<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 16, 1996
REGISTRATION NO. 333-3372
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
DIME BANCORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 11-3197414
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
589 FIFTH AVENUE
NEW YORK, NEW YORK 10017
(212) 326-6170
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
GENE C. BROOKS, ESQ.
EXECUTIVE VICE PRESIDENT & GENERAL COUNSEL
DIME BANCORP, INC.
589 FIFTH AVENUE
NEW YORK, NEW YORK 10017
(212) 326-6144
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
MITCHELL S. EITEL, ESQ. MICHAEL L. RYAN, ESQ.
SULLIVAN & CROMWELL CLEARY, GOTTLIEB, STEEN & HAMILTON
125 BROAD STREET ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10004 NEW YORK, NEW YORK 10006
MITCHELL KLEINMAN, ESQ. DAVID GEARIN, ESQ.
BROWN & WOOD FEDERAL DEPOSIT INSURANCE CORPORATION
ONE WORLD TRADE CENTER 550 17TH STREET, N.W.
NEW YORK, NEW YORK 10048 WASHINGTON, D.C. 20429
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS DATED MAY 16, 1996
PROSPECTUS
8,407,500 SHARES
DIME BANCORP, INC.
COMMON STOCK
-----------
The shares of common stock, par value $0.01 per share ("Common Stock"), of
Dime Bancorp, Inc., a Delaware corporation (the "Company"), offered by this
Prospectus are being offered for the account of the Federal Deposit Insurance
Corporation (the "FDIC") as the manager of the FSLIC Resolution Fund (the
"FRF"; the FDIC in its capacity as manager of the FRF is referred to herein as
the "Selling Stockholder"). The Common Stock is listed on the New York Stock
Exchange, Inc. under the symbol "DME." On May 15, 1996, the last sale price for
the Common Stock as reported on the New York Stock Exchange Composite Tape was
$11.875 per share.
The shares of Common Stock offered hereby have been approved for listing on
the New York Stock Exchange, Inc., subject to official notice of issuance.
PROSPECTIVE INVESTORS SHOULD CAREFULLY READ THIS PROSPECTUS, INCLUDING THE
MATERIAL INCORPORATED BY REFERENCE HEREIN AND THE MATERIAL UNDER THE HEADING
"INVESTMENT CONSIDERATIONS" BEGINNING ON PAGE 11 OF THIS PROSPECTUS.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE FDIC, THE OFFICE OF THRIFT SUPERVISION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION, THE
FDIC, THE OFFICE OF THRIFT SUPERVISION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REP-
RESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS
OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION, AND ARE NOT INSURED
BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY.
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<TABLE>
<CAPTION>
PROCEEDS TO PROCEEDS TO
PRICE TO UNDERWRITING THE SELLING THE
PUBLIC DISCOUNT (1) STOCKHOLDER (2) COMPANY (2)(3)
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<S> <C> <C> <C> <C>
Per Share................. $ $ $ $ 0.01
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Total..................... $ $ $ $84,075.00
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Each of the Company and the Selling Stockholder has agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the Underwriters may
be required to make in respect thereof.
(2) Prior to completion of the sale of the Common Stock in the offering to
which this Prospectus relates, the Selling Stockholder will have acquired
such shares of Common Stock from the Company at a price of $0.01 per share,
pursuant to the terms of a Warrant held by the Selling Stockholder. See
"Selling Stockholder."
(3) Before deducting expenses payable by the Company estimated to be $361,000
(including reimbursement of certain expenses of the Selling Stockholder).
In addition, the Company has agreed to reimburse the Selling Stockholder
for one-half of the underwriters' discount in connection with this
offering, subject to a maximum. See "Selling Stockholder."
-----------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in New York, New York on or
about May , 1996.
-----------
MERRILL LYNCH & CO.
-----------
The date of this Prospectus is , 1996.
<PAGE>
(ART)
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's Regional Offices in New York
(Seven World Trade Center, 13th Floor, New York, New York 10048) and Chicago
(Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661), and copies of such materials can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Common Stock is listed on the New York Stock
Exchange, Inc. (the "NYSE"). Copies of reports, proxy statements and other
information should be available for inspection at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
The Company became the holding company of The Dime Savings Bank of New York,
FSB (the "Bank"; and, together with the Company, "Dime") pursuant to a
reorganization effected on May 25, 1994; until that time, such reports, proxy
statements and other information were filed with the Office of Thrift
Supervision (the "OTS"). Reports, proxy statements and other information filed
prior to May 25, 1994 should be available for inspection and copying at the
public reference facilities maintained by the OTS at the Office of Public
Information, Office of Thrift Supervision, 1700 G Street, N.W., Washington,
D.C. 20552, and also can be obtained by written request from such office at
prescribed rates.
This Prospectus does not contain all of the information set forth in the
Registration Statement on Form S-3 of which this Prospectus is a part
(together with all amendments and exhibits thereto, the "Registration
Statement") and which the Company has filed with the Commission under the
Securities Act of 1933 (the "Securities Act"), certain portions of which have
been omitted pursuant to the rules and regulations of the Commission, and to
which reference is hereby made for further information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-13094) under Section 13(a) or 15(d) of the Exchange Act are hereby
incorporated by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as amended by Amendment No. 1 thereto on Form 10-K/A
filed on May 15, 1996 (the "Form 10-K") (provided, however, that the
information referred to in Item 402(a)(8) of Regulation S-K of the
Commission shall not be deemed incorporated by reference herein);
(b) The Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1996;
(c) The Company's Current Report on Form 8-K, filed April 26, 1996;
(d) The description of the Common Stock set forth in the Registration
Statement on Form 8-A filed pursuant to Section 12 of the Exchange Act and
any amendment to that description so filed with the Commission; and
(e) The description of the rights to purchase Participating Preferred
Stock issued pursuant to the Rights Agreement (as herein defined) set forth
in the Registration Statement on Form 8-A filed pursuant to Section 12 of
the Exchange Act and any amendment to that description so filed with the
Commission.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Common Stock shall be deemed to be
incorporated by reference in this Prospectus, and to be a part hereof, from
the dates of filing of such documents. Any statement contained herein or in a
document all or a portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement
3
<PAGE>
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, including any beneficial owner, upon the written or
oral request of any such person, a copy of any and all of the foregoing
documents which are incorporated herein by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by
reference in such documents). Written requests should be directed to Dime
Bancorp, Inc., 589 Fifth Avenue, New York, New York 10017, Attention: Investor
Relations Department. Telephone requests should be directed to (212) 326-6170.
4
<PAGE>
SUMMARY
This summary is qualified in its entirety by the detailed information,
definitions and financial statements appearing elsewhere herein or incorporated
herein by reference. Unless the context otherwise requires, references herein
to the Company include the Company and its consolidated subsidiaries;
references herein to the Bank include the Bank and its consolidated
subsidiaries.
THE COMPANY AND THE BANK
General
The Company is a Delaware corporation and the holding company for the Bank.
The Company is registered with the OTS, and is subject to regulation and
examination, as a savings and loan holding company.
Headquartered in New York City, Dime currently operates 85 branch offices in
the New York City metropolitan area and northern New Jersey and one in Florida.
At March 31, 1996, the Company had total assets of $19.4 billion, total
deposits of $12.7 billion and total stockholders' equity of $986.1 million. The
Bank provides services to approximately 725,000 households, including
approximately 435,000 (or one out of ten) households in its nine-county New
York City metropolitan market area, based upon data from PSI Inc. for January
1996. The Bank was organized in 1859 and then converted from a state charter to
a federal charter in 1983 and to stock ownership in 1986.
At March 31, 1996, approximately 60% of the Bank's deposits were subject to
assessments payable to the Bank Insurance Fund (the "BIF") of the FDIC, and
approximately 40% of the Bank's deposits were subject to assessments payable to
the Savings Association Insurance Fund (the "SAIF") of the FDIC.
Merger-of-Equals with Anchor
On January 13, 1995, the Company consummated a merger of equals (the
"Merger") with Anchor Bancorp, Inc. ("Anchor Bancorp"), which was the parent
company of Anchor Savings Bank FSB ("Anchor Savings" and, together with Anchor
Bancorp, "Anchor"). Based on total assets as of December 31, 1995, the Merger
created the largest savings association headquartered on the East Coast and the
fifth largest publicly traded thrift institution in the United States. On
August 12, 1994, Anchor had acquired The Lincoln Savings Bank, FSB ("Lincoln")
and immediately thereafter had merged Lincoln with and into Anchor Savings (the
"Lincoln Acquisition").
In 1995, Dime substantially completed the integration of operations following
the Merger and the Lincoln Acquisition and achieved a substantial portion of
the aggregate reduction in annual general and administrative ("G&A") expense of
approximately $68 million that had been anticipated as a result of the Merger
and the Lincoln Acquisition. These cost savings were attributed to the
consolidation of overlapping branch offices, the integration of data processing
and loan servicing operations and the elimination of redundant corporate
overhead and staff positions. At June 30, 1994, Dime, Anchor and Lincoln on a
pro forma combined basis had 3,475 full-time equivalent ("fte") employees and
99 branches, compared to a combined 2,697 fte employees and 86 branches at
December 31, 1995, excluding additions to staff as a result of certain
acquisitions consummated in the fourth quarter of 1995. Prior to, and for a
period of time following, the Merger and the Lincoln Acquisition, the
operations then attributable to each of Dime, Anchor and Lincoln relied upon
distinct data processing systems, including systems covering retail banking,
accounting, loan origination and servicing, among other functions. By the first
quarter of 1996, these systems were integrated, and generally have enhanced
capabilities.
Consumer Banking
The Bank is one of the largest consumer banking organizations headquartered
in New York City. Currently, the Bank operates 37 branches in New York City, 23
branches in Long Island, 7 branches in Westchester and Rockland counties in New
York, 18 branches in New Jersey and one branch in Florida. Based on data from
SNL
5
<PAGE>
Securities, at June 30, 1995 after giving effect to completed and pending
acquisitions at the date hereof, the Company had the second largest market
share (approximately 16.2%) of deposits in Brooklyn and the fourth largest
market share of deposits (approximately 8.5%) in Nassau County and ranked among
the top ten in terms of deposit market share in five other metropolitan New
York area counties. The Bank seeks to maintain the high-quality, personalized
services traditionally offered by smaller banking organizations, while offering
a variety of consumer financial products and services comparable to those
offered by large commercial banks. Through this strategy, the Bank seeks to
distinguish itself from both its larger competitors, based upon its position as
a community-oriented institution emphasizing personalized service, and its
smaller competitors, based upon the greater breadth of its product and service
lines.
The Bank delivers its banking services through a variety of delivery
channels. As of December 31, 1995, the Bank's 85 branches in the greater New
York metropolitan area had average deposits per branch of over $140 million,
substantially in excess of the $83 million average for commercial banks and
thrift institutions in the counties in which the Bank's branches are located
(based on information from SNL Securities at June 30, 1995). In addition to
receiving banking services through its branches, the Bank's customers may
conduct their banking activities through the Bank's 24-hour telephone banking
system, through over 100 proprietary automated teller machines ("ATMs") or
through over 200,000 ATMs worldwide belonging to the six ATM networks in which
the Bank participates.
In addition to its traditional deposit and loan products, Dime offers a
variety of securities brokerage and insurance services. Dime Securities of New
York, Inc., a securities brokerage subsidiary of the Bank, generates fee income
through the sale of stocks, bonds, mutual funds and annuities. Dime also offers
savings bank life insurance ("SBLI") through its customer service
representatives and its direct mail marketing programs. At December 31, 1995,
Dime serviced approximately 75,000 policies with over $3 billion of insurance
in force. Dime also offers a variety of products that supplement its SBLI
program, including credit insurance, term- and whole-life insurance and single-
premium life insurance.
Mortgage Banking
Dime's mortgage banking business consists principally of originating and
acquiring loans secured by residential properties (one-to-four family
properties and cooperative apartments), both for sale in the secondary market
and for Dime's own portfolio, and servicing residential property loans both for
itself and for others. In recent years, Dime has focused on increasing its
residential loan origination capabilities in its core lending area of New York,
New Jersey and Connecticut, while also pursuing a strategy of controlled growth
in markets that the Company finds attractive outside that core lending area. In
the fourth quarter of 1995, Dime acquired certain assets related to the
residential property loan origination businesses of National Mortgage
Investments Co., Inc., a Georgia-based mortgage banking company ("National
Mortgage"), and James Madison Mortgage Company, a Virginia-based lender
("Madison Mortgage"), each of which was an established lender in its respective
market. At the time of the acquisition of National Mortgage, it operated 24
retail offices in Georgia, Virginia, South Carolina and Maryland; and Madison
Mortgage at the time of its acquisition operated through seven offices in
Virginia, Maryland and South Carolina. These acquisitions are expected to
provide Dime with both greater geographic diversification and enhanced Federal
Housing Administration ("FHA") insured and Veterans Administration ("VA")
guaranteed lending capability. For the year ended December 31, 1995, the
Company believes that National Mortgage and Madison Mortgage were among the
leading residential mortgage originators in the Atlanta and Washington, D.C.
metropolitan areas, respectively.
As a result of these acquisitions and other efforts, Dime's residential
mortgage production (which includes both originations and purchases) increased
steadily, from $180.1 million in the first quarter of 1995 to $747.9 million in
the fourth quarter of 1995 to $904.9 million in the first quarter of 1996.
Dime's portfolio of loans serviced for others was approximately $9.4 billion
at March 31, 1996.
6
<PAGE>
Commercial Real Estate Lending
Dime originates loans secured by multifamily and commercial properties
located primarily within the greater New York metropolitan area. Dime
originated $232.6 million and $31.0 million of such loans for the year ended
December 31, 1995 and the quarter ended March 31, 1996, respectively, and had a
total of $1.9 billion of such loans outstanding at March 31, 1996.
Consumer Lending and Small-Business Banking
Dime's recent retail banking strategy has been to refocus its consumer
lending capabilities through its branch system, including training of branch
employees regarding both product knowledge and sales techniques and upgrading
its marketing efforts. These marketing efforts include the development of
telemarketing capabilities that are intended to identify prospective customers,
facilitate timely responses to customer inquiries and promote effective loan
processing. In 1994, Dime began its small-business banking program, through
which it intends to expand its deposit-taking and lending programs for entities
with annual revenues of less than $10 million, although no assurance can be
made that such efforts will be successful. At March 31, 1996, the Company had
consumer and business loans of $727.9 million and $32.9 million, respectively.
1995 Balance Sheet Restructuring Plan and Stock Buy-Back Program
Dime's current operating strategies focus on improving net interest income by
reducing its reliance on mortgage-backed securities ("MBS"), which, in general,
provide lower yields than Dime's loans, and by reducing its reliance on
borrowings, which generally are more volatile than Dime's retail funding
sources. In connection with a decision by the Financial Accounting Standards
Board in October 1995 to allow entities a one-time opportunity to reassess
their security classifications made pursuant to Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," in the fourth quarter of 1995, the Company transferred
securities with an amortized cost of $3.6 billion (including $3.5 billion of
MBS), from its held-to-maturity portfolio to its available-for-sale portfolio;
of such transferred MBS, $1.1 billion were designated for sale at December 31,
1995. These MBS were sold in the first quarter of 1996, and the proceeds were
used to reduce its outstanding borrowings and, accordingly, the size of the
Company's consolidated balance sheet (the "1995 Balance Sheet Restructuring
Plan"). The Company's management believes that the 1995 Balance Sheet
Restructuring Plan, in addition to reducing Dime's reliance on MBS and
borrowings, should: (a) enable Dime to improve its net interest margin by
eliminating from the MBS portfolio certain lower yielding securities; (b)
provide Dime with greater flexibility in adjusting to varying interest rate
environments (see "Certain Investment Considerations--Interest Rate Risks");
and (c) provide Dime with the opportunity to further reduce its asset size,
should that be deemed appropriate. No assurances can be given, however, that
the Company will be successful in such efforts. As a result of the decision to
sell these securities, the Company recognized a pre-tax loss of $23.6 million
in December 1995, reflecting the write-down of those securities with unrealized
losses to estimated fair value.
In January 1996, the Company announced its intention to repurchase, in
connection with the Company's stock-based employee benefit plans, approximately
2% of the outstanding Common Stock, or approximately 2,000,000 shares, at
prevailing prices in the open market or in privately-negotiated transactions.
No time limit has been established to complete the repurchase program, and
there can be no assurances that such repurchases will be completed or as to the
prices at which any shares may be repurchased. During the first quarter of
1996, the Company repurchased 1,000,000 of such shares.
Claim Regarding Supervisory Goodwill
As is the case with a number of thrift institutions, Dime, as successor to
Anchor Savings, has filed a claim against the United States for the loss of its
ability to include supervisory goodwill in the calculation of regulatory
capital that resulted from the passage of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 ("FIRREA"). The direct effect of the
passage of FIRREA was to cause Anchor Savings to go from an
7
<PAGE>
institution that substantially exceeded its regulatory capital requirements to
one that was critically undercapitalized upon the effectiveness of FIRREA-
mandated requirements. The elimination of the supervisory goodwill resulted in
severe limitations on Anchor Savings' activities and required the disposition
of valuable assets under liquidation-like circumstances. No assurances can be
given as to the results of this claim or the timing of any proceeding in
relation thereto. For a discussion of the factual background of this claim, see
"Investment Considerations--Legal Proceedings--Claim Related to Supervisory
Goodwill."
THE OFFERING
The 8,407,500 shares of Common Stock offered by this Prospectus are being
offered for the account of the Selling Stockholder.
Prior to the completion of the sale of the Common Stock in this offering, the
Selling Stockholder will have acquired such shares of Common Stock from the
Company at a price of $0.01 per share, pursuant to the terms of a Warrant,
dated July 9, 1993 (the "Warrant"), issued by the Company (as successor to
Anchor Bancorp) to the Selling Stockholder. See "Selling Stockholder."
RECENT DEVELOPMENTS--FIRST QUARTER RESULTS
The Company reported net income of $27.1 million, or $0.25 per common share,
for the three months ended March 31, 1996, compared with $22.4 million, or
$0.20 per common share, for the three months ended March 31, 1995. (Per share
calculations were based upon the fully diluted average number of shares
outstanding during the period.) The quarter ended March 31, 1995 included net
pre-tax gains on sales activities, primarily related to sales of branches and
facilities, of $9.7 million. The return on average total assets was 0.54% and
the return on average equity was 10.93% for the three months ended March 31,
1996, as compared with a return on average total assets of 0.44% and a return
on average equity of 9.86% for the three months ended March 31, 1995.
The Company's net interest income increased to $114.3 million for the three
months ended March 31, 1996 from $107.4 million for the three months ended
March 31, 1995. The net interest margin increased to 2.35% for the three months
ended March 31, 1996 from 2.16% for the three months ended March 31, 1995.
These increases were primarily attributable to the 1995 Balance Sheet
Restructuring Plan (see "--The Company and the Bank--1995 Balance Sheet
Restructuring and Stock Buy-Back Program") and the upward repricing of
adjustable-rate loans and securities. The provision for loan losses was $10.5
million for the three months ended March 31, 1996, compared with $10.0 million
for the three months ended March 31, 1995.
Non-interest income, excluding net gains on sale activities, for the three
months ended March 31, 1996 was $20.9 million, up from $19.9 million for the
three months ended March 31, 1995. The increase was the result of growth in
banking service fees and the sale of securities and insurance products.
G&A expense for the three months ended March 31, 1996 was $70.2 million, or
1.39% of average assets, compared with $78.9 million, or 1.55% of average
assets, for the three months ended March 31, 1995. The Company's efficiency
ratio (generally defined as G&A expense, other than amortization of goodwill,
divided by the sum of net interest income and recurring non-interest income)
decreased to 51.0% for the three months ended March 31, 1996 from 61.9% for the
three months ended March 31, 1995. This improvement in operating efficiency was
largely attributable to an increase in net interest income and to cost savings
related to the Merger.
As a result of the 1995 Balance Sheet Restructuring Plan, at March 31, 1996,
the Company's total assets were $19.4 billion, compared with $20.3 billion at
December 31, 1995. Total deposits increased to $12.7 billion at March 31, 1996
from $12.6 billion at December 31, 1995. Non-performing assets were reduced to
$313.4 million at March 31, 1996 from $315.8 million at December 31, 1995.
The Bank's regulatory leverage capital was 5.60% of adjusted assets at March
31, 1996, compared with 5.16% at December 31, 1995. Risk-based regulatory
capital was 12.55% of risk-weighted assets at March 31, 1996, compared with
12.01% at December 31, 1995. As a result, at March 31, 1996, the Bank continued
to satisfy the published standards for a "well capitalized" institution under
OTS regulations. See "Description of Capital Stock--Certain Regulatory
Restrictions on Capital Distributions."
8
<PAGE>
DIME BANCORP, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth, in summary form, certain financial data for
each of the years in the five-year period ended December 31, 1995 and for each
of the three-month periods ended March 31, 1996 and 1995. These selected
consolidated financial data are qualified in their entirety by the detailed
information and the consolidated financial statements of the Company and notes
thereto included in documents incorporated by reference in this Prospectus and
should be read in conjunction therewith. See "Incorporation of Certain
Documents By Reference." The consolidated financial statements for each of the
years in the five-year period ended December 31, 1995 have been audited by KPMG
Peat Marwick LLP, independent certified public accountants, and the related
auditor's report for the three-year period ended December 31, 1995 refers to
changes in accounting principles for post-retirement benefits other than
pensions, certain investments in debt and equity securities and goodwill. The
selected consolidated financial data at or for the three-month periods ended
March 31, 1996 and 1995 are derived from unaudited financial statements that,
in the opinion of Dime's management, include all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of the
consolidated financial position and results of operations for such periods.
Results for the three-month period ended March 31, 1996 are not necessarily
indicative of the results expected for the full year ending December 31, 1996.
For purposes of this presentation, the results provided for each of the years
ended December 31, 1993, 1992 and 1991 include Anchor's results at or for its
fiscal year ended June 30th of the subsequent calendar year.
<TABLE>
<CAPTION>
AT OR FOR THE
THREE MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED DECEMBER 31,
----------------- --------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- ---------- ---------- -------- ---------- ----------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
DATA:
Interest income......... $343,528 $332,549 $1,357,131 $1,136,862 $980,111 $1,243,664 $1,535,669
Interest expense........ 229,193 225,158 947,505 707,785 589,939 753,288 1,101,592
-------- -------- ---------- ---------- -------- ---------- ----------
Net interest income..... 114,335 107,391 409,626 429,077 390,172 490,376 434,077
Provision for loan
losses................. 10,500 9,950 39,650 55,799 95,489 103,684 343,427
-------- -------- ---------- ---------- -------- ---------- ----------
Net interest income
after provision for
loan losses............ 103,835 97,441 369,976 373,278 294,683 386,692 90,650
-------- -------- ---------- ---------- -------- ---------- ----------
Non-interest income:
Loan servicing fees,
net................... 7,663 8,274 30,452 28,213 30,001 32,270 26,427
Securities and
insurance brokerage
fees.................. 4,674 3,440 15,532 16,885 22,336 22,111 13,898
Net (losses) gains on
sales activities...... 461 9,675 (12,415) 2,925 36,606 28,544 55,356
Banking service fees
and other............. 8,539 8,206 32,598 31,244 33,582 35,789 32,195
-------- -------- ---------- ---------- -------- ---------- ----------
Total non-interest
income................. 21,337 29,595 66,167 79,267 122,525 118,714 127,876
-------- -------- ---------- ---------- -------- ---------- ----------
Non-interest expense:
General and
administrative
expense............... 70,194 78,893 285,901 294,474 294,755 323,122 323,165
Other real estate owned
expense, net.......... 2,493 3,676 12,892 11,013 77,393 50,204 40,961
Amortization of
mortgage servicing
rights................ 3,194 2,764 12,107 9,664 19,884 26,650 7,871
Restructuring and
merger-related
expense............... 3,504 1,725 15,331 58,258 4,000 3,000 9,718
-------- -------- ---------- ---------- -------- ---------- ----------
Total non-interest
expense................ 79,385 87,058 326,231 373,409 396,032 402,976 381,715
-------- -------- ---------- ---------- -------- ---------- ----------
Minority interest-
preferred stock
dividend of
subsidiary............. -- -- -- 11,433 1,312 -- --
-------- -------- ---------- ---------- -------- ---------- ----------
Income (loss) before
income tax expense
(benefit),
extraordinary item and
cumulative effect of a
change in accounting
principle.............. 45,787 39,978 109,912 67,703 19,864 102,430 (163,189)
Income tax expense
(benefit).............. 18,732 17,556 47,727 (53,138) (68,959) 41,642 9,437
-------- -------- ---------- ---------- -------- ---------- ----------
Income (loss) before
extraordinary item and
cumulative effect of a
change in accounting
principle.............. 27,055 22,422 62,185 120,841 88,823 60,788 (172,626)
Extraordinary item-loss
on early extinguishment
of debt................ -- -- -- -- -- (2,760) --
Cumulative effect of a
change in accounting
principle for goodwill,
securities available
for sale and mortgage
servicing rights,
respectively........... -- -- -- (92,887) (1,187) (7,066) --
-------- -------- ---------- ---------- -------- ---------- ----------
Net income (loss)....... $ 27,055 $ 22,422 $ 62,185 $ 27,954 $ 87,636 $ 50,962 $ (172,626)
======== ======== ========== ========== ======== ========== ==========
Net income (loss)
attributable to common
stock.................. $ 27,055 $ 22,422 $ 62,185 $ 27,954 $ 87,636 $ 39,403 $ (185,304)
======== ======== ========== ========== ======== ========== ==========
Primary and fully
diluted earnings (loss)
per common share:
Income (loss) before
extraordinary item and
cumulative effect of a
change in accounting
principle............. $ 0.25 $ 0.20 $ 0.57 $ 1.12 $ 0.91 $ 0.89 $ (3.43)
Extraordinary item..... -- -- -- -- -- (0.05) --
Cumulative effect of a
change in accounting
principle............. -- -- -- (0.86) (0.01) (0.13) --
-------- -------- ---------- ---------- -------- ---------- ----------
Net income (loss)....... $ 0.25 $ 0.20 $ 0.57 $ 0.26 $ 0.90 $ 0.71 $ (3.43)
======== ======== ========== ========== ======== ========== ==========
</TABLE>
9
<PAGE>
DIME BANCORP, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
<TABLE>
<CAPTION>
AT OR FOR THE
THREE MONTHS
ENDED MARCH 31, AT OR FOR THE YEAR ENDED DECEMBER 31,
------------------------ ---------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
DATA (CONTINUED):
Pro forma amounts
assuming the changes in
accounting principles
for goodwill and
mortgage servicing
rights were applied
retroactively:
Income (loss) before
extraordinary item and
cumulative effect of a
change in accounting
principle............. $ 120,841 $ 90,133 $ 52,120 $ (196,961)
Extraordinary item..... -- -- (2,760) --
Cumulative effect of a
change in accounting
principle for
securities available
for sale, net of
income tax benefit.... -- (1,187) -- --
----------- ----------- ----------- -----------
Net income (loss)...... $ 120,841 $ 88,946 $ 49,360 $ (196,961)
=========== =========== =========== ===========
Primary and fully
diluted earnings
(loss) per share:
Income (loss) before
extraordinary item and
cumulative effect of a
change in accounting
principle............. $ 1.12 $ 0.93 $ 0.73 $ (3.88)
Extraordinary item..... -- -- (0.05) --
Cumulative effect of a
change in accounting
principle for
securities available
for sale, net of
income tax benefit.... -- (0.01) -- --
----------- ----------- ----------- -----------
Net income (loss)...... $ 1.12 $ 0.92 $ 0.68 $ (3.88)
=========== =========== =========== ===========
Primary average common
shares outstanding..... 110,020 109,510 109,742 107,668 97,153 55,344 54,046
Fully diluted average
common shares
outstanding............ 110,196 109,590 109,862 107,700 97,367 55,386 54,046
FINANCIAL CONDITION
DATA:
Total assets............ $19,413,115 $19,737,160 $20,326,620 $19,647,937 $18,098,984 $16,680,405 $17,835,764
Securities available for
sale................... 3,252,807 516,928 4,070,865 530,714 658,204 898,279 233,131
Securities held to
maturity............... 4,809,976 8,863,765 5,085,736 8,609,897 8,159,747 6,678,036 6,804,023
Federal Home Loan Bank
of New York stock...... 318,690 213,836 318,690 265,586 273,551 187,075 144,402
Total loans receivable.. 10,007,633 9,356,776 9,830,313 9,351,622 7,906,573 7,629,100 9,101,959
Allowance for loan
losses................. (127,193) (164,669) (128,295) (170,383) (157,515) (248,429) (329,899)
Deposits................ 12,664,315 12,543,460 12,572,203 12,811,269 11,091,362 13,039,885 14,569,605
Total borrowed funds.... 5,624,228 6,106,377 6,614,552 5,758,734 5,850,575 2,888,269 2,486,194
Total stockholders'
equity................. 986,141 930,247 976,530 905,125 904,982 635,843 584,441
OTHER DATA:(1)
Book value per common
share(2)............... $ 9.19 $ 8.64 $ 9.03 $ 8.43 $ 8.48 $ 8.79 $ 7.90
Interest rate spread.... 2.26% 2.08% 1.98% 2.26% 2.40% 2.93% 2.43%
Net interest margin..... 2.35 2.16 2.07 2.36 2.47 2.91 2.44
General and
administrative expense
as a percentage of
average total assets... 1.39 1.55 1.39 1.56 1.79 1.83 1.74
Efficiency ratio........ 50.99 61.87 58.11 58.49 60.11 53.70 60.89
Return on average
assets................. 0.54 0.44 0.30 0.15 0.53 0.29 (0.93)
Return on average common
stockholders' equity... 10.93 9.86 6.56 3.25 11.07 10.99 (28.96)
Common stockholders'
equity as a percentage
of total assets........ 5.08 4.71 4.80 4.61 5.00 2.87 2.40
Total non-performing
assets................. $ 313,379 $ 389,349 $ 315,800 $ 415,866 $ 641,743 $ 1,010,877 $ 1,184,840
Total non-performing
assets as a percentage
of total assets........ 1.61% 1.97% 1.55% 2.12% 3.55% 6.06% 6.64%
Allowance for loan
losses as a percentage
of:
Loans receivable....... 1.27 1.76 1.31 1.82 1.99 3.26 3.62
Non-accrual loans...... 49.93 50.56 50.29 49.84 54.14 31.97 33.71
Loans serviced for
others................. $ 9,376,735 $ 9,042,758 $ 9,514,560 $ 8,713,047 $ 8,265,354 $ 9,039,183 $ 7,718,000
</TABLE>
- -------
Notes:
(1) Ratios for the three months ended March 31, 1996 and 1995 have been
annualized.
(2) The book value computations for the years ended December 31, 1995, 1994 and
1993 and the three months ended March 31, 1996 and 1995 assume that the
Warrant had been exercised by the Selling Stockholder.
10
<PAGE>
INVESTMENT CONSIDERATIONS
Investment in the Common Stock involves certain risks. Prospective
purchasers should carefully consider the following risk factors, in addition
to the other information included in this Prospectus, when evaluating the
Company and its business in making an investment decision.
Except for the historical information included or incorporated by reference
in this Prospectus, the discussion in this Prospectus contains certain
forward-looking statements that involve risks and uncertainties, such as
statements of Dime's plans, objectives, expectations and intentions. The
cautionary statements made in this Prospectus should be read as being
applicable to all related forward-looking statements wherever they appear in
this Prospectus or in the documents incorporated by reference herein. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include those
discussed below, as well as those discussed elsewhere herein or in the
documents incorporated by reference herein.
GENERAL BUSINESS RISKS
Dime's business is subject to various material business risks. For example,
changes in prevailing interest rates can have significant effects on Dime's
business. Some of the risks to which Dime's business is subject may become
more acute in periods of economic slowdown or recession. During such periods,
foreclosures generally increase and could result in an increased incidence of
claims and legal actions against Dime. In addition, such conditions could lead
to a potential decline in demand for Dime's loan origination services.
INTEREST RATE RISK
Dime realizes its income primarily from the differential or "spread" between
the interest earned on loans and investments and the interest paid on deposits
and borrowings. Net interest spreads are affected by the difference between
the maturities and the repricing characteristics of interest-earning assets
and interest-bearing liabilities. As is typical of most thrift institutions,
Dime's interest-bearing liabilities reprice or mature, on the average, sooner
than its interest-earning assets. Additionally, the characteristics of many of
Dime's interest-earning assets (such as pre-payment options, interest rate
caps and similar features) are sensitive to changes in the level of interest
rates. Although Dime utilizes a variety of techniques in an effort to manage
its interest rate risk, Dime remains subject to a significant level of
interest rate risk. In addition, changes in the relationship between long-term
and short-term interest rates (the "yield curve") can have a significant
impact on Dime's net interest income.
COMPETITION
Dime experiences substantial competition both in attracting and retaining
deposits and in making loans. Its most direct competition for deposits
historically has come from other thrift institutions and commercial banks
doing business in the greater New York metropolitan area. However, as with all
banking organizations, Dime has experienced increasing competition from
nonbanking sources. For example, Dime also competes for funds with mutual
funds, corporate and governmental debt securities and other investment
alternatives. Dime's competition for loans comes principally from other thrift
institutions, commercial banks, mortgage banking companies, consumer finance
companies, insurance companies and other institutional lenders. A number of
institutions with which Dime competes for deposits and loans have
significantly greater assets and capital than Dime.
REGULATION
Each of the Company, as a savings and loan holding company, and the Bank, as
a federal savings bank, is subject to significant regulation, which has
materially affected their businesses as well as the businesses of other
banking organizations in the past and is likely to do so in the future.
Statutes and regulations now affecting the Company and the Bank may be changed
at any time, and the interpretation of these statutes and regulations by
examining authorities is also subject to change. There can be no assurance
that future changes in the regulations or in their interpretation will not
adversely affect the business of Dime. As a savings and loan holding company,
the Company is subject to regulation and examination by the OTS. As a federal
savings association, the Bank is
11
<PAGE>
subject to examination from time to time by the OTS, its primary regulator,
and the FDIC, as administrator of the BIF and the SAIF. There can be no
assurance that the OTS or the FDIC may not, as a result of such examinations
or otherwise, impose various requirements or regulatory sanctions upon the
Bank or the Company.
BIF-SAIF PREMIUM DISPARITY AND POSSIBLE RECAPITALIZATION OF THE SAIF
The Bank is a member of the BIF, to which the Bank pays FDIC deposit
insurance assessments for approximately 60% of its deposits. As a result of
its merger with Anchor, approximately 40% of the Bank's deposits are subject
to FDIC deposit insurance assessments payable to the SAIF. Until mid-1995, the
FDIC assessed both BIF-insured deposits and SAIF-insured deposits at rates
ranging between 0.23% and 0.31% of insured deposits, depending on the capital
level and risk category assigned to the institution. However, because the BIF
has attained its required reserve ratio of 1.25%, the FDIC was able to reduce
the premium schedule for BIF deposits to a range of 0.0% to 0.27% effective in
the first quarter of 1996. Because the SAIF has not reached (and, in fact, may
never reach) its 1.25% statutory reserve ratio, the FDIC has not reduced
premiums payable on SAIF deposits. As a result, the Bank pays higher premiums
on its SAIF-assessed deposits than on its BIF-assessed deposits, and suffers a
competitive disadvantage with respect to commercial banks and other
institutions that are wholly BIF-assessed.
Without legislative action, this assessment imbalance is expected to
continue for at least the next several years. The Department of the Treasury,
the federal banking regulatory agencies and members of Congress have offered
various proposals to address this imbalance. These proposals have variously
called for one or more of the following: a one-time special assessment of all
SAIF-assessed deposits to recapitalize the SAIF; the merger of the BIF and the
SAIF; the elimination of the OTS; and the elimination of the federal savings
association charter (see "--Elimination of the Thrift Charter"). In addition,
certain of these proposals would address to some extent the federal income tax
consequences of the elimination of the federal savings association charter.
The Administration and certain members of Congress have continued to
advocate the adoption of legislation to address the assessment imbalance, and
a number of proposals are still pending in Congress, including proposals
providing for a one-time assessment in connection with a merger of the BIF and
the SAIF. No assurance can be given as to whether, when or in what form
legislation on the SAIF recapitalization ultimately will be enacted, or the
effect of any such legislation on Dime. A special assessment, however, would
have an adverse effect on Dime's financial condition and earnings.
ELIMINATION OF THE THRIFT CHARTER
Members of Congress have expressed their intention to consider legislation
in 1996 that generally would require federal savings associations, such as the
Bank, to convert to a national bank charter (or a state charter); and
legislation has been proposed in Congress that envisions such action as part
of a BIF-SAIF recapitalization package. It is uncertain to what extent, if at
all, the existing branch and investment powers of federal savings
associations, such as the Bank, that are impermissible for national banks,
would be grandfathered. In addition, the proposals express the intent that
savings and loan holding companies, such as the Company, should convert to
bank holding companies. It is also uncertain to what extent, if at all, the
existing powers of savings and loan holding companies that are impermissible
for national banks, would be grandfathered. In addition, unless such
legislation provided grandfathering or other remedial provisions, a charter
conversion could result in recapture of deductions for bad debts previously
taken by a savings association for tax purposes. Consequently, it is
impossible at this time to evaluate the ultimate form any legislation might
take or what the effect upon Dime might be.
PROPOSED TAX LEGISLATION
Legislation proposed both by Congress and by President Clinton would, among
other things, raise questions concerning recapture of income tax deductions
arising from commonly utilized methods of calculating bad debt reserves.
Unless clarifying legislation is adopted, affected institutions could be
required to record, immediately for financial accounting purposes, a deferred
tax liability for the amount of recaptured taxes for which liabilities have
not been recorded. Dime currently estimates that its federal tax liability in
the event of such a recapture might range from $60 million to $65 million,
although other pending legislation would virtually eliminate Dime's exposure
to this tax liability. There can be no assurance as to the outcome of these
various legislative proposals, the effect of which could be material to Dime's
financial condition and earnings.
12
<PAGE>
LIMITATIONS ON USE OF TAX LOSSES; RESTRICTIONS ON TRANSFER OF STOCK
As of December 31, 1995, the Company had net deferred tax assets of $223.5
million reflected on its consolidated balance sheet. The tax deductions
associated with these deferred tax assets may be reviewed and potentially
disallowed by the Internal Revenue Service (the "IRS"). In addition, such tax
deductions would be subject to significant limitation under Section 382 of the
Internal Revenue Code of 1986, as amended (the "Code"), if the Company
undergoes an "ownership change" (as defined below). In the event of an
ownership change, Section 382 imposes an annual limitation on the amount of
taxable income a corporation may offset with net operating loss carryforwards
and certain recognized built-in losses. The limitation equals the product of
(i) the fair market value of the corporation's equity on the date of an
ownership change (the "Change Date") (with certain adjustments, including an
adjustment excluding certain capital contributions made in the two years
preceding the Change Date) and (ii) a long-term tax-exempt bond rate as
defined by the Code.
The Company would undergo an "ownership change" if the stockholders who own
or have owned, directly or indirectly, 5% or more of the Common Stock or are
otherwise treated as 5% stockholders under Section 382 of the Code ("5%
stockholders"), increase their aggregate percentage ownership of such stock by
more than 50 percentage points over the lowest percentage of such stock owned
by such stockholders at any time during the testing period (generally the
preceding three years). In applying Section 382, under a special rule, at
least a portion of newly issued stock is considered to be acquired by a new 5%
stockholder even if no person acquiring the stock in fact owns as much as five
percent of the issuer's stock. Under this rule, the Company believes that all
of the Common Stock that was issued to former Anchor stockholders in the
Merger probably would be considered by the IRS to have been acquired by a new
5% stockholder. The sale of shares of Common Stock by the Selling Stockholder
under this Prospectus is not expected to increase materially the likelihood
that an ownership change will occur.
Based on the information currently available to the Company, it does not
currently believe that the issuance of shares of Common Stock in the Merger
resulted in an ownership change. However, the application of Section 382 is
highly complex and uncertain in some respects. In addition, the Merger
resulted in a substantial increase in the percentage of ownership of capital
stock of the Company by 5% stockholders. Accordingly, although the Company
does not believe that the Merger caused an ownership change, the Merger may
have increased significantly the likelihood that an ownership change could
occur in the three years after the effective date of the Merger. The
acquisition of stock by a 5% stockholder during this three-year period could
cause an ownership change.
The Company's Restated Certificate of Incorporation, as amended (the
"Charter"), limits transfers of shares of Common Stock and other interests in
the Company that would be treated as stock under the Code or applicable IRS
regulations and certain options that would either cause a person or entity to
become a 5% stockholder or increase a 5% stockholder's percentage ownership
interest, in an effort to prevent transfers of Common Stock from triggering an
ownership change. These restrictions would not prevent settlement of any
transaction through the NYSE and the directors of the Company retain the
discretion to waive these limitations or to take certain other actions that
could trigger an ownership change should it appear advantageous for the
Company to allow an ownership change to take place. A regular trade in Common
Stock through the NYSE by a person or entity that does not, and will not, own
directly or indirectly 5% or more of the capital stock of the Company before
or after the trade generally will not be limited by the Charter. See
"Description of Capital Stock--Restrictions on Transfer of Stock."
GOVERNMENTAL IMMUNITY OF THE SELLING STOCKHOLDER
The doctrine of sovereign immunity, as limited by the Federal Tort Claims
Act, 28 U.S.C. (S)(S) 1346(b) and 2671 et seq., as amended, provides that
claims may not be brought against the United States of America or any agency
or instrumentality thereof unless specifically permitted by act of Congress.
The Federal Tort Claims Act bars claims for fraud or misrepresentation, and
courts have held, in cases involving the FDIC as well as other federal
agencies and instrumentalities, that the United States may assert its
sovereign immunity to claims brought under the federal securities laws. Thus,
any attempt to assert a claim against the Selling Stockholder alleging a
13
<PAGE>
violation of the federal securities laws, including the Securities Act and the
Exchange Act, resulting from an alleged material misstatement in or material
omission from the Registration Statement or this Prospectus, or any other act
or omission in connection with the offering to which this Prospectus relates,
probably would be barred. In addition, Section 2(f)(1) of the Federal Deposit
Insurance Act (the "FDI Act"), 12 U.S.C. (S) 1812(f)(1), specifically provides
that directors, members, officers and employees of the FDIC have no liability
under the Securities Act with respect to any claim arising out of or resulting
from any alleged act or omission by such person within the scope of such
person's employment in connection with any transaction involving the
disposition of assets (or any interests in assets or any obligations backed by
any assets) by the FDIC. Moreover, the Selling Stockholder has advised the
Company that the FDIC and its directors, officers, agents, and employees are
exempt from liability for any violation or alleged violation of the anti-fraud
provisions of Section 10(b) of the Exchange Act by virtue of Section 3(c)
thereof. Accordingly, any attempt to assert such a claim against the
directors, members, officers or employees of the FDIC for a violation of the
Securities Act or the Exchange Act resulting from an alleged material
misstatement in or material omission from the Registration Statement or this
Prospectus or any other act or omission in connection with the offering of
Common Stock hereunder probably would be barred.
CERTAIN LEGAL PROCEEDINGS
On January 13, 1995, Anchor Savings filed suit in the United States Court of
Federal Claims against the United States for breach of contract and taking of
property without compensation in contravention of the Fifth Amendment of the
United States Constitution. The action arose because the passage of FIRREA and
the regulations adopted by the OTS pursuant to FIRREA deprived Anchor of the
ability to include supervisory goodwill and certain other assets for purposes
of computing its regulatory capital as the Federal Savings and Loan Insurance
Corporation ("FSLIC") had previously agreed it could. The direct effect was to
cause Anchor Savings to go from an institution that substantially exceeded its
regulatory capital requirements to one that was critically undercapitalized
upon the effectiveness of the FIRREA-mandated requirements.
From 1982 to 1985, Anchor Savings acquired eight FSLIC-insured institutions
that were in danger of failing or causing a loss to the FSLIC. Four
institutions were acquired with some financial assistance from the FSLIC and
four were unassisted "supervisory" cases. In acquiring the institutions,
Anchor Savings assumed liabilities determined to exceed the assets it acquired
by over $600 million at the dates of the respective acquisitions. The
difference between the fair values of the assets acquired and the liabilities
assumed in the transactions was recorded on Anchor Savings' books as goodwill.
The FSLIC agreed that this supervisory goodwill was to be amortized over
periods of up to 40 years. Without that agreement, Anchor Savings would not
have made the acquisitions. When the capital regulations imposed under FIRREA
became effective, Anchor Savings still had over $470 million of supervisory
goodwill on its books and approximately 20 years remaining to amortize it
under the agreements with FSLIC. The FIRREA capital requirements excluded all
but approximately $124 million of Anchor Savings' supervisory goodwill and
also excluded $157 million associated with preferred stock issued to the FSLIC
as a result of one of the acquisitions. The remaining supervisory goodwill was
required to be eliminated by December 31, 1994, rather than over more than 20
years, as had been agreed. The elimination of the supervisory goodwill
resulted in severe limitations on Anchor Savings' activities and required the
disposition of valuable assets under liquidation-like circumstances. The
complaint asks the government to make Anchor Savings whole for the effects of
the loss, which are estimated to exceed substantially the goodwill remaining
at the time FIRREA was enacted.
There are over 100 similar cases pending in the United Stated Court of
Federal Claims, which has entered summary judgment for the plaintiffs as to
liability, but not damages, in three of the cases. These three cases (the
"Winstar cases") were appealed to the United States Court of Appeals for the
Federal Circuit, which affirmed the judgment for the plaintiffs following a
hearing en banc after a three-judge panel had found for the government. The
United States Supreme Court has agreed to review the decision in the Winstar
cases; oral argument occurred on April 24, 1996, and the Supreme Court is
expected to issue a decision during 1996. The Anchor Savings claim has been
stayed, pending the decisions of the Supreme Court in the Winstar cases. There
have been no decisions determining damages in any of the supervisory goodwill
cases. The Company is unable
14
<PAGE>
to predict the outcome of its claim against the United States and the amount
of any damages that may be awarded to Dime, if any, in the event that judgment
is made in favor of Dime. Consequently, no assurances can be given as to the
results of this claim or the timing of any proceeding in relation thereto.
USE OF PROCEEDS
The sale of the shares of the Common Stock offered hereby is for the account
of the Selling Stockholder. Accordingly, the Company will not receive any
proceeds from the sale to the public of the shares of Common Stock offered
hereby. Pursuant to the Warrant, at the time of completion of this offering,
the Selling Stockholder will have acquired all such shares of Common Stock
from the Company at a price of $0.01 per share. See "Selling Stockholder."
SELLING STOCKHOLDER
The FDIC is a government-controlled corporation and an instrumentality of
the United States of America. Under the provisions of FIRREA, all the assets
and liabilities of the FSLIC were transferred to the FRF, which is managed by
the FDIC. Shares of preferred stock, which originally had been issued by
Anchor to FSLIC, were among the assets transferred from FSLIC to the FRF.
These shares were subsequently exchanged for $71,000,000 of 8.9375% Senior
Notes due July 9, 2003 (the "8.9375% Senior Notes"), which were sold by the
Selling Stockholder as part of a public offering in October 1993, and the
Warrant, which entitled the Selling Stockholder to purchase 4,750,000 shares
of Anchor Bancorp common stock, at a price of $0.01 per share.
Upon consummation of the Merger, the Warrant was converted into the right to
acquire 8,407,500 shares of Common Stock at a price of $0.01 per share.
Additionally, the Company assumed the obligations of Anchor to file up to two
registration statements under the Securities Act with respect to the offering
and sale of the shares of Common Stock issuable upon the exercise of the
Warrant. The Company is required to pay expenses of such registration and to
reimburse the Selling Stockholder for one-half of the underwriters' fees,
discounts and commissions in connection with the offering and sale of such
shares, subject to a maximum reimbursement of 1.75% of the proceeds thereof.
Under the terms of the registration rights agreement between the Selling
Stockholder and the Company, as successor to the obligations of Anchor
Bancorp, the Company has agreed to indemnify the Selling Stockholder against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments that the Selling Stockholder may be required to make in
respect thereof.
The shares of Common Stock offered by this Prospectus constitute all the
shares owned by the Selling Stockholder as well as all the shares issuable
under the Warrant.
In its capacity as manager of the FRF or otherwise, the FDIC has not held
any position, office or other material relationship with the Company or any of
its predecessors or affiliates within the past three years. At the time of
completion of the offering to which this Prospectus relates, the FDIC will not
own, in any capacity, any other securities of the Company and will not then
have any contractual right to acquire any such securities.
As a government-controlled corporation and an instrumentality of the United
States of America, the Selling Stockholder benefits from certain governmental
immunities from actions under the federal securities laws. See "Certain
Investment Considerations--Governmental Immunity of the Selling Stockholder."
A primary purpose of the FDIC's regulatory powers is to safeguard the BIF
and the SAIF. All depository institutions which are insured by the BIF or the
SAIF are also subject to regulation by the FDIC. The FDIC is authorized to set
standards for the operations of insured depository institutions, examine such
institutions to ensure compliance with the standards, take action to prevent
troubled institutions from failing and to pay depositors, in accordance with
the FDI Act and applicable regulations, if any institution fails. The FDIC has
substantial enforcement authority with respect to insured depository
institutions and, under certain circumstances, is authorized to appoint a
conservator or receiver for an insured depository institution. The FDIC may
terminate the deposit insurance of an insured depository institution if it
determines that the institution is engaging in unsafe or unsound practices,
has violated any applicable law, regulation, order or any condition imposed in
writing by the FDIC, or if the institution does not have any tangible capital.
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PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is listed on the NYSE under the symbol "DME." The following
table sets forth, for the periods indicated, the high and low sale prices per
share of the Common Stock, as reported by the Wall Street Journal.
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
1994:
First Quarter............................................. $ 9 1/8 $ 7 5/8
Second Quarter............................................ 10 1/8 7 7/8
Third Quarter............................................. 10 3/4 8 7/8
Fourth Quarter............................................ 9 1/2 7 3/8
1995:
First Quarter............................................. 9 7 1/2
Second Quarter............................................ 10 3/8 8 3/4
Third Quarter............................................. 13 3/8 10
Fourth Quarter............................................ 12 10 1/4
1996:
First Quarter............................................. 12 3/8 10 3/4
Second Quarter (through May 15, 1996)..................... 12 5/8 11 3/8
</TABLE>
For a recent sale price of the Common Stock, see the cover page of this
Prospectus.
As indicated above, in January 1996, the Company announced its intention to
repurchase up to 2% of the outstanding Common Stock, or approximately
2,000,000 shares, of which 1,000,000 were repurchased during the first quarter
of 1996. See "Summary--The Company and the Bank--1995 Balance Sheet
Restructuring Plan and Stock Buy-Back Program."
Holders of Common Stock are entitled to receive dividends when, as and if
declared by the Company's Board of Directors out of funds legally available
therefor. The Company (including the Bank prior to the formation of the
Company) has not paid dividends on the Common Stock since the third quarter of
1990. The Company has no present plans to pay a dividend. However, the Board
of Directors of the Company periodically will consider the payment of
dividends on the Common Stock when it deems it appropriate, taking into
account federal regulatory restrictions, the Company's level of net income and
financial condition, its future prospects, economic conditions, industry
practices and other factors. The ability of the Company to pay dividends on
Common Stock will be subject to a number of legal and contractual
restrictions, including regulatory restrictions on capital distributions from
the Bank to the Company. See "Description of Capital Stock--Common Stock--
Dividends" and "--Certain Regulatory Restrictions on Capital Distributions."
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DESCRIPTION OF CAPITAL STOCK
The following summary of certain provisions of the Company's Charter and By-
laws and of the Rights Agreement (as defined below) are not intended to be
complete and are qualified in their entirety by reference to such instruments,
each of which is an exhibit to the Registration Statement of which this
Prospectus is a part.
AUTHORIZED STOCK
The Charter authorizes 200 million shares of Common Stock and 40 million
shares of preferred stock, par value $0.01 per share (the "Preferred Stock").
COMMON STOCK
The shares of Common Stock entitle the holders thereof (a) to dividends
when, as and if declared by the Company's Board of Directors, subject to any
rights of any holders of preferred stock that may be outstanding, (b) to one
vote per share on each matter properly submitted to stockholders for their
vote and (c) to participate ratably in the net assets of the Company in the
event of liquidation, dissolution or winding up, subject to the prior rights
of creditors and of holders of any preferred stock of the Company that may be
outstanding. Holders of Common Stock are not entitled to preemptive rights.
Restrictions on Transfer of Stock. The Charter limits transfers of shares of
Common Stock and other interests that would be treated as stock of the Company
under the Code or applicable IRS regulations and certain options that would
cause either a person or an entity to become a 5% stockholder or increase a 5%
stockholder's percentage ownership interest in the Company. This limitation is
intended to prevent transfers of stock of the Company from triggering an
"ownership change," which would result in the limitation of certain potential
tax benefits available to the Company. This limitation would not prevent the
settlement of any transaction entered into through the facilities of the NYSE.
See "Certain Investment Considerations--Limitations on Use of Tax Losses;
Restrictions on Transfer of Common Stock."
Dividends. The Company's ability to pay dividends is limited by certain
restrictions generally imposed on Delaware corporations. Under these
restrictions, dividends may be paid only out of a Delaware corporation's
surplus, as defined by Delaware law, or if there should be no surplus, its net
profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year.
The principal source of income of the Company consists of dividends and
other capital distributions, if any, from the Bank, which will be subject to
regulatory restrictions. See "Certain Regulatory Restrictions on Capital
Distributions."
The Company is also subject to a limitation under the terms of its 10.50%
Senior Notes due November 2005 (the "10.50% Senior Notes") on the payment of
dividends or other distributions on the Common Stock, as well as purchases,
redemptions and acquisitions of Common Stock and payments in respect of
subordinated debt of the Company (collectively, "Restricted Distributions"),
until such time as the 10.50% Senior Notes have been rated "investment grade"
for a period of three calendar months. In general, the Company is not
permitted to make Restricted Distributions if, at such time or after giving
effect thereto, (a) the Company is in default with respect to the 10.50%
Senior Notes; (b) the Bank would fail to meet any of its OTS capital
requirements (as described below); or (c) the aggregate amount of dividends or
other distributions on the Common Stock subsequent to December 17, 1994 would
exceed the sum of (i) $5 million, plus (ii) 50% of the Company's consolidated
net income from that date (but, if there should be a net loss from such date,
minus 100% of such net loss), plus (iii) 100% of the net proceeds received by
the Company from any capital stock issued by the Company after December 17,
1994.
The payment of dividends or other distributions by the Company is also
subject to restrictions imposed by the indenture governing the 8.9375% Senior
Notes. Under the terms of that indenture, the Company is prohibited from
declaring or paying any dividends on, or purchasing, redeeming or otherwise
acquiring or retiring for value any of its capital stock now or hereafter
outstanding, or returning any capital to holders of its capital stock (each,
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a "Distribution"), except that the Company may declare and pay dividends in
capital stock of the Company and make Distributions in cash or property (other
than the Company's capital stock) if the amount of such Distribution, together
with the amount of all previous Distributions subsequent to June 30, 1993,
does not exceed in the aggregate the sum of $10 million, plus 75% of Dime's
consolidated net income based on Dime's financial statements contained in
periodic public filings with the Commission for each fiscal quarter after June
30, 1993 (but reduced by 100% of the net losses incurred in any quarter), plus
100% of the net proceeds received by the Company in respect of capital stock
issued subsequent to September 1, 1993.
The repurchase of shares of Common Stock by the Company involves Restricted
Distributions and Distributions for purposes of these provisions. See
"Summary--The Company and the Bank--1995 Balance Sheet Restructuring Plan and
Stock Buy-Back Program."
PREFERRED STOCK
Shares of Preferred Stock will be issuable from time to time in one or more
series as may be determined from time to time by the Board of Directors of the
Company. The powers, designations, preferences and relative, participating,
optional or other rights, if any, and the qualifications, limitations or
restrictions thereof, including, but not limited to, the number of shares
constituting any series of Preferred Stock, the dividend rights, redemption
rights, liquidation preferences, voting rights and conversion rights of any
such series, shall be as fixed by resolution of the Board of Directors of the
Company.
STOCKHOLDER PROTECTION RIGHTS PLAN
Each share of Common Stock has attached to it one right (a "Right") issued
pursuant to a Stockholder Protection Rights Agreement, dated as of October 20,
1995 (the "Rights Agreement"), between the Company and the First National Bank
of Boston, as Rights Agent. Each Right entitles its registered holder to
purchase one-hundredth of a share of Participating Preferred Stock, par value
$0.01 per share, for $50 (the "Exercise Price"), subject to adjustment, after
the close of business on the earlier of (i) the tenth day after commencement
of a tender or exchange offer which, if consummated, would result in a Person
(as defined in the Rights Agreement) becoming the Beneficial Owner (as defined
in the Rights Agreement) of 20% or more of the outstanding shares of Common
Stock (an "Acquiring Person") and (ii) the tenth day after the first date (the
"Flip-in Date") of public announcement that a Person has become an Acquiring
Person. In any case, the time described in the foregoing sentence is referred
to as the "Separation Time."
The Rights will not be exercisable until the business day following the
Separation Time. The Rights will expire on the earlier of (i) the close of
business on November 6, 2005; (ii) the Redemption Time (as defined below);
(iii) the Exchange Time (as defined below); or (iv) the merger of the Company
into another corporation pursuant to an agreement entered into prior to a
Flip-in Date (such time when the Rights expire being the "Expiration Time").
The Board of Directors of the Company may, at its option, at any time prior to
occurrence of a Flip-in Date, redeem all the Rights at a price of $0.01 per
Right (the "Redemption Price," and such time when the Rights are redeemed
being the "Redemption Time").
If a Flip-in Date shall occur, the Company has agreed in the Rights
Agreement to ensure and provide that each Right (other than Rights
Beneficially Owned by the Acquiring Person or any Affiliate or Associate (each
as defined in the Rights Agreement) thereof or by any transferees, direct or
indirect, of any of the foregoing, which Rights shall become void) shall
constitute the right to purchase from the Company shares of Common Stock
having an aggregate market price (calculated in the manner set forth in the
Rights Agreement) equal to twice the Exercise Price for an amount in cash
equal to the then-current Exercise Price. In addition, the Board of Directors
of the Company may, at its option, at any time after a Flip-in Date and prior
to the time that an Acquiring Person becomes the beneficial owner of more than
50% of the outstanding shares of Common Stock, elect to exchange the Rights
for shares of Common Stock at an exchange ratio of one share of Common Stock
per Right (such time when the Rights are exchanged being the "Exchange Time").
The Company has agreed in the Rights Agreement not to consolidate or merge,
or engage in certain other transactions, with an Acquiring Person without
entering into a supplemental agreement with the Acquiring Person providing
that, upon consummation or occurrence of the transaction, each Right shall
thereafter constitute
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<PAGE>
the right to purchase common stock of the Acquiring Person having an aggregate
market price equal to twice the Exercise Price for an amount in cash equal to
the then-current Exercise Price.
The Rights will not prevent a takeover of the Company. The Rights, however,
may have certain anti-takeover effects. The Rights may cause substantial
dilution to a person or group that acquires 20% or more of the outstanding
Common Stock unless the Rights are first redeemed by the Board of Directors of
the Company.
CERTAIN OTHER PROVISIONS
Board of Directors. The Charter provides that the number of directors shall
be fixed from time to time by the Company's Board of Directors. The directors
are divided into three classes of as nearly equal size as possible, with one
class elected annually to serve for a term of three years. The classification
of the Board of Directors of the Company could moderate the pace of any change
in control of the Company because a stockholder with a majority interest in
the Company would have to wait for at least two consecutive annual meetings of
stockholders to elect a majority of the members of the Company's Board of
Directors. The inability to change the composition of the Board of Directors
immediately, even if such change in composition were deemed by a majority of
the Company's stockholders to be in their best interests, may tend to
discourage a takeover of the Company.
Cumulative Voting. Under the Delaware General Corporation Law ("DGCL"), the
certificate of incorporation of a corporation may authorize cumulative voting.
The Charter does not authorize cumulative voting, and therefore, cumulative
voting is not available in the election of directors of the Company.
Stockholder Nominations. The Charter and By-laws provide that stockholder
nominations for election of directors at an annual meeting of stockholders
must be stated in writing and filed with the Secretary of the Company not less
than 60 days nor more than 90 days in advance of the anniversary of the date
of the notice mailed to the stockholders in connection with the previous
year's annual meeting. With respect to an election of directors to be held at
a special meeting of stockholders, notice of nomination must be delivered not
later than the close of business on the seventh day following the day on which
notice of such meeting is first given to stockholders. The Company's By-laws
also require that any notice of nomination by a stockholder set forth certain
information concerning such stockholder and his or her nominee, including,
among other things, such information regarding the nominee as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Commission had the nominee been nominated by the Company's Board of
Directors, and the consent of the nominee to serve as a director of the
Company if elected. The presiding officer at the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedures.
The provisions regarding stockholder nominations for election of directors
contained in the Charter and By-laws do not give the Company's Board of
Directors any power to approve or disapprove stockholder nominations for
election of directors, and will not preclude a stockholder contest for the
election of directors, if the prescribed procedures are followed. They may,
however, have the effect of precluding a contest for the election of directors
if the prescribed procedures are not followed and may have the effect of
discouraging a third party from conducting a solicitation of proxies or
otherwise attempting to elect its own slate of directors.
Removal of Directors. The Charter and By-laws provide that directors may be
removed only for cause (defined as a felony conviction or a final adjudication
that a director is liable for gross negligence or misconduct in the
performance of his or her duties to the Company) and only with the affirmative
vote of at least two-thirds of the shares of capital stock of the Company
entitled to vote at an election of directors. In addition, the Charter and By-
laws give a majority of the directors the ability to remove a director if such
removal is directed by a federal banking agency.
The provisions of the Charter and the By-laws giving the Board of Directors
the power to fix the exact number of directors and to fill any vacancies or
newly created positions and allowing removal of directors only for cause upon
the vote of at least two-thirds of the shares entitled to vote at an election
of directors are intended to insure that the classified Board provisions are
not circumvented by the removal of incumbent directors.
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<PAGE>
Furthermore, as discussed below, stockholders will not have the ability to
call special meetings of stockholders; as a result, a stockholder seeking to
have a director removed for cause generally will be able to do so only at an
annual meeting of stockholders. These provisions of the Charter and the By-
laws make the removal of any director more difficult, even if such removal is
believed by a majority of stockholders to be in their best interests. In
addition, these provisions of the Charter and the By-laws could make a
takeover of the Company more difficult under circumstances where the potential
acquiror seeks to do so through obtaining control of the Board of Directors of
the Company.
Special Meetings of Stockholders. As permitted by the DGCL, the Charter
provides that special meetings of stockholders may be called by the Chairman
of the Board (or, if there is none, the Chief Executive Officer) or a majority
of the Board of Directors. Special meetings may not be called by stockholders.
If the Board of Directors determines not to call a special meeting,
stockholder proposals cannot be presented to the stockholders for action until
the next annual meeting.
The provision of the Charter relating to special meetings of stockholders is
intended to enable the Board of Directors of the Company to determine if it is
appropriate for the Company to incur the expense of a special meeting in order
to present a proposal to its stockholders. If the Board of Directors
determines not to call a special meeting, stockholder proposals could not be
presented to the stockholders for action until the next annual meeting. In
addition, these provisions of the Charter could make a takeover of the Company
more difficult under circumstances where the potential acquiror seeks to do so
through obtaining control of the Board of Directors of the Company.
Action of Stockholders by Written Consent. The Charter permits any action
required to be taken at a meeting of its stockholders to be taken without a
meeting only if the written consent of 100% of stockholders is obtained.
The purpose of this provision of the Charter is to prevent any person or
persons holding the requisite percentage of the voting stock of the Company to
take corporate action without giving prior notice to other stockholders and
without the procedures of a stockholder meeting. In a publicly-held
corporation with many stockholders, the practical effect of requiring 100% of
the stockholders to consent to any action is tantamount to requiring
stockholders to act only at a duly held stockholder meeting.
Voting at a Meeting. The By-laws provide that when a quorum is present at
any meeting, the vote of the holders of a majority of the stock that has
voting power present in person or represented by proxy (for this purpose,
shares abstaining and "broker non-votes" are deemed to be present at such
meeting) shall decide any question properly brought before such meeting,
unless the question is one upon which by express provision of law, the
Charter, a certificate of designation of any series of Preferred Stock or the
By-laws a different vote is required, in which case such express provision
shall govern and control the decision of such question. Notwithstanding the
above, in the case of any proposal submitted to the stockholders for the
purpose, as determined by the Board of Directors, which is not required to be
the sole purpose, of satisfying any term or condition of the Exchange Act or
the Code, any successors to such statutes or any rules or regulations
promulgated thereunder or any other law or regulation applicable to the
Company, the vote (and the manner of calculating such vote) required for
purposes of the By-laws with respect to such proposal shall be the vote (and
the manner of calculating such vote) required to satisfy the applicable term
or condition.
Notice of Stockholder Proposals. The By-laws provide that proposals by
stockholders of business to be considered at an annual meeting must be stated
in writing and filed with the Secretary not less than 60 days nor more than 90
days in advance of the anniversary date of the notice of meeting mailed to
stockholders in connection with the previous year's annual meeting. The date
for the annual meeting of stockholders is fixed as the fourth Friday of April
or such earlier or later date as the Board of Directors may direct.
The By-laws also provide that the notice required to be delivered by a
stockholder who wishes to propose business at an annual meeting must set forth
certain information concerning such stockholder.
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<PAGE>
The By-laws further provide that the number of proposals that may be
submitted by a stockholder is limited to two and set forth the reasons that a
proposal could be deemed out of order, which generally correspond to those
established by the rules of the Commission that govern when a corporation may
exclude stockholder proposals from its proxy materials. The types of proposals
that the Company does not have to consider if raised by a stockholder in
connection with an annual meeting include, among others, those that, if
adopted, would be violative of laws or regulations, would result in a breach
or violation of contract, would be impossible to effectuate, are not a proper
matter for stockholder action or relate to ordinary business operations.
The procedures set forth in the By-laws may have the effect of precluding a
stockholder proposal if the prescribed procedures are not followed or if a
proposal of the type described above is submitted.
Limitation of Liability and Indemnification of Directors and Officers. The
Charter contains provisions expressly permitted under the DGCL that limit
certain types of causes of action that can be maintained by a corporation (or
by stockholders on behalf of the corporation) against its directors.
Accordingly, in any action by the Company or its stockholders against the
directors of the Company, the directors will not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as directors, except for (a) any breach of the directors' duty of loyalty to
the Company or its stockholders, (b) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c)
improper dividends or distributions or (d) transactions involving improper
personal benefit.
The Charter provides indemnification rights to any person who is made or
threatened to be made a party to any action (other than an action by or in the
right of the Company) by reason of the fact that such person has served as a
director or officer of the Company (or of any other entity, including the
Bank, at the request of the Company) with respect to costs, expenses,
judgments, fines and amounts paid in settlement. Subject to applicable banking
laws and regulations, these indemnification provisions apply if such person
acted in good faith and in a manner he or she reasonably believed to be in (or
not opposed to) the best interests of the Company and, with respect to a
criminal action, if such person had no reasonable cause to believe that his or
her conduct was unlawful. The persons described in the preceding sentence are
entitled to indemnification rights in an action by or in the right of the
Company with respect to costs, expenses and amounts paid in settlement,
subject to the same standards, except where there is an adjudication of
liability (in which case indemnification is permitted only upon a court
determination that indemnification is, in view of all the circumstances, fair
and reasonable). The Charter also provides for the Company to advance expenses
of litigation described in this paragraph on an on-going basis.
Under the Charter, indemnification of the costs and expenses of defending
any action is required to be made to any director or officer who is successful
(on the merits or otherwise) in defending the action. Furthermore,
indemnification also is required to be made with respect to all amounts
referred to in the preceding paragraph, unless a determination is made by a
majority of disinterested directors (or if the disinterested directors so
request, or if a quorum of disinterested directors does not exist, by
independent counsel or by the stockholders) that indemnification is not proper
because the director or officer has not met the applicable standard of
conduct.
The Charter also permits (but does not require) the Company to indemnify and
advance expenses to its non-officer employees and agents in connection with
any civil, criminal, administrative or investigative actions, suits or
proceedings.
The Charter also provides that if the DGCL is amended to expand the
permitted indemnification of directors and officers, then the Company will
indemnify directors and officers to the fullest extent permitted by such
amendment.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, employees and agents of the Company
pursuant to Delaware law, or otherwise, the Company has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such
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<PAGE>
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer, employee or agent of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, employee or agent in connection with the securities being
registered, the Company 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The Company is not permitted to prepay (which would include the direct or
indirect transfer of any funds or assets and any segregation thereof for the
purpose of making, or pursuant to any agreement to make, any payment
thereafter) any legal expenses or amounts of, or costs incurred in connection
with, any settlement of, or judgment or penalty with respect to, any claim,
proceeding or action, if made in contemplation of, or after, any insolvency of
the Company or the Bank or with a view to, or having the result of, preventing
the proper application of the assets of the Bank to creditors or preferring
one creditor over another. Further, the FDIC is authorized by statute to
prohibit or limit, by regulation or order, both the Company and the Bank from
indemnifying officers, directors and employees for liability or legal expense
with regard to any administrative proceeding or civil action by any federal or
state banking agency which results in a final order pursuant to which such
person is assessed a civil money penalty, is removed or prohibited from
participating in the conduct of the affairs of the institution or is required
to cease and desist or take affirmative action ordered by the agency.
Amendment of Certificate of Incorporation. The Charter provides that
amendment of certain of its provisions requires, in addition to the approval
of the Board of Directors, the approval of stockholders holding two-thirds of
the total votes eligible to be cast at a meeting. The provisions subject to
the two-thirds stockholder approval requirement include amendments of the
provisions relating to (a) the Board of Directors (including, without
limitation, the size and classes of the Board, the lack of cumulative voting
in the election of directors and the removal of directors), (b) special
meetings of stockholders, (c) amendment of the By-laws by stockholders, (d)
written consents of stockholders, (e) stockholder proposals and (f) amendment
of the two-thirds stockholders approval requirement itself. Amendment of any
other provisions of the Charter requires, in addition to the approval of the
Board of Directors, approval only of a majority of the total votes eligible to
be cast at a meeting.
Amendment of By-Laws. The Charter and the By-laws provide that the By-laws
may be amended by either a resolution adopted by a majority of the Board of
Directors or the approval of two-thirds of the total votes eligible to be cast
at a meeting of stockholders.
The requirement of an increased stockholder vote for the amendment of the
By-laws is intended to prevent a stockholder controlling a majority of the
Common Stock from avoiding the requirements of important provisions of the By-
laws simply by amending or repealing them. Thus, the holders of a minority of
the shares of the Common Stock could block the future repeal or modification
of the By-laws even if such action were deemed beneficial by the holders of
more than a majority (although less than two-thirds) of the Common Stock.
Business Combinations. Except as described below, the Company may effect a
merger or consolidation or sell all or substantially all of its assets if
authorized by its Board of Directors and the holders of a majority of the
outstanding Common Stock in accordance with the relevant provisions of the
DGCL. The Company may, however, acquire another corporation or bank (including
through a merger with a subsidiary of the Company), for cash or stock, in a
transaction that does not require any stockholder approval (except that, under
NYSE listing requirements, the issuance in an acquisition of shares equal to
20% or more of the number of shares of Common Stock then outstanding will
generally require approval by the affirmative vote of a majority of those
shares of Common Stock voting at a meeting at which the matter is presented).
In 1988, Delaware enacted a statute designed to provide Delaware
corporations with limited protection against hostile takeovers. The statute,
which is codified in Section 203 of the DGCL ("Section 203"), is intended to
discourage certain takeover practices by impeding the ability of a hostile
acquiror to engage in certain transactions with the target company.
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In general, Section 203 provides that a person or entity that owns 15% or
more of the outstanding voting stock of a Delaware corporation (an "Interested
Stockholder") may not consummate a merger or other business combination
transaction with such corporation at any time during the three-year period
following the date such person or entity became an Interested Stockholder,
unless an exemption described below is applicable. The term "business
combination" is defined broadly to cover a wide range of corporate
transactions including mergers, sales of assets, issuances of stock,
transactions with subsidiaries and the receipt of disproportionate financial
benefits.
The statute exempts the following transactions from the requirements of
Section 203: (i) any business combination if, prior to the date a person
became an Interested Stockholder, the board of directors approved either the
business combination or the transaction which resulted in the stockholder
becoming an Interested Stockholder, (ii) any business combination involving a
person who acquired at least 85% of the outstanding voting stock in the
transaction in which he or she became an Interested Stockholder, with the
number of shares outstanding calculated without regard to those shares owned
by the corporation's directors who are also officers or by certain employee
stock plans, (iii) any business combination with an Interested Stockholder
that is approved by the board of directors and by a two-thirds vote of the
outstanding voting stock not owned by the Interested Stockholder, and (iv)
certain business combinations that are proposed after the corporation had
received other acquisition proposals and that are approved or not opposed by a
majority of certain continuing members of the board of directors. The Charter
does not contain an election, as permitted by the DGCL, to be exempt from the
requirements of Section 203.
Appraisal Rights. Under the DGCL, for as long as there are more than 2,000
holders of the Common Stock or the Common Stock is listed on the NYSE, the
Company stockholders will not be entitled to appraisal rights in connection
with mergers, consolidations and sales of assets unless such stockholders are
required to accept for their Common Stock consideration other than stock of
the resulting corporation or stock of another corporation that is held by more
than 2,000 holders or is listed or quoted on a national securities exchange or
the NASDAQ (or cash in lieu of fractional shares).
Other Factors Affecting Acquisitions of Control. The preceding discussion
has focused on certain provisions of the Charter and By-laws of the Company,
as well as certain provisions of Delaware law applicable to the Company. In
addition, as discussed above, the Charter authorizes the issuance of 200
million shares of Common Stock and 40 million shares of Preferred Stock. The
authorized but unissued shares of Common Stock and Preferred Stock provide the
Board of Directors of the Company with flexibility to effect, among other
transactions, financings, acquisitions, stock dividends, stock splits and
employee stock options without the need for a stockholder vote. The Board of
Directors of the Company, consistent with its fiduciary duties, could also
authorize the issuance of these shares, and could establish voting,
conversion, liquidation and other rights for the Preferred Stock being issued,
in an effort to deter attempts to gain control of the Company.
In addition, Dime is subject to federal statutes and regulations concerning
changes in control, or potential changes in control, of depository
institutions. In particular, under the Home Owners' Loan Act ("HOLA"), before
any company may acquire control (as defined in HOLA) of Dime, that company
must obtain OTS approval. Also, under the Change in Bank Control Act (the
"CIBCA"), before any person may acquire control (as defined under the CIBCA;
generally, ownership or control of 10% or more of the outstanding shares of
voting stock) of Dime, it must submit 60 days' prior written notice to the OTS
and such notice must not be disapproved.
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CERTAIN REGULATORY RESTRICTIONS ON CAPITAL DISTRIBUTIONS
The description of statutory provisions and regulations applicable to
savings associations and savings and loan holding companies set forth below
does not purport to be a complete description of the statutes and regulations
described or of all such statutes and regulations and their effects on the
Bank and the Company. The regulatory scheme has been established primarily for
the protection of depositors and the financial system generally and is not
intended for the protection of stockholders or other creditors.
As a holding company, the Company's ability to pay dividends and make other
distributions is dependent on its ability to receive dividends and other funds
from the Bank. In addition to the other limitations described above on the
Company's ability to pay dividends or other distributions on its capital stock
(see "--Common Stock--Dividends"), the Company is also affected by statutes
and regulations relating to the business of federal savings associations that
have the effect of limiting such transfer of funds from the Bank to the
Company. The nature and extent of such restrictions are dependent upon the
institution's level of regulatory capital and its income.
Regulatory Capital Requirements. Under federal statute and OTS regulations,
savings associations are generally required to comply with each of three
separate capital adequacy standards. Such institutions are required to have
"core ("leverage") capital" equal to at least 3% of adjusted total assets,
"tangible capital" equal to at least 1.5% of adjusted total assets and "total
risk-based capital" equal to at least 8% of risk-weighted assets.
"Core capital" includes common stockholders' equity (including common stock,
common stock surplus and retained earnings but excluding any net unrealized
gains or losses, net of related taxes, on certain securities available for
sale) and noncumulative perpetual preferred stock and any related surplus as
well as a limited amount of deferred tax assets as described below. Intangible
assets, other than mortgage servicing rights (both purchased and originated)
("MSRs") valued in accordance with applicable regulations and purchased credit
card relationships ("PCCRs"), generally must be deducted from core capital.
MSRs and PCCRs may comprise only up to 50% of core capital. In January 1993,
the OTS issued Thrift Bulletin 56 ("TB-56"), which advised savings
associations to adopt Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," regarding accounting for deferred tax assets
for regulatory reporting purposes. TB-56 permits savings associations to
include limited amounts of net deferred tax assets in regulatory capital;
i.e., to the extent that realization of deferred net assets depends on future
taxable income, the institution may include the lesser of the amount that can
be realized within one year of the quarter-end report date, or 10% of core
capital.
"Tangible capital" means core capital less any intangible assets (except for
MSRs includable in core capital) and less investments in "non-includable
subsidiaries."
For purposes of the risk-based capital requirement, "total risk-based
capital" means core capital plus supplementary capital, so long as the amount
of supplementary capital that is used to satisfy the requirement does not
exceed the amount of core capital. "Supplementary capital" includes, among
other things, general valuation loan and lease loss allowances up to a maximum
of 1.25% of risk-weighted assets. Risk-weighted assets are determined by
multiplying certain categories of the savings association's assets, including
off-balance sheet equivalents, by an assigned risk weight of 0% to 100% based
on the credit risk associated with those assets as specified in OTS
regulations.
As of March 31, 1996, the Bank had core capital and tangible capital of $1.1
billion, which was equal to 5.60% of adjusted total assets, and total risk-
based capital of $1.2 billion, which was equal to 12.55% of risk-weighted
assets, and exceeded the capital requirements imposed by the OTS.
In 1991, Congress enacted the so-called "prompt corrective action"
provisions of the FDI Act, which established five capital-based categories for
depository institutions insured by the FDIC: "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized" and
"critically undercapitalized." The OTS is required to take certain mandatory
action and is authorized to take other
24
<PAGE>
discretionary action with respect to savings associations in the three
undercapitalized categories. Under OTS regulations, an institution is treated
as well capitalized if its ratio of total risk-based capital to risk-weighted
assets is 10% or more, its ratio of core capital to risk-weighted assets is 6%
or more, its ratio of core capital to adjusted total assets is 5% or more and
it is not subject to any order or directive by the OTS to meet a specific
capital level. At March 31, 1996, the Bank continued to satisfy the published
standards for a well-capitalized institution.
Limitations on Capital Distributions. A savings association such as the Bank
may not make a capital distribution if, following such distribution, the
association will be "undercapitalized" under the prompt corrective action
provisions described above. In addition, OTS regulations limit the ability of
savings associations to pay dividends and make other capital distributions
according to the institution's level of capital and income, with the greatest
flexibility afforded to institutions that meet or exceed their OTS capital
requirements. For this purpose, "capital distributions" include cash
dividends, payments to repurchase, redeem, retire or otherwise acquire a
savings association's shares, payments to stockholders of another institution
in a cash-out merger, other distributions charged against capital and any
other transaction that the OTS determines to entail a payout of capital. To
the extent that the OTS regulations described below and the prompt corrective
action provisions are inconsistent, the prompt corrective action provisions
control.
Under current OTS regulations, a savings association's ability to pay
dividends depends on its level of regulatory capital as well as its earnings.
A savings association that exceeds its OTS regulatory capital requirements
both before and after a proposed dividend (or other distribution of capital)
(a "Tier 1 Institution") and has not been advised by the OTS that it is in
need of more than normal supervision may, after prior notice to but without
the approval of the OTS, make capital distributions during a calendar year up
to the higher of (a) 100% of its net income to date during the calendar year
plus the amount that would reduce by one-half its "surplus capital ratio" (the
institution's excess capital over its capital requirements) at the beginning
of the calendar year or (b) 75% of its net income over the most recent four-
quarter period. In addition, a Tier 1 Institution may make capital
distributions in excess of the foregoing limits if the OTS does not object
within a 30-day period following notice by the institution. Under OTS
regulations, a Tier 3 Institution (i.e., an institution that does not meet its
OTS capital requirements) generally cannot make any capital distribution
without the prior written approval of the OTS. A Tier 1 Institution that has
been notified by the OTS that it is in need of "more than normal supervision"
must, under OTS regulations, be treated as a Tier 2 or a Tier 3 Institution.
Under OTS regulations, a Tier 2 Institution may, after prior notice but
without the approval of the OTS, make capital distributions in an amount up to
75% of its net income during the most recent four-quarter period. The Bank is
currently a Tier 1 Institution. The OTS also may prohibit a proposed capital
distribution that would otherwise be permitted by the regulation if the OTS
determines that the distribution would constitute an unsafe or unsound
practice. In addition, a savings association that has converted from mutual to
stock form (such as the Bank) may not declare or pay a dividend on, or
repurchase, any of its capital stock if the effect of such action would be to
reduce the regulatory capital of the institution below the amount required for
its liquidation account.
Transactions with Affiliates. Under federal law and regulation, transactions
between a savings association and its "affiliates," which term includes its
holding company and other companies controlled by its holding company, are
subject to quantitative and qualitative restrictions. Savings associations are
restricted in their ability to engage in certain types of transactions with
their affiliates, including transactions that could provide funds to a holding
company for the payment of capital distributions. These "covered transactions"
include (a) purchasing or investing in securities issued by an affiliate, (b)
lending or extending credit to, or guaranteeing credit of, an affiliate, (c)
purchasing assets from an affiliate, and (d) accepting securities issued by an
affiliate as collateral for a loan or extension of credit. Covered
transactions are permitted between a savings association and a single
affiliate up to 10% of the capital stock and surplus of the association, and
between a savings association and all of its affiliates up to 20% of the
capital stock and surplus of the institution. The purchase of low-quality
assets by a savings association from an affiliate is not permitted. Each loan
or extension of credit to an affiliate by a savings association must be
secured by collateral with a market value ranging from 100% to 130% (depending
on the type of collateral) of the amount of credit extended. Notwithstanding
the foregoing, a savings association is not permitted to make a loan or
extension of credit to any affiliate unless the affiliate is engaged only in
activities that the Federal Reserve Board has determined to be permissible for
bank holding companies. Savings
25
<PAGE>
associations also are prohibited from purchasing or investing in securities
issued by an affiliate, other than shares of a subsidiary. Covered
transactions between a savings association and an affiliate, and certain other
transactions with or benefiting an affiliate, must be on terms and conditions
at least as favorable to the institution as those prevailing at the time for
comparable transactions with non-affiliated companies. This arm's-length
requirement applies to all covered transactions, as well as to (a) the sale of
securities or other assets to an affiliate, (b) the payment of money or the
furnishing of services to an affiliate, (c) any transaction in which an
affiliate acts as agent or broker or receives a fee for its services to the
savings association or to any other person, or (d) any transaction or series
of transactions with a third party if any affiliate has a financial interest
in the third party or is a participant in the transaction or series of
transactions.
CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF COMMON STOCK
The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a person that, for United States federal income tax purposes, is a
non-resident alien individual, a foreign corporation, a foreign partnership or
an estate or trust, in each case not subject to United States federal income
tax on a net income basis in respect of income or gain from the Common Stock
(a "non-U.S. holder"). This discussion does not consider the specific facts
and circumstances that may be relevant to particular holders and does not
address the treatment of non-U.S. holders of Common Stock under the laws of
any state, local or foreign taxing jurisdiction. Further, the discussion is
based on provisions of the Code, Treasury regulations thereunder, and
administrative and judicial interpretations thereof, all as in effect on the
date hereof and all of which are subject to change, possibly on a retroactive
basis. Each prospective holder is urged to consult a tax advisor with respect
to the United States federal tax consequences of acquiring, holding and
disposing of Common Stock, as well as any tax consequences that may arise
under the laws of any state, local or foreign taxing jurisdiction.
DIVIDENDS
Dividends paid to a non-U.S. holder of Common Stock will be subject to
withholding of United States federal income tax at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty, unless the
dividends are effectively connected with the conduct of a trade or business
within the United States (and are attributable to a United States permanent
establishment of such holder, if an applicable income tax treaty so requires
as a condition for the non-U.S. holder to be subject to United States income
tax on a net income basis in respect of such dividends). Such "effectively
connected" dividends are subject to tax at rates applicable to United States
citizens, resident aliens and domestic United States corporations, and are not
generally subject to withholding. Any such effectively connected dividends
received by a non-United States corporation may also, under certain
circumstances, be subject to an additional "branch profits tax" at a 30% rate
or such lower rate as may be specified by an applicable income tax treaty.
Under current United States Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country (unless the payor has knowledge to the contrary) for purposes of the
withholding discussed above and, under the current interpretation of United
States Treasury regulations, for purposes of determining the applicability of
a tax treaty rate. Under United States Treasury regulations that are proposed
to be effective for distributions after 1997 (the "Proposed Regulations"),
however, a non-U.S. holder of Common Stock who wishes to claim the benefit of
an applicable treaty rate would be required to satisfy applicable
certification requirements. In addition, under the Proposed Regulations, in
the case of Common Stock held by a foreign partnership, (x) the certification
requirement would generally be applied to the partners of the partnership and
(y) the partnership would be required to provide certain information,
including a United States taxpayer identification number. The Proposed
Regulations also provide look-through rules for tiered partnerships. It is not
certain whether, or in what form, the Proposed Regulations will be adopted as
final regulations.
A non-U.S. holder of Common Stock that is eligible for a reduced rate of
United States withholding tax pursuant to a tax treaty may obtain a refund of
any excess amounts currently withheld by filing an appropriate claim for
refund with the United States Internal Revenue Service.
26
<PAGE>
GAIN ON DISPOSITION OF COMMON STOCK
A non-U.S. holder generally will not be subject to United States federal
income tax in respect of gain recognized on a disposition of Common Stock
except in the following circumstances: (i) the gain is effectively connected
with a trade or business conducted by the non-U.S. holder in the United
States; (ii) in the case of a non-U.S. holder who is an individual and holds
the Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in the taxable year of the sale and certain other
conditions exist; or (iii) the Company is or has been a "United States real
property holding corporation" for federal income tax purposes and the non-U.S.
holder held, directly or indirectly at any time during the five-year period
ending on the date of disposition, more than 5% of the Common Stock (and is
not eligible for any treaty exemption). Effectively connected gains realized
by a corporate non-U.S. Holder may also, under certain circumstances, be
subject to an additional "branch profits tax" at a 30% rate or such lower rate
as may be specified by an applicable income tax treaty.
The Company has not been, is not, and does not currently anticipate becoming
a "United States real property holding corporation" for federal income tax
purposes.
FEDERAL ESTATE TAXES
Common Stock held by a non-U.S. holder at the time of death will be included
in such holder's gross estate for United States federal estate tax purposes,
unless an applicable estate tax treaty provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Under current law, United States information reporting requirements (other
than reporting of dividend payments for purposes of the withholding tax noted
above) and backup withholding tax generally will not apply to dividends paid
to non-U.S. holders that are either subject to the 30% withholding discussed
above or that are not so subject because an applicable tax treaty reduces such
withholding. Otherwise, backup withholding of United States federal income tax
at a rate of 31% may apply to dividends paid with respect to Common Stock to
holders that are not "exempt recipients" and that fail to provide certain
information (including the holder's United States taxpayer identification
number). Generally, unless the payor of dividends has definite knowledge that
the payee is a United States person, the payor may treat dividend payments to
a payee with a foreign address as exempt from information reporting and backup
withholding. However, under the Proposed Regulations, dividend payments
generally will be subject to information reporting and backup withholding
unless applicable certification requirements are satisfied. See the discussion
above with respect to the rules applicable to foreign partnerships under the
Proposed Regulations.
In general, United States information reporting and backup withholding
requirements also will not apply to a payment made outside the United States
of the proceeds of a sale of Common Stock through an office outside the United
States of a non-United States broker. However, United States information
reporting (but not backup withholding) requirements will apply to a payment
made outside the United States of the proceeds of a sale of Common Stock
through an office outside the United States of a broker that is a United
States person, that derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States, or that
is a "controlled foreign corporation" as to the United States, unless the
broker has documentary evidence in its records that the holder or beneficial
owner is a non-United States person or the holder or beneficial owner
otherwise establishes an exemption. Payment of the proceeds of the sale of
Common Stock to or through a United States office of a broker is currently
subject to both United States backup withholding and information reporting
unless the holder certifies its non-United States status under penalties of
perjury or otherwise establishes an exemption.
A non-United States holder generally may obtain a refund of any excess
amounts withheld under the backup withholding rules by filing the appropriate
claim for a refund with the IRS.
27
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Selling Stockholder has agreed to sell to each of the Underwriters named
below, and each of the Underwriters, for whom Merrill Lynch, Pierce, Fenner &
Smith Incorporated is acting as Representative (the "Representative"), has
severally agreed to purchase the number of shares of Common Stock set forth
opposite its name below. The Underwriters are committed to purchase all of
such shares if any are purchased. Under certain circumstances, the commitments
of non-defaulting Underwriters may be increased as set forth in the
Underwriting Agreement.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................................
---------
Total........................................................ 8,407,500
=========
</TABLE>
The Representative has advised the Company that the Underwriters propose
initially to offer the shares of Common Stock to the public at the public
offering price set forth on the cover page of this Prospectus and to certain
dealers at such price less a concession not in excess of per share. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of per share on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.
Each of the Company and the Selling Stockholder has agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments the Underwriters may be required
to make in respect thereof.
The Company has agreed that it will not, with certain exceptions, offer,
sell or otherwise dispose of any shares of Common Stock for a period of 45
days from the date of this Prospectus without the prior written consent of the
Underwriters. This prohibition will not affect shares of Common Stock issued
by the Company pursuant to employee or director benefit plans, any dividend
reinvestment plan, an acquisition, or the conversion or exercise of securities
convertible into or exercisable for Common Stock.
Merrill Lynch, Pierce, Fenner & Smith Incorporated renders various financial
advisory services to Dime from time to time.
VALIDITY OF COMMON STOCK
The validity of the shares of Common Stock offered by this Prospectus will
be passed upon for the Company by Sullivan & Cromwell, New York, New York, and
for the Underwriters by Cleary, Gottlieb, Steen & Hamilton, New York, New
York.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by KPMG Peat Marwick LLP, independent
certified public accountants, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
28
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR ANY UNDERWRITER.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UN-
DER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN IN
THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AU-
THORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUAL-
IFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Map...................................................................... 2
Available Information.................................................... 3
Incorporation of Certain Documents by Reference.......................... 3
Summary.................................................................. 5
Investment Considerations................................................ 11
Use of Proceeds.......................................................... 15
Selling Stockholder...................................................... 15
Price Range of Common Stock and Dividends................................ 16
Description of Capital Stock............................................. 17
Certain United States Tax Consequences to Non-U.S. Holders of Common
Stock................................................................... 26
Underwriting............................................................. 28
Validity of Common Stock................................................. 28
Experts.................................................................. 28
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
8,407,500 SHARES
[LOGO]
DIME BANCORP, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
MERRILL LYNCH & CO.
DATED , 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting or agents' compensation,
are estimated to be as follows:
<TABLE>
<S> <C>
SEC Filing Fee for Registration Statement....................... $ 34,789.66
NASD Filing Fee................................................. 10,589.00
Legal Fees and Expenses......................................... 175,000.00
Accounting Fees and Expenses.................................... 25,000.00
Transfer Agent and Registrar Fees and Expenses.................. 1,000.00
Blue Sky Fees and Expenses...................................... 10,000.00
New York Stock Exchange Listing Fee............................. 59,726.00
Printing and Engraving Fees..................................... 35,000.00
Miscellaneous................................................... 10,000.00
-----------
Total......................................................... $361,104.66
===========
</TABLE>
The foregoing expenses are payable or, to the extent incurred by the Federal
Deposit Insurance Corporation (the "FDIC") as manager of the FSLIC Resolution
Fund, reimbursable by Dime Bancorp, Inc. (the "Company").
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law contains detailed
provisions for indemnification of directors and officers of Delaware
corporations against expenses, judgments, fines and settlements in connection
with litigation.
The Restated Certificate of Incorporation, as amended, of the Company and
its directors' and officers' liability insurance policy provide for
indemnification of the directors and officers of the Registrant against
certain liabilities. Reference is made to the text under the heading
"Description of Capital Stock--Certain Other Provisions--Limitation of
Liability and Indemnification of Directors and Officers" in the accompanying
Prospectus.
Reference is made to the form of Purchase Agreement filed as Exhibit 1
hereto for a description of certain other indemnification arrangements
relating to this offering.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
1 Form of Purchase Agreement
4(a) Restated Certificate of Incorporation of the Company
4(b) Amendment to Certificate of Incorporation, dated June 14, 1995
4(c) By-laws of the Company
4(d) Form of Common Stock certificate
4(e) Stockholder Protection Rights Agreement, dated as of October 20,
1995, between the Company and The First National Bank of Boston,
as Rights Agent
5 Opinion of Sullivan & Cromwell
23(a) Consent of Sullivan & Cromwell (included in the opinion designated
as Exhibit 5)
23(b) Consent of KPMG Peat Marwick LLP
24 Powers of Attorney
99(a) Warrant, dated as of July 9, 1993, between the Company (as
successor to Anchor Bancorp, Inc.) and the FDIC
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information 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 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 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 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 the
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.
(c) The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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 provisions described under Item 15 above, 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 Securities Act of 1933 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 Registrant 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 Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(e) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent
or given, the latest annual report to Securityholders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the Prospectus, to deliver, or
cause to be delivered to each person to whom the Prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such interim financial information.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF NEW YORK, STATE OF NEW YORK, AS OF THE 16TH DAY OF MAY, 1996.
Dime Bancorp, Inc.
/s/ James M. Large, Jr.
By___________________________________
(JAMES M. LARGE, JR.)
(CHAIRMAN OF THE BOARD, CHIEF
EXECUTIVE
OFFICER AND DIRECTOR)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED AS OF MAY
16, 1996.
SIGNATURE TITLE
Chairman of the Board, Chief Executive
/s/ James M. Large, Jr. Officer and a Director (Principal
_____________________________________ Executive Officer)
(JAMES M. LARGE, JR.)
* President, Chief Operating Officer and
_____________________________________ a Director
(LAWRENCE J. TOAL)
* Senior Vice President and Controller
_____________________________________ (Principal Financial and Accounting
(HAROLD E. REYNOLDS) Officer)
* A Director
_____________________________________
(DERRICK D. CEPHAS)
* A Director
_____________________________________
(FREDERICK C. CHEN)
* A Director
_____________________________________
(J. BARCLAY COLLINS II)
* A Director
_____________________________________
(RICHARD W. DALRYMPLE)
* A Director
_____________________________________
(E. CHARLOTTE FANTA)
II-3
<PAGE>
SIGNATURE TITLE
* A Director
_____________________________________
(JAMES F. FULTON)
* A Director
_____________________________________
(MURRAY HANDWERKER)
* A Director
_____________________________________
(VIRGINIA M. KOPP)
* A Director
_____________________________________
(JOHN MORNING)
* A Director
_____________________________________
(MARGARET G. OSMER-MCQUADE)
* A Director
_____________________________________
(SALLY HERNANDEZ PINERO)
* A Director
_____________________________________
(DR. PAUL A. QUALBEN)
* A Director
_____________________________________
(EUGENE G. SCHULZ, JR.)
* A Director
_____________________________________
(HOWARD SMITH)
* A Director
_____________________________________
(DR. NORMAN R. SMITH)
* A Director
_____________________________________
(IRA T. WENDER)
/s/ James M. Large, Jr.
*By _________________________________
(JAMES M. LARGE, JR.)
ATTORNEY-IN-FACT
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
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<C> <S> <C>
1 --Form of Purchase Agreement...........................
4(a) --Restated Certificate of Incorporation of Dime
Bancorp, Inc. (the "Company"), incorporated by
reference to Appendix A to the Joint Proxy Statement-
Prospectus filed under cover of the Company's
Registration Statement on Form S-4 (No. 33-86002)..... **
4(b) --Amendment to Certificate of Incorporation, dated June
14, 1995, incorporated by reference to Exhibit 3(ii)
to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995................... **
4(c) --By-laws of the Company, incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on
Form S-4 (No. 33-86002)............................... **
4(d) --Form of Common Stock certificate, incorporated by
reference to Exhibit 5 to the Company's Registration
Statement on Form 8-A filed January 10, 1995.......... **
4(e) --Stockholder Protection Rights Agreement, dated as of
October 20, 1995, between the Company and The First
National Bank of Boston, as Rights Agent, incorporated
by reference to Exhibit (1) to the Company's
Registration Statement on Form 8-A filed November 3,
1995.................................................. **
5 --Opinion of Sullivan & Cromwell.......................
23(a) --Consent of Sullivan & Cromwell (included in the
opinion designated as Exhibit 5)......................
23(b) --Consent of KPMG Peat Marwick LLP.....................
24 --Powers of Attorney................................... *
99(a) --Warrant, dated as of July 9, 1993, between the
Company (as successor to Anchor Bancorp, Inc.) and the
Federal Deposit Insurance Corporation................. *
</TABLE>
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* Previously Filed.
** Incorporated by reference.
<PAGE>
EXHIBIT 1
CGSH DRAFT 5/16/96
______________________________________________________________________________
______________________________________________________________________________
DIME BANCORP, INC.
(a Delaware corporation)
8,407,500 Shares of Common Stock
PURCHASE AGREEMENT
Dated: May 16, 1996
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
<S> <C>
SECTION 1. Representations And Warranties................................. 3
(a) Representations and Warranties by the Company.................. 3
(i) Compliance with Registration Requirements......................... 3
(ii) Incorporated Documents........................................... 4
(iii) Independent Accountants......................................... 4
(iv) Financial Statements............................................. 4
(v) No Material Adverse Change in Business............................ 4
(vi) Good Standing of the Company..................................... 5
(vii) Good Standing of Subsidiaries................................... 5
(viii) Capitalization................................................. 5
(ix) Authorization of Agreement....................................... 6
(x) Authorization and Description of Securities....................... 6
(xi) Absence of Defaults and Conflicts................................ 6
(xii) Absence of Labor Dispute........................................ 7
(xiii) Absence of Proceedings......................................... 7
(xiv) Exhibits........................................................ 7
(xv) Absence of Further Requirements.................................. 7
(xvi) Possession of Licenses and Permits.............................. 7
(xvii) Title to Property.............................................. 8
(xviii) Compliance with Cuba Act...................................... 8
(xix) Environmental Laws.............................................. 8
(xx) Not an Investment Company....................................... 9
(b) Representations and Warranties by the Selling Stockholder...... 9
(i) The Warrant....................................................... 9
(ii) Authorization of Agreement....................................... 9
(iii) Absence of Violations........................................... 10
(iv) Accuracy of Information Regarding Selling Stockholder and FDIC... 10
(v) Authority to Execute this Agreement............................... 10
(vi) Absence of Proceedings........................................... 10
(vii) Absence of Manipulation......................................... 10
(c) Officer's Certificates......................................... 10
SECTION 2. Sale and Delivery to Underwriters; Closing.................... 11
(a) Securities..................................................... 11
(b) Payment........................................................ 11
(c) Denominations; Registration.................................... 12
SECTION 3. Covenants of the Company
(a) Compliance with Securities Regulations and Commission Requests. 12
(b) Filing of Amendments........................................... 12
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<TABLE>
<S> <C>
(c) Delivery of Registration Statements............................ 13
(d) Delivery of Prospectuses....................................... 13
(e) Continued Compliance with Securities Laws...................... 13
(f) Blue Sky Qualifications........................................ 14
(g) Rule 158....................................................... 14
(h) Listing........................................................ 14
(i) Restriction on Sale of Securities.............................. 14
(j) Reporting Requirements......................................... 15
SECTION 4. Payment of Expenses........................................... 15
(a) Expenses....................................................... 15
(b) Expenses of the Selling Stockholder............................ 16
(c) Termination of Agreement....................................... 16
(d) Effect on Warrant.............................................. 16
SECTION 5. Conditions of Underwriters' Obligations....................... 16
(a) Effectiveness of Registration Statement........................ 16
(b) Opinion of Counsel for Company................................. 17
(c) Opinion of Counsel for the Selling Stockholder................. 17
(d) Opinion of Counsel for Underwriters............................ 17
(e) Officers' Certificate.......................................... 17
(f) Certificate of Selling Stockholder............................. 18
(g) Accountant's Comfort Letter.................................... 18
(h) Bring-down Comfort Letter...................................... 18
(i) Approval of Listing............................................ 18
(j) No Objection................................................... 18
(k) Additional Documents........................................... 19
(l) Termination of Agreement....................................... 19
SECTION 6. Indemnification................................................ 19
(a) Indemnification by the Company................................. 19
(b) Indemnification by the Selling Stockholder..................... 20
(c) Indemnification by the Underwriters............................ 21
(d) Actions against Parties; Notification.......................... 21
(e) Other Agreements............................................... 22
SECTION 7. Contribution................................................... 22
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. 23
SECTION 9. Termination of Agreement....................................... 24
(a) Termination; General........................................... 24
(b) Liabilities.................................................... 24
</TABLE>
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<TABLE>
<S> <C>
SECTION 10. Default by One or More of the Underwriters.................... 24
SECTION 11. Default by the Selling Stockholder or the Company............. 25
SECTION 12. Notices....................................................... 25
SECTION 13. Parties....................................................... 25
SECTION 14. GOVERNING LAW AND TIME........................................ 26
SECTION 15. Effect of Headings............................................ 26
</TABLE>
iii
<PAGE>
DIME BANCORP, INC.
(a Delaware corporation)
8,407,500 Shares of Common Stock
(Par Value $0.01 Per Share)
PURCHASE AGREEMENT
------------------
May 16, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
as Representative of the several Underwriters
North Tower
World Financial Center
New York, New York 10281-l209
Ladies and Gentlemen:
Dime Bancorp, Inc., a Delaware corporation (the "Company"), and the
Federal Deposit Insurance Corporation, a corporation duly organized and existing
under the laws of the United States (the "FDIC"), as the manager of the FSLIC
Resolution Fund (the "FRF;" the FDIC in its capacity as manager of the FRF is
referred to herein as the "Selling Stockholder"), confirm their respective
agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch is acting as representative (in such capacity,
the "Representative"), with respect to the sale by the Selling Stockholder, and
the purchase by the Underwriters, acting severally and not jointly, of 8,407,500
shares (the "Securities") of Common Stock, par value $.01 per share (the "Common
Stock"), of the Company. The Securities are issuable to the Selling Stockholder
at a price of $0.01 per share of Common Stock pursuant to the warrant, dated as
of July 9, 1993 (the "Warrant"), issued by the Company (as successor to Anchor
Bancorp, Inc.) to the Selling Stockholder.
The Company and the Selling Stockholder understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representative deems advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-3372) covering the
registration
1
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of the Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or prospectuses. Promptly after
execution and delivery of this Agreement, the Company will either (i) prepare
and file a prospectus in accordance with the provisions of Rule 430A ("Rule
430A") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the
1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for
use in connection with the offering of the Securities, is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated April 26, 1996 together with the Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
2
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SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company
---------------------------------------------
represents and warrants to each Underwriter and the Selling Stockholder as of
the date hereof and as of the Closing Time referred to in Section 2(b) hereof,
as follows:
(i) Compliance with Registration Requirements. The Company meets
-----------------------------------------
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act; no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
filed and at the Closing Time, included or will include an untrue statement
of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement, any post-
effective amendment to the Registration Statement, the Prospectus or any
amendment or supplement to the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through Merrill Lynch or by the Selling Stockholder expressly
for use in the Registration Statement, the Prospectus or any such amendment
or supplement.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act and the 1933 Act
Regulations.
(ii) Incorporated Documents. The documents incorporated or deemed
----------------------
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time
3
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they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the
time the Prospectus was issued and at the Closing Time, did not and will
not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which such statements were made, not misleading.
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The consolidated statements of
--------------------
financial condition, consolidated statements of income, consolidated
statements of changes in stockholders' equity and consolidated statements
of cash flows included in the Registration Statement and the Prospectus,
together with the related schedules and notes (the "Financial Statements"),
present fairly in all material respects the consolidated financial
position, results of operations, changes in stockholders' equity and cash
flows of the Company and its consolidated subsidiaries at the dates
indicated and, for the periods specified, as the case may be, subject in
the case of unaudited balance sheets and statements to normal year-end
audit adjustments; said Financial Statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved, except as may be
noted therein, subject in the case of unaudited balance sheets and
statements to normal year-end audit adjustments and the limited scope of
the notes thereto.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change, or development involving a prospective material
adverse change, in the financial condition, results of operation or
stockholders' equity of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (C) there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the state of
4
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Delaware and has corporate power and authority to own, lease and operate
its properties and to conduct its business in all material respects as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. The Dime Savings Bank of New
-----------------------------
York, FSB (the "Bank") has been duly organized and is validly existing as a
federally chartered stock savings bank and is a member in good standing of
the Federal Home Loan Bank of New York; the Bank's deposit accounts are
insured up to applicable limits by the Savings Association Insurance Fund
or the Bank Insurance Fund, each of the FDIC; and no proceeding for the
termination or revocation of such insurance is pending or, to the knowledge
of the Company or the Bank, threatened. The Bank is the only "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) and has corporate power and authority to own, lease and
operate its properties and to conduct its business in all material respects
as described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of the Bank has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of the Bank was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary.
The only subsidiaries of the Company are the subsidiaries listed on
Schedule C hereto.
(viii) Capitalization. The Securities have been duly authorized
--------------
and, when issued and delivered in accordance with the terms of the Warrant,
will be duly and validly issued and fully paid and non-assessable; none of
the outstanding shares of Common Stock was issued, and the Securities will
not be issued, in violation of the preemptive or other similar rights of
any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Common Stock
-------------------------------------------
conforms to the description thereof under the heading "Description of
Capital Stock" contained in the Prospectus and such description, insofar as
it purports to be a
5
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summary of the instruments defining the rights of holders of the Common
Stock, is accurate, complete and fair; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor
---------------------------------
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities) and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
default under or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws of the Company or any subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the
------------------------
employees of the Company or any subsidiary exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
----------------------
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened,
6
<PAGE>
against or affecting the Company or any subsidiary, which, individually or
in the aggregate for all such actions, suits, proceedings, inquiries or
investigations, is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which might reasonably be expected to
result in a Material Adverse Effect (other than as disclosed in the
Registration Statement), or which might reasonably be expected to
materially and adversely affect the properties or assets thereof (other
than as disclosed in the Registration Statement) or the consummation of the
transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder.
(xiv) Exhibits. There are no contracts or documents which are
--------
required to be described in the Registration Statement, the Prospectus or
the documents incorporated by reference therein, or to be filed as exhibits
thereto, which have not been so described or filed as required.
(xv) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(xvi) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xvii) Title to Property. The Company and its subsidiaries have
-----------------
good and marketable title to all real property reflected in the most recent
balance sheet included in the Prospectus as owned by the Company and its
subsidiaries and good title to all other properties reflected in the most
recent balance sheet included in the Prospectus as owned by them, in each
case, free and clear of all mortgages, pledges, liens, security
7
<PAGE>
interests, claims, restrictions or encumbrances of any kind except such as
(a) are described in the Prospectus or (b) do not, singly or in the
aggregate, materially interfere with the use made and proposed to be made
of such property by the Company or any of its subsidiaries or, with respect
to any such real property, render title unmarketable as to a material part
thereof; and all of the leases and subleases material to the business of
the Company and its subsidiaries, considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties described in
the Prospectus, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(xviii) Compliance with Cuba Act. The Company has complied with,
------------------------
and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(xix) Environmental Laws. Except as described in the Registration
------------------
Statement or except as would not, singly or in the aggregate, result in a
Material Adverse Effect: (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or redemption, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
8
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(xx) Not an Investment Company. The Company is not an "investment
-------------------------
company" or a company "controlled by" an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(b) Representations and Warranties by the Selling Stockholder. The
---------------------------------------------------------
Selling Stockholder represents and warrants to each Underwriter and the Company
as of the date hereof and as of the Closing Time, and agrees with each
Underwriter and the Company as follows:
(i) The Warrant. The Selling Stockholder has as of the date of this
-----------
Agreement, good and valid title to the Warrant, free and clear of all
liens, encumbrances, security interests and claims whatsoever; and at or
prior to the Closing Time, the Selling Stockholder will have duly
authorized and exercised the Warrant and complied with all of the
conditions applicable to the Selling Stockholder for such exercise,
including the payment of the consideration specified therein, and pursuant
to such exercise, at the Closing Time, the Selling Stockholder shall have
good and valid title to the Securities being sold pursuant to this
Agreement, free and clear of all liens, encumbrances, security interests
and claims whatsoever; and upon sale and delivery of, and payment for, such
Securities, as provided herein, at the Closing Time, the Selling
Stockholder will convey to the Underwriters good and valid title to such
Securities, free and clear of all liens, encumbrances, security interests
and claims whatsoever.
(ii) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Selling Stockholder and is the
legal, valid and binding agreement of the Selling Stockholder, enforceable
in accordance with its terms.
(iii) Absence of Violations. Neither the execution and delivery of
---------------------
this Agreement, nor the sale of the Securities by the Selling Stockholder,
nor the consummation of any of the other transactions contemplated herein,
nor the fulfillment of the terms hereof, has violated or will violate any
provision of Federal law as administered by the FDIC or to which the
Selling Stockholder is subject.
(iv) Accuracy of Information Regarding Selling Stockholder and FDIC.
--------------------------------------------------------------
Such parts of the Registration Statement and the Prospectus comprising
information under the caption "The Selling Stockholder" which specifically
relate to the Selling Stockholder and the FDIC will not, at the date the
Registration Statement becomes effective, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and at
the date of the Prospectus and at the Closing Time will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading.
9
<PAGE>
(v) Authority to Execute this Agreement. The FDIC has statutory
-----------------------------------
authority to execute this Agreement on behalf of the Selling Stockholder
pursuant to 12 U.S.C. 1821a, to sell, assign, transfer and deliver the
Securities being sold by the Selling Stockholder hereunder in the manner
provided herein, to perform its obligations under this Agreement and to
take all other actions taken by it on behalf of the Selling Stockholder in
connection herewith.
(vi) Absence of Proceedings. No actions, suits or proceedings before
----------------------
or by any court or governmental agency, body or authority, or arbitrator
are pending or, to the best of the Selling Stockholder's knowledge,
threatened or contemplated, seeking to prevent the sale of the Securities
or the consummation of this Agreement.
(vii) Absence of Manipulation. The FDIC and the Selling Stockholder
-----------------------
have not taken and will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result under the 1934 Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(c) Officer's Certificates. Any certificate signed by any officer of
----------------------
the Company or any of its subsidiaries delivered to the Representative or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter and to the Selling Stockholder as to the matters
covered thereby, without personal liability for the officer signing such
certificate; and any certificate signed by or on behalf of the Selling
Stockholder as such and delivered to the Representative or to counsel for the
Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Selling Stockholder to the Underwriters and
to the Company as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Securities. On the basis of the representations and warranties
----------
herein contained and subject to the terms and conditions herein set forth, the
Selling Stockholder agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Selling Stockholder, at the price per share set forth in Schedule B,
the number of Securities set forth in Schedule A opposite the name of the
Underwriter, plus any additional number of Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof,
subject, in each case, to such adjustments among the Underwriters as the
Representative in its sole discretion shall make to eliminate any sales or
purchases of fractional securities.
(b) Payment. Payment of the purchase price for, and delivery of
-------
certificates for, the Securities shall be made at the offices of Cleary,
Gottlieb, Steen & Hamilton, One Liberty Plaza, New York, New York, 10006, or at
such other place as shall be agreed upon by the Representative, the Company and
the Selling Stockholder, at 10:00 A.M. Eastern time
10
<PAGE>
on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on
any given day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the Representative
and the Company and the Selling Stockholder (such time and date of payment and
delivery being herein called the "Closing Time").
Payment shall be made to the Selling Stockholder by wire transfer of
immediately available funds to a bank account designated by the Selling
Stockholder against (a) exercise by the Selling Stockholder of the Warrant in
accordance with the terms thereof, including the payment for the Common Stock
purchased pursuant to such Warrant, and (b) delivery by the Company to the
Representative for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Securities that it has agreed to purchase. Merrill Lynch, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) Denominations; Registration. Certificates for the Securities
---------------------------
shall be in such denominations and registered in such names as the
Representative may request in writing at least one full business day before the
Closing Time. The certificates for the Securities will be made available for
examination and packaging by the Representative in The City of New York not
later than 10:00 A.M. (Eastern time) on the business day prior to the Closing
Time.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriter and the Selling Stockholder as follows:
(a) Compliance with Securities Regulations and Commission Requests.
--------------------------------------------------------------
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Representative and the
Selling Stockholder promptly, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become effective,
or any supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not,
11
<PAGE>
it will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representative
--------------------
and the Selling Stockholder notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under Rule
462(b)), any Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the Representative and the Selling Stockholder with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which the Selling Stockholder, the Representative or counsel for the
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
-----------------------------------
will deliver to the Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representative, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters.
(d) Delivery of Prospectuses. The Company has delivered to each
------------------------
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request.
(e) Continued Compliance with Securities Laws. The Company will
-----------------------------------------
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations to the extent necessary to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
the Underwriters or the Company, based upon advice of counsel, to amend the
12
<PAGE>
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or if it shall be necessary, in the opinion of such
party, based upon the advice of counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section 3(b),
such amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
-----------------------
in cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Representative may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b) Registration
Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
--------
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Listing. The Company will use its best efforts to effect the
-------
listing of the Securities on the New York Stock Exchange.
(i) Restriction on Sale of Securities. During a period of 45 days
---------------------------------
from the date of the Prospectus, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise
13
<PAGE>
The foregoing sentence shall not apply to (A) the Securities to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof and referred to in the Prospectus, (C) any shares of Common
Stock issued or options to purchase Common Stock granted pursuant to existing
employee benefit plans of the Company referred to in the Prospectus, (D) any
shares of Common Stock issued pursuant to any non-employee director stock plan
or dividend reinvestment plan or (E) an acquisition;
(j) Reporting Requirements. The Company, during the period when the
----------------------
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations and the Company will cause the Bank to file all documents required
to be filed with any supervisory, regulatory, administrative or governmental
agency, body or authority, whether pursuant to the 1934 Act and the 1934 Act
Regulations or otherwise (except reports to any bank or thrift regulatory
agencies prepared on a confidential basis), except when the failure to file such
documents could not reasonably be expected to result, directly or indirectly, in
a Material Adverse Effect.
SECTION 4. Payment of Expenses. (a) Expenses. The Company and the
------------------- --------
Selling Stockholder covenant and agree with one another and with the several
Underwriters that (a) the Company will pay the following expenses incident to
this Agreement: (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities,
(ix) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the NASD of
14
<PAGE>
the terms of the sale of the Securities, (x) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange and
(xi) the fees and disbursements of Brown & Wood, outside counsel for the Selling
Stockholder.
(b) Expenses of the Selling Stockholder. The Selling Stockholder will
-----------------------------------
pay or cause to be paid all costs and expenses incident to the performance of
its obligations hereunder that are not otherwise specifically provided for in
this Section. Merrill Lynch agrees to pay any state stock transfer tax and the
Selling Stockholder agrees to reimburse Merrill Lynch for associated carrying
costs if such tax payment is not rebated on the day of payment and for any
portion of such tax payment not rebated. It is understood, however, that,
except as provided in this Section and Sections 6, 7 and 9 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stamp duties, capital duties and stock transfer taxes, if any,
payable on resale of any of the Securities by them, and any advertising expenses
connected with any offers they may make.
(c) Termination of Agreement. If this Agreement is terminated by the
------------------------
Representative in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company shall reimburse the Underwriters for all of
their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
(d) Effect on Warrant. This Section 4 shall not affect the
-----------------
arrangements between the Company and the Selling Stockholder for payment of
expenses contained in the Registration Rights Agreement attached as Exhibit II-A
to the Warrant, which shall remain in effect as between the Company and the
Selling Stockholder and, solely as between the Company and the Selling
Stockholder, shall govern in the event of any inconsistency with this Section 4.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
---------------------------------------
of the several Underwriters hereunder are subject to the accuracy, as of the
Closing Time, of the representations and warranties of the Company and the
Selling Stockholder contained in Section 1 hereof or in certificates of any
officer of the Company or any subsidiary of the Company or on behalf of the
Selling Stockholder delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder to
be performed at or prior to the Closing Time, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
---------------------------------------
Statement, including any Rule 462(b) Registration Statement, has become
effective and at the Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters. A prospectus containing the Rule 430A
Information shall have been filed with the Commission in accordance with
Rule 424(b) (or a post-effective amendment providing such information shall
have been filed and declared
15
<PAGE>
effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
------------------------------
Representative shall have received the favorable opinions, dated as of
Closing Time, of Sullivan & Cromwell, special counsel for the Company, and
Gene C. Brooks, Esq., Executive Vice President and General Counsel for the
Company, in each instance in form and substance reasonably satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of
such opinions for each of the other Underwriters, collectively to the
effect set forth in Exhibit A hereto.
(c) Opinion of Counsel for the Selling Stockholder. At Closing Time,
----------------------------------------------
the Representative shall have received the favorable opinion, dated as of
Closing Time, of the Deputy General Counsel for the Selling Stockholder, in
form and substance reasonably satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letters for each of the
other Underwriters to the effect set forth in Exhibit B hereto.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
-----------------------------------
Representative shall have received the favorable opinion, dated as of
Closing Time, of Cleary, Gottlieb, Steen & Hamilton, counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters with respect to such matters as they may
reasonably request. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States, and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representative. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have
---------------------
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change, or
development involving a prospective material adverse change, in the
financial condition, results of operations or stockholders' equity of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representative and the
Selling Stockholder shall have received a certificate signed by the
President or a Vice President of the Company and by the chief financial or
chief accounting officer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
satisfied all
16
<PAGE>
conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or are contemplated by the Commission.
(f) Certificate of Selling Stockholder. The FDIC shall have furnished
----------------------------------
to the Representative and the Company a certificate, signed by the acting
Director or an Associate Director of Resolutions of the FDIC, dated the
date of the Closing Time, to the effect that the signer of such certificate
has carefully examined the Registration Statement, the Prospectus, any
amendment or supplement to the Prospectus, and this Agreement and that the
representations and warranties of the FDIC and the Selling Stockholder in
this Agreement are true and correct in all material respects on and as of
the Closing Time to the same effect as if made at the Closing Time and the
FDIC and the Selling Stockholder have complied with all the agreements and
satisfied all the conditions on their part to be performed or satisfied at
or prior to the Closing Time.
(g) Accountant's Comfort Letter'. At the time of the execution of
---------------------------
this Agreement, the Representative shall have received from KPMG Peat
Marwick LLP a letter dated such date, in form and substance satisfactory to
the Representative, together with signed or reproduced copies of such
letter for each of the other Underwriters, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Representative
-------------------------
shall have received from KPMG Peat Marwick LLP a letter, dated as of
Closing Time, to the effect that it reaffirms the statements made in the
letter furnished pursuant to subsection (g) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(i) Approval of Listing. At the Closing Time, the Securities shall
-------------------
have been approved for listing on the New York Stock Exchange, subject only
to official notice of issuance.
(j) No Objection. The NASD shall not have raised any objection with
------------
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(k) Additional Documents. At the Closing Time, counsel for the
--------------------
Underwriters shall have been furnished with such documents and opinions as
they may reasonably require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company and the Selling Stockholder in
17
<PAGE>
connection with the issuance and sale of the Securities as herein
contemplated shall be reasonably satisfactory in form and substance to the
Representative and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this
------------------------
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Representative by notice to the
Company at any time at or prior to Closing Time, and such termination shall
be without liability of any party to any other party, except as provided in
Section 4, and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification by the Company. The Company agrees to indemnify
------------------------------
and hold harmless the Selling Stockholder, each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act to the extent and in the manner as set forth
below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch or the
Selling Stockholder), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission,
18
<PAGE>
to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company (A) by the Selling Stockholder, or (B) by any Underwriter through
Merrill Lynch, expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided further that the foregoing indemnity with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) from
whom the person asserting any such loss, liability, claim or damage purchased
Securities if such untrue statement or omission or alleged untrue statement or
omission made in such preliminary prospectus is eliminated or remedied in the
Prospectus (as amended or supplemented by the Company if the Company shall have
furnished any amendments or supplements thereto) and a copy of the Prospectus
(as so amended or supplemented), which at such time had been provided to the
Underwriters for their use, shall not have been furnished to such person at or
prior to the written confirmation of sale of such Securities to such person.
(b) Indemnification by the Selling Stockholder. The Selling
------------------------------------------
Stockholder agrees to indemnify and hold harmless the Company, its directors,
each of its officers who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act, and each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the extent and in the manner as set forth below
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by the Selling Stockholder expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Indemnification by the Underwriters. Each Underwriter severally
-----------------------------------
agrees to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, and the Selling Stockholder, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to
19
<PAGE>
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party
-------------------------------------
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) or 6(b) above, counsel to the indemnified parties shall be selected by
Merrill Lynch, and in the case of parties indemnified pursuant to Section 6(c)
above, counsel to the indemnified parties shall be selected by the Company or
the Selling Stockholder, as the case may be. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Other Agreements. The provisions of this Section shall not affect
----------------
any agreement between the Company and the Selling Stockholder, or between the
Representative and the Selling Stockholder, with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party (other than pursuant to the terms thereof) in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate
20
<PAGE>
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Selling Stockholder
on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Selling Stockholder (which for purposes of this
Agreement shall be treated as a benefit of both the Company and the Selling
Stockholder) and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet bear to the aggregate initial
public offering price of the Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholder on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Stockholder or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public
21
<PAGE>
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Securities set forth opposite their respective names
in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among
the Company and the Selling Stockholder with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement, or in certificates of officers of the Company or the Selling
Stockholder submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company or the
Selling Stockholder, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representative may terminate this
--------------------
Agreement, by notice to the Company and the Selling Stockholder, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change, or development involving a
prospective material adverse change, in the financial condition, results of
operations or stockholders' equity of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any material change or
development involving a prospective material change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representative, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or limited
by the Commission or the New York Stock Exchange, or if trading
22
<PAGE>
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
-----------
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or
------------------------------------------
more of the Underwriters shall fail at Closing Time to purchase the Securities
which it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representative shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then: (a) if the number of
Defaulted Securities does not exceed 10% of the number of Securities to be
purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or (b) if the
number of Defaulted Securities exceeds 10% of the number of Securities to be
purchased on such date, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representative, the Company or the
Selling Stockholder shall have the right to postpone Closing Time, for a period
not exceeding seven days, in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Default by the Selling Stockholder or the Company. If
-------------------------------------------------
(a) the Selling Stockholder shall fail at Closing Time to exercise the Warrant
in accordance with its terms, including the payment to the Company that it is
obligated to deliver thereunder, or (b) if the Selling Stockholder shall make
such delivery but the Company shall fail to deliver the Securities to the
Representative, then the Underwriters may, at the option of the Representative,
by notice from the Representative to the Company and the Selling
23
<PAGE>
Stockholder, terminate this Agreement without any liability on the fault of any
non-defaulting party except that the provisions of Sections 1, 4, 6 and 7 shall
remain in full force and effect. No action taken pursuant to this Section 11
shall relieve the defaulting party from liability, if any, in respect of such
default.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at North Tower, World
Financial Center, New York, New York 10281-1201, attention of ____________;
notices to the Company shall be directed to it at 589 Fifth Avenue, New York,
New York 10017, attention of General Counsel; and notices to the Selling
Stockholder shall be directed to the Federal Deposit Insurance Corporation, 550
17th Street, N.W., Washington, DC 20429, attention of the General Counsel.
SECTION 13. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon each of the Underwriters, the Company and the Selling
Stockholder and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and the Selling
Stockholder and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling Stockholder
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 15. Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
24
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Stockholder a
counterpart hereof, whereupon this agreement, along with all counterparts, will
become a binding agreement among the Underwriters, the Company and the Selling
Stockholder in accordance with its terms.
Very truly yours,
DIME BANCORP, INC.
By _________________________________
Name:
Title:
FEDERAL DEPOSIT INSURANCE CORPORATION,
as the manager of the FSLIC Resolution Fund
By _________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By________________________________
Authorized Signatory
For itself and as Representative of the other Underwriters named in
Schedule A hereto.
25
<PAGE>
EXHIBIT A
---------
OPINION OF THE COMPANY'S SPECIAL COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
The opinions of special counsel for the Company referred to in Section
5(b) collectively shall be substantially to the following effect:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware.
The Company has the requisite corporate power and authority to conduct
its business in all material respects as described in the Prospectus.
(ii) The Bank is validly existing as a Federal savings bank under the
Federal laws of the United States. The Bank has the requisite corporate
power and authority to conduct its business in all material respects as
described in the Prospectus.
(iii) The Securities have been duly authorized and validly issued and
are fully paid and nonassessable.
(iv) The statements set forth under the heading "Description of
Capital Stock" in the Prospectus, insofar as such statements purport to
summarize certain provisions of the Company's certificate of
incorporation and by-laws defining the rights of holders of the
Securities, provide a fair summary of such provisions in all material
respects. The current form of certificate for the common stock, par
value $0.01 per share, of the Company complies as to form with the
requirements of the General Corporation Law of Delaware.
(v) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws
of the United States, the laws of the State of New York and the
General Corporation Law of the State of Delaware for the issuance,
sale and delivery of the Securities by the Company pursuant to the
Warrant have been obtained or made.
(vi) The issuance of the Securities by the Company pursuant to the
Warrant does not (a) violate the Company's certificate of incorporation
or by-laws, (b) result in a default under or breach of the agreements
listed in Annex A to this opinion or (c) violate any Federal law of the
United States or law of the State of New York applicable to the
Company; provided, however, that, for purposes of
-------- -------
this paragraph (vi), such counsel need not express an opinion with
respect to Federal or state securities laws, other antifraud laws or
fraudulent transfer laws.
(vii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
A-1
<PAGE>
In addition, such counsel shall state that they have reviewed the
Registration Statement and the Prospectus, participated in discussions with the
Representative and the representatives of the Company and its accountants and
that, on the basis of the information gained in such discussions, the
Registration Statement, as of the date it became effective, and the Prospectus,
as of the date of the Prospectus, appeared on their face to be appropriately
responsive in all material respects to the requirements of the 1933 Act and the
1933 Act Regulations. Further, such counsel shall confirm that nothing that
came to their attention in the course of the aforementioned review has caused
them to believe that the Registration Statement, as of the date it became
effective, contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of the date of the
Prospectus and as of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
The limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such, however, that such counsel shall not be required to assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus except for those made
under the captions "Description of Capital Stock" and "Underwriting" in the
Prospectus insofar as they relate to provisions of documents therein described.
Also, such counsel need not express any opinion or belief as to the financial
statements or other financial data contained in the Registration Statement of
the Prospectus.
A-2
<PAGE>
EXHIBIT B
OPINION OF THE SENIOR DEPUTY GENERAL COUNSEL
FOR THE SELLING STOCKHOLDER, TO BE DELIVERED
PURSUANT TO SECTION 5(c)
__________, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
as Representative of the several Underwriters
North Tower
World Financial Center
New York, New York 10281-1209
Dear Sirs:
I am the Senior Deputy General Counsel in the Legal Division of the
Federal Deposit Insurance Corporation (the "FDIC"). I and members of my staff
have acted as counsel for the FDIC in its capacity as manager of the FSLIC
Resolution Fund ("FRF") in connection with the preparation and filing by Dime
Bancorp, Inc., a savings and loan holding company organized under the laws of
the State of Delaware ("Bancorp") with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933, as amended (the "Act"), of its
registration statement on Form S-3 (file number 33-33372), for the registration
under the Act of the offering and sale of 8,407,500 shares of Common Stock
("Common Stock"), par value $0.01 per share (the "Securities") owned by the FRF
(the "Selling Stockholder"). The Securities have been issued to the Selling
Stockholder, on the date of this opinion, at a price of $0.01 per share of
Common Stock, pursuant to the exercise of a warrant of Bancorp, dated as of July
9, 1993 (the "Warrant") issued by Bancorp (as successor to Anchor Bancorp, Inc.)
to the Selling Stockholder. Such registration statement, as amended when it
became effective, is herein called the "Registration Statement". This opinion is
furnished pursuant to Section 5(c) of the Purchase Agreement (the "Purchase
Agreement") dated May __, 1996 between the FDIC, Bancorp and the several
underwriters named therein (the "Underwriters") for whom you are acting as
representative (the "Representative").
In arriving at the opinions expressed below, I and members of my staff
have examined and relied on the following documents:
(a) an executed copy of the Purchase Agreement;
(b) the Registration Statement;
(c) the Prospectus dated May __, 1996;
B-1
<PAGE>
(d) the documents delivered to you by Bancorp and the FDIC at the
closing pursuant to the Underwriting Agreement.
In addition, we have examined and relied on the originals or copies
certified or otherwise identified to our satisfaction of all such corporate
records of the FDIC and Bancorp and such other instruments and other
certificates of public officials, officers and representatives of the FDIC and
such other persons, and we have made such investigations of law, as we have
deemed appropriate as a basis for the opinions expressed below. In rendering
the opinions expressed below, we have assumed and have not verified that the
signatures on all documents that we have examined are genuine.
Based on the foregoing and subject to the assumptions and
qualifications set forth below, it is my opinion that:
1. The Purchase Agreement has been duly authorized, executed and
delivered by the FDIC, as manager of the Selling Stockholder, and is the legal,
valid and binding agreement of the Selling Stockholder enforceable in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws relating to
or affecting the enforcement of creditors' rights generally or by general
principles of equity regardless of whether enforcement is sought in a proceeding
in equity or at law; and, except to the extent, if any, that the provisions of
Section 6 of the Purchase Agreement may be limited by applicable law or
unenforceable as against public policy.
2. The delivery by the Selling Stockholder to the Underwriter of the
Securities being sold by the Selling Stockholder pursuant to the Purchase
Agreement against payment therefor as provided in the Purchase Agreement will
convey good and valid title to the Securities being sold to the Underwriters
free and clear of all liens, encumbrances, security interests, restrictions and
claims whatsoever.
3. Neither the exercise and delivery of the Warrant nor the execution
and delivery of the Purchase Agreement nor the sale of the Securities by the
Selling Stockholder, nor the consummation of the transactions contemplated in
the Purchase Agreement nor the fulfillment of the terms of the Purchase
Agreement has violated or will violate any provisions of Federal law as
administered by the FDIC or to which the Selling Stockholder is subject.
4. The FDIC has the statutory authority to execute the Purchase
Agreement on behalf of the Selling Stockholder pursuant to 12 U.S.C. Sect.
1821a, and to sell, assign, transfer and deliver the Securities being sold by
the Selling Stockholder pursuant to the Purchase Agreement in the manner
provided for in the Purchase Agreement, to perform its obligation under the
Purchase Agreement and to take all other actions taken by it on behalf of the
Selling Stockholder in connection therewith.
B-2
<PAGE>
5. No actions, suits or proceedings before or by any court or
governmental agency, body or authority, or arbitrator are pending or, to the
best of my knowledge, threatened or contemplated, seeking to prevent the sale of
the Securities being sold by the Selling Stockholder pursuant to the Purchase
Agreement or the consummation of the Purchase Agreement.
6. To the best of my knowledge such parts of the Registration
Statement and the Prospectus comprising information under the caption "Selling
Stockholder" which specifically relate to the Selling Stockholder and the FDIC
(i) did not at the date the Registration Statement became effective, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (ii) did not at the date of the Prospectus and do not on the date hereof
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 under
which they were made, not misleading.
In rendering the opinion set forth in paragraph 1 above, I have with
your permission assumed that the Purchase Agreement has been duly authorized,
executed and delivered by each of the respective parties thereto (other than the
FDIC).
In rendering the opinion set forth in paragraph 3 above, I have with
your permission assumed that:
(x) The Registration Statement has become effective under the Act; any
required filing of the Prospectus and any supplements thereto pursuant to Rule
424(b) has been made in the manner and within the time period required by Rule
424(b); no stop order suspending the effectiveness of the Registration Statement
or suspending the offering of the Notes has been issued and no proceedings for
such purposes have been instituted or threatened.
(y) At the time the Registration Statement became effective, the
Registration Statement and the Prospectus and each supplement thereto complied
as to form in all material respects with the applicable requirements of the Act
and the respective rules thereunder; and (except as specifically addressed by
the matters set forth in paragraph 6 above) the Registration Statement at the
date of its effectiveness did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and the Prospectus at
its date and at the Closing Date did not contain or does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
I express no opinion other than as to the Federal law of the United
States of America.
B-3
<PAGE>
I am furnishing this opinion letter to you solely for your benefit.
This opinion letter is not to be used, circulated, quoted or otherwise referred
to for any other purpose.
Very truly yours,
B-4
<PAGE>
EXHIBIT 5
[LETTERHEAD OF SULLIVAN & CROMWELL]
May 15, 1996
Dime Bancorp, Inc.,
589 Fifth Avenue,
New York, New York 10017
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933 (the
"Act") of 8,407,500 shares (the "Shares") of Common Stock, par value $0.01 per
share, of Dime Bancorp, Inc., a Delaware corporation (the "Company"), and
related stock purchase rights (the "Rights") to be issued pursuant to the
Stockholder Protection Rights Agreement, dated as of October 20, 1995 (the
"Rights Agreement"), between the Company and the First National Bank of Boston,
as Rights Agent (the "Rights Agent"), we, as your special counsel, have examined
such corporate records, certificates and other documents, and such questions of
law, as we have considered necessary or appropriate for the purposes of this
opinion. Upon the basis of such examination, we advise you that, in our opinion:
<PAGE>
Dime Bancorp, Inc. -2-
(1) When the Shares have been duly issued and sold in accordance with
the terms and conditions of the Warrant, dated July 9, 1993 (the
"Warrant"), of the Company (as successor by merger to Anchor Bancorp,
Inc.), the Shares will be validly issued, fully paid and nonassessable.
(2) Assuming that the Rights Agreement has been duly authorized,
executed and delivered by the Rights Agent, when the Shares have been
validly issued and sold in accordance with the terms of the Warrant, the
Rights attributable to the Shares will be validly issued.
In connection with our opinion set forth in paragraph (2) above, we note that
the question whether the Board of Directors of the Company might be required to
redeem the Rights at some future time will depend upon the facts and
circumstances existing at that time and, accordingly, is beyond the scope of
such opinion.
The foregoing opinion is limited to the General Corporation Law of the State
of Delaware, and we are expressing no opinion as to the effect of the laws of
any other jurisdiction.
<PAGE>
Dime Bancorp, Inc. -3-
We have relied as to certain matters on information obtained from public
officials, officers of the Company and other sources believed by us to be
responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity of
Common Stock" in the Prospectus. 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/ Sullivan & Cromwell
<PAGE>
Independent Auditors' Consent
The Board of Directors
Dime Bancorp, Inc.
We consent to the use of our report dated January 26, 1996, incorporated by
reference in the Registration Statement on Form S-3 of Dime Bancorp, Inc.,
relating to our audit of the consolidated statements of financial condition of
Dime Bancorp, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for each of the years in the three-year period ended December 31,
1995, and to the references to our Firm under the headings "Selected
Consolidated Financial Data" and "Experts" in the Registration Statement. Our
report included an explanatory paragraph that described a change in accounting
principle and adoption of new accounting principles, as discussed in the notes
to those statements.
KPMG PEAT MARWICK LLP
New York, New York
May 16, 1996
