
and the other transactions contemplated by this Agreement.
(d) Buyer and the Company shall promptly furnish each other with copies of
written communications received by Buyer or the Company, as the case may be, or
any of their respective Subsidiaries, Affiliates or Associates (as such terms
are defined in Rule 12b-2 under the Exchange Act as in effect on the date of
this Agreement) from, or delivered by any of the foregoing to, any Governmental
Entity in respect of the transactions contemplated hereby.
6.2. Access to Information. (a) Upon reasonable notice and subject to
applicable laws relating to the exchange of information, each party shall, and
shall cause each of its Subsidiaries to, afford to the officers, employees,
accountants, counsel and other representatives of the other party, access,
during normal business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments, records, officers, employees,
accountants, counsel and other representatives and, during such period, it
shall, and shall cause its Subsidiaries to, make available to the other party
(i) a copy of each report, schedule, registration statement and other document
filed or received by it during such period pursuant to the requirements of
Federal securities laws or Federal or state banking laws (other than reports or
documents which it is not permitted to disclose under applicable law) and (ii)
all other information concerning its business, properties and personnel as the
other party may reasonably request. Neither party nor any of its Subsidiaries
shall be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of its customers,
jeopardize any attorney-client privilege or contravene any law, rule,
regulation, order, judgment, decree, fiduciary duty or binding agreement entered
into prior to the date of this Agreement. The parties hereto will make
appropriate substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply.
(b) All information furnished by either party to the other party or its
representatives pursuant hereto shall be treated as the sole property of the
delivering party and, if the Merger shall not occur, the receiving party and its
representatives shall return to the delivering party all of such written
information and all documents, notes, summaries or other materials containing,
reflecting or referring to, or derived from, such information. The receiving
party shall, and shall use its best efforts to cause its representatives to,
keep confidential all such information, and shall not directly or indirectly use
such information for any competitive or other commercial purpose. The obligation
to keep such information confidential shall continue for ten years from the date
the proposed Merger is abandoned and shall not apply to (i) any information
which (x) was already in the receiving party's possession prior to the
disclosure thereof by the delivering party; (y) was then generally known to the
public; or (z) was disclosed to the receiving party by a third party not bound
by an obligation of confidentiality or (ii) disclosures made as required by law.
It is further agreed that, if in the absence of a protective order or the
receipt of a waiver hereunder the receiving party is nonetheless, in the opinion
of its counsel, compelled to disclose information concerning the delivering
party to any tribunal or governmental body or agency or else stand liable for
contempt or suffer other censure or penalty, the receiving party may disclose
such information to such tribunal or governmental body or agency without
liability hereunder.
(c) No investigation by either of the parties or their respective
representatives shall affect the representations, warranties, covenants or
agreements of the other set forth herein.
6.3. Stockholder Meetings. The Company and Buyer each shall take all
steps necessary to duly call, give notice of, convene and hold a meeting of its
respective stockholders to be held as soon as is reasonably practicable after
the date on which the S-4 becomes effective for the purpose of voting upon the
approval of this Agreement and the consummation of the transactions contemplated
hereby. The Company and Buyer
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each will, through its respective Board of Directors, except, in the case of the
Company, to the extent inconsistent with the fiduciary duties of such board as
determined by the Board following the receipt of advice from such board's
independent counsel, recommend to its respective stockholders approval of this
Agreement and the transactions contemplated hereby and such other matters as may
be submitted to its stockholders in connection with this Agreement. The Company
and Buyer shall coordinate and cooperate with respect to the foregoing matters,
with a view towards, among other things, holding the respective meetings of each
party's stockholders on the same day.
6.4. Legal Conditions to Merger. Each of Buyer and the Company shall, and
shall cause its Subsidiaries to, use their best efforts (a) to take, or cause to
be taken, all actions necessary, proper or advisable to comply promptly with all
legal requirements which may be imposed on such party or its Subsidiaries with
respect to the Merger or the Subsidiary Merger and, subject to the conditions
set forth in Article VII hereof, to consummate the transactions contemplated by
this Agreement and (b) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of, or any exemption by,
any Governmental Entity and any other third party which is required to be
obtained by the Company or Buyer or any of their respective Subsidiaries in
connection with the Merger and the Subsidiary Merger and the other transactions
contemplated by this Agreement, and to comply with the terms and conditions of
such consent, authorization, order or approval.
6.5. Affiliates. (a) Each of Buyer and the Company shall use its best
efforts to cause each director, executive officer and other person who is an
"affiliate" (for purposes of Rule 145 under the Securities Act and for purposes
of qualifying the Merger for "pooling-of-interests" accounting treatment) of
such party to deliver to the other party hereto, as soon as practicable after
the date of this Agreement, a written agreement, in the form of Exhibit 6.5(a)
hereto (in the case of affiliates of Buyer) or 6.5(b) hereto (in the case of
affiliates of the Company).
(b) Buyer shall use all reasonable efforts to publish, not later than 21
days after the end of the first full calendar month following the Effective
Time, financial results covering at least 30 days of post-Merger combined
operations as contemplated by SEC Accounting Series Release No. 135.
6.6. Stock Exchange Listing. Buyer shall use all reasonable efforts to
cause the shares of Buyer Common Stock to be issued in the Merger to be approved
for listing on the NYSE, subject to official notice of issuance, as of the
Effective Time.
6.7. Employee Benefit Plans; Existing Agreements. (a) As soon as
practicable following the Effective Time, the employees of the Company (the
"Company Employees") shall be eligible to participate in Buyer's employee
benefit plans in which similarly situated employees of Buyer or Buyer Bank
participate, to the same extent as similarly situated employees of Buyer or
Buyer Bank (it being understood that inclusion of Company Employees in Buyer's
employee benefit plans may occur at different times with respect to different
plans).
(b) With respect to each Buyer Plan that is an "employee benefit plan," as
defined in Section 3(3) of ERISA, for purposes of determining eligibility to
participate, vesting, and entitlement to benefits, including for severance
benefits and vacation entitlement (but not for accrual of pension benefits),
service with the Company (or predecessor employers to the extent the Company
provides past service credit) shall be treated as service with Buyer; provided
however, that such service shall not be recognized to the extent that such
recognition would result in a duplication of benefits. Such service also shall
apply for purposes of satisfying any waiting periods, evidence of insurability
requirements, or the application of any preexisting condition limitations. Each
Buyer Plan shall waive pre-existing condition limitations to the same extent
waived under the applicable Company Plan. Company Employees shall be given
credit for amounts paid under a corresponding benefit plan during the same
period for purposes of applying deductibles, copayments and out-of-pocket
maximums as though such amounts had been paid in accordance with the terms and
conditions of the Buyer Plan.
(c) Following the Effective Time, Buyer shall honor and shall cause the
Surviving Bank to honor in accordance with their terms all employment, severance
and other compensation agreements and arrangements existing prior to the
execution of this Agreement which are between the Company and any director,
officer or
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employee thereof and which have been disclosed in the Company Disclosure
Schedule and previously have been delivered to Buyer.
6.8. Indemnification. (a) In the event of any threatened or actual claim,
action, suit, proceeding or investigation, whether civil, criminal or
administrative, including, without limitation, any such claim, action, suit,
proceeding or investigation in which any person who is now, or has been at any
time prior to the date of this Agreement, or who becomes prior to the Effective
Time, a director or officer or employee of the Company or any of its
Subsidiaries (the "Indemnified Parties") is, or is threatened to be, made a
party based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he is or was a director, officer or employee of
the Company, any of the Subsidiaries of the Company or any of their respective
predecessors or (ii) this Agreement or any of the transactions contemplated
hereby, whether in any case asserted or arising before or after the Effective
Time, the parties hereto agree to cooperate and use their best efforts to defend
against and respond thereto. It is understood and agreed that after the
Effective Time, Buyer shall indemnify and hold harmless, as and to the extent
permitted by Delaware law, each such Indemnified Party against any losses,
claims, damages, liabilities, costs, expenses (including reasonable attorney's
fees and expenses in advance of the final disposition of any claim, suit,
proceeding or investigation to each Indemnified Party to the fullest extent
permitted by law upon receipt of any undertaking required by applicable law),
judgments, fines and amounts paid in settlement in connection with any such
threatened or actual claim, action, suit, proceeding or investigation, and in
the event of any such threatened or actual claim, action, suit, proceeding or
investigation (whether asserted or arising before or after the Effective Time),
the Indemnified Parties may retain counsel reasonably satisfactory to them after
consultation with Buyer; provided, however, that (1) Buyer shall have the right
to assume the defense thereof and upon such assumption Buyer shall not be liable
to any Indemnified Party for any legal expenses of other counsel or any other
expenses subsequently incurred by any Indemnified Party in connection with the
defense thereof, except that if Buyer elects not to assume such defense or
counsel for the Indemnified Parties reasonably advises that there are issues
which raise conflicts of interest between Buyer and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to them after
consultation with Buyer, and Buyer shall pay the reasonable fees and expenses of
such counsel for the Indemnified Parties, (2) Buyer shall in all cases be
obligated pursuant to this paragraph to pay for only one firm of counsel for all
Indemnified Parties, (3) Buyer shall not be liable for any settlement effected
without its prior written consent (which consent shall not be unreasonably
withheld) and (4) Buyer shall have no obligation hereunder to any Indemnified
Party when and if a court of competent jurisdiction shall ultimately determine,
and such determination shall have become final and nonappealable, that
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law. Any Indemnified Party wishing to claim
Indemnification under this Section 6.8, upon learning of any such claim, action,
suit, proceeding or investigation, shall notify promptly Buyer thereof, provided
that the failure to so notify shall not affect the obligations of Buyer under
this Section 6.8 except to the extent such failure to notify prejudices Buyer.
Buyer's obligations under this Section 6.8 shall continue in full force and
effect without time limit from and after the Effective Time.
(b) Buyer shall cause the persons serving as officers and directors of the
Company immediately prior to the Effective Time to be covered for a period of
three years from the Effective Time by the directors' and officers' liability
insurance policy maintained by the Company (provided that Buyer may substitute
therefor policies of at least the same coverage and amounts containing terms and
conditions which are not less advantageous than such policy) with respect to
acts or omissions occurring prior to the Effective Time which were committed by
such officers and directors in their capacity as such; provided, however, that
in no event shall Buyer be required to expend on an annual basis more than 200%
of the current amount expended by the Company (the "Insurance Amount") to
maintain or procure insurance coverage, and further provided that if Buyer is
unable to maintain or obtain the insurance called for by this Section 6.8(b)
Buyer shall use all reasonable efforts to obtain as much comparable insurance as
available for the Insurance Amount.
(c) In the event Buyer or any of its successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger, or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person, then, and in each such
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case, to the extent necessary, proper provision shall be made so that the
successors and assigns of Buyer assume the obligations set forth in this
section.
(d) The provisions of this Section 6.8 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party and his or her heirs and
representatives.
6.9. Subsequent Interim and Annual Financial Statements. As soon as
reasonably available, but in no event later than March 31, 1998 or, in the case
of the Company, December 31, 1997, Buyer will deliver to the Company and the
Company will deliver to Buyer their respective Annual Reports on Form 10-K for,
in the case of Buyer, the fiscal year ended December 31, 1997 and, in the case
of the Company, the fiscal year ended September 30, 1997, as filed with the SEC
under the Exchange Act. As soon as reasonably available, but in no event more
than 45 days after the end of each fiscal quarter ending after the date of this
Agreement, Buyer will deliver to the Company and the Company will deliver to
Buyer their respective Quarterly Reports on Form 10-Q, as filed with the SEC
under the Exchange Act.
6.10. Additional Agreements. In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of this
Agreement or the Bank Merger Agreement or to vest the Surviving Corporation or
the Surviving Bank with full title to all properties, assets, rights, approvals,
immunities and franchises of any of the parties to the Merger or the Subsidiary
Merger, the proper officers and directors of each party to this Agreement and
their respective Subsidiaries shall take all such necessary action as may be
reasonably requested by Buyer.
6.11. Advice of Changes. Buyer and the Company shall promptly advise the
other party of any change or event having a Material Adverse Effect on it or
which it believes would or would be reasonably likely to cause or constitute a
material breach of any of its representations, warranties or covenants contained
herein. From time to time prior to the Effective Time (and on the date prior to
the Closing Date), each party will promptly supplement or amend the Disclosure
Schedules delivered in connection with the execution of this Agreement to
reflect any matter which, if existing, occurring or known at the date of this
Agreement, would have been required to be set forth or described in such
Disclosure Schedules or which is necessary to correct any information in such
Disclosure Schedules which has been rendered inaccurate thereby. No supplement
or amendment to such Disclosure Schedules shall have any effect for the purpose
of determining satisfaction of the conditions set forth in Sections 7.2(a) or
7.3(a) hereof, as the case may be, or the compliance by the Company or Buyer, as
the case may be, with the respective covenants and agreements of such parties
contained herein.
6.12. Current Information. During the period from the date of this
Agreement to the Effective Time, each of the Company and Buyer will cause one or
more of its designated representatives to confer on a regular and frequent basis
(not less than monthly) with representatives of the other party and to report
(i) the general status of its ongoing operations and those of its Subsidiaries
and (ii) with respect to the Company only, the status of, and the action
proposed to be taken with respect to, those Loans held by the Company or any
Subsidiary of the Company which, individually or in combination with one or more
other Loans to the same borrower thereunder, have an original principal amount
of $250,000 or more and are non-performing assets. Each party will promptly
notify the other of any material change in the normal course of business or in
the operation of its properties or those of any of its Subsidiaries and of any
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the institution or the threat
of significant litigation involving it or any of its Subsidiaries, and will keep
the other party fully informed of such events.
6.13. Execution and Authorization of Bank Merger Agreement. As soon as
reasonably practicable after the date of this Agreement, (a) Buyer shall (i)
cause the Board of Directors of Buyer Bank to approve the Bank Merger Agreement,
(ii) cause Buyer Bank to execute and deliver the Bank Merger Agreement, and
(iii) approve the Bank Merger Agreement as the sole stockholder of Buyer Bank,
and (b) the Company shall (i) cause the Board of Directors of the Company Bank
to approve the Bank Merger Agreement, (ii) cause the Company Bank to execute and
deliver the Bank Merger Agreement, and (iii) approve the Bank Merger Agreement
as the sole stockholder of the Company Bank. The Bank Merger Agreement shall
contain terms
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that are normal and customary in light of the transactions contemplated hereby
and such additional terms as are necessary to carry out the purposes of this
Agreement.
6.14. Directorship. Buyer shall cause its Board of Directors to be
expanded by one member and shall appoint Patrick E. Malloy, III, or any other
person designated by the Board of Directors of the Company and acceptable to
Buyer as a nominee to fill the vacancy on Buyer's Board of Directors created by
such increase as of the Effective Time.
6.15. Coordination of Dividends. From the date of this Agreement to the
Effective Time, Buyer and the Company shall coordinate the declaration, record
and payment dates with respect to dividends on the Buyer Common Stock and the
Company Common Stock so that each such event occurs on the same, or as close as
possible to the same, day for each of Buyer and the Company (provided that
nothing contained in this Section 6.15 shall require either of the parties to
take any action that would materially impair their ability to satisfy the
conditions set forth in 7.2(e) and 7.3(e)).
6.16. Issuance of Treasury Shares. The Company shall use all reasonable
efforts to reissue the requisite number of shares of Company Common Stock held
as treasury stock as of the date of this Agreement so that the Merger will not
fail to qualify for pooling of interests accounting treatment by virtue of the
number of shares of Company Common Stock held in Company's treasury.
6.17. Loans. From the date of this Agreement to the Effective Time, the
Company shall furnish to Buyer, promptly upon its substantial completion, the
information package prepared for the Company's loan committee with respect to
all proposed extensions of credit by the Company and its Subsidiaries (including
purchases, renewals and commitments) to any borrower and its affiliates in an
aggregate principal amount in excess of $650,000 (or in an amount which, when
aggregated with any existing indebtedness of and unfunded commitments to such
borrower and its affiliates from the Company and its Subsidiaries would exceed
$650,000).
6.18. SERP Amendment. The Company shall take all action necessary to
amend its Executives Supplemental Benefits Plan ("SERP") to provide that from
and after January 1, 1998, all benefits under the SERP will be frozen and no
amount of income with respect to the period from and after January 1, 1998 will
be taken into account for purposes of calculating benefits under the SERP.
6.19. Consulting Agreement. At the Effective Time, Buyer shall enter into
a consulting agreement with Patrick E. Malloy, III containing the terms set
forth on Section 6.19 of the Company Disclosure Schedule and otherwise in form
and substance reasonably acceptable to Buyer.
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to Each Party's Obligation To Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) Stockholder Approval. This Agreement shall have been approved and
adopted by the affirmative votes of the holders of a majority of the
outstanding shares of Company Common Stock and Buyer Common Stock entitled
to vote thereon.
(b) NYSE Listing. The shares of Buyer Common Stock which shall be
issued to the stockholders of the Company upon consummation of the Merger
shall have been authorized for listing on the NYSE, subject to official
notice of issuance.
(c) Other Approvals. All regulatory approvals required to consummate
the transactions contemplated hereby (including the Merger and the
Subsidiary Merger) shall have been obtained and shall remain in full force
and effect and all statutory waiting periods in respect thereof shall have
expired (all such approvals and the expiration of all such waiting periods
being referred to herein as the "Requisite Regulatory Approvals").
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(d) S-4. The S-4 shall have become effective under the Securities Act
and no stop order suspending the effectiveness of the S-4 shall have been
issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other
legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger or the Subsidiary Merger shall be in effect. No
statute, rule, regulation, order, injunction or decree shall have been
enacted, entered, promulgated or enforced by any Governmental Entity which
prohibits, restricts or makes illegal consummation of the Merger or the
Subsidiary Merger.
7.2. Conditions to Obligations of Buyer. The obligation of Buyer to
effect the Merger is also subject to the satisfaction or waiver by Buyer at or
prior to the Effective Time of the following conditions:
(a) Representations and Warranties. (i) Subject to Section 2A.2, the
representations and warranties of the Company set forth in this Agreement
(other than those set forth in Sections 3.2 and 3.19) shall be true and
correct in all material respects as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an
earlier date) as of the Closing Date as though made on and as of the
Closing Date; and (ii) the representations and warranties of the Company
set forth in Sections 3.2 and 3.19 of this Agreement shall be true and
correct in all material respects (without giving effect to Section 2A.2 of
this Agreement) as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date. Buyer shall have
received a certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company to the
foregoing effect.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and Buyer shall
have received a certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company to such
effect.
(c) No Pending Governmental Actions. No proceeding initiated by any
Governmental Entity seeking an Injunction shall be pending.
(d) Federal Tax Opinion. Buyer shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel to Buyer ("Buyer's
Counsel"), in form and substance reasonably satisfactory to Buyer,
substantially to the effect that, on the basis of facts, representations
and assumptions set forth in such opinion which are consistent with the
state of facts existing at the Effective Time, the Merger and Subsidiary
Merger will be treated as reorganizations within the meaning of Section
368(a) of the Code and that, accordingly, for federal income tax purposes
no gain or loss will be recognized by Buyer, the Company, Buyer Bank or the
Company Bank as a result of the Merger and Subsidiary Merger (except to the
extent the Company Bank, the Company, Buyer Bank or the Company Bank may be
required to recognize income due to the recapture of bad debt reserves as a
result of the Subsidiary Merger). Subject to the limitations set forth in
Section 7.2(d) of the Buyer Disclosure Schedule, in rendering such opinion,
Buyer's Counsel may require and rely upon representations and covenants,
including those contained in certificates of officers of Buyer, Buyer Bank,
the Company, the Company Bank in the form attached hereto and others
reasonably satisfactory in form and substance to such counsel.
(e) Pooling of Interests. Buyer shall have received a letter from
KPMG Peat Marwick LLP addressed to Buyer, to the effect that the Merger
will qualify for "pooling of interests" accounting treatment.
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7.3. Conditions to Obligations of the Company. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. (i) Subject to Section 2A.2, the
representations and warranties of Buyer set forth in this Agreement (other
than those set forth in Section 4.2) shall be true and correct in all
material respects as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as
of the Closing Date as though made on and as of the Closing Date; and (ii)
the representations and warranties of Buyer set forth in Section 4.2 of
this Agreement shall be true and correct in all material respects (without
giving effect to Section 2A.2 of this Agreement) as of the date of this
Agreement and (except to the extent such representations and warranties
speak as of an earlier date) as of the Closing Date as though made on and
as of the Closing Date. The Company shall have received a certificate
signed on behalf of Buyer by the Chief Executive Officer and the Chief
Financial Officer of Buyer to the foregoing effect.
(b) Performance of Obligations of Buyer. Buyer shall have performed
in all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date, and the Company shall
have received a certificate signed on behalf of Buyer by the Chief
Executive Officer and the Chief Financial Officer of Buyer to such effect.
(c) No Pending Governmental Actions. No proceeding initiated by any
Governmental Entity seeking an Injunction shall be pending.
(d) Federal Tax Opinion. The Company shall have received an opinion
of Weil, Gotshal & Manges LLP (the "Company's Counsel"), in form and
substance reasonably satisfactory to the Company, dated as of the Effective
Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing at the Effective Time, the
Merger will be treated as a reorganization within the meaning of Section
368(a) of the Code and that accordingly, for federal income tax purposes:
(i) No gain or loss will be recognized by the Company as a result
of the Merger; and
(ii) No gain or loss will be recognized by the shareholders of the
Company who exchange all of their Company Common Stock solely for Buyer
Common Stock pursuant to the Merger (except with respect to cash
received in lieu of a fractional share interest in Buyer Common Stock
and, if any, the payment of any real property transfer taxes on behalf
of stockholders of the Company)
In rendering such opinion, the Company's Counsel may require and rely
upon representations and covenants, including those contained in
certificates of officers of Buyer, Buyer Bank, the Company, the Company
Bank and others, including certain shareholders of the Company, reasonably
satisfactory in form and substance to such counsel.
(e) Pooling of Interests. The Company shall have received a letter
from KPMG Peat Marwick LLP addressed to Buyer, to the effect that the
Merger will qualify for "pooling of interests" accounting treatment.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of the matters presented in
connection with the Merger by the stockholders of both the Company and Buyer
(unless otherwise provided below):
(a) by mutual consent of the Company and Buyer in a written
instrument, if the Board of Directors of each so determines by a vote of a
majority of the members of its entire Board;
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(b) by either Buyer or the Company upon written notice to the other
party (i) 60 days after the date on which any request or application for a
Requisite Regulatory Approval shall have been denied or withdrawn at the
request or recommendation of the Governmental Entity which must grant such
Requisite Regulatory Approval, unless within the 60-day period following
such denial or withdrawal a petition for rehearing or an amended
application has been filed with the applicable Governmental Entity,
provided, however, that no party shall have the right to terminate this
Agreement pursuant to this Section 8.1(b)(i) if such denial or request or
recommendation for withdrawal shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe the covenants and
agreements of such party set forth herein or (ii) if any Governmental
Entity of competent jurisdiction shall have issued a final nonappealable
order enjoining or otherwise prohibiting the Merger or the Subsidiary
Merger;
(c) by either Buyer or the Company if the Merger shall not have been
consummated on or before September 30, 1998, unless the failure of the
Closing to occur by such date shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe the covenants and
agreements of such party set forth herein;
(d) by either Buyer or the Company (provided that the terminating
party shall not be in material breach of any of its obligations under
Section 6.3) if any approval of the stockholders of either of the Company
or Buyer required for the consummation of the Merger shall not have been
obtained by reason of the failure to obtain the required vote at a duly
held meeting of such stockholders or at any adjournment or postponement
thereof;
(e) by either Buyer or the Company (provided that the terminating
party is not then in material breach of any representation, warranty,
covenant or other agreement contained herein) if there shall have been a
material breach of any of the representations or warranties set forth in
this Agreement on the part of the other party, which breach is not cured
within thirty days following written notice to the party committing such
breach, or which breach, by its nature, cannot be cured prior to the
Closing; provided, however, that neither party shall have the right to
terminate this Agreement pursuant to this Section 8.1(e) unless the breach
of representation or warranty, together with all other such breaches, would
entitle the party receiving such representation not to consummate the
transactions contemplated hereby under Section 7.2(a) (in the case of a
breach of representation or warranty by the Company) or Section 7.3(a) (in
the case of a breach of representation or warranty by Buyer);
(f) by either Buyer or the Company (provided that the terminating
party is not then in material breach of any representation, warranty,
covenant or other agreement contained herein) if there shall have been a
material breach of any of the covenants or agreements set forth in this
Agreement on the part of the other party, which breach shall not have been
cured within thirty days following receipt by the breaching party of
written notice of such breach from the other party hereto;
(g) by Buyer, if the Board of Directors of the Company does not
publicly recommend in the Proxy Statement that the Company's stockholders
approve and adopt this Agreement or if, after recommending in the Proxy
Statement that stockholders approve and adopt this Agreement, the Board of
Directors of the Company shall have withdrawn, modified or amended such
recommendation in any respect materially adverse to Buyer;
(h) [reserved]
(i) by the Company, upon the execution by the Company of a definitive
agreement relating to a takeover proposal (as defined in Section 5.1(e)),
provided that (i) the Company shall have complied with its obligations
under Section 5.1(e) hereof, (ii) the Board of Directors of the Company
shall have determined, after having received the advice of outside legal
counsel to the Company and the advice of the Company's financial advisor,
that such action is necessary for the Board of Directors to act in a manner
consistent with its fiduciary duties under applicable law and (iii)
concurrent with its notification of termination, the Company shall have
made an irrevocable and unconditional offer to Buyer in writing to
repurchase the Option from Buyer at any time, within thirty days following
the date of such offer, at a price equal to the greater of (x) the Option
Repurchase Price set forth in Section 7 of the Company
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Option Agreement and (y) the Surrender Price set forth in Section 15 of the
Company Option Agreement (subject in each case to the limitation set forth
in Section 16 of the Company Option Agreement), with an undertaking to
effect such repurchase by wire transfer of immediately available funds to
an account designated by Buyer within two business days following receipt
of written notice from Buyer pursuant to this Section 8.1(i) of its
election to tender the Option to the Company for repurchase and the
applicable repurchase price elected; provided, however, that
notwithstanding the foregoing, if the Company exercises its right pursuant
to this Section 8.1(i) following the approval by the Company stockholders
of this Agreement, then concurrently with the execution by the Company of a
definitive agreement with respect to a takeover proposal, the Company shall
pay or cause to be paid to Buyer by wire transfer of immediately available
funds to an account designated by Buyer $40 million in full satisfaction of
the Company's obligations under this Section 8.1(i) and the Company Option
Agreement. In the case of any termination of this Agreement by the Company
pursuant to this Section 8.1(i) prior to the approval of this Agreement by
the Company stockholders the rights of Buyer set forth in this Section
8.1(i) shall be in addition to all rights of Buyer contained in the Company
Option Agreement; or
(j) by either the Company or Buyer, by action of its Board of
Directors by giving written notice of such election to the other party
within two business days after the Valuation Period (as defined below), in
the case of Buyer, or within four business days after the Valuation Period,
in the case of the Company, in the event the average closing sales price
per share of Buyer Common Stock (the "Buyer Average Closing Price") on the
NYSE (as reported by The Wall Street Journal or, if not reported thereby,
another authoritative source) for the ten consecutive trading days (the
"Valuation Period") ending on the date on which the last of the Requisite
Regulatory Approvals is obtained without regard to any requisite waiting
period in respect thereof, is less than $25.50 per share; provided,
however, that no right of termination in favor of the Company shall arise
under this Section 8.1(j) if Buyer elects, within two business days after
the Valuation Period, to notify the Company in writing that it has
increased the Exchange Ratio such that the product of such increased
Exchange Ratio and the Buyer Average Closing Price is not less than $30.35
per share.
8.2. Effect of Termination; Expenses. In the event of termination of this
Agreement by either Buyer or the Company as provided in Section 8.1, this
Agreement shall forthwith become void and have no effect except (i) Sections
6.2(b), 8.2 and 9.3, shall survive any termination of this Agreement, and (ii)
that notwithstanding anything to the contrary contained in this Agreement, no
party shall be relieved or released from any liabilities or damages arising out
of its willful breach of any provision of this Agreement, except that, in the
event that concurrently with or following a termination of this Agreement, Buyer
realizes a "Total Profit" of $32 million or greater pursuant to its rights under
the Company Option Agreement, then Buyer's receipt of such Total Profit shall
constitute the sole and exclusive remedy for Buyer under this Agreement and
there shall be no further liability under this Agreement on the part of the
Company to Buyer other than liability for any breach by the Company of Section
6.2 hereof.
8.3. Amendment. Subject to compliance with applicable law, this Agreement
may be amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after approval of the
matters presented in connection with the Merger by the stockholders of either
the Company or Buyer; provided, however, that after any approval of the
transactions contemplated by this Agreement by the Company's stockholders, there
may not be, without further approval of such stockholders, any amendment of this
Agreement which reduces the amount or changes the form of the consideration to
be delivered to the Company stockholders hereunder other than as contemplated by
this Agreement. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
8.4. Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party, but such
extension or waiver or failure to insist on strict compliance with an
obligation,
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covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
9.1. Closing. Subject to the terms and conditions of this Agreement and
the Bank Merger Agreement, the closing of the Merger (the "Closing") will take
place at 10:00 a.m. on the first day which is (a) the last business day of a
month and (b) at least two business days after the satisfaction or waiver
(subject to applicable law) of the latest to occur of the conditions set forth
in Article VII hereof (other than those conditions which relate to actions to be
taken at the Closing)(the "Closing Date"), at the offices of Buyer's Counsel
unless another time, date or place is agreed to in writing by the parties
hereto.
9.2. Nonsurvival of Representations, Warranties and Agreements. None of
the representations, warranties, covenants and agreements in this Agreement or
in any instrument delivered pursuant to this Agreement (other than pursuant to
the Company Option Agreement which shall terminate in accordance with its terms)
shall survive the Effective Time, except for those covenants and agreements
contained herein and therein which by their terms apply in whole or in part
after the Effective Time.
9.3. Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expense, provided, however, that the costs and expenses of
printing and mailing the Proxy Statement to the stockholders of the Company and
Buyer, and all filing and other fees paid to the SEC or any other Governmental
Entity in connection with the Merger, the Subsidiary Merger and the other
transactions contemplated hereby, shall be borne equally by Buyer and the
Company, provided further, however, that nothing contained herein shall limit
either party's rights to recover any liabilities or damages arising out of the
other party's willful breach of any provision of this Agreement (except as
provided in Section 8.2). Buyer shall be responsible for any transfer, sales or
similar taxes resulting from the Merger and imposed by New York State or New
York City, except as provided in Section 2.2(c) hereof.
9.4. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation), mailed by registered or certified mail (return receipt requested)
or delivered by an express courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Buyer, to:
North Fork Bancorporation, Inc.
275 Broad Hollow Road
Melville, New York 11747
Attention: Chief Executive Officer
with a copy to:
Skadden, Arps Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: William S. Rubenstein, Esq.
and
(b) if to the Company, to:
New York Bancorp Inc.
241-02 Northern Boulevard
Douglaston/Flushing, New York 11362
Attention: Chief Executive Officer
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with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Dennis J. Block, Esq.
9.5. Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The phrases "the date of this Agreement", "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to October 7, 1997.
9.6. Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
9.7. Entire Agreement. This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof, other than the Bank Merger
Agreement, the Company Option Agreement and the Confidentiality Agreement
between Buyer and the Company.
9.8. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law.
9.9. Enforcement of Agreement. The parties hereto agree that irreparable
damage would occur in the event that the provisions contained in 6.2(b) of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of Section 6.2(b) of this
Agreement and to enforce specifically the terms and provisions thereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
9.10. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
9.11. Publicity. Except as otherwise required by law or the rules of the
NYSE, so long as this Agreement is in effect, neither Buyer nor the Company
shall, or shall permit any of its Subsidiaries to, issue or cause the
publication of any press release or other public announcement with respect to,
or otherwise make any public statement concerning, the transactions contemplated
by this Agreement without the consent of the other party, which consent shall
not be unreasonably withheld.
9.12. Assignment; No Third Party Beneficiaries. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns. Except as otherwise
expressly provided herein, this Agreement (including the documents and
instruments referred to herein) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
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<PAGE> 148
IN WITNESS WHEREOF, Buyer and the Company have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
NORTH FORK BANCORPORATION, INC.
By /s/ JOHN ADAM KANAS
------------------------------------
Name: John Adam Kanas
Title: Chairman, President and
Chief Executive Officer
NEW YORK BANCORP INC.
By /s/ PATRICK E. MALLOY, III
------------------------------------
Name: Patrick E. Malloy, III
Title: Chairman of the Board
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<PAGE> 149
ANNEX B
THE TRANSFER OF THIS AGREEMENT IS SUBJECT TO
CERTAIN PROVISIONS CONTAINED HEREIN AND TO
RESALE RESTRICTIONS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
STOCK OPTION AGREEMENT, dated October 7, 1997, between New York Bancorp
Inc., a Delaware corporation ("Issuer"), and North Fork Bancorporation, Inc., a
Delaware corporation ("Grantee").
W I T N E S S E T H :
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement"), which agreement has been
executed by the parties hereto immediately prior to this Stock Option Agreement
(the "Agreement"); and
WHEREAS, as a condition to Grantee's entering into the Merger Agreement and
in consideration therefor, Issuer has agreed to grant Grantee the Option (as
hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto
agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional, irrevocable
option (the "Option") to purchase, subject to the terms hereof, up to 4,261,000
fully paid and nonassessable shares of Issuer's Common Stock, par value $0.01
per share ("Common Stock"), at a price of $30.50 per share (the "Option Price");
provided, however, that in no event shall the number of shares of Common Stock
for which this Option is exercisable exceed 19.9% of the Issuer's issued and
outstanding shares of Common Stock without giving effect to any shares subject
to or issued pursuant to the Option. The number of shares of Common Stock that
may be received upon the exercise of the Option and the Option Price are subject
to adjustment as herein set forth.
(b) In the event that any additional shares of Common Stock are either (i)
issued or otherwise become outstanding after the date of this Agreement (other
than pursuant to this Agreement or as permitted under the terms of the Merger
Agreement) or (ii) redeemed, repurchased, retired or otherwise cease to be
outstanding after the date of the Agreement, the number of shares of Common
Stock subject to the Option shall be increased or decreased, as appropriate, so
that, after such issuance, such number equals 19.9% of the number of shares of
Common Stock then issued and outstanding without giving effect to any shares
subject or issued pursuant to the Option. Nothing contained in this Section 1(b)
or elsewhere in this Agreement shall be deemed to authorize Issuer or Grantee to
breach any provision of the Merger Agreement.
2. (a) The Holder (as hereinafter defined) may exercise the Option, in
whole or part, and from time to time, if, but only if, both an Initial
Triggering Event (as hereinafter defined) and a Subsequent Triggering Event (as
hereinafter defined) shall have occurred prior to the occurrence of an Exercise
Termination Event (as hereinafter defined), provided, however, that the Holder
shall have sent the written notice of such exercise (as provided in subsection
(e) of this Section 2) within six months following such Subsequent Triggering
Event, provided further, however, that if the Option cannot be exercised on any
day because of any injunction, order or similar restraint issued by a court of
competent jurisdiction, the period during which the Option may be exercised
shall be extended so that the Option shall expire no earlier than on the 10th
business day after such injunction, order or restraint shall have been dissolved
or when such injunction, order or restraint shall have become permanent and no
longer subject to appeal, as the case may be. Each of the following shall be an
"Exercise Termination Event": (i) the Effective Time (as defined in the Merger
Agreement) of the Merger; (ii) termination of the Merger Agreement in accordance
with the provisions thereof if such termination occurs prior to the occurrence
of an Initial Triggering Event except a termination by Grantee pursuant to
Section 8.1(f) of the Merger Agreement (unless the breach by Issuer giving rise
to such right of termination is non-volitional); or (iii) the passage of 12
months after termination of the Merger Agreement if such termination follows the
occurrence of an Initial Triggering Event or is a termination by Grantee
pursuant to
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Section 8.1(f) of the Merger Agreement (unless the breach by Issuer giving rise
to such right of termination is non-volitional). The term "Holder" shall mean
the holder or holders of the Option. Notwithstanding anything to the contrary
contained herein, the Option may not be exercised (nor may Grantee's rights
under Sections 7, 8, 9, 13 or 15 hereof be exercised) at any time when Grantee
shall be in willful breach of any of its covenants or agreements contained in
the Merger Agreement under circumstances that would entitle Issuer to terminate
the Merger Agreement. In the event that Issuer terminates the Merger Agreement
under circumstances where the proviso to Section 8.1(i) of the Merger Agreement
is applicable, then immediately upon Grantee's receipt of the wire transfer
contemplated by such proviso to Section 8.1(i), this Agreement shall terminate
and shall become void and of no further force and effect and Grantee shall
surrender this Agreement to Issuer.
(b) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) Issuer or any of its Subsidiaries (each an "Issuer Subsidiary"),
without having received Grantee's prior written consent, shall have entered
into an agreement to engage in an Acquisition Transaction (as hereinafter
defined) with any person (the term "person" for purposes of this Agreement
having the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules
and regulations thereunder) other than Grantee or any of its Subsidiaries
(each a "Grantee Subsidiary") or Issuer or any of its Subsidiaries, without
having received Grantee's prior written consent, shall have authorized,
recommended, proposed, or publicly announced its intention to authorize,
recommend or propose to engage in an Acquisition Transaction with any
person other than Grantee or a Subsidiary of Grantee. For purposes of this
Agreement, "Acquisition Transaction" shall mean (w) a merger or
consolidation, or any similar transaction, involving Issuer or any
Significant Subsidiary (as defined in Rule 1-02 of Regulation S-X
promulgated by the Securities and Exchange Commission (the "SEC")) of
Issuer, (x) a purchase, lease or other acquisition or assumption of all or
a substantial portion of the assets or deposits of Issuer or any
Significant Subsidiary of Issuer, (y) a purchase or other acquisition
(including by way of merger, consolidation, share exchange or otherwise) of
securities representing 10% or more of the voting power of Issuer, or (z)
any substantially similar transaction; provided, however, that in no event
shall any merger, consolidation, purchase or similar transaction involving
only the Issuer and one or more of its Subsidiaries or involving only two
or more of such Subsidiaries, be deemed to be an Acquisition Transaction,
provided that any such transaction is not entered into in violation of the
terms of the Merger Agreement;
(ii) Any person (other than Grantee, any Subsidiary of Grantee,
Patrick E. Malloy, III, Valer and Josiah T. Austin or Findin Investments
S.A. (provided that none of such persons increases its beneficial ownership
of outstanding Issuer Common Stock (other than as a result of exercise of
options outstanding as of the date hereof) by more than 1%)) shall have
acquired beneficial ownership or the right to acquire beneficial ownership
of 10% or more of the outstanding shares of Common Stock (the term
"beneficial ownership" for purposes of this Agreement having the meaning
assigned thereto in Section 13(d) of the 1934 Act, and the rules and
regulations thereunder) or any person other than Grantee or any Subsidiary
of Grantee shall have commenced (as such term is defined under the rules
and regulations of the SEC), or shall have filed or publicly disseminated a
registration statement or similar disclosure statement with respect to, a
tender offer or exchange offer to purchase any shares of Issuer Common
Stock such that, upon consummation of such offer, such person would own or
control 10% or more of the then outstanding shares of Issuer Common Stock
(such an offer being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively);
(iii) (A) the holders of Issuer Common Stock shall not have approved
the Merger Agreement and the transactions contemplated thereby, at the
meeting of such stockholders held for the purpose of voting on such
agreement, (B) such meeting shall not have been held or shall have been
cancelled prior to termination of the Merger Agreement, or (C) the Board of
Directors of Issuer shall have publicly withdrawn or modified, or publicly
announced its intent to withdraw or modify, in any manner adverse to
Grantee, its recommendation that the stockholders of Issuer approve the
transactions contemplated by the Merger Agreement, in each case after it
shall have been publicly announced that any person other than Grantee or
any Subsidiary of Grantee shall have (x) made, or disclosed an intention to
make, a
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proposal to engage in an Acquisition Transaction, (y) commenced a Tender
Offer, or filed or publicly disseminated a registration statement or
similar disclosure statement with respect to an Exchange Offer, or (z)
filed an application (or given a notice), whether in draft or final form,
under any federal or state banking laws seeking regulatory approval to
engage in an Acquisition Transaction; or
(iv) After an overture is made by a third party to Issuer or its
stockholders to engage in an Acquisition Transaction, Issuer shall have
breached any covenant or obligation contained in the Merger Agreement and
such breach (x) would entitle Grantee to terminate the Merger Agreement and
(y) shall not have been cured prior to the Notice Date (as defined below).
(c) The term "Subsequent Triggering Event" shall mean either of the
following events or transactions occurring after the date hereof:
(i) The acquisition by any person of beneficial ownership of 25% or
more of the then outstanding shares of Common Stock; or
(ii) The occurrence of the Initial Triggering Event described in
paragraph (i) of subsection (b) of this Section 2, except that the
percentage referred to in clause (y) shall be 25%.
(d) Issuer shall notify Grantee promptly in writing of the occurrence of
any Initial Triggering Event or Subsequent Triggering Event of which it has
notice (together, a "Triggering Event"), it being understood that the giving of
such notice by Issuer shall not be a condition to the right of the Holder to
exercise the Option.
(e) In the event the Holder is entitled to and wishes to exercise the
Option, it shall send to Issuer a written notice (the date of which being herein
referred to as the "Notice Date") specifying (i) the total number of shares it
will purchase pursuant to such exercise and (ii) a place and date not earlier
than three business days nor later than 60 business days from the Notice Date
for the closing of such purchase (the "Closing Date"); provided that if prior
notification to or approval of the Federal Reserve Board, the Office of Thrift
Supervision ("OTS") or any other regulatory agency is required in connection
with such purchase, the Holder shall promptly file the required notice or
application for approval and shall expeditiously process the same and the period
of time that otherwise would run pursuant to this sentence shall run instead
from the date on which any required notification periods have expired or been
terminated or such approvals have been obtained and any requisite waiting period
or periods shall have passed. Any exercise of the Option shall be deemed to
occur on the Notice Date relating thereto.
(f) At the closing referred to in subsection (e) of this Section 2, the
Holder shall pay to Issuer the aggregate purchase price for the shares of Common
Stock purchased pursuant to the exercise of the Option in immediately available
funds by wire transfer to a bank account designated by Issuer, provided that
failure or refusal of Issuer to designate such a bank account shall not preclude
the Holder from exercising the Option.
(g) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer shall
deliver to the Holder a certificate or certificates representing the number of
shares of Common Stock purchased by the Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of the Holder thereof
to purchase the balance of the shares purchasable hereunder, and the Holder
shall deliver to Issuer a copy of this Agreement and a letter agreeing that the
Holder will not offer to sell or otherwise dispose of such shares in violation
of applicable law or the provisions of this Agreement.
(h) Certificates for Common Stock delivered at a closing hereunder may be
endorsed with a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is subject
to certain provisions of an agreement between the registered holder hereof
and Issuer and to resale restrictions arising under the Securities Act of
1933, as amended. A copy of such agreement is on file at the principal
office of Issuer and will be provided to the holder hereof without charge
upon receipt by Issuer of a written request therefor."
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It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "1933 Act"), in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if the Holder shall have delivered to Issuer a copy of a letter from the staff
of the SEC, or an opinion of counsel, in form and substance reasonably
satisfactory to Issuer, to the effect that such legend is not required for
purposes of the 1933 Act; (ii) the reference to the provisions to this Agreement
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in compliance
with the provisions of this Agreement and under circumstances that do not
require the retention of such reference; and (iii) the legend shall be removed
in its entirety if the conditions in the preceding clauses (i) and (ii) are both
satisfied. In addition, such certificates shall bear any other legend as may be
required by law.
(i) Upon the giving by the Holder to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2 and
the tender of the applicable purchase price in immediately available funds, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
Issuer shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to the Holder. Issuer shall
pay all expenses, and any and all United States federal, state and local taxes
and other charges that may be payable in connection with the preparation, issue
and delivery of stock certificates under this Section 2 in the name of the
Holder or its assignee, transferee or designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock; (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer;
(iii) promptly to take all action as may from time to time be required
(including (x) complying with all premerger notification, reporting and waiting
period requirements specified in 15 U.S.C. sec. 18a and regulations promulgated
thereunder and (y) in the event, under federal or state banking law, prior
approval of or notice to the Federal Reserve Board, the OTS or to any state
regulatory authority is necessary before the Option may be exercised,
cooperating fully with the Holder in preparing such applications or notices and
providing such information to the Federal Reserve Board, the OTS or such state
regulatory authority as they may require) in order to permit the Holder to
exercise the Option and Issuer duly and effectively to issue shares of Common
Stock pursuant hereto; and (iv) promptly to take all action provided herein to
protect the rights of the Holder against dilution.
4. This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the option of the Holder, upon presentation and surrender of
this Agreement at the principal office of Issuer, for other Agreements providing
for Options of different denominations entitling the holder thereof to purchase,
on the same terms and subject to the same conditions as are set forth herein, in
the aggregate the same number of shares of Common Stock purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any Stock Option
Agreements and related Options for which this Agreement (and the Option granted
hereby) may be exchanged. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
5. In addition to the adjustment in the number of shares of Common Stock
that are purchasable upon exercise of the Option pursuant to Section 1 of this
Agreement, the number of shares of Common Stock purchasable upon the exercise of
the Option and the Option Price shall be subject to adjustment from time to time
as provided in this Section 5. In the event of any change in, or distributions
in respect of, the Common Stock by reason of stock dividends, split-ups,
mergers, recapitalizations, combinations, subdivisions, conversions, exchanges
of shares, distributions on or in respect of the Common Stock that would be
prohibited under
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the terms of the Merger Agreement, or the like, the type and number of shares of
Common Stock purchasable upon exercise hereof and the Option Price shall be
appropriately adjusted in such manner as shall fully preserve the economic
benefits provided hereunder and proper provision shall be made in any agreement
governing any such transaction to provide for such proper adjustment and the
full satisfaction of the Issuer's obligations hereunder.
6. Upon the occurrence of a Subsequent Triggering Event that occurs prior
to an Exercise Termination Event, Issuer shall, at the request of Grantee
delivered within six months of such Subsequent Triggering Event (whether on its
own behalf or on behalf of any subsequent holder of this Option (or part
thereof) or any of the shares of Common Stock issued pursuant hereto), promptly
prepare, file and keep current a registration statement under the 1933 Act
covering this Option and any shares issued and issuable pursuant to this Option
and shall use its reasonable best efforts to cause such registration statement
to become effective and remain current in order to permit the sale or other
disposition of this Option and any shares of Common Stock issued upon total or
partial exercise of this Option ("Option Shares") in accordance with any plan of
disposition requested by Grantee. Issuer will use its reasonable best efforts to
cause such registration statement first to become effective and then to remain
effective for such period not in excess of 180 days from the day such
registration statement first becomes effective or such shorter time as may be
reasonably necessary to effect such sales or other dispositions. Grantee shall
have the right to demand two such registrations. The foregoing notwithstanding,
if, at the time of any request by Grantee for registration of the Option or
Option Shares as provided above, Issuer is in registration with respect to an
underwritten public offering of shares of Common Stock, and if in the good faith
judgment of the managing underwriter or managing underwriters, or, if none, the
sole underwriter or underwriters, of such offering the inclusion of the Holder's
Option or Option Shares would interfere with the successful marketing of the
shares of Common Stock offered by Issuer, the number of Option Shares otherwise
to be covered in the registration statement contemplated hereby may be reduced;
and provided, however, that after any such required reduction the number of
Option Shares to be included in such offering for the account of the Holder
shall constitute at least 25% of the total number of shares to be sold by the
Holder and Issuer in the aggregate; and provided further, however, that if such
reduction occurs, then the Issuer shall file a registration statement for the
balance as promptly as practicable and no reduction shall thereafter occur. Each
such Holder shall provide all information reasonably requested by Issuer for
inclusion in any registration statement to be filed hereunder. If requested by
any such Holder in connection with such registration, Issuer shall become a
party to any underwriting agreement relating to the sale of such shares, but
only to the extent of obligating itself in respect of representations,
warranties, indemnities and other agreements customarily included in secondary
offering underwriting agreements for the Issuer. Upon receiving any request
under this Section 6 from any Holder, Issuer agrees to send a copy thereof to
any other person known to Issuer to be entitled to registration rights under
this Section 6, in each case by promptly mailing the same, postage prepaid, to
the address of record of the persons entitled to receive such copies.
Notwithstanding anything to the contrary contained herein, in no event shall
Issuer be obligated to effect more than two registrations pursuant to this
Section 6 by reason of the fact that there shall be more than one Grantee as a
result of any assignment or division of this Agreement.
7. (a) Immediately prior to the occurrence of a Repurchase Event (as
defined below), (i) following a request of the Holder, delivered prior to an
Exercise Termination Event, Issuer (or any successor thereto) shall repurchase
the Option from the Holder at a price (the "Option Repurchase Price") equal to
the amount by which (A) the Market/Offer Price (as defined below) exceeds (B)
the Option Price, multiplied by the number of shares for which this Option may
then be exercised and (ii) at the request of the owner of Option Shares from
time to time (the "Owner"), delivered within 90 days of such occurrence (or such
later period as provided in Section 10), Issuer shall repurchase such number of
the Option Shares from the Owner as the Owner shall designate at a price (the
"Option Share Repurchase Price") equal to the Market/Offer Price multiplied by
the number of Option Shares so designated. The term "Market/Offer Price" shall
mean the highest of (i) the price per share of Common Stock at which a tender
offer or exchange offer therefor has been made, (ii) the price per share of
Common Stock to be paid by any third party pursuant to an agreement with Issuer,
(iii) the highest closing price for shares of Common Stock within the six-month
period immediately preceding the date the Holder gives notice of the required
repurchase of this Option or the Owner gives notice of the required repurchase
of Option Shares, as the case may be, or (iv) in the event of a sale of all or a
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substantial portion of Issuer's assets, the sum of the price paid in such sale
for such assets and the current market value of the remaining assets of Issuer
as determined by a nationally recognized investment banking firm selected by the
Holder or the Owner, as the case may be, and reasonably acceptable to Issuer,
divided by the number of shares of Common Stock of Issuer outstanding at the
time of such sale. In determining the Market/Offer Price, the value of
consideration other than cash shall be determined by a nationally recognized
investment banking firm selected by the Holder or Owner, as the case may be, and
reasonably acceptable to Issuer.
(b) The Holder and the Owner, as the case may be, may exercise its right to
require Issuer to repurchase the Option and any Option Shares pursuant to this
Section 7 by surrendering for such purpose to Issuer, at its principal office, a
copy of this Agreement or certificates for Option Shares, as applicable,
accompanied by a written notice or notices stating that the Holder or the Owner,
as the case may be, elects to require Issuer to repurchase this Option and/or
the Option Shares in accordance with the provisions of this Section 7. Within
the latter to occur of (x) five business days after the surrender of the Option
and/or certificates representing Option Shares and the receipt of such notice or
notices relating thereto and (y) the time that is immediately prior to the
occurrence of a Repurchase Event, Issuer shall deliver or cause to be delivered
to the Holder the Option Repurchase Price and/or to the Owner the Option Share
Repurchase Price therefor or the portion thereof that Issuer is not then
prohibited under applicable law and regulation from so delivering.
(c) To the extent that Issuer is prohibited under applicable law or
regulation from repurchasing the Option and/or the Option Shares in full, Issuer
shall immediately so notify the Holder and/or the Owner and thereafter deliver
or cause to be delivered, from time to time, to the Holder and/or the Owner, as
appropriate, the portion of the Option Repurchase Price and the Option Share
Repurchase Price, respectively, that it is no longer prohibited from delivering,
within five business days after the date on which Issuer is no longer so
prohibited; provided, however, that if Issuer at any time after delivery of a
notice of repurchase pursuant to paragraph (b) of this Section 7 is prohibited
under applicable law or regulation from delivering to the Holder and/or the
Owner, as appropriate, the Option Repurchase Price and the Option Share
Repurchase Price, respectively, in full (and Issuer hereby undertakes to use its
best efforts to obtain all required regulatory and legal approvals and to file
any required notices as promptly as practicable in order to accomplish such
repurchase), the Holder or Owner may revoke its notice of repurchase of the
Option or the Option Shares either in whole or to the extent of the prohibition,
whereupon, in the latter case, Issuer shall promptly (i) deliver to the Holder
and/or the Owner, as appropriate, that portion of the Option Repurchase Price or
the Option Share Repurchase Price that Issuer is not prohibited from delivering;
and (ii) deliver, as appropriate, either (A) to the Holder, a new Stock Option
Agreement evidencing the right of the Holder to purchase that number of shares
of Common Stock obtained by multiplying the number of shares of Common Stock for
which the surrendered Stock Option Agreement was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Option Repurchase Price less the portion thereof theretofore delivered to
the Holder and the denominator of which is the Option Repurchase Price, or (B)
to the Owner, a certificate for the Option Shares it is then so prohibited from
repurchasing.
(d) For purposes of this Section 7, a Repurchase Event shall be deemed to
have occurred (i) upon the consummation of any merger, consolidation or similar
transaction involving Issuer or any purchase, lease or other acquisition of all
or a substantial portion of the assets of Issuer, other than any such
transaction which would not constitute an Acquisition Transaction pursuant to
the provisos to Section 2(b)(i) hereof or (ii) upon the acquisition by any
person of beneficial ownership of 50% or more of the then outstanding shares of
Common Stock, provided that no such event shall constitute a Repurchase Event
unless a Subsequent Triggering Event shall have occurred prior to an Exercise
Termination Event. The parties hereto agree that Issuer's obligations to
repurchase the Option or Option Shares under this Section 7 shall not terminate
upon the occurrence of an Exercise Termination Event unless no Subsequent
Triggering Event shall have occurred prior to the occurrence of an Exercise
Termination Event.
8. (a) In the event that prior to an Exercise Termination Event, Issuer
shall enter into an agreement (i) to consolidate with or merge into any person,
other than Grantee or one of its Subsidiaries, and shall not be the continuing
or surviving corporation of such consolidation or merger, (ii) to permit any
person, other than Grantee or one of its Subsidiaries, to merge into Issuer and
Issuer shall be the continuing or surviving
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corporation, but, in connection with such merger, the then outstanding shares of
Common Stock shall be changed into or exchanged for stock or other securities of
any other person or cash or any other property or the then outstanding shares of
Common Stock shall after such merger represent less than 50% of the outstanding
voting shares and voting share equivalents of the merged company, or (iii) to
sell or otherwise transfer all or substantially all of its assets to any person,
other than Grantee or one of its Subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provision so that the
Option shall, upon the consummation of any such transaction and upon the terms
and conditions set forth herein, be converted into, or exchanged for, an option
(the "Substitute Option"), at the election of the Holder, of either (x) the
Acquiring Corporation (as hereinafter defined) or (y) any person that controls
the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(1) "Acquiring Corporation" shall mean (i) the continuing or surviving
corporation of a consolidation or merger with Issuer (if other than
Issuer), (ii) Issuer in a merger in which Issuer is the continuing or
surviving person, and (iii) the transferee of all or substantially all of
Issuer's assets.
(2) "Substitute Common Stock" shall mean the common stock issued by
the issuer of the Substitute Option upon exercise of the Substitute Option.
(3) "Assigned Value" shall mean the Market/Offer Price, as defined in
Section 7.
(4) "Average Price" shall mean the average closing price of a share of
the Substitute Common Stock for the one year immediately preceding the
consolidation, merger or sale in question, but in no event higher than the
closing price of the shares of Substitute Common Stock on the day preceding
such consolidation, merger or sale; provided that if Issuer is the issuer
of the Substitute Option, the Average Price shall be computed with respect
to a share of common stock issued by the person merging into Issuer or by
any company which controls or is controlled by such person, as the Holder
may elect.
(c) The Substitute Option shall have the same terms as the Option,
provided, that if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to the Holder. The issuer of the Substitute Option shall
also enter into an agreement with the then Holder or Holders of the Substitute
Option in substantially the same form as this Agreement, which shall be
applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares of
Substitute Common Stock as is equal to the Assigned Value multiplied by the
number of shares of Common Stock for which the Option is then exercisable,
divided by the Average Price. The exercise price of the Substitute Option per
share of Substitute Common Stock shall then be equal to the Option Price
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock for which the Option is then exercisable and the denominator of
which shall be the number of shares of Substitute Common Stock for which the
Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the shares of Substitute
Common Stock outstanding prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than 19.9% of the
shares of Substitute Common Stock outstanding prior to exercise but for this
clause (e), the issuer of the Substitute Option (the "Substitute Option Issuer")
shall make a cash payment to Holder equal to the excess of (i) the value of the
Substitute Option without giving effect to the limitation in this clause (e)
over (ii) the value of the Substitute Option after giving effect to the
limitation in this clause (e). This difference in value shall be determined by a
nationally recognized investment banking firm selected by the Holder or the
Owner, as the case may be, and reasonably acceptable to the Acquiring
Corporation.
(f) Issuer shall not enter into any transaction described in subsection (a)
of this Section 8 unless the Acquiring Corporation and any person that controls
the Acquiring Corporation assume in writing all the obligations of Issuer
hereunder.
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the Substitute Option Issuer shall repurchase the
Substitute Option from the Substitute Option Holder at a price
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(the "Substitute Option Repurchase Price") equal to (x) the amount by which (i)
the Highest Closing Price (as hereinafter defined) exceeds (ii) the exercise
price of the Substitute Option, multiplied by the number of shares of Substitute
Common Stock for which the Substitute Option may then be exercised plus (y)
Grantee's reasonable out-of-pocket expenses (to the extent not previously
reimbursed), and at the request of the owner (the "Substitute Share Owner") of
shares of Substitute Common Stock (the "Substitute Shares"), the Substitute
Option Issuer shall repurchase the Substitute Shares at a price (the "Substitute
Share Repurchase Price") equal to (x) the Highest Closing Price multiplied by
the number of Substitute Shares so designated plus (y) Grantee's reasonable
out-of-pocket expenses (to the extent not previously reimbursed). The term
"Highest Closing Price" shall mean the highest closing price for shares of
Substitute Common Stock within the six-month period immediately preceding the
date the Substitute Option Holder gives notice of the required repurchase of the
Substitute Option or the Substitute Share Owner gives notice of the required
repurchase of the Substitute Shares, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner, as the
case may be, may exercise its respective right to require the Substitute Option
Issuer to repurchase the Substitute Option and the Substitute Shares pursuant to
this Section 9 by surrendering for such purpose to the Substitute Option Issuer,
at its principal office, the agreement for such Substitute Option (or, in the
absence of such an agreement, a copy of this Agreement) and certificates for
Substitute Shares accompanied by a written notice or notices stating that the
Substitute Option Holder or the Substitute Share Owner, as the case may be,
elects to require the Substitute Option Issuer to repurchase the Substitute
Option and/ or the Substitute Shares in accordance with the provisions of this
Section 9. As promptly as practicable, and in any event within five business
days after the surrender of the Substitute Option and/or certificates
representing Substitute Shares and the receipt of such notice or notices
relating thereto, the Substitute Option Issuer shall deliver or cause to be
delivered to the Substitute Option Holder the Substitute Option Repurchase Price
and/or to the Substitute Share Owner the Substitute Share Repurchase Price
therefor or, in either case, the portion thereof which the Substitute Option
Issuer is not then prohibited under applicable law and regulation from so
delivering.
(c) To the extent that the Substitute Option Issuer is prohibited under
applicable law or regulation from repurchasing the Substitute Option and/or the
Substitute Shares in part or in full, the Substitute Option Issuer following a
request for repurchase pursuant to this Section 9 shall immediately so notify
the Substitute Option Holder and/or the Substitute Share Owner and thereafter
deliver or cause to be delivered, from time to time, to the Substitute Option
Holder and/or the Substitute Share Owner, as appropriate, the portion of the
Substitute Share Repurchase Price, respectively, which it is no longer
prohibited from delivering, within five business days after the date on which
the Substitute Option Issuer is no longer so prohibited; provided, however, that
if the Substitute Option Issuer is at any time after delivery of a notice of
repurchase pursuant to subsection (b) of this Section 9 prohibited under
applicable law or regulation from delivering to the Substitute Option Holder
and/or the Substitute Share Owner, as appropriate, the Substitute Option
Repurchase Price and the Substitute Share Repurchase Price, respectively, in
full (and the Substitute Option Issuer shall use its best efforts to receive all
required regulatory and legal approvals as promptly as practicable in order to
accomplish such repurchase), the Substitute Option Holder or Substitute Share
Owner may revoke its notice of repurchase of the Substitute Option or the
Substitute Shares either in whole or to the extent of the prohibition,
whereupon, in the latter case, the Substitute Option Issuer shall promptly (i)
deliver to the Substitute Option Holder or Substitute Share Owner, as
appropriate, that portion of the Substitute Option Repurchase Price or the
Substitute Share Repurchase Price that the Substitute Option Issuer is not
prohibited from delivering; and (ii) deliver, as appropriate, either (A) to the
Substitute Option Holder, a new Substitute Option evidencing the right of the
Substitute Option Holder to purchase that number of shares of the Substitute
Common Stock obtained by multiplying the number of shares of the Substitute
Common Stock for which the surrendered Substitute Option was exercisable at the
time of delivery of the notice of repurchase by a fraction, the numerator of
which is the Substitute Option Repurchase Price less the portion thereof
theretofore delivered to the Substitute Option Holder and the denominator of
which is the Substitute Option Repurchase Price, or (B) to the Substitute Share
Owner, a certificate for the Substitute Common Shares it is then so prohibited
from repurchasing.
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10. The 90-day or six-month period for exercise of certain rights under
Sections 2, 6, 7, 13 and 15 shall be extended: (i) to the extent necessary to
obtain all regulatory approvals for the exercise of such rights, and for the
expiration of all statutory waiting periods; and (ii) to the extent necessary to
avoid liability under Section 16(b) of the 1934 Act by reason of such exercise.
11. Issuer hereby represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Issuer and no other corporate
proceedings on the part of Issuer are necessary to authorize this Agreement
or to consummate the transactions so contemplated. This Agreement has been
duly and validly executed and delivered by Issuer.
(b) Issuer has taken all necessary corporate action to reserve for use
from its treasury and to permit it to use, and at all times from the date
hereof through the termination of this Agreement in accordance with its
terms will have reserved for use upon the exercise of the Option, that
number of shares of Common Stock equal to the maximum number of shares of
Common Stock at any time and from time to time issuable hereunder, and all
such shares, upon issuance pursuant hereto, will be duly authorized,
validly issued, fully paid, nonassessable, and will be delivered free and
clear of all claims, liens, encumbrance and security interests and not
subject to any preemptive rights.
12. Grantee hereby represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to enter
into this Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Grantee. This Agreement has been duly executed and
delivered by Grantee.
(b) The Option is not being, and any shares of Common Stock or other
securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act.
13. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person, without the express written consent of the other party, except that in
the event a Subsequent Triggering Event shall have occurred prior to an Exercise
Termination Event, Grantee, subject to the express provisions hereof, may assign
in whole or in part its rights and obligations hereunder within six months
following such Subsequent Triggering Event (or such later period as provided in
Section 10); provided, however, that until the date 15 days following the date
on which the Federal Reserve Board approves an application by Grantee to acquire
the shares of Common Stock subject to the Option, Grantee may not assign its
rights under the Option except in (i) a widely dispersed public distribution,
(ii) a private placement in which no one party acquires the right to purchase in
excess of 2% of the voting shares of Issuer, (iii) an assignment to a single
party (e.g., a broker or investment banker) for the purpose of conducting a
widely dispersed public distribution on Grantee's behalf, or (iv) any other
manner approved by the Federal Reserve Board.
14. Each of Grantee and Issuer will use its best efforts to make all
filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including without limitation making application to list the
shares of Common Stock issuable hereunder on the New York Stock Exchange upon
official notice of issuance and applying to the Federal Reserve Board and the
OTS, as applicable for approval to acquire the shares issuable hereunder, but
Grantee shall not be obligated to apply to state banking authorities for
approval to acquire the shares of Common Stock issuable hereunder until such
time, if ever, as it deems appropriate to do so.
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15. (a) Grantee may, at any time following a Repurchase Event and prior to
the occurrence of an Exercise Termination Event (or such later period as
provided in Section 10), relinquish the Option (together with any Option Shares
issued to and then owned by Grantee) to Issuer in exchange for a cash fee equal
to the Surrender Price (as defined below); provided, however, that Grantee may
not exercise its rights pursuant to this Section 15 if Issuer has repurchased
the Option (or any portion thereof) or any Option Shares pursuant to Section 7.
The "Surrender Price" shall be equal to $32 million (i) plus, if applicable,
Grantee's purchase price with respect to any Option Shares and (ii) minus, if
applicable, the sum of (A) the excess of (1) the net cash amounts, if any,
received by Grantee pursuant to the arms' length sale of Option Shares (or any
other securities into which such Option Shares were converted or exchanged) to
any unaffiliated party, over (2) Grantee's purchase price of such Option Shares
and (B) the net cash amounts, if any, received by Grantee pursuant to an arms'
length sale of a portion of the Option to any unaffiliated party.
(b) Grantee may exercise its right to relinquish the Option and any Option
Shares pursuant to this Section 15 by surrendering to Issuer, at its principal
office, a copy of this Agreement together with certificates for Option Shares,
if any, accompanied by a written notice stating (i) that Grantee elects to
relinquish the Option and Option Shares, if any, in accordance with the
provisions of this Section 15 and (ii) the Surrender Price. The Surrender Price
shall be payable in immediately available funds on or before the second business
day following receipt of such notice by Issuer.
(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from paying the
Surrender Price to Grantee in full, Issuer shall immediately so notify Grantee
and thereafter deliver or cause to be delivered, from time to time, to Grantee,
the portion of the Surrender Price that it is no longer prohibited from paying,
within five business days after the date on which Issuer is no longer so
prohibited, provided, however, that if Issuer at any time after delivery of a
notice of surrender pursuant to paragraph (b) of this Section 15 is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from paying to Grantee the Surrender Price in full, (i) Issuer shall (A)
use its reasonable best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to make such payments, (B) within five days of the submission or receipt of any
documents relating to any such regulatory and legal approvals, provide Grantee
with copies of the same, and (c) keep Grantee advised of both the status of any
such request for regulatory and legal approvals, as well as any discussions with
any relevant regulatory or other third party reasonably related to the same and
(ii) Grantee may revoke such notice of surrender by delivery of a notice of
revocation to Issuer and, upon delivery of such notice of revocation, the
Exercise Termination Date shall be extended to a date six months from the date
on which the Exercise Termination Date would have occurred if not for the
provisions of this Section 15(c) (during which period Grantee may exercise any
of its rights hereunder, including any and all rights pursuant to this Section
15).
16. (a) Notwithstanding any other provision of this Agreement, in no event
shall the Grantee's Total Profit (as hereinafter defined) exceed $40 million
and, if it otherwise would exceed such amount, the Grantee, at its sole
election, shall either (i) reduce the number of shares of Common Stock subject
to this Option, (ii) deliver to the Issuer for cancellation Option Shares
previously purchased by Grantee, (iii) pay cash to the Issuer, or (iv) any
combination thereof, so that Grantee's actually realized Total Profit shall not
exceed $40 million after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, this Option may
not be exercised for a number of shares as would, as of the date of exercise,
result in a Notional Total Profit (as defined below) of more than $40 million;
provided, that nothing in this sentence shall restrict any exercise of the
Option permitted hereby on any subsequent date.
(c) As used herein, the term "Total Profit" shall mean the aggregate amount
(before taxes) of the following: (i) the amount received by Grantee pursuant to
Issuer's repurchase of the Option (or any portion thereof) pursuant to Section 7
of this Agreement or Section 8.1(i) of the Merger Agreement, (ii)(x) the amount
received by Grantee pursuant to Issuer's repurchase of Option Shares pursuant to
Section 7, less (y) the Grantee's purchase price for such Option Shares,
(iii)(x) the net cash amounts received by Grantee pursuant to the sale of Option
Shares (or any other securities into which such Option Shares are converted or
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exchanged) to any unaffiliated party, less (y) the Grantee's purchase price of
such Option Shares, (iv) any amounts received by Grantee on the transfer of the
Option (or any portion thereof) to any unaffiliated party, and (v) any
equivalent amount with respect to the Substitute Option.
(d) As used herein, the term "Notional Total Profit" with respect to any
number of shares as to which Grantee may propose to exercise this Option shall
be the Total Profit determined as of the date of such proposed exercise assuming
that this Option were exercised on such date for such number of shares and
assuming that such shares, together with all other Option Shares held by Grantee
and its affiliates as of such date, were sold for cash at the closing market
price for the Common Stock as of the close of business on the preceding trading
day (less customary brokerage commissions).
17. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party hereto
through injunctive or other equitable relief.
18. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that the Holder is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7, the full number of shares of Common Stock
provided in Section 1(a) hereof (as adjusted pursuant to Section 1(b) or 5
hereof), it is the express intention of Issuer to allow the Holder to acquire or
to require Issuer to repurchase such lesser number of shares as may be
permissible, without any amendment or modification hereof.
19. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
cable, telegram, telecopy or telex, or by registered or certified mail (postage
prepaid, return receipt requested) at the respective addresses of the parties
set forth in the Merger Agreement.
20. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
21. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
22. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
23. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, except as expressly provided herein.
24. Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned thereto in the Merger Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
NEW YORK BANCORP INC.
By: /s/ PATRICK E. MALLOY, III
------------------------------------
Name: Patrick E. Malloy, III
Title: Chairman of the Board
NORTH FORK BANCORPORATION, INC.
By: /s/ JOHN ADAM KANAS
------------------------------------
Name: John Adam Kanas
Title: Chairman, President and
Chief Executive Officer
B-12
<PAGE> 161
ANNEX C
PERSONAL AND CONFIDENTIAL
December , 1997
Board of Directors
North Fork Bancorporation, Inc.
275 Broad Hollow Road
Melville, NY 11747
Gentlemen:
You have requested our opinion as to the fairness from a financial point of
view to North Fork Bancorporation, Inc. (the "Company") of the exchange ratio
(the "Exchange Ratio") of 1.19 shares of Common Stock, par value $2.50 per share
(the "Company Shares"), of the Company to be paid for each share of Common
Stock, par value $.01 per share (the "NYB Shares"), of New York Bancorp, Inc.
("NYB"), pursuant to the merger (the "Merger") contemplated by the Amended and
Restated Agreement and Plan of Merger dated as of October 7, 1997, between the
Company and NYB (the "Agreement").
Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes. We are
familiar with the Company having acted as the Company's financial advisor in
connection with, and having participated in certain of the negotiations leading
to, the Agreement. We are familiar with NYB having provided certain investment
banking services to NYB from time to time. In addition, Goldman Sachs is a full
service securities firm, and in the course of its trading activities may from
time to time effect transactions for its own account or the account of customers
and hold positions in securities of the Company and NYB.
In connection with this opinion, we have reviewed, among other things, the
Agreement; the Annual Reports to Stockholders and Annual Reports on Form 10-K of
the Company for the five years ended December 31, 1996 and for NYB for the five
fiscal years ended September 30, 1996; certain interim reports to stockholders
and Quarterly Reports on Form 10-Q of the Company and NYB; certain other
communications from the Company and NYB to their respective stockholders;
certain internal financial analyses and forecasts for the Company and NYB
prepared by their respective managements; and certain internal financial
forecasts for the Company and NYB on a combined basis, after giving effect to
the Merger, prepared by the management of the Company. We have also held
discussions with members of the senior managements of the Company and NYB
regarding the strategic rationale for, and the potential benefits of, the
transaction contemplated by the Agreement and the past and current business
operations, financial condition and future prospects of their respective
companies. In addition, we have reviewed the reported price and trading activity
for the Company Shares and NYB Shares, compared certain financial and stock
market information for the Company and NYB with similar information for certain
other companies the securities of which are publicly traded, reviewed the
financial terms of certain recent business combinations in the savings industry
specifically and other industries generally and performed such other studies and
analyses as we considered appropriate.
We have relied upon the accuracy and completeness of all of the financial
and other information reviewed by us and have assumed such accuracy and
completeness for purposes of rendering this opinion. In that regard, we have
assumed, with your consent, that the financial forecasts, including, without
limitation, projected cost savings and operating synergies resulting from the
Merger and projections regarding under-performing and non-performing assets and
net charge-offs, have been reasonably prepared on a basis reflecting the best
currently available judgments and estimates of the Company and that such
forecasts will be realized in the amounts and at the times contemplated thereby.
We are not experts in the evaluation of loan and lease portfolios for purposes
of assessing the adequacy of the allowances for losses with respect thereto and
have assumed, with your consent, that such allowances for each of the Company
and NYB are in the aggregate adequate to cover all such losses. In addition, we
have not reviewed individual credit files nor have we made an
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North Fork Bancorporation, Inc.
December , 1997
Page Two
independent evaluation or appraisal of the assets and liabilities of the Company
or NYB and we have not been furnished with any such evaluation or appraisal.
Our advisory services and the opinion expressed herein are provided for the
information and assistance of the Board of Directors of the Company in
connection with its consideration of the transaction contemplated by the
Agreement and such opinion does not constitute a recommendation as to how any
holder of the Company's securities should vote with respect to such transaction.
Based upon and subject to the foregoing and based upon such other matters
as we consider relevant, it is our opinion that as of the date hereof the
Exchange Ratio pursuant to the Agreement is fair from a financial point of view
to the Company.
Very truly yours,
--------------------------------------
(GOLDMAN, SACHS & CO.)
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<PAGE> 163
ANNEX D
, 1997
Board of Directors
New York Bancorp Inc.
241-02 Northern Boulevard
Douglaston, NY 11362-1061
Ladies and Gentlemen:
New York Bancorp Inc. ("New York Bancorp") and North Fork Bancorporation,
Inc. ("North Fork") have entered into an Amended and Restated Agreement and Plan
of Merger, dated as of October 7, 1997 (the "Agreement"), pursuant to which New
York Bancorp will be merged with and into North Fork (the "Merger"). Upon the
Effective Time of the Merger as defined in the Agreement, each share of New York
Bancorp common stock, par value $0.01 per share, issued and outstanding
immediately prior to the Effective Time (the "New York Bancorp Shares"), other
than certain shares specified in the Agreement, will be converted into the right
to receive 1.19 shares (the "Exchange Ratio") of North Fork common stock, par
value $2.50 per share, together with the associated preferred stock purchase
rights granted pursuant to the Shareholder Rights Agreement, dated as of
February 28, 1989, between North Fork and North Fork Bank. The terms and
conditions of the Merger are more fully set forth in the Agreement. You have
requested our opinion as to the fairness, from a financial point of view, of the
Exchange Ratio to the holders of New York Bancorp Shares.
Sandler O'Neill & Partners, L.P., as part of its investment banking
business, is regularly engaged in the valuation of financial institutions and
their securities in connection with mergers and acquisitions and other corporate
transactions. In connection with this opinion, we have reviewed, among other
things: (i) the Agreement and exhibits thereto; (ii) the Stock Option Agreement,
dated as of October 7, 1997, by and between New York Bancorp and North Fork;
(iii) New York Bancorp's audited consolidated financial statements and
management's discussion and analysis of financial condition and results of
operations as contained in its annual report to shareholders for the year ended
September 30, 1996; (iv) North Fork's audited consolidated financial statements
and management's discussion and analysis of financial condition and results of
operations as contained in its annual report to shareholders for the year ended
December 31, 1996; (v) New York Bancorp's unaudited consolidated financial
statements and management's discussion and analysis of financial condition and
results of operations contained in its Quarterly Report on Form 10-Q for the
quarters ended December 31, 1996 and March 31 and June 30, 1997, respectively;
(vi) North Fork's unaudited consolidated financial statements and management's
discussion and analysis of financial condition and results of operations
contained in its Quarterly Report on Form 10-Q for the quarters ended March 31,
June 30 and September 30, 1997, respectively; (vii) certain financial
information regarding the financial condition and results of operations of New
York Bancorp as of and for the year and the quarter ended September 30, 1997
included in New York Bancorp's Current Report on Form 8-K dated October 29,
1997; (viii) certain financial analyses and forecasts of New York Bancorp
prepared by and reviewed with management of New York Bancorp and the views of
senior management of New York Bancorp regarding New York Bancorp's past and
current business operations, results thereof, financial condition and future
prospects; (ix) certain financial analyses and forecasts of North Fork prepared
by and reviewed with management of North Fork and the views of senior management
of North Fork regarding North Fork's past and current business operations,
results thereof, financial condition and future prospects; (x) the pro forma
impact of the Merger on North Fork; (xi) the publicly reported historical price
and trading activity for New York Bancorp's and North Fork's common stock,
including a comparison of certain financial and stock market information for New
York Bancorp and North Fork with similar publicly available information for
certain other companies the securities of which are publicly traded; (xii) the
financial terms of recent business combinations in the savings institution
industry, to the extent publicly available; (xiii) the current market
environment generally and the banking environment in particular; and (xiv) such
other information, financial studies, analyses and investigations and financial,
economic and market criteria as we considered relevant. In
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<PAGE> 164
connection with rendering this opinion, we were not asked to, and did not,
solicit indications of interest in a potential transaction from other third
parties.
In performing our review, we have assumed and relied upon, without
independent verification, the accuracy and completeness of all the financial
information, analyses and other information that was publicly available or
otherwise furnished to, reviewed by or discussed with us, and we do not assume
any responsibility or liability therefor. We did not make an independent
evaluation or appraisal of the specific assets, the collateral securing assets
or the liabilities of New York Bancorp or North Fork or any of their
subsidiaries, or the collectibility of any such assets, nor have we been
furnished with any such evaluations or appraisals (relying, where relevant, on
the analyses and estimates of New York Bancorp and North Fork). With respect to
the financial projections reviewed with management, we have assumed that they
have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the respective managements of the respective future
financial performances of New York Bancorp and North Fork and that such
performances will be achieved. We have also assumed that there has been no
material change in New York Bancorp's or North Fork's assets, financial
condition, results of operations, business or prospects since the dates of the
last financial statements noted above. We have assumed that New York Bancorp and
North Fork will remain as going concerns for all periods relevant to our
analyses, that the Merger will be accounted for as a pooling of interests and
that the conditions precedent in the Agreement are not waived.
Our opinion is necessarily based on financial, economic, market and other
conditions as in effect on, and the information made available to us as of, the
date hereof. Events occurring after the date hereof could materially affect this
opinion. We have not undertaken to update, revise or reaffirm this opinion or
otherwise comment upon events occurring after the date hereof. We are expressing
no opinion herein as to what the value of North Fork common stock will be when
issued to New York Bancorp's shareholders pursuant to the Agreement or the
prices at which New York Bancorp's or North Fork's common stock will trade at
any time.
We have acted as New York Bancorp's financial advisor in connection with
the Merger and will receive a fee for our services, a significant portion of
which is contingent upon consummation of the Merger. We have also received a fee
for rendering this opinion. In the past, we have also provided certain other
investment banking services for New York Bancorp and have received compensation
for such services. We may also provide certain investment banking services to
New York Bancorp in the future, including in connection with the reissuance of
certain shares of New York Bancorp common stock in connection with the Merger,
and will receive compensation for such services. We may also provide certain
investment banking services to New York Bancorp in the future, including in
connection with the reissuance of certain shares of New York Bancorp common
stock in connection with the Merger, and will receive compensation for such
services.
In the ordinary course of our business, we may actively trade the debt and
equity securities of New York Bancorp and North Fork for our own account and for
the accounts of our customers and, accordingly, may at any time hold a long or
short position in such securities.
Our opinion is directed to the Board of Directors of New York Bancorp in
connection with its consideration of the Merger and does not constitute a
recommendation to any stockholder of New York Bancorp as to how such stockholder
should vote at any meeting of stockholders called to consider and vote upon the
Merger. Our opinion is not to be quoted or referred to, in whole or in part, in
a registration statement, prospectus, proxy statement or in any other document,
nor shall this opinion be used for any other purposes, without Sandler O'Neill's
prior written consent; provided, however, that we hereby consent to the
inclusion of this opinion as an annex to the Joint Proxy Statement/Prospectus of
New York Bancorp and North Fork dated the date hereof.
Based upon and subject to the foregoing, it is our opinion, as of the date
hereof, that the Exchange Ratio is fair, from a financial point of view, to the
holders of New York Bancorp Shares.
Very truly yours,
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<PAGE> 165
ANNEX E
December , 1997
Board of Directors
New York Bancorp Inc.
New York Bancorp Building
241-02 Northern Boulevard
Douglaston, NY 11362
Members of the Board:
You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to the common stockholders of New York Bancorp
Inc. ("New York Bancorp") of the consideration to be received by such
stockholders in the proposed merger (the "Merger") of New York Bancorp with and
into North Fork Bancorporation Inc. ("North Fork"), pursuant to the Amended and
Restated Agreement and Plan of Merger ("Agreement") dated as of October 7, 1997
between New York Bancorp and North Fork (the "Agreement"). Under the terms of
the Merger, stockholders of New York Bancorp will receive 1.19 shares of North
Fork's common stock, subject to adjustment as described in the Agreement (the
"Consideration") for each of their shares of common stock, par value $.01 per
share of New York Bancorp. It is our understanding that the Merger will be
accounted for as a pooling accounting transaction under generally accepted
accounting practices.
Keefe, Bruyette & Woods, Inc. as part of its investment banking business,
is continually engaged in the valuation of banking businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes. As specialists in the securities of banking companies, we have
experience in, and knowledge of, the valuation of banking enterprises. In the
ordinary course of our business as a broker-dealer, we may, from time to time,
purchase securities from, and sell securities to, New York Bancorp and North
Fork and as a market maker in securities we may from time to time have a long or
short position in, and buy or sell, debt or equity securities of New York
Bancorp and North Fork for our own account and for the accounts of our
customers. We have acted exclusively for the Board of Directors of New York
Bancorp in rendering this fairness opinion and will receive a fee from New York
Bancorp for our services.
In rendering our opinion, we have (i) reviewed, among other things, the
Merger Agreement, Annual Reports to stockholders and Annual Reports on Form 10-K
of New York Bancorp for the four years ended September 30, 1996 and Annual
Report on Form 10-K of North Fork for the four years ended December 31, 1996,
certain interim reports to stockholders and Quarterly Reports on Form 10-Q of
New York Bancorp and Quarterly Reports on Form 10-Q of North Fork and certain
internal financial analyses and forecasts for New York Bancorp prepared by
management; (ii) held discussions with members of senior management of New York
Bancorp and North Fork regarding past and current business operations,
regulatory relationships, financial condition and future prospects of the
respective companies; (iii) compared certain financial and stock market
information for New York Bancorp and North Fork with similiar information for
certain other companies the securities of which are publicly traded; (iv)
reviewed the financial terms of certain recent business combinations in the
banking industry; and (v) performed such other studies and analyses as we
considered appropriate.
In conducting our review and arriving at our opinion, we have relied upon
and assumed the accuracy and completeness of all of the financial and other
information provided to us or publicly available and we have not assumed any
responsibility for independently verifying any of such information. We have
relied upon the management of New York Bancorp as to the reasonableness and
achievability of the financial and operating forecasts and projections (and the
assumptions and bases therefor) provided to us, and we have assumed that such
forecasts and projections reflect the best currently available estimates and
judgments of New York Bancorp and that such forecasts and projections will be
realized in the amounts in the time periods currently estimated by such
management. We have also assumed, without independent verification, that the
aggregate
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New York Bancorp Inc.
Board of Directors
Page 2
allowances for loan losses for New York Bancorp and North Fork are adequate to
cover such losses. In rendering our opinion, we have not made or obtained any
evaluations or appraisals of the property of New York Bancorp or North Fork, nor
have we examined any individual credit files.
We have considered such financial and other factors as we have deemed
appropriate under the circumstances, including among others the following: (i)
the historical and current financial position and results of operations of New
York Bancorp and North Fork; (ii) the assets and liabilities of New York Bancorp
and North Fork; and (iii) the nature and terms of certain other merger
transactions involving thrift and bank holding companies. We have also taken
into account our assessment of general economic, market and financial conditions
and our experience in other transactions, as well as our experience in
securities valuation and our knowledge of the banking industry generally. Our
opinion is necessarily based upon conditions as they exist and can be evaluated
on the date hereof and the information made available to us through the date
thereof.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Consideration is fair, from a financial point of view, to the
common stockholders of New York Bancorp.
Very truly yours,
[SIGNATURE TO COME]
KEEFE, BRUYETTE & WOODS, INC.
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<PAGE> 167
PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporate Law (the "DGCL") generally
provides that a corporation may indemnify directors, officers, employees or
agents against liabilities they may incur in such capacities provided certain
standards are met, including good faith and the reasonable belief that the
particular action was in, or not opposed to, the best interests of the
corporation.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that he is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor, by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
under standards similar to those set forth above, except that no indemnification
may be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation, unless and only to the
extent that the Delaware Court of Chancery or the court in which such action or
suit was brought shall determine that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.
Section 145 of the DGCL further provides that, among other things, to the
extent that a director or officer of a corporation has been successful in the
defense of any action, suit or proceeding referred to in Subsections (a) and (b)
of Section 145, or in the defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith; that indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled; and that a corporation is empowered
to purchase and maintain insurance on behalf of a director or officer of the
corporation against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify against such liability under
Section 145.
Indemnification as described above shall be granted in a specific case only
upon a determination that indemnification is proper under the circumstances
using the applicable standard of conduct which is made by (a) a majority of
directors who were not parties to such proceeding, (b) independent legal counsel
in a written opinion if there are no such disinterested directors or if such
disinterested directors so direct, or (c) the shareholders.
Article 8.1 of the By-laws of the Registrant provides that the Registrant
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding by
reason of the fact that he or she is or was a director or officer of the
Registrant against expenses (including attorneys' fees), judgments, fines and
settlement payments actually and reasonably incurred by him or her to the
fullest extent permitted by the DGCL and any other applicable law, as may be in
effect from time to time.
Article 8.2 of the By-laws of the Registrant provides that the Registrant
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
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proceeding by reason of the fact that he or she is or was an employee or agent
of the Registrant or is serving at the request of the Registrant as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him or her to the extent permitted by the DGCL, and any other applicable law
as may be in effect from time to time.
Section 102(b)(7) of the DGCL ("Section 102(b)(7)") permits the certificate
of incorporation of a corporation to limit or eliminate a director's personal
liability to the corporation or its stockholders for monetary damages for breach
of his or her fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(dealing with unlawful dividends or unlawful stock purchases or redemptions), or
(iv) for any transaction from which the director derived an improper personal
benefit.
Article 10 of the Registrant's Certificate of Incorporation provides that,
subject only to the express prohibitions on elimination or limitation of
liability of directors set forth in Section 102(b)(7), as it now exists or may
be hereinafter amended, directors shall not be liable for monetary damages in
excess of $25,000 per occurrence resulting from a breach of their fiduciary
duties.
The Registrant maintains a director and officer liability insurance policy
providing for the insurance on behalf of any person who is or was a director or
officer of the Registrant and subsidiary companies against any liability
incurred by him in any such capacity or arising out of his status as such. The
insurer's limit of liability under the policy is $20,000,000 in the aggregate
for all insured losses per year. The policy contains various reporting
requirements and exclusions.
Section 8(k) of the Federal Deposit Insurance Act (the "FDI Act") provides
that the Federal Deposit Insurance Corporation (the "FDIC") may prohibit or
limit, by regulation or order, payments by any insured depository institution or
its holding company for the benefit of directors and officers of the insured
depository institution, or others who are or were "institution-affiliated
parties," as defined under the FDI Act, in order to pay or reimburse such person
for any liability or legal expense sustained with regard to any administrative
or civil enforcement action which results in a final order against the person.
FDIC regulations prohibit, subject to certain exceptions, insured depository
institutions, their subsidiaries and affiliated holding companies from
indemnifying officers, directors or employees for any civil money penalty or
judgment resulting from an administrative or civil enforcement action commenced
by any federal banking agency, or for that portion of the costs sustained with
regard to such an action that results in a final order or settlement that is
adverse to the director, officer or employee.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT, SCHEDULES.
(a) Exhibits.
<TABLE>
<C> <S>
2.1 Amended and Restated Agreement and Plan of Merger, dated as of October 7, 1997,
between North Fork Bancorporation, Inc., and New York Bancorp Inc. (included as
Annex A to the Joint Proxy Statement/Prospectus which is part of this Registration
Statement).
3.1 Restated Certificate of Incorporation of the Registrant.
3.2 By-laws of the Registrant, previously filed and incorporated by reference to North
Fork Bancorporation, Inc.'s Annual Report on Form 10-K for the year ended December
31, 1993.
4.1 Rights Agreement, previously filed and incorporated by reference to North Fork
Bancorporation, Inc.'s Registration Statement on Form 8-A filed March 21, 1989.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding tax matters.
8.2 Opinion of Weil, Gotshal & Manges, LLP regarding tax matters.
</TABLE>
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<TABLE>
<C> <S>
10.1 Stock Option Agreement, dated as of October 7, 1997, between New York Bancorp Inc.
and North Fork Bancorporation, Inc. (included as Annex B to the Joint Proxy
Statement/Prospectus which is part of this Registration Statement).
23.1 Consent of KPMG Peat Marwick LLP, Jericho, New York.
23.2 Consent of KPMG Peat Marwick LLP, New York, New York.
23.3 Consent of Goldman, Sachs & Co., New York, New York.
23.4 Consent of Sandler O'Neill & Partners, L.P., New York, New York.
23.5 Consent of Keefe, Bruyette & Woods, Inc., New York, New York.
23.5 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1
hereto).
23.6 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.1
hereto).
23.7 Consent of Weil, Gotshal & Manges, LLP (included in Exhibit 8.2 hereto).
24.1 Powers of Attorney (see the signature page to this Form S-4 Registration
Statement).
99.1 Opinion of Goldman, Sachs & Co. (included as Annex C to the Joint Proxy Statement/
Prospectus which is part of this Registration Statement).
99.2 Opinion of Sandler O'Neill & Partners, L.P. (included as Annex D to the Joint Proxy
Statement/Prospectus which is part of this Registration Statement).
99.3 Opinion of Keefe, Bruyette & Woods, Inc. (included as Annex E to the Joint Proxy
Statement/ Prospectus which is part of this Registration Statement).
99.4 Form of North Fork Proxy Card.
99.5 Form of New York Bancorp Proxy Card.
</TABLE>
(b) Financial Statement Schedules.
None.
(c) Item 4(b) Information.
None.
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
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offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder, through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c) of
the Securities Act of 1933, the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(c) The undersigned registrant hereby undertakes that every prospectus (i)
that is filed pursuant to the paragraph immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Securities Act of
1933 and is used in connection with an offering of securities subject to Rule
415 of the Securities Act of 1933, will be filed as a part of an amendment to
the registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(e) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(f) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(g) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
<PAGE> 171
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Melville, State of New
York, on December 17, 1997.
NORTH FORK BANCORPORATION, INC.
By: /s/ DANIEL M. HEALY
------------------------------------
Daniel M. Healy
Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on December 17, 1997.
We, the undersigned officers and directors of North Fork Bancorporation,
Inc. hereby severally and individually constitute and appoint Daniel M. Healy,
the true and lawful attorney and agent (with full power of substitution and
resubstitution in each case) of each of us to execute in the name, place and
stead of each of us (individually and in any capacity stated below) any and all
amendments to this registration statement and all instruments necessary or
advisable in connection therewith and to file the same with the Securities and
Exchange Commission, said attorney and agent to have power to act and to have
full power and authority to do and perform in the name and on behalf of each of
the undersigned every act whatsoever necessary or advisable to be done in the
premises as fully and to all intents and purposes as any of the undersigned
might or could do in person and we hereby ratify and confirm our signatures as
they may be signed by our said attorney and agent to any and all such amendments
and instruments.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------------------ -----------------------------------------------
<S> <C>
/s/ JOHN A. KANAS President, Chief Executive Officer and Chairman
- ------------------------------------------ of the Board
John A. Kanas
/s/ DANIEL M. HEALY Executive Vice President and Chief Financial
- ------------------------------------------ Officer (Principal Financial and Accounting
Daniel M. Healy Officer)
/s/ JOHN BOHLSEN Director
- ------------------------------------------
John Bohlsen
/s/ Director
- ------------------------------------------
Irvin L. Cherashore
/s/ ALLAN C. DICKERSON Director
- ------------------------------------------
Allan C. Dickerson
/s/ LLOYD A. GERARD Director
- ------------------------------------------
Lloyd A. Gerard
/s/ THOMAS M. O'BRIEN Director
- ------------------------------------------
Thomas M. O'Brien
</TABLE>
II-5
<PAGE> 172
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------------------ -----------------------------------------------
<S> <C>
- ------------------------------------------ Director
James F. Reeve
/s/ GEORGE H. ROWSOM Director
- ------------------------------------------
George H. Rowsom
Director
- ------------------------------------------
Kurt R. Schmeller
Director
- ------------------------------------------
Raymond W. Terry, Jr.
</TABLE>
II-6
<PAGE> 173
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
SEQUENTIAL
NUMBER
- ----------
<C> <S> <C>
2.1 Amended and Restated Agreement and Plan of Merger, dated as of October 7,
1997 between North Fork Bancorporation, Inc., and New York Bancorp Inc.
(included as Annex A to the Joint Proxy Statement/Prospectus which is
part of this Registration Statement).
3.1 Restated Certificate of Incorporation of the Registrant.
3.2 By-laws of the Registrant, previously filed and incorporated by reference
to North Fork Bancorporation, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1993.
4.1 Rights Agreement, previously filed and incorporated by reference to North
Fork Bancorporation, Inc.'s Registration Statement on Form 8-A filed
March 21, 1989.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding tax
matters.
8.2 Opinion of Weil, Gotshal & Manges, LLP regarding tax matters.
10.1 Stock Option Agreement, dated as of October 7, 1997, between New York
Bancorp Inc. and North Fork Bancorporation, Inc. (included as Annex B to
the Joint Proxy Statement/Prospectus which is part of this Registration
Statement).
23.1 Consent of KPMG Peat Marwick LLP, Jericho, New York.
23.2 Consent of KPMG Peat Marwick LLP, New York, New York.
23.3 Consent of Goldman, Sachs & Co., New York, New York.
23.4 Consent of Sandler O'Neill & Partners, L.P., New York, New York.
23.5 Consent of Keefe, Bruyette & Woods, Inc., New York, New York.
23.5 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit
5.1 hereto).
23.6 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit
8.1 hereto).
23.7 Consent of Weil, Gotshal & Manges, LLP (included in Exhibit 8.2 hereto).
24.1 Powers of Attorney (see the signature page to this Form S-4 Registration
Statement).
99.1 Opinion of Goldman, Sachs & Co. (included as Annex C to the Joint Proxy
Statement/Prospectus which is part of this Registration Statement).
99.2 Opinion of Sandler O'Neill & Partners, L.P. (included as Annex D to the
Joint Proxy Statement/Prospectus which is part of this Registration
Statement).
99.3 Opinion of Keefe, Bruyette & Woods, Inc. (included as Annex E to the
Joint Proxy Statement/Prospectus which is part of this Registration
Statement).
99.4 Form of North Fork Proxy Card
99.5 Form of New York Bancorp Proxy Card
</TABLE>
II-7
<PAGE> 1
Exhibit 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
NORTH FORK BANCORPORATION, INC.
The undersigned, John Adam Kanas, certifies that he is the President of
North Fork Bancorporation, Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), and does hereby further
certify as follows:
(1) The name of the Corporation is NORTH FORK BANCORPORATION, INC.
(2) The name under which the Corporation was originally incorporated
was NORTH FORK BANCORPORATION, INC. and the original Certificate of
Incorporation of the Corporation was filed with the Secretary of State of
the State of Delaware on December 8, 1980.
(3) This Restated Certificate of Incorporation was duly adopted by in
accordance with the provisions of Section 245 of the General Corporation
Law of the State of Delaware.
(4) The text of the Restated Certificate of Incorporation of the
Corporation is restated to read in its entirety, as follows:
FIRST: Name. The name of the corporation is NORTH FORK BANCORPORATION,
INC.(hereinafter called the "Corporation").
SECOND: Address; Registered Agent. The address of the Corporation's
registered office is Corporation Trust Center, 1209 Orange Street, City of
Wilmington, County of New Castle, State of Delaware; and its registered agent at
such address is The Corporation Trust Company.
THIRD; Purposes. The nature of the business and purposes to be
conducted or promoted by the Corpora-
<PAGE> 2
tion are to engage in, carry on and conduct any lawful act or activity for
which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: Capital Stock. (a) The authorized shares which the
Corporation has authority to issue shall be two hundred ten million
(210,000,000), divided into two hundred million (200,000,000) shares of
Common Stock, par value of two dollars and fifty cents ($2.50) each, and
ten million (10,000,000) shares of Preferred Stock, par value of one dollar
($1.00) each, which Preferred Stock may be divided into and issued in
series as described herein.
(b) Subject to any applicable provisions of the
Certificate of Incorporation (including such provisions set forth in
the Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock attached hereto as Exhibit A) and
any applicable requirements or limitations prescribed by law, the Board
of Directors of the Corporation is hereby expressly authorized, from
time to time by resolution, to divide the Preferred Stock into series,
to authorize the issuance of one or more series of the Preferred
Shares, and to fix for each such series the number, designation,
powers, preferences and rights and the qualifications, limitations or
restrictions of such preferences or rights, specifying as to each such
series:
(A) the designation of such series in such
manner as shall distinguish shares thereof
from all other series, and the number of
shares which shall constitute the initial
issue thereof;
(B) the dividend rights of such series,
including the dividend rate or rates
thereon, the time or times at which such
dividends shall be payable, whether such
dividends are cumulative and, if so, on what
terms;
(C) the redemption rights of such series, if
any, including the price or prices at which
and the terms and conditions on which shares
of such series may be
2
<PAGE> 3
(D) the amount payable upon shares of such
series in the event of a voluntary or
involuntary liquidation, dissolution or
winding up of the affairs of the
Corporation;
(E) sinking fund provisions, if any, for the
redemption or purchase of shares of such
series,
(F) the conversion rights of such series, if
any, including the identity of the security
or securities into which such shares are
convertible, the rate or rates of
conversion, and the terms and conditions of
conversion;
(G) whether the shares of such series shall have
any voting rights in addition to those
prescribed by law, and, if so, the nature of
such rights and under what circumstances the
rights may be exercised; and
(H) such other powers, preferences, and relative
participating, optional or other special
rights of such series, and the
qualifications, limitations, or restrictions
of such preferences and/or rights desired to
be so fixed.
(c) All shares of any one series of Preferred
Stock shall be identical with each other in all respects except that
shares of any one series issued at different times may differ as to the
dates from which dividends thereon shall accumulate, and all series of
Preferred Stock shall rank equally and be identical in all respects
except in respect to the particulars which may be fixed in the
resolutions of the Board of Directors providing for the initial issue
thereof.
(d) Except as may be otherwise provided in this
Article Fourth or in the resolution or resolutions providing for the
issue of a particular series, the Board of Directors may from time to
time increase the number of shares of any series already
3
<PAGE> 4
created by providing that any unissued shares of Preferred Stock shall
constitute part of such series, or may decrease (but not below the
number of shares thereof then outstanding) the number of shares of any
series already created by providing that any unissued shares previously
assigned to such series shall no longer constitute part thereof.
(e) Each holder of record of Common Stock shall have the right
to one vote for each share of Common Stock held in his name on the
record books of the Corporation as of the record date for any matter
submitted to a vote of the stockholders of the Corporation. Except to
the extent otherwise provided herein or in any resolution or
resolutions of the Board of Directors providing of for the initial
issue of shares of one or more series of Preferred Stock or as
otherwise required by law, holders of shares of Preferred Stock of any
series shall not be entitled to vote such shares with respect to any
matter which is put to a vote of the stockholders. The number of shares
of Preferred Stock which the Corporation shall have the authority to
issue may be increased or decreased from time to time by the
affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote, and the holders of the Preferred Stock,
if entitled by law to vote on any such increase or decrease, shall not
be entitled to vote separately as a class or series of a class thereon.
(f) Subject to the prior and superior rights of the Preferred
Stock as set forth in any resolution or resolutions of the Board of
Directors providing for the initial issue of one or more series of
Preferred Stock, the holders of Common Stock shall be entitled to
receive such dividends, whether payable in cash, stock or otherwise, as
may be declared from time to time by the Board of Directors to be paid
thereon out of any fund legally available therefor, and the Preferred
Stock shall not be entitled to participate in any such dividend.
(g) In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation, after
distribution in full of the preferential amounts required to
4
<PAGE> 5
be distributed to the holders of each series of Preferred Stock then
outstanding including the amount of any cumulated but unpaid dividends,
if any, if a preference shall then attach thereto, the holders of
Common Stock shall be entitled to receive all of the remaining assets
of the Corporation, tangible and intangible, of whatever kind available
for distribution to stockholders, ratably in proportion to the numbers
of shares of Common Stock held by them respectively.
FIFTH: [Intentionally Omitted.]
SIXTH: Directors; Election and Classification.
(h) Members of the Board of Directors may be elected
either by written ballot or by voice vote.
(i) The Board of Directors shall consist of not less
than three (3) members, such number to be fixed initially by the
incorporator and subject to change thereafter from time to time by
action of the stockholders or by action of the Board. The Board shall
be divided into three classes. The number of directors of the first
class shall equal one third (1/3) of the total of the number of
directors thus determined (or the nearest whole number thereto); the
number of directors of the second class shall equal the number of
directors of the first class; and the number of directors of the third
class shall equal said total number of directors minus the aggregate
number of directors of the first and second classes. At the election of
the first Board, the class of each of the members then elected shall be
designated. The term of office of those members then designated as the
first class shall expire at the annual meeting of shareholders next
ensuing, that of the members designated as the second class at the
annual meeting of shareholders one year thereafter, and that of the
members designated as the third class at the annual meeting of
shareholders two years thereafter. At each annual
5
<PAGE> 6
meeting of the shareholders held after the election and classification
of the first Board, directors shall be elected for a full term of three
(3) years to succeed those members whose terms then expire.
SEVENTH: Adoption, Amendment and/or Repeal of By-Laws. The
Board of Directors may from time to time (after adoption by the
undersigned of the original by-laws of the Corporation) adopt, amend or
repeal the by-laws of the Corporation; provided, that any by-laws
adopted, amended or repealed by the Board of Directors may be amended
or repealed, and any by-laws may be adopted, by the stockholders of the
Corporation.
EIGHTH: Compromise and Arrangements. Whenever a compromise or
arrangement is proposed between this Corporation and its creditors or
any class of them and/or between this Corporation and its stockholders
or any class of them, any court of equitable jurisdiction within the
State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation
under the provisions of section 291 of Title 8 of the Delaware Code or
on the application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of
section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement
and to any reorganization of this Corporation as a consequence of such
compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of
this Corporation, as the case may be, and also on this Corporation.
6
<PAGE> 7
NINTH: Special Provisions. The holders of any shares of any
class of stock or any other securities of the Corporation shall have no
preemptive rights, and shall have no pro rata preference rights, to
subscribe for any new or increased shares of any class of stock or
securities of the Corporation or any rights or options to purchase such
shares or any securities convertible into such shares which are
authorized for issuance.
TENTH: Liability of Directors. Subject only to the express
prohibitions on elimination or limitation of liability of directors set
forth in Section 102(b)(7) of the Delaware General Corporation Law, as
the same exists or may hereafter be amended, the personal liability of
a director of this Corporation to the Corporation or its stockholders
for monetary damages for breach of his fiduciary duty as a director
shall be limited to $25,000 per occurrence.
IN WITNESS WHEREOF, this Certificate has been signed on this 9th
day of December, 1997, and the signature of the undersigned shall constitute the
affirmation and acknowledgement of the undersigned, under penalties of perjury,
that the Certificate is the act and deed of the undersigned and that the facts
stated in the Certificate are true.
/s/ John Adam Kanas
-------------------------------------
John Adam Kanas, President
7
<PAGE> 8
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
NORTH FORK BANCORPORATION, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, John A. Kanas, President and Chief Executive Officer, and Frank A.
Anderson, Secretary, of North Fork Bancorporation, Inc., a corporation organized
and existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the said Corporation, as amended, the said
Board of Directors on February 28, 1989, adopted the following resolution
creating a series of 500,000 shares of Preferred Stock designated as Series A
Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, as amended, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 500,000.
<PAGE> 9
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the first day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $2.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, par value $2.50 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. In the event the Corporation shall at any
time after February 28, 1989 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating
2
<PAGE> 10
Preferred Stock as provided in paragraph (A) above immediately after it declares
a dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $2.00 per share on the Series A Junior Participating
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Participating Preferred Stock shall entitle the holder
3
<PAGE> 11
thereof to 100 votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the number of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a "default period") which shall extend until such
time when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each default period, all holders of
Preferred Stock (including holders of the Series A Junior Participating
Preferred Stock) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of series, shall
have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the holders of
Series A Junior Participating Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at
any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any,
4
<PAGE> 12
to increase, in certain cases, the authorized number of Directors shall be
exercised unless the holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by proxy. The absence
of a quorum of the holders of Common Stock shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting at which the
holders of Preferred Stock shall exercise such voting right initially during an
existing default period, they shall have the right, voting as a class, to elect
Directors to fill such vacancies, if any, in the Board of Directors as may then
exist up to two (2) Directors or, if such right is exercised at an annual
meeting, to elect two (2) Directors. If the number which may be so elected at
any special meeting does not amount to the required number, the holders of the
Preferred Stock shall have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of the required
number. After the holders of the Preferred Stock shall have exercised their
right to elect Directors in any default period and during the continuance of
such period, the number of Directors shall not be increased or decreased except
by vote of the holders of Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or pari passu with the Series
A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
a special meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this paragraph (C) (iii)
shall be given to each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders
5
<PAGE> 13
owning in the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding. Notwithstanding the provisions of this
paragraph (C)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next annual meeting
of the stockholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be entitled
to elect the whole number of Directors until the holders of Preferred Stock
shall have exercised their right to elect two (2) Directors voting as a class,
after the exercise of which right (x) the Directors so elected by the holders of
Preferred Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock which elected
the Director whose office shall have become vacant. References in this paragraph
(C) to Directors elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Preferred Stock as a class to elect Directors shall cease, (y)
the term of any Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such number as may be
provided for in the certificate of incorporation or by-laws irrespective of any
increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3
(such number being subject, however, to change thereafter in any manner provided
by law or in the certificate of incorporation or by-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be
6
<PAGE> 14
required (except to the extent they are entitled to vote with holders of Common
stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, except dividends paid ratably on the Series
A Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or
7
<PAGE> 15
winding up) to the Series A Junior Participating Preferred Stock;
(iv) purchase or otherwise acquire for consideration any shares
of Series A Junior Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series A Junior Participating Preferred Stock,
except in accordance with an offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon
such terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
8
<PAGE> 16
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C
below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Com-
9
<PAGE> 17
mon Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. The Certificate of incorporation of the
Corporation, as amended, shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote
10
<PAGE> 18
of the holders of a majority or more of the outstanding shares of Series A
Junior Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
11
<PAGE> 19
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this 28th day
of February, 1989.
NORTH FORK BANCORPORATION, INC.
/s/ John Adam Kanas
---------------------------------------
President and Chief
Executive Officer
Attest:
/s/ Frank Q. Anderson
- -------------------------------------
Secretary
12
<PAGE> 1
Exhibit 5.1
December 17, 1997
Board of Directors
North Fork Bancorporation, Inc.
275 Broad Hollow Road
Melville, New York 11747
Re: North Fork Bancorporation, Inc.
Registration Statement on Form S-4
Gentlemen:
We have acted as special counsel to North Fork Bancorporation, Inc., a
Delaware corporation (the "Company"), in connection with the issuance and sale
by the Company of an aggregate of up to 28,131,644 shares of common stock, par
value $2.50 per share (the "Common Stock"), together with an equal number of
rights to purchase units of Series A Junior Participating Preferred Stock
associated therewith (the "Rights"), of the Company pursuant to an Amended and
Restated Agreement and Plan of Merger, dated as of October 7, 1997 (the "Merger
Agreement"), by and between the Company and New York Bancorp Inc., a Delaware
corporation.
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement of the Company on Form S-4 filed with the Securities and Exchange
Commission (the "Commission") on the date hereof (the "Registration Statement"),
(ii) the Merger Agreement, (iii) the form of certificates to be used to
represent the shares of Common Stock (and the Rights),
<PAGE> 2
Board of Directors
North Fork Bancorporation, Inc.
December 17, 1997
Page 2
(iv) the Certificate of Incorporation and By-Laws of the Company, as amended to
date, (v) resolutions adopted by the Board of Directors of the Company relating
to the Merger Agreement and the issuance of the shares of Common Stock and
Rights pursuant thereto, (vi) the Rights Agreement, dated as of February 28,
1989 (the "Rights Agreement"), between the Company and North Fork Bank, as
Rights Agent, and (vii) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies, and the
authenticity of originals of such copies. As to any facts material to this
opinion which we did not independently establish or verify, we have relied upon
statements or representations of officers and other representatives of the
Company and others.
Members of our firm are admitted to the bar in the State of Delaware,
and we express no opinion as to the laws of any other jurisdiction.
Based upon and subject to the foregoing, and assuming the due execution
and delivery of certificates representing the shares of Common Stock in the form
examined by us, we are of the opinion that (i) the shares Of Common Stock to be
issued by the Company pursuant to
<PAGE> 3
Board of Directors
North Fork Bancorporation, Inc.
December 17, 1997
Page 3
the Merger Agreement, when issued in accordance with the terms of the Merger
Agreement, will be duly authorized, validly issued, fully paid and nonassessable
and (ii) the Rights, when issued as described in the Registration Statement and
in accordance with the Rights Agreement, will be duly authorized and validly
issued.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
our firm under the caption "LEGAL MATTERS" in the Registration Statement. In
giving such consent we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom, L.L.P.
<PAGE> 1
Exhibit 8.1
December 17, 1997
North Fork Bancorporation, Inc.
275 Broad Hollow Road
Melville, New York 11747
Ladies and Gentlemen:
We have acted as counsel to North Fork Bancorporation, Inc., a
Delaware corporation ("North Fork"), in connection with the contemplated merger
(the "Merger") under the laws of the State of Delaware of New York Bancorp,
Inc., a Delaware corporation ("New York Bancorp") with and into North Fork and
the subsequent merger ("Subsidiary Bank Merger") under the laws and regulations
of the State of New York and the laws of the United States of Home Federal
Savings Bank, a federally chartered savings bank and wholly owned subsidiary of
New York Bancorp ("Home Federal") with and into North Fork Bank, a New York
chartered stock commercial bank and wholly owned subsidiary of North Fork
("North Fork Bank"), pursuant to the Amended and Restated Agreement and Plan of
Merger dated as of October 7, 1997 by and between North Fork and New York
Bancorp (the "Merger Agreement"). At your request, in connection with the
Registration Statement on Form S-4 (the "Registration Statement") filed on
December 17, 1997, with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act") and in accordance with
the requirements of Item 601(b)(8) of Regulation S-K under the Securities Act,
we are rendering our opinion concerning certain federal income tax consequences
of the Merger and Subsidiary Bank Merger.(1) The delivery of this opinion, dated
as of the Effective Time of the Merger, is a condition to the Merger pursuant to
Section 7.2 of the Merger Agreement.
- --------
1 Unless otherwise indicated, all defined terms used herein shall have
the meanings assigned to them in the Registration Statement.
<PAGE> 2
North Fork Bancorporation, Inc.
December 17, 1997
Page 2
In rendering our opinion, we have examined and relied upon the
accuracy and completeness of the facts, information, covenants and
representations contained in originals or copies, certified or otherwise
identified to our satisfaction, of the Merger Agreement, the Joint Proxy
Statement/Prospectus which is included as part of the Registration Statement,
and such other documents as we have deemed necessary or appropriate as a basis
for the opinion set forth below. In addition, we have relied upon certain
statements, representations and agreements made by North Fork, North Fork Bank,
New York Bancorp, Home Federal, the shareholders of New York Bancorp and others,
including representations set forth in letters from officers of North Fork,
North Fork Bank, New York Bancorp and Home Federal and from shareholders of New
York Bancorp (the "Representation Letters"). Our opinion is conditioned on,
among other things, the initial and continuing accuracy of the facts,
information, covenants and representations set forth in the documents referred
to above and the statements, representations and agreements made by North Fork,
North Fork Bank, New York Bancorp, Home Federal, shareholders of New York
Bancorp and others (including those set forth in the Representation Letters).
Furthermore, we have assumed that the Representation Letters will be complete
and accurate, and will be re-executed by appropriate officers of North Fork,
North Fork Bank, New York Bancorp and Home Federal and by shareholders of New
York Bancorp as of the Effective Time.
In our examination we have assumed the genuine ness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such documents. We also have assumed that the
transactions related to the Merger or Subsidiary Bank Merger or con templated by
the Merger Agreement will be consummated in accordance with the Merger Agreement
and as described in the Registration Statement and that none of the terms and
conditions contained therein will have been waived or modified in any respect
prior to the Effective Time.
2
<PAGE> 3
North Fork Bancorporation, Inc.
December 17, 1997
Page 3
Finally, we have assumed that the Merger will qualify as a statutory merger
under the laws of the State of Delaware and the Subsidiary Bank Merger will
qualify as a statutory merger under the laws and regulations of the State of New
York and the laws of the United States.
In rendering our opinion, we have considered the applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury Regulations promulgated thereunder, pertinent judicial authorities,
rulings of the Internal Revenue Service and such other authorities as we have
considered relevant. It should be noted that statutes, regulations, judicial
decisions and administrative interpretations are subject to change at any time
and, in some circumstances, with retroactive effect. A change in any of the
authorities upon which our opinion is based could affect our conclusions herein.
Opinion
Based solely upon the foregoing, we are of the opinion that
under current law, the Merger and the Subsidiary Bank Merger will each be
treated as a reorganization within the meaning of section 368(a) of the Code
and that, accordingly, for federal income tax purposes, no gain or loss will be
recognized by North Fork, New York Bancorp, North Fork Bank or Home Federal as a
result of the Merger and Subsidiary Bank Merger, respectively (except to the
extent that income may be required to be recognized due to the recapture of Home
Federal's bad debt reserves).
/s/ Skadden, Arps, Slate,
Meagher & Flom, L.L.P.
3
<PAGE> 1
EXHIBIT 8.2
[WEIL, GOTSHAL & MANGES LLP LETTERHEAD]
December 17, 1997
New York Bancorp Inc.
241-02 Northern Boulevard
Douglaston, New York 11362
Ladies and Gentlemen:
You have requested our opinion regarding certain of the
federal income tax consequences of the merger (the "Merger") of New York Bancorp
Inc. ("NY Bancorp") with and into North Fork Bancorporation, Inc. ("North
Fork").
In formulating our opinion, we examined such documents as we
have deemed appropriate, including the Amended and Restated Agreement and Plan
of Merger, dated as of October 7, 1997, by and between NY Bancorp and North
Fork (the "Merger Agreement") and the Registration Statement of North Fork
(including the prospectus) filed on December 17, 1997 on Form S-4 under the
Securities Act of 1933, as amended, with the Securities and Exchange Commission
(the "Registration Statement.") In addition, we obtained such additional
information as we deemed relevant and necessary through consultations with
officers and representatives of NY Bancorp and North Fork.
Our opinion set forth below assumes (a) the accuracy of the
statements and facts concerning the Merger set forth in the Merger Agreement and
Registration Statement; (b) the consummation of the Merger in the manner
contemplated by, and in accordance with the terms set forth in, the Merger
Agreement and the Registration Statement; and (c) the accuracy of the
representations made by NY Bancorp and North Fork, which are set forth in the
certificates delivered to us by NY Bancorp and North Fork dated the date hereof.
Based on the facts and statements set forth above, our
examination and review of the documents referred to above and subject to the
assumptions set forth above and the discussion set
<PAGE> 2
New York Bancorp Inc.
December 17, 1997
Page 2
forth below, we are of the opinion that: (i) the Merger will constitute a
reorganization within the meaning of Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended (the "Code"); (ii) no gain or loss will be
recognized by NY Bancorp as a result of the Merger; and (iii) no gain or loss
will be recognized by the stockholders of NY Bancorp who exchange all of their
common stock, par value $.01 per share, of NY Bancorp solely for common stock,
par value $2.50 per share, of North Fork (the "North Fork Common Stock")
pursuant to the Merger (except with respect to cash received in lieu of a
fractional share interest in North Fork Common Stock and, if any, the payment
of any real property transfer tax on behalf of stockholders of NY Bancorp).
Our opinion is based on current provisions of the Code, the
Treasury Regulations promulgated thereunder, published pronouncements of the
Internal Revenue Service and case law, any of which may be changed at any time
with retroactive effect. Any change in applicable laws or the facts and
circumstances surrounding the Merger, or any inaccuracy in the statements,
facts, assumptions and representations on which we have relied, may affect the
continuing validity of the opinion set forth herein. We assume no responsibility
to inform you of any such change or inaccuracy that occurs or comes to our
attention. We express no opinion concerning any tax consequences of the Merger
other than as expressly set forth herein.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors of
New York Bancorp Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-4 of North Fork Bancorporation, Inc. of our report dated October 29,
1996, related to the consolidated statements of financial condition of New York
Bancorp Inc. as of September 30, 1996 and 1995, and the related consolidated
statements of income, changes in shareholders' equity and cash flows for each of
the years in the three-year period ended September 30, 1996, which report is
included in the 1996 Annual Report to Shareholders of New York Bancorp Inc. and
has been incorporated by reference in the September 30, 1996 Annual Report on
Form 10-K of New York Bancorp Inc., and to the reference to our firm under the
heading "Experts" in the registration statement. Our report refers to a change
in accounting principles.
/s/ KPMG Peat Marwick LLP
Jericho, New York
December 16, 1997
<PAGE> 1
Exhibit 23.2
The Stockholders and Board of Directors
North Fork Bancorporation, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the registration statement.
Our report refers to various changes in accounting principles as discussed in
the notes to the consolidated financial statements.
/s/ KPMG Peat Marwick LLP
New York, New York
December 16, 1997
<PAGE> 1
Exhibit 23.3
[GOLDMAN, SACHS & CO. LETTERHEAD]
PERSONAL AND CONFIDENTIAL
December 16, 1997
Board of Directors
North Fork Bancorporation, Inc.
275 Broad Hollow Road
Melville, NY 11747
Re: Registration Statement of
North Fork Bancorporation, Inc.
Gentlemen:
You have requested our opinion with respect to the fairness from a financial
point of view to North Fork Bancorporation, Inc. (the "Company") of the exchange
ratio (the "Exchange Ratio") of 1.19 shares of Common Stock, par value $2.50 per
share, of the Company to be paid for each share of Common Stock, par value $.01
per share, of New York Bancorp, Inc. ("NYB"), pursuant to the merger
contemplated by the Amended and Restated Agreement and Plan of Merger dated as
of October 7, 1997, between the Company and NYB.
The foregoing opinion letter is provided for the information and assistance of
the Board of Directors of the Company in connection with its consideration of
the transaction contemplated therein and is not to be used, circulated, quoted
or otherwise referred to for any other purpose, nor is it to be filed with,
included in or referred to in whole or in part in any registration statement,
proxy statement or any other document, except in accordance with our prior
written consent. We understand that the Company has determined to include our
opinion in the above-referenced Registration Statement.
In that regard, we hereby consent to the reference to the opinion of our Firm
under the captions "SUMMARY -- Opinions of Financial Advisors" and "THE MERGER
- -- Background of, Recommendation of the Boards of Directors; Reasons for the
Merger, and Opinions of Financial Advisors" and to the inclusion of the
foregoing opinion as Annex C in the Joint Proxy Statement included in the
above-mentioned Registration Statement, as amended. In giving such consent, we
do not thereby admit that we come within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933 or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Goldman, Sachs & Co.
_______________________________
(GOLDMAN, SACHS & CO.)
<PAGE> 1
EXHIBIT 23.4
CONSENT OF SANDLER O'NEILL & PARTNERS, L.P.
We hereby consent to the inclusion of our opinion letter to the Board of
Directors of New York Bancorp Inc. (the "Company") as Annex D to the Joint
Proxy Statement/Prospectus relating to the proposed merger of the Company with
and into North Fork Bancorporation, Inc. contained in the Registration
statement on Form S-4 dated the date hereof, and to the references to our firm
and such opinion in such Joint Proxy Statement/Prospectus. In giving such
consent, we do not admit that we come within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended
(the "Act"), or the rules and regulations of the Securities and Exchange
Commission thereunder (the "Regulations"), nor do we admit that we are experts
with respect to any part of such Registration Statement within the meaning of
the term "experts" as used in the Act or the Regulations.
/s/ Sandler O'Neill & Partners, L.P.
December 16, 1997
<PAGE> 1
Exhibit 23.5
[KEEFE, BRUYETTE & WOODS, INC. LETTERHEAD]
Consent of
Keefe, Bruyette & Woods, Inc.
We hereby consent to the use in this Registration Statement on Form S-4
of our letter to the Board of Directors of New York Bancorp Inc. included as
Annex E to the Prospectus/Joint Proxy Statement forming a part of this
Registration Statement on Form S-4 and to all references to our firm in such
Prospectus/Joint Proxy Statement. In giving such consent, we do not hereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission thereunder, nor do we admit that we are
experts with respect to any part of such Registration Statement within the
meaning of the term "experts" as used in the Securities Act or the rules and
regulations of the Securities Act or the rules and regulations of the Securities
and Exchange Commission thereunder.
KEEFE, BRUYETTE & WOODS, INC.
By: /s/ Frank S. Cicero
------------------------------
Frank S. Cicero
Vice President
Dated: 12/16/97
<PAGE> 1
EXHIBIT 99.4
P R O X Y
NORTH FORK BANCORPORATION, INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JANUARY 30, 1998
The undersigned stockholder(s) of North Fork Bancorporation, Inc., a Delaware
corporation (the "Company"), hereby appoint(s) Aurelie S. Graf, and Kathleen H.
Martin, and each of them, with full power to act alone, the true and lawful
attorneys-in-fact and proxies of the undersigned, with full power of
substitution, and hereby authorize(s) them and each of them, to represent the
undersigned and to vote all shares of common stock of the Company that the
undersigned is entitled to vote at the Special Meeting of Stockholders of the
Company to be held at the Wyndham Windwatch Hotel, 1717 Vanderbilt Motor
Parkway, Hauppauge, New York at 10:00 a.m. on January 30, 1998, and at any
adjournments or postponements thereof, with all powers the undersigned would
possess if personally present, on the following proposal and any other matters
coming before the Special Meeting:
<TABLE>
<S> <C>
1. Proposal to approve and adopt the Amended and Restated
Agreement and Plan of Merger, dated as of October 7, 1997, (CHANGE OF ADDRESS)
(the "Agreement"), between the Company and New York Bancorp ______________________________
Inc. ("New York Bancorp"), pursuant to which New York Bancorp ______________________________
would be merged with and into the Company, upon the terms ______________________________
and subject to the conditions set forth in the Agreement. (Over)
</TABLE>
It is important that your shares are represented at the Special Meeting.
Whether or not you plan to attend the Special Meeting, please review the
enclosed Joint Proxy Statement/Prospectus, complete the proxy form and return
it promptly in the envelope provided.
This proxy will be voted in the manner directed herein by the undersigned. If
no direction is given, this proxy will be voted FOR proposal 1, and in the
discretion of the proxies on such other matters as may properly come before the
Special Meeting or any adjournment or postponement thereof.
SEE REVERSE
SIDE
________________________________________________________________________________
FOLD AND DETACH HERE
<PAGE> 2
[X] PLEASE MARK YOUR 0103
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<S> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
I DO NOT PLAN
FOR AGAINST ABSTAIN I PLAN TO ATTEND TO ATTEND
1. Proposal to approve and adopt the Amended [ ] [ ] [ ] Please indicate whether [ ] [ ]
and Restated Agreement and Plan of Merger, you plan on attending
dated as of October 7, 1997 the Special Meeting.
(the "Agreement"), between
North Fork Bancorporation, Inc. CHANGE OF ADDRESS [ ]
("North Fork") and New York Bancorp Inc. ON REVERSE SIDE
("New York Bancorp"), pursuant to which
New York Bancorp will be merged with and
into North Fork. If you receive more than one Joint Proxy [ ]
Statement/Prospectus at the address set forth
on this proxy card and have no need for the
extra copy, please check the box at the right.
This will not affect the distribution of
dividends or proxy statements.
Receipt of the Notice of Special Meeting of Stockholders and
accompanying Joint Proxy Statement/Prospectus is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this
proxy. Joint owners should each sign personally. If signing
as attorney, executor, administrator, trustee or guardian,
please include your full title. Corporate proxies should be
signed by an authorized officer.
____________________________________________________________
____________________________________________________________
SIGNATURE(S) DATE
</TABLE>
________________________________________________________________________________
FOLD AND DETACH HERE
<PAGE> 1
EXHIBIT 99.5
FORM OF
PROXY NEW YORK BANCORP INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, JANUARY 30, 1998,
AT THE ADRIA CONFERENCE CENTER, 220-33 NORTHERN BOULEVARD,
BAYSIDE, NEW YORK AT 10:00 A.M. EASTERN TIME.
The undersigned hereby appoints Patrick E. Malloy, III, Michael A.
McManus, Jr. and Stan I. Cohen, or any of them acting in the absence of the
other, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of the common stock of New York Bancorp
Inc., a Delaware corporation (the "Company"), held or owned by the undersigned
or standing in the name of the undersigned at the Special Meeting of
Stockholders of the Company and at any adjournments or postponements thereof,
and the undersigned hereby instructs said attorneys to vote on the following
proposals:
SEE REVERSE SIDE
(Continued and to be signed on the other side)
<PAGE> 2
(Reverse of Form of Proxy)
[X] Please mark your vote as in this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1.
1. Proposal to approve and adopt an Amended and Restated Agreement and Plan of
Merger, dated as of October 7, 1997 (the "Merger Agreement"), between North
Fork Bancorporation, Inc., a Delaware corporation ("North Fork"), and the
Company, providing for the merger of the Company with and into North Fork,
with North Fork continuing as the surviving corporation.
| | For | | Against | | Abstain
2. Any other matter as may properly come before the Special Meeting or any
adjournments or postponements thereof, including, without limitation, a
motion to adjourn or postpone the Special Meeting to another time and/or
place for the purpose of soliciting additional proxies in order to approve
and adopt the Merger Agreement.
The undersigned hereby acknowledges receipt from the
Company prior to the execution of this proxy of the Notice
of Special Meeting of Stockholders and the accompanying
Joint Proxy Statement/Prospectus.
THIS PROXY WILL BE VOTED AS INSTRUCTED. IN THE ABSENCE OF
SUCH INSTRUCTIONS, THIS PROXY WILL BE VOTED "FOR" PROPOSAL
1. PROXIES HEREIN NAMED WILL VOTE ON OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE SPECIAL MEETING OR ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF IN ACCORDANCE WITH
THEIR JUDGMENT, EXCEPT THAT NO PROXY WHICH IS VOTED
AGAINST PROPOSAL 1 WILL BE VOTED IN FAVOR OF ANY
ADJOURNMENT OR POSTPONEMENT OF THE SPECIAL MEETING.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE PRE-PAID ENVELOPE.
SIGNATURE(S)________________________________________________DATE________________
(Please sign exactly as shown on envelope addressed to you. If shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by an authorized officer. If a
partnership, please sign in partnership name by an authorized person.)
