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MADISON BANK
May 3, 1996
Dear Shareholder:
By now I am sure you are aware that Alan Schiffman is going to make an attempt
to replace four members of your current Board of Directors with four of his own
candidates. We did not provide any information about Mr. Schiffman's proxy
solicitation in our proxy materials because we did not believe Mr. Schiffman
would take such a drastic action. The reason for this action by Mr. Schiffman is
simple.
ALAN SCHIFFMAN WANTS TO SELL YOUR BANK.
WE DO NOT BELIEVE HE IS ACTING IN YOUR BEST INTEREST.
He will contact you either by phone or in writing and tell you how he can
provide you with a substantial return for your investment. It may all sound good
but it is not factual.
It is true that we received two proposals concerning a possible merger of the
bank with two larger institutions. Once we received these proposals, we hired
Janney Montgomery Scott, Inc., as our financial advisors to assist us in
evaluating the contents of these proposals. After careful consideration by the
Board, those proposals were not pursued. The reason being was that it was our
belief, based on our current five year strategic plan, it was in the best
interest of the shareholders not to pursue these proposals. Your Board believes
that the return on your investment in the future will be greater than that
proposed today and it would be premature to sell the bank at this time.
Three of Mr. Schiffman's proposed directors are not even shareholders of this
Company! This is inconsistent with his original mandate for directors. Mr.
Schiffman made it a condition that the original board members purchase a minimum
of $50,000 in Madison Bancshares stock. In 1994, Mr. Schiffman introduced Donald
Reape to the Board as a proposed director. Mr. Schiffman required Mr. Reape to
purchase $100,000 of Madison Bancshares stock as a condition to his
directorship. Ask yourself how Mr. Schiffman's nominees can have your best
interests at heart if three of them do not even own any of the Company's stock.
Each of the four nominees recommended by your Board of Directors has a
substantial personal ownership interest in the Company.
Peter DePaul 92,753 Shares 9.5%
Arnold Katz 33,131 Shares 3.4%
Lorraine C. King 17,599 Shares 1.8%
Michael O'Donoghue 6,103 Shares
If it were in the best interests of the shareholders to sell the Bank, don't
you think that these
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individuals would have voted to do so? These individuals, along with the balance
of the Board, own 310,631 shares or 27% (including warrants and options).
The Board believes that it is acting in the best interest of the shareholders
and if you would like to discuss this further with any board member, I have
provided you with the Directors names and telephone numbers.
Naturally, if you would like to speak to me directly, I can be reached at the
Bank or my home.
Sincerely,
Vito A. DeLisi
President/CEO
PLEASE DO NOT SIGN ANY GREEN PROXY CARDS, ONLY RETURN THE WHITE PROXY CARDS IN
SUPPORT OF YOUR MANAGEMENT.
