SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|X| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
JSB FINANCIAL, INC.
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(Name of Registrant as Specified In Its Charter)
N/A
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0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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NORTH FORK BANCORPORATION, INC. LOGO JSB FINANCIAL, INC. LOGO
SUPPLEMENT TO THE
JOINT PROXY STATEMENT-PROSPECTUS
DATED JANUARY 11, 2000
INTRODUCTION
This Supplement is being sent to the stockholders of North Fork
Bancorporation, Inc. and JSB Financial, Inc. for the purpose of supplementing
the joint proxy statement-prospectus, dated January 11, 2000, initially mailed
to the stockholders of North Fork and JSB on or about January 12, 2000 in
connection with the special meeting of stockholders of JSB to be held on
February 10, 2000 and the special meeting of stockholders of North Fork to be
held on February 11, 2000 to consider and vote upon the proposed merger of North
Fork and JSB pursuant to the Amended and Restated Agreement and Plan of Merger,
dated as of August 16, 1999. Also included with this Supplement is another proxy
card for your use if you wish to revoke your earlier proxy or change your vote
in accordance with the instructions set forth below under "Voting Procedures."
IF YOU DO NOT WISH TO CHANGE YOUR VOTE OR REVOKE YOUR PROXY, NO ACTION IS
REQUIRED BY YOU IN CONNECTION WITH THIS SUPPLEMENT.
As described in more detail below, on January 14, 2000, a purported
class and derivative action entitled WOLFSON V. JSB FINANCIAL, INC., ET AL.,
C.A. No. 17741, was filed in the Court of Chancery of the State of Delaware
against JSB, its directors and North Fork by Elliot Wolfson. This Supplement is
being provided to you pursuant to the Stipulation and Agreement of Compromise
and Settlement dated February 1, 2000 (the "Settlement Agreement"), which
embodies the terms of the settlement reached by the parties. The Settlement
Agreement is subject to the approval of the Delaware Court of Chancery.
This Supplement is dated February 1, 2000 and is first being mailed to
the stockholders of North Fork and JSB on or about February 1, 2000.
PENDING LITIGATION
On January 14, 2000, a purported class action lawsuit was filed in the
Court of Chancery of the State of Delaware entitled WOLFSON V. JSB FINANCIAL,
INC., ET AL., naming JSB, all of JSB's directors (the "individual defendants")
and North Fork as defendants. The complaint alleges, among other things, four
causes of action, including: (i) breach of fiduciary duty of disclosure by the
individual defendants to the effect that the joint proxy statement-prospectus
omits or misrepresents material facts with respect to whether Northeast Capital
& Advisory, Inc. ("Northeast Capital"), JSB's financial advisor, in updating its
fairness opinion, took into account the proposed merger of Reliance Bancorp,
Inc. with North Fork that was announced on August 30, 1999, and that the
identity of the other bidder for JSB, whose nominally higher offer was not
accepted by JSB, should be disclosed; (ii) breach of fiduciary duties of care
and loyalty by the individual defendants in connection with JSB's acceptance of
a nominally lower offer from North Fork, as compared to the nominally higher
offer from the other bidder, following solicitations of indications of interest,
and with regard to the individual defendants allegedly having material interests
in the transaction that differ from the interests of JSB's stockholders
generally; (iii) North Fork's aiding and abetting the individual defendants'
breaches of fiduciary duty in connection with North Fork's participation in the
alleged misstatements and omissions in the joint proxy statement-prospectus and
in the alleged provision of material financial benefits to the individual
defendants that were not shared by JSB's stockholders generally so as to induce
them into accepting North Fork's bid; and (iv) breach of the merger agreement by
North Fork in that North Fork, by entering into an agreement to acquire
Reliance, took an action that, in fact, had a materially adverse effect on North
Fork, thereby constituting a breach of the merger agreement, and that the
plaintiff should be entitled to assert a claim derivatively on behalf of JSB,
and that allegedly allowing North Fork to breach the merger agreement did not
constitute a valid exercise of business judgment by the individual defendants.
The complaint seeks, among other things, a preliminary and permanent
injunction against consummation of the North Fork/JSB merger and related
transactions, an order requiring the defendants to issue corrective disclosure,
a declaration that the individual defendants have breached and are breaching
their fiduciary duties, an order requiring
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the individual defendants to sell JSB to the highest bidder, an order certifying
the action as a class action and unspecified damages, attorneys' fees and costs.
Each of North Fork, JSB and the individual defendants believe that the
allegations made against each of them, respectively, in the complaint are
entirely without merit. Contrary to the assertions in the complaint, Northeast
Capital did in fact take into account the proposed merger of Reliance into North
Fork in preparing its updated fairness opinion dated as of the date of the joint
proxy statement-prospectus. In addition, JSB and the individual defendants
believe that the proposed merger is intended to be a strategic combination of
North Fork and JSB, that JSB's board of directors is entitled to accept an offer
for a strategic combination involving merger consideration that it reasonably
believes will provide a higher long-term value for its stockholders than that
offered by a competing bidder, even if the market value of the other bidder's
all-stock offer at the time it was considered by the JSB board of directors was
nominally higher, and that the individual defendants have not violated their
duties of care, loyalty and disclosure. As indicated throughout the joint proxy
statement-prospectus, there can be no assurance, however, that any particular
long-term value will be obtained. There are no appraisal rights available to JSB
stockholders in connection with the North Fork/JSB merger.
Even though each of North Fork, JSB and the individual defendants
believe that the allegations made against each of them, respectively, in the
complaint are entirely without merit, North Fork and JSB suggested a meeting
with the plaintiff to determine if an acceptable settlement could be reached.
The parties engaged in expedited discovery and agreed to a meeting between the
plaintiff and senior officers of JSB and North Fork and their respective
counsel, which was held on January 26, 2000. On February 1, 2000, the parties
reached the Settlement Agreement, which is subject to the approval of the
Delaware Court of Chancery. In accordance with the terms of the Settlement
Agreement, both North Fork and JSB have agreed to provide the supplemental
disclosure set forth in this Supplement to their respective stockholders. Both
North Fork and JSB have agreed to the Settlement Agreement in order to
expeditiously settle the pending litigation, and avoid the additional expense
and delays involved in defending such litigation, and proceed with the proposed
merger.
ADDITIONAL DISCLOSURE REGARDING THE OTHER INSTITUTION
The "Background of the Merger" and "Opinion of JSB's Financial Advisor"
sections of the joint proxy statement-prospectus, which can be found beginning
on pages 23 and 40 thereof, respectively, contain references to the other
institution with whom JSB was engaged in discussions regarding a possible
business combination. This other institution was Queens County Bancorp, Inc., a
Delaware corporation and bank holding company parent of Queens County Savings
Bank. As discussed in more detail in the joint proxy statement-prospectus,
Queens County's proposal of July 27, 1999 contemplated a merger of JSB with and
into Queens County, structured as a stock-for-stock exchange of 2.175 shares of
common stock of Queens County for each share of JSB's common stock. Based on a
price per Queens County share of $30.125, the proposal represented a value of
$65.52 per JSB share. Although Queens County's offer to JSB technically lapsed
prior to the August 10, 1999 meeting of the JSB board of directors, Northeast
Capital continued to analyze the offer at an assumed exchange ratio of 2.2
which, based upon prior discussions with Queens County's management, Northeast
Capital believed Queens County may have been willing to offer if Queens County
had been selected as the favored bidder. Even at this assumed increased exchange
ratio, the value of Queen's County's proposal decreased to $63.80 as of August
13, 1999 (or $63.08 based on the actual proposed exchange ratio of 2.175) due to
a decrease in Queen's County's closing stock price to $29.00 as of that date.
Queens County files reports, proxy statements and other information
with the Securities and Exchange Commission under the Securities Exchange Act of
1934. Copies of this information can be obtained from the SEC's Internet world
wide web site at the following address: http://www.sec.gov.
ADDITIONAL DISCLOSURE REGARDING OTHER INDICATIONS OF INTEREST
At least as early as the June 22, 1999 meeting of the JSB board of
directors, JSB's board confirmed that JSB would only solicit indications of
interest with respect to a strategic combination. At the August 15, 1999 meeting
of the JSB board of directors, Northeast Capital reported that a representative
of European American Bank ("EAB"), a subsidiary of ABN AMRO Bank, NV, had called
Northeast Capital on August 9th after reading an August 5th NEWSDAY article
regarding a possible business combination involving JSB and asked whether EAB
could be considered in any process being conducted by JSB. Northeast Capital
responded that time was short and requested that EAB provide an
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initial indication of EAB's interest and the level of such interest. The
representative of EAB called back on August 12th, stating that EAB might,
subject to due diligence and other considerations, be willing to discuss a
transaction price of $65, comprised principally of cash and some American
Depositary Receipts (ADRs) of ABN AMRO Bank, based on JSB's publicly available
financial information, but that such willingness was not a commitment. Northeast
Capital reported this development to JSB's management and outside legal counsel.
Northeast Capital and JSB's outside legal counsel advised JSB's board about the
issues that would be raised in connection with the consideration of a
principally cash transaction at this point in the process, which heretofore had
been limited to strategic business combinations, and that if JSB were to
consider EAB's indication of interest, which would generally be taxable to JSB's
stockholders under the Internal Revenue Code, JSB might have to go back to the
other bidders with this alternative approach as well, which could delay the
process considerably. The JSB board was also advised that if a principally cash
transaction were to be considered, JSB could, under Delaware law, be required to
maximize short-term shareholder value. After such discussion, JSB's board agreed
that further conversations with EAB should not be pursued. EAB never requested
or received the confidential book of information regarding JSB and never
submitted any formal offer or indication of interest.
As described on page 24 of the joint proxy statement-prospectus, two of
the financial institutions that had submitted written indications of interest to
JSB made separate presentations to the JSB board of directors. One of such
financial institutions was Queens County, whose indication of interest is
described above. The other financial institution proposed two alternative
pricing structures. The first alternative consisted entirely of stock of such
institution, and the second alternative consisted of a combination of cash and
stock. Based on the closing price of this institution's common stock on August
13, 1999 (the last trading day prior to the JSB board of directors' approval of
the merger with North Fork) and the fixed exchange ratio contemplated under the
first alternative, the first alternative had a nominal value of $53.38 per share
of JSB common stock. Based on the same closing price, the second alternative had
a blended value of $55.67 per share of JSB common stock (consisting of $40.67 in
stock and $15.00 in cash). The second alternative also contemplated an election
procedure whereby stockholders would have been entitled to elect to receive
either all stock, all cash or a mixture of cash and stock (subject to proration
procedures if the stock or cash portions were oversubscribed). Based on the
closing price of this institution's stock on January 31, 2000, the first
alternative would have a current nominal value of approximately $34.67 per JSB
share, and the second alternative would have a current nominal value of
approximately $41.42 per JSB share.
Neither EAB, nor Queens County or any other institution that submitted
an indication of interest to JSB, has at any time since the announcement of the
North Fork/JSB merger indicated any intention of pursuing its indication of
interest.
NORTHEAST CAPITAL'S CONSIDERATION OF THE PROPOSED NORTH FORK/RELIANCE
TRANSACTION
At the September 14, 1999 meeting of the JSB board of directors,
Northeast Capital made a financial presentation regarding the proposed merger of
Reliance with North Fork, which presentation was based primarily on financial
information regarding Reliance and the proposed transaction obtained from North
Fork. The presentation included various analyses regarding the North
Fork/Reliance transaction, including an analysis of comparable transactions, a
discounted cash flow analysis and a pro forma merger analysis, and also included
an analysis of the potential impact the transaction would have on JSB's stock.
In addition, in connection with updating its fairness opinion, dated as
of the date of the joint proxy statement-prospectus, Northeast Capital conducted
a due diligence review of North Fork for the period since August 16, 1999 that
included discussions with North Fork's management regarding the proposed
Reliance acquisition and reviewed documents prepared by North Fork's management
in connection with their due diligence review of Reliance and documents prepared
by North Fork's financial advisor in connection with rendering its fairness
opinion. Based upon the information provided by North Fork, Northeast Capital
considered the impact that the Reliance acquisition would have on (i) the pro
forma effects resulting from the North Fork/JSB merger, (ii) the relative
contributions to, among other things, pro forma earnings, total assets, total
gross loans, total common equity and total deposits to be made to the combined
company by JSB and North Fork, and (iii) the discounted cash flow values for
North Fork and JSB. Following such consideration and the performance of other
procedures to update, as necessary, the analyses described in the "Opinion of
JSB's Financial Advisor" section beginning on page 40 of the joint proxy
statement-prospectus, Northeast Capital rendered its updated fairness opinion to
the JSB board of directors.
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AMENDMENT TO THE MERGER AGREEMENT
Pursuant to the Settlement Agreement, North Fork and JSB have agreed to
an amendment to section 4.1 of the merger agreement. A copy of the amendment is
filed as an exhibit to the Current Reports on Form 8-K filed by each of North
Fork and JSB on February 1, 2000. Prior to such amendment, section 4.1 provided
that JSB could not take certain actions relating to an "acquisition proposal,"
as defined and described in more detail under "No Solicitation by JSB" on page
54 of the joint proxy statement-prospectus, unless, among other things, the JSB
board of directors, "after consultation with and based upon the written opinion
of outside legal counsel, in good faith deems such action to be legally
necessary for the proper discharge of its fiduciary duties." The amendment to
section 4.1 removes the part of this provision requiring that such determination
by the JSB board of directors be based upon a written opinion of counsel. The
full text of the merger agreement is set forth in Appendix A to the joint proxy
statement-prospectus.
AMENDMENT TO THE STOCK OPTION AGREEMENT
Pursuant to the Settlement Agreement, North Fork and JSB have agreed to
an amendment to section 13 of the Stock Option Agreement, dated as of August 16,
1999, by and between North Fork and JSB. A copy of the amendment is filed as an
exhibit to the Current Reports on Form 8-K filed by each of North Fork and JSB
on February 1, 2000. The amendment reduces the limit on the aggregate realizable
profit to North Fork from the option and any termination fees payable by JSB
pursuant to the merger agreement, as described in "The Merger -- Termination
Fees" on page 60 of the joint proxy statement-prospectus, from $30 million to
$25 million. The full text of the stock option agreement is set forth in
Appendix B to the joint proxy statement-prospectus.
RECOMMENDATION OF NORTH FORK'S AND JSB'S BOARDS OF DIRECTORS
The amendments to the merger agreement and the stock option agreement
do not affect the merger consideration to be received by JSB's stockholders in
the merger. EACH OF THE NORTH FORK BOARD OF DIRECTORS AND THE JSB BOARD OF
DIRECTORS RECOMMENDS THAT ITS STOCKHOLDERS VOTE "FOR" APPROVAL AND ADOPTION OF
THE MERGER AGREEMENT.
VOTING PROCEDURES
Enclosed with this Supplement is an additional proxy card (and a return
envelope) for your use. IF YOU HAVE ALREADY VOTED YOUR PROXY AND YOU DO NOT WISH
TO CHANGE YOUR VOTE, YOU DO NOT NEED TO RETURN THIS SECOND PROXY CARD. If you
have already voted and you wish to change your vote, you may revoke your proxy
in any one of the following ways:
1. by completing, signing and dating the enclosed proxy card and
returning it by mail prior to the date of your special
meeting;
2. by sending a written notice to the corporate secretary of your
company prior to the date of your special meeting stating that
you would like to revoke your proxy;
3. by attending your special meeting and voting in person; or
4. by calling the toll-free number on the proxy card and
following the instructions if your shares were originally
voted by telephone.
If you have not already voted, you may use either the proxy card which
was originally sent to you, or you may use the second proxy card enclosed
herewith. You do not need to return both the original and this second proxy
card. Alternatively, you may vote your shares by calling the toll-free number
and following the instructions on the proxy card. If your company receives the
enclosed proxy card, duly executed and dated, or your telephone vote, prior to
the special meeting, any proxy previously granted by you will be, without
further action, revoked.
IF YOU HAVE ALREADY RETURNED A PROXY CARD OR VOTED BY TELEPHONE AND DO
NOT WISH TO CHANGE YOUR VOTE, NO FURTHER ACTION IS REQUIRED.
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Written notices of revocation and other communications with respect to
the revocation of proxies by North Fork stockholders should be addressed to
Aurelie S. Graf, Corporate Secretary, North Fork Bancorporation, Inc., 275 Broad
Hollow Road, Melville, New York 11747. Written notices of revocation and other
communications with respect to the revocation of proxies by JSB stockholders
should be addressed to Joanne Corrigan, Corporate Secretary, JSB Financial,
Inc., 303 Merrick Road, Lynbrook, New York 11563.
All shares represented by valid proxies received pursuant to this
solicitation, and not revoked before they are exercised, will be voted in the
manner specified therein. If no specification is made, the proxies will be voted
in favor of the matters to be voted upon at your special meeting, including
approval of the merger and the merger agreement. No proxy that has been voted
against approval of the merger and the merger agreement will be voted in favor
of any adjournment or postponement of your special meeting for the purpose of
soliciting additional proxies.
For additional information or to request an additional copy of the
joint proxy statement-prospectus, North Fork stockholders can call Aurelie S.
Graf, Corporate Secretary, at (631) 844-1004, and JSB stockholders can call
Edward Lekstutis, Vice President, at (516) 887-7000, ext. 372.
Dated: February 1, 2000
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