<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-9
(RULE 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
DIME BANCORP, INC.
(Name of Subject Company)
DIME BANCORP, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
25429Q
(CUSIP Number of Class of Securities)
JAMES E. KELLY, ESQ.
GENERAL COUNSEL
DIME BANCORP, INC.
589 FIFTH AVENUE
3RD FLOOR
NEW YORK, NEW YORK 10017
(212) 326-6170
(Name, address and telephone number of person authorized to receive notice
and communications on behalf of the person(s) filing statement)
Copy to:
MITCHELL S. EITEL, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
<PAGE> 2
This solicitation/recommendation statement on Schedule 14D-9 is filed by
Dime Bancorp, Inc., a Delaware corporation ("Dime"), in relation to the exchange
offer disclosed in the Schedule TO, dated March 15, 2000, of North Fork
Bancorporation, Inc., a Delaware corporation ("North Fork"), and Fleet Boston
Corporation, a Rhode Island corporation ("FleetBoston"), to exchange each issued
and outstanding share of Dime common stock, par value $0.01 per share, for
0.9302 of a share of North Fork common stock, par value $0.01 per share, and
$2.00 in cash, upon the terms and subject to the conditions described in the
Schedule TO, the Registration Statement filed on Form S-4 by North Fork on March
15, 2000 and the Prospectus relating to North Fork's common stock dated March
14, 2000 and contained therein (each of which is an Exhibit and incorporated by
reference into North Fork's Schedule TO).
In response to Items 1 through 8 of this Schedule 14D-9, Dime hereby
incorporates by reference its disclosure document, included herewith as Exhibit
(a)(1), which contains the information responsive to the requirements of this
Schedule 14D-9.
ITEM 9. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- ------------------------------------------------------------
<S> <C>
(a)(1) Solicitation/Recommendation Statement, first mailed to Dime
stockholders on March 21, 2000
(a)(2) Proxy Statement/Prospectus, dated February 9, 2000, relating
to Dime-Hudson merger (incorporated by reference from Dime's
Registration Statement on Form S-4, filed February 8, 2000,
and Dime's 424(b)(3) prospectus, filed February 11, 2000)
(a)(3) Press release, dated March 6, 2000 (incorporated by
reference to Dime's Rule 425 communication and Schedule 14A
additional proxy materials, each filed March 6, 2000)
(a)(4) Press release, dated March 7, 2000 (incorporated by
reference to Dime's Rule 425 communication and Schedule 14A
additional proxy materials, each filed March 7, 2000)
(a)(5) Supplement, dated March 7, 2000, to Proxy
Statement/Prospectus, dated February 9, 2000 (incorporated
by reference to Dime's Rule 425 communication and Exhibit
20.1 to Dime's Current Report on Form 8-K, each filed March
8, 2000)
(a)(6) Press release, dated March 8, 2000 (incorporated by
reference to Dime's Current Report on Form 8-K, filed March
8, 2000)
(a)(7) Presentation materials for investors (incorporated by
reference to Dime's Rule 425 communication and Exhibit 99.1
to Dime's Current Report on Form 8-K, each filed March 8,
2000)
(a)(8) Letter to 401(k) participants delivering supplement, dated
March 7, 2000, to Proxy Statement/Prospectus, dated February
9, 2000 (incorporated by reference to Dime's Rule 425
communication and Schedule 14A additional proxy materials,
each filed March 9, 2000)
(a)(9) Press Release, dated March 9, 2000 (incorporated by
reference to Dime's Current Report on Form 8-K, filed March
10, 2000)
(a)(10) Public announcement advertisement, dated March 10, 2000
(incorporated by reference to Dime's Rule 425 communication
and Schedule 14A additional proxy materials, each filed
March 10, 2000)
(a)(11) Complaints filed against Dime (incorporated by reference to
Exhibits 99.1 through 99.12 of Dime's Current Report on Form
8-K, filed March 13, 2000)
(a)(12) Notice of Postponement of Special Meeting, dated March 13,
2000 (incorporated by reference to Dime's Rule 425
communication and Schedule 14A additional proxy materials,
each filed March 13, 2000)
(a)(13) Press Release, dated March 10, 2000 (incorporated by
reference to Dime's Rule 425 communication and Current
Report on Form 8-K, each filed March 13, 2000)
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- ------------------------------------------------------------
<S> <C>
(a)(14) Complaints filed against Dime (incorporated by reference to
Exhibits 99.1 and 99.2 to Dime's Current Report on Form 8-K,
filed March 14, 2000)
(a)(15) Press Release, dated March 13, 2000 (incorporated by
reference to Dime's Rule 425 communication and Schedule 14A
additional proxy materials, each filed March 14, 2000)
(a)(16) Press Release, dated March 15, 2000 (incorporated by
reference to Dime's Rule 425 communication and Schedule 14A
additional proxy materials, filed March 15, 2000)
(e)(1) Definitive Proxy Statement of Dime, dated March 31, 1999,
relating to Dime's annual meeting held on April 29, 1999
(incorporated by reference to Dime's Definitive Proxy
Statement, filed March 31, 1999)
(e)(2) Information updating arrangements with Dime executive
officers, directors and affiliates (incorporated by
reference to Annexes 1 and 2 to the
Solicitation/Recommendation Statement to Dime Stockholders
included as Exhibit (a)(2)(i) to this Schedule 14D-9)
(i)(1) Stockholder Protection Rights Agreement, dated October 20,
1995, by and between Dime and the First National Bank of
Boston (incorporated by reference to Exhibit (1) of Dime's
Registration Statement on Form 8-A, filed November 3, 1995)
</TABLE>
<PAGE> 4
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DIME BANCORP, INC.
By: /s/ ANTHONY BURRIESCI
------------------------------------
Name: Anthony Burriesci
Title: Chief Financial Officer
Dated: March 21, 2000
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
(a)(1) Solicitation/Recommendation Statement, first mailed to Dime
stockholders on March 21, 2000
(a)(2) Proxy Statement/Prospectus, dated February 9, 2000, relating
to Dime-Hudson merger (incorporated by reference from Dime's
Registration Statement on Form S-4, filed February 8, 2000,
and Dime's 424(b)(3) prospectus, filed February 11, 2000)
(a)(3) Press release, dated March 6, 2000 (incorporated by
reference to Dime's Rule 425 communication and Schedule 14A
additional proxy materials, each filed March 6, 2000)
(a)(4) Press release, dated March 7, 2000 (incorporated by
reference to Dime's Rule 425 communication and Schedule 14A
additional proxy materials, each filed March 7, 2000)
(a)(5) Supplement, dated March 7, 2000, to Proxy
Statement/Prospectus, dated February 9, 2000 (incorporated
by reference to Dime's Rule 425 communication and Exhibit
20.1 to Dime's Current Report on Form 8-K, each filed March
8, 2000)
(a)(6) Press release, dated March 8, 2000 (incorporated by
reference to Dime's Current Report on Form 8-K, filed March
8, 2000)
(a)(7) Presentation materials for investors (incorporated by
reference to Dime's Rule 425 communication and Exhibit 99.1
to Dime's Current Report on Form 8-K, each filed March 8,
2000)
(a)(8) Letter to 401(k) participants delivering supplement, dated
March 7, 2000, to Proxy Statement/Prospectus, dated February
9, 2000 (incorporated by reference to Dime's Rule 425
communication and Schedule 14A additional proxy materials,
each filed March 9, 2000)
(a)(9) Press Release, dated March 9, 2000 (incorporated by
reference to Dime's Current Report on Form 8-K, filed March
10, 2000)
(a)(10) Public announcement advertisement, dated March 10, 2000
(incorporated by reference to Dime's Rule 425 communication
and Schedule 14A additional proxy materials, each filed
March 10, 2000)
(a)(11) Complaints filed against Dime (incorporated by reference to
Exhibits 99.1 through 99.12 of Dime's Current Report on Form
8-K, filed March 13, 2000)
(a)(12) Notice of Postponement of Special Meeting, dated March 13,
2000 (incorporated by reference to Dime's Rule 425
communication and Schedule 14A additional proxy materials,
each filed March 13, 2000)
(a)(13) Press Release, dated March 10, 2000 (incorporated by
reference to Dime's Rule 425 communication and Current
Report on Form 8-K, each filed March 13, 2000)
(a)(14) Complaints filed against Dime (incorporated by reference to
Exhibits 99.1 and 99.2 to Dime's Current Report on Form 8-K,
filed March 14, 2000)
(a)(15) Press Release, dated March 13, 2000 (incorporated by
reference to Dime's Rule 425 communication and Schedule 14A
additional proxy materials, each filed March 14, 2000)
(a)(16) Press Release, dated March 15, 2000 (incorporated by
reference to Dime's Rule 425 communication and Schedule 14A
additional proxy materials, filed March 15, 2000)
(e)(1) Definitive Proxy Statement of Dime, dated March 31, 1999,
relating to Dime's annual meeting held on April 29, 1999
(incorporated by reference to Dime's Definitive Proxy
Statement, filed March 31, 1999)
(e)(2) Information updating arrangements with Dime executive
officers, directors and affiliates (incorporated by
reference to Annexes 1 and 2 to the
Solicitation/Recommendation Statement to Dime Stockholders
included as Exhibit (a)(2)(i) to this Schedule 14D-9)
(i)(1) Stockholder Protection Rights Agreement, dated October 20,
1995, by and between Dime and the First National Bank of
Boston (incorporated by reference to Exhibit (1) of Dime's
Registration Statement on Form 8-A, filed November 3, 1995)
</TABLE>
<PAGE> 1
March 20, 2000
DIME LOGO
Dear Fellow Stockholder:
On March 15th, North Fork Bancorporation, Inc. officially began its hostile
bust-up acquisition offer to buy your shares of Dime stock.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU REJECT NORTH FORK'S
OFFER BY NOT TENDERING YOUR SHARES.
Quite simply, your board believes North Fork's offer is being made for the wrong
price, by the wrong company, at the wrong time and is unlikely to succeed. North
Fork's hostile actions, which include multiple lawsuits and distorted
disclosure, have not changed your board's belief but in fact reinforced it.
Your board has concluded that North Fork's offer is inadequate and not in the
best interests of Dime and its stockholders. Your board believes that, because
of this conclusion and consistent with its fiduciary duties, it cannot approve
North Fork's offer - whether or not the proposed merger of equals with Hudson
United Bancorp is completed.
WRONG PRICE. North Fork's hostile acquisition offer is:
- - Inadequate - in the opinions of both our financial advisors, Credit Suisse
First Boston and Merrill Lynch, North Fork's offer is inadequate from a
financial point of view to Dime stockholders.
- - Priced far below comparable acquisitions - it represents about 7.5 times
Dime's estimated 2000 earnings while the median price of comparable
transactions was about 23.8 times estimated current year's earnings.
- - Highly dilutive to you - it results in 14.3% dilution to your estimated
earnings per share in 2001, even accepting North Fork's cost savings
estimates.
- - Based on unachievable and unprecedented cost savings and unrealistic revenue
projections.
- - Value Destructive - about $250-$270 million in potential stockholder value
would be diverted.
- - Not reflective of your contribution - it provides you with ownership in the
combined company that is far below the contribution Dime would
be making in terms of earnings, equity and assets.
WRONG COMPANY. North Fork:
- - Would suffer severe integration risks - North Fork's next largest acquisition
was only one-seventh the size of Dime, which even North Fork's own Chairman
called a big risk. It also has a reputation as a slash-and-burn acquiror.
- - Has the potential for a reduced price-to-earnings multiple - acquiring Dime
could cause its stock to trade like the stock of comparable thrift holding
companies.
- - Would have a highly detrimental effect on Dime's customers, communities and
employees.
WRONG TIME. North Fork's hostilities:
- - Attempt to take advantage of our currently depressed stock price - North
Fork's offer reflected a discount to our stock price as recently as August
1999 and an average premium of only about 5% in 1999.
- - Undermine our strategic initiatives.
UNLIKELY TO SUCCEED. North Fork's offer is unlikely to succeed because of:
- - Significant conditions North Fork has imposed - several require approval by
Dime's board, but your board has rejected North Fork's offer. One condition
requires Hudson's agreement.
- - Regulatory approval - North Fork's offer could be impeded by antitrust
scrutiny and by North Fork's "unique relationship" with Fleet Boston
Corporation.
- - History - North Fork has a history of abandoning its hostile offers.
I assure you that we will continue to act to provide you with enhanced value in
both the short and long term. Thank you for your investment and support.
[LAWRENCE J. TOAL]
Lawrence J. Toal
Chief Executive Officer
<PAGE> 2
QUESTIONS AND ANSWERS
Q: IS NORTH FORK'S OFFER AN ALTERNATIVE TO THE PLANNED DIME-HUDSON MERGER?
A: No. North Fork has conditioned its offer on actions that require the
approval of your board. Your board unanimously believes that, because
it has concluded that North Fork's offer is not in the best interests
of Dime and Dime's stockholders, it cannot approve the offer -- whether
or not the Dime-Hudson merger is completed. Therefore, you should not
consider North Fork's offer an alternative to the Dime-Hudson merger.
Q: IS IT TRUE YOU HAVE NOT TALKED TO NORTH FORK ABOUT ITS OFFER?
A: North Fork launched its hostile offer without telling us, and, as is
customary, our agreement with Hudson prevents us from talking to North
Fork about its hostile offer. However, we want you to understand that
your board did not just say "no" to North Fork based on our agreement
with Hudson. Rather, your board undertook a careful analysis of North
Fork's offer and rejected it on its own merits.
Also, we previously discussed a business combination with North Fork,
and decided not to pursue one. At that time, we had identified many of
the same concerns described in this document.
Q: WHEN DO I NEED TO RESPOND TO NORTH FORK'S OFFER?
A: You are not hurt by taking your time to respond to North Fork's offer.
The offer must continue until at least April 14th. Given all of the
conditions to the offer, even North Fork predicts the deadline will be
pushed back much further. Because the conditions include actions that
require the approval of your board and because your board has rejected
the offer, there is no near-term prospect of North Fork successfully
completing its current offer.
Q: DO I HAVE ANYTHING TO LOSE IF I DO NOT TENDER BUT NORTH FORK'S OFFER IS
SUCCESSFUL ANYWAY? WILL I GET LESS THAN STOCKHOLDERS WHO TENDER NOW?
A: No. If North Fork's offer is successful, it intends to merge Dime with
a North Fork subsidiary at the same price. That way, in the unlikely
event that North Fork's offer were to close, even stockholders who
never tender will still get paid the same amount as those who tender
now.
Q: WHAT IF I ALREADY TENDERED MY SHARES TO NORTH FORK?
A. You can withdraw your shares at any time before North Fork's offer
expires. If you need any help with this, please call our representative
in connection with North Fork's hostile offer, Innisfree M&A
Incorporated, toll free at 1-888-750-5834.
Q: IS REFUSING TO TENDER MY SHARES TO NORTH FORK THE SAME AS A VOTE FOR
THE DIME-HUDSON MERGER?
A: No. If you want us to complete the Dime-Hudson merger, you need to vote
"for" that merger at the special stockholders meeting, either in person
or by proxy. If you vote "against" the merger and you refuse to tender
your shares, you are telling us not to do either transaction at this
time.
Q: WHAT IF YOU DON'T COMPLETE THE MERGER WITH HUDSON?
A: Your board is committed to the proposed merger with Hudson and has
recommended that you vote for it.
Your board is also committed to enhancing stockholder value. If the
merger agreement with Hudson is terminated, it would be your board's
intention to explore all strategic options available to it.
Q: WHO CAN I TURN TO WITH QUESTIONS?
A: Please call Innisfree toll free at 1-888-750-5834 with any questions
you have. They can also help you withdraw any shares you may have
tendered to North Fork.
2
<PAGE> 3
RECOMMENDATION
Your board believes North Fork's offer is being made for the wrong price,
by the wrong company, at the wrong time and is unlikely to succeed. In making
its recommendation on the merits of North Fork's offer, your board considered a
number of factors, including the material factors listed below. North Fork's
hostile actions, which include multiple lawsuits and distorted public statements
and disclosures, have not changed the board's belief but in fact reinforced it.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU REJECT NORTH FORK'S
OFFER BY NOT TENDERING YOUR SHARES. Your board has concluded that North Fork's
offer is inadequate and not in the best interests of Dime and its stockholders.
Your board believes that, because of this conclusion and consistent with its
fiduciary duties to you, it cannot approve North Fork's offer -- whether or not
the proposed merger of equals with Hudson is completed.
The board reviewed North Fork's offer on its own merits. We want to
emphasize that the board's rejection of the offer is not driven by the
provisions of the Dime-Hudson merger agreement that limit our ability to
negotiate with North Fork. Rather, the rejection is premised upon our conclusion
that North Fork's offer is inadequate and is not in your best interests as a
Dime stockholder. Your board believes that it would have reached that same
conclusion even if Dime were not already in the middle of its merger with Hudson
when North Fork made its offer.
You should know that we have taken a survey and learned that none of our
directors, executive officers, affiliates or subsidiaries intends to tender a
single share of Dime stock in North Fork's hostile offer. Nor do they plan to
sell a single share as a result of the offer.
REASONS
We summarize below some of the financial analyses and considerations taken
into account by us and our financial advisors. The discussion is not intended to
be exhaustive, but includes all material factors considered by the board. Some
of the summaries are in table form. You should read the tables together with the
accompanying text.
- - WRONG PRICE
-- Inadequate to you from a financial point of view.
North Fork has offered to exchange, for each share of Dime common
stock, 0.9302 shares of North Fork common stock and $2.00 in cash.
In the opinions of both our financial advisors, Credit Suisse First
Boston and Merrill Lynch, North Fork's offer is inadequate from a
financial point of view to Dime's stockholders. We have attached as
Annex A the full text of our advisors' opinions, which describe the
procedures followed, assumptions made, matters considered and
limitations on the review undertaken in connection with the opinions.
You should read the entire text of these opinions.
-- Priced far below comparable acquisitions.
North Fork's offer is priced far below comparable
acquisitions -- including acquisitions North Fork itself completed
only one month ago -- in terms of such ratios as price-to-earnings and
price-to-book value. Our financial advisors compared North Fork's
offer to North Fork's two most
3
<PAGE> 4
recent acquisitions and to all transactions involving thrift
institutions valued at greater than $250 million announced since
January 1, 1998. The advisors noted the following:
<TABLE>
<CAPTION>
NORTH FORK'S COMPARABLE
RECENT ACQUISITIONS TRANSACTIONS
RATIO OF PRICE TO: NORTH FORK'S OFFER (MEDIAN)(1) (MEDIAN)
------------------ ------------------ ------------------- ------------
<S> <C> <C> <C>
Current year's estimated
earnings...................... 7.5x(2) 17.8x(3) 23.8x(3)
Book value...................... 1.30x 1.76x(3) 2.52x(3)
</TABLE>
- ---------------
(1) North Fork's acquisitions of JSB Financial and Reliance Bancorp,
which were completed in February.
(2) Based on consensus earnings per share estimates published by
I/B/E/S International Inc. as of September 10, 1999. I/B/E/S is an
industry service provider of global earnings information based on
an average of earnings estimates published by selected research
analysts regarding companies of interest to institutional
investors. Estimates as of September 10th have been used by us in
making presentations to investors relating to the Dime-Hudson
merger and are used here for consistency.
(3) Source: SNL Securities, a provider of financial and mergers and
acquisitions data for the banking and thrift industries.
Although there has been a significant decline in the stock prices of
virtually all depositary institutions, your board does not believe the
decline explains the extraordinary difference between North Fork's
offer and comparable transactions.
-- Highly dilutive to you.
North Fork's offer will be highly dilutive to Dime stockholders'
estimated earnings per share (EPS) in 2001 and 2002, even accepting
North Fork's cost savings estimates. The following table compares
estimates of Dime's earnings per share and the equivalent earnings per
share you would recognize as a result of North Fork's offer:
[BAR GRAPH]
(1) Based on I/B/E/S estimates for 2001, as of September 10, 1999. Year
2002 earnings are based on 2001 earnings estimates grown at the
I/B/E/S projected growth rate.
(2) Based on Dime's stand-alone figures presented and North Fork's
assumptions set forth in North Fork's March 6, 2000 investor
presentation relating to its hostile offer. To provide the equivalent
to you, North Fork's pro forma per share estimates are multiplied by
0.9302, the exchange ratio in North Fork's offer, and adjusted to
incorporate the benefit of reinvesting the $2.00 per share cash
portion of North Fork's offer, after tax, at an after-tax rate of
4.5%.
4
<PAGE> 5
In fact, as we discuss below, we believe that this dilution will be
even greater because the cost savings and revenue assumptions North
Fork has used in its analysis are so unrealistic. Your board also
considered that North Fork's offer would result in dilution to you of
about 14% in book value per share and 25% in tangible book value per
share, based on pro forma figures at December 31, 1999.
-- Unachievable cost savings.
Your board believes that North Fork's proposed expense reductions are
overly aggressive and completely unrealistic. As a result, North
Fork's projections very likely will turn out to be inaccurate, and the
price of North Fork's stock could be substantially hurt.
North Fork is proposing pre-tax cost savings of about $159 million.
North Fork estimates that its expense reductions equal about 50% of
Dime's estimated 2001 operating expenses related to its banking
operations. This is an extremely high amount in relation to other
transactions. From the perspective of North Fork, the smaller of the
two companies, the expense reductions equal over 80% of North Fork's
annualized fourth quarter 1999 operating expenses related to its
banking operations -- an even more extraordinary number.
Our financial advisors illustrated that this level of expense
reduction far exceeded the level assumed in any recently announced
comparable in-market bank or thrift combination. They also noted that
the lower cost savings estimates in several of these other
combinations were not achieved and that the surviving company's stock
underperformed a banking industry stock index.
<TABLE>
<CAPTION>
% COST MARGINAL
ANNOUNCE DATE ACQUIROR TARGET SAVINGS(1) EFFICIENCY(2)
------------- ----------------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
06/06/99............... Zions First 15% 53%
Security
03/17/98............... Washington Mutual H.F. Ahmanson 40 31
11/18/97............... First Union CoreStates 46 29
08/29/97............... NationsBank Barnett Banks 55 27
03/06/97............... Washington Mutual Great Western 33 43
-- --
Average 38% 37%
NORTH FORK
PROPOSAL DIME 86% 4%
</TABLE>
-----------------------
(1) Announced cost savings as a percentage of the smaller company's
annual expense base.
(2) Pro forma expense base of smaller company divided by net revenues of
smaller company.
These transactions were consensual. In our view, the risk that a hostile
acquiror like North Fork will not be able to achieve its projections is
much higher.
Additionally, your board believes that North Fork's projections for
expense reductions and revenue enhancements relating to its two most
recent friendly acquisitions were also overly aggressive and
unrealistic. These acquisitions closed last month. Because these
projections could prove unachievable, your board believes that these two
acquisitions pose additional risk to someone considering an investment
in North Fork's stock and to Dime's stockholders if North Fork's offer
proceeded.
-- Unachievable revenue assumptions.
North Fork did not include any potential negative effects in its
revenue projections related to its aggressive cost-savings program or
the hostile nature of its proposal. Recent transactions in the banking
industry have demonstrated that aggressive cost-savings programs,
particularly when combined with substantial branch closings such as
those apparently contemplated by North Fork, have a significant
negative effect on revenues. The board considered that these negative
revenue effects could hurt the price of North Fork's stock.
5
<PAGE> 6
-- Destroys stockholder value.
North Fork's offer diverts significant value to parties other than
you, Dime's stockholders. Our advisors noted that North Fork's
proposed issuance of warrants and sale of branches to FleetBoston had
a value to FleetBoston of roughly $50 - $70 million and $100 million,
respectively. In addition, North Fork is taking an extra after-tax
restructuring charge of about $100 million, including a proposed
break-up fee to Hudson of $50 million. Our advisors estimated the
total value lost to Dime stockholders as being roughly $250 - $270
million, or 13% to 14% of the estimated value of North Fork's offer to
you.
-- Ownership far below your contribution to the combined company.
Based on North Fork's offer and market capitalization as of March 3,
2000, when taking into account the dilutive effect of the bargain sale
of North Fork convertible preferred stock and warrants to FleetBoston,
Dime stockholders would own only about 34.5% of a combined Dime-North
Fork despite the fact that Dime would be contributing 60% of the
assets to the combined company, 49% of its tangible common equity and
45% of year 2000 projected net income, on the basis of I/B/E/S
estimates.
-- Eliminates potential higher bidder.
North Fork's bargain arrangement with FleetBoston was apparently
intended to have, and undoubtedly does have, the effect of removing a
potential higher bidder for Dime. This was noted by the American
Banker, which quoted North Fork's Chief Executive Officer as saying
"It is clear that Fleet could have outbid us." In addition, North
Fork's proposed sale of Dime's branches to FleetBoston would be at a
deposit premium of only 8%, well below what your board and its
financial advisors believe are normal market terms.
- - WRONG COMPANY
-- High execution risk.
An acquisition of Dime would be more than seven times larger than
North Fork's next largest acquisition and almost three times larger
than all of its acquisitions over the past four years combined.
Moreover, in February North Fork completed two acquisitions,
increasing its assets by about 35%.
If North Fork now combines with Dime, North Fork would be roughly
three times larger, based on total assets, than it was less than a
month ago. This level and speed of acquisition growth creates
virtually unprecedented integration risk.
North Fork's Chief Executive Officer has recognized this risk. In
North Fork's March 6th conference call with investors, he said that:
"With respect to risk issues, I mean I think they are
self-evident. This is big. And, so generally speaking, the larger
the deal, the tougher it is to integrate. We've spent a lot of
time looking at that -- that is the negative side."
In the same discussion, he also acknowledged that North Fork has never
completed a hostile acquisition.
Your board noted that hostile transactions such as Wells Fargo's
acquisition of First Interstate Bancorp in 1996 have demonstrated that
these transactions present dramatically higher execution and
integration risk than fully consensual transactions that combine the
best management talents of both organizations.
-- Very "thrift-like".
North Fork has grown primarily through acquisitions of thrifts.
Consequently, your board views North Fork as becoming more and more
"thrift-like" while our long-term strategy has been to
6
<PAGE> 7
shift from a traditional thrift to a more commercial bank-like profile. The
following table highlights North Fork's acquisitions, and their effects, since
1995.
<TABLE>
<CAPTION>
TRANSACTION TOTAL ASSETS TOTAL DEPOSITS NET INTEREST MARGIN
----------- ------------ -------------- -------------------
<S> <C> <C> <C>
North Fork -- Year End 1995.............. $ 3,303 $2,535 5.18%
Acquisitions Since Year End 1995:
Northside Savings Bank -- Thrift....... $ 1,580 $1,227
Branford Savings Bank -- Thrift........ 177 158
New York Bancorp -- Thrift............. 3,284 1,691
JSB Financial -- Thrift................ 1,613 1,119
Reliance Bancorp -- Thrift............. 2,452 1,549
------- ------
TOTAL ACQUISITIONS..................... $ 9,106 $5,744
North Fork -- Pro Forma 12/31/99......... $16,321 $9,189 3.88%
% Thrift Composition of North Fork..... 56% 63%
Reduction in Net Interest Margin......... 130bps
</TABLE>
-- Potential for reduced price-to-earnings multiple of North Fork common
stock.
Your board analyzed the historical and current market prices of North
Fork common stock and concluded that a Dime-North Fork combination
could produce a decrease in North Fork's price-to-earnings multiple.
Our advisors noted that, if North Fork and Dime combine, the
percentage of North Fork's loan portfolio represented by residential
mortgages would increase from 31% to 46% and its net interest margin
would fall from 3.88% to 3.34%. The combined company would have about
$28 billion in mortgage loans and securities, representing more than
75% of its interest-earning assets.
As a result, the board believes that a combined North Fork-Dime would
be more of a thrift than a commercial bank. Dime's financial advisors
noted that, on average, a peer group of thrifts trades at an average
price-to-earnings multiple of 7.7 times estimated year-2000 earnings
while North Fork currently trades at 9.2 times earnings. Combining
North Fork and Dime could well result in North Fork's multiple
contracting towards the thrift peer group.
Removing the burden of the lower thrift price-to-earnings multiple is
precisely why Dime has placed so much strategic emphasis on moving
toward becoming more like a commercial bank.
-- Detrimental effect on Dime's customers, communities and employees.
Your board considered, in the context of North Fork's prior
acquisition record, the likely adverse effect on Dime's customers,
employees and communities. Your board also was concerned that high
attrition and low employee morale following a hostile merger with
North Fork would pose serious integration risks to a combined North
Fork-Dime and could result in a serious reduction in Dime's historic
level of customer service. Your board also was concerned that North
Fork had not taken into account potential reductions in revenues from
this negative effect on the communities we serve and the people we
employ.
-- Lacks credibility.
Your board also considered the fact that the credibility of North
Fork's Chief Executive Officer was questioned in a federal judge's
decision, published in relation to North Fork's unsuccessful attempt
to take over The Greater New York Savings Bank in September 1997.
- - WRONG TIME
-- Opportunistic timing.
Your board observed that the premium implied by North Fork's offer
relative to Dime's stock price was significantly affected by North
Fork's timing. It noted that North Fork's offer would have reflected a
discount to Dime's stock price as recently as August 1999 and that the
average premium over Dime's stock price during 1999 implied by North
Fork's offer would have been
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<PAGE> 8
only about 5%. It also observed that Dime's stock price was being
adversely affected by what it believes are temporary factors relating
to the thrift industry.
-- Undermines strategic initiatives.
North Fork's offer requires us to terminate the planned Dime-Hudson
merger. For the many reasons described on pages 27 through 31 of our
February 9th proxy statement/prospectus, your board concluded that the
Dime-Hudson merger would accelerate Dime's strategic plans and enhance
stockholder value. Your board also considered that a combined
Dime-Hudson would itself be a highly attractive acquisition candidate.
- - UNLIKELY TO SUCCEED
-- Highly conditional.
North Fork has subjected its offer to many conditions. Indeed, North
Fork's formal offering document contains a number of additional
conditions not clearly disclosed in the materials it originally
published. A number of North Fork's conditions are entirely or
partially in the control of your board. For example:
-- Board approval would be required for Dime to enter into a
definitive merger agreement with North Fork.
-- Board approval would be required to redeem Dime's long-standing
stockholder protection rights agreement. Otherwise, North Fork
would need to convince a court to invalidate the rights agreement.
-- Board approval would be required to make Section 203 of Delaware's
corporate law inapplicable to North Fork's offer. Otherwise, North
Fork would need to acquire at least 85% of Dime's stock.
-- North Fork's offer requires Dime not to engage in any transaction
that impairs North Fork's ability to acquire Dime or otherwise
diminish the expected economic value to North Fork of the
acquisition of Dime.
As a result of its conclusion that North Fork's offer is inadequate and
not in the best interests of Dime and its stockholders, your board
believes that, consistent with its fiduciary duties, it cannot approve
North Fork's offer -- whether or not the Dime-Hudson merger is
completed. Therefore, you should understand that it is very unlikely
that your board could act to satisfy North Fork's conditions or that
North Fork's current offer will succeed.
Furthermore, North Fork's offer is conditioned on Hudson surrendering,
for not more than $50 million, the option it was granted as part of the
Dime-Hudson merger agreement which entitles Hudson to purchase up to
19.9% of Dime's common stock under certain circumstances. North Fork's
offer constituted an initial triggering event under that option, so
that Hudson could be entitled to exercise the option if North Fork's
offer (or other similar acquisition transactions) is consummated during
a period of 18 months following termination of the Dime-Hudson merger
agreement. As the value of Hudson's option could be well in excess of
the $50 million that North Fork is willing to pay for it, we believe it
unlikely that this condition will be met.
-- Antitrust and regulatory risk.
Your board also considered that North Fork's offer, including
FleetBoston's role, could be subject to significant antitrust
scrutiny. Recent actions by the antitrust enforcement authorities
suggest that Suffolk County, New York may be considered a separate
banking market. In that event, North Fork's offer would create a
significant antitrust issue because a combined North Fork-
Dime-FleetBoston would have a market share in Suffolk County exceeding
40%. This is particularly the case because North Fork plans a "unique
relationship" and "synergies" with FleetBoston. The result could be
lengthy delay or failure of North Fork's offer.
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<PAGE> 9
We have filed a lawsuit in New York Supreme Court challenging North
Fork's offer, and FleetBoston's involvement in it, on antitrust
grounds.
-- North Fork unsuccessful in prior hostile attempts.
Your board also considered that North Fork has a history of abandoning
hostile attacks on other companies.
- - NORTH FORK'S REASONS FOR ITS OFFER
Your board also considered the reasons that North Fork has given you to
accept its offer. As discussed below, we disagree with North Fork's
assertions or believe they fail to disclose the impact on you.
-- Purported accretion. North Fork has noted that its offer would be
accretive to earnings per share and book value per share to North
Fork's stockholders. That accretion would come at the expense of
Dime's stockholders. As we explained above, from the perspective of
Dime stockholders the offer is significantly dilutive to earnings and
book value per share. Your board also noted that North Fork's
estimates were dependent on its aggressive cost savings projections.
-- Purported significant premium. North Fork has highlighted the
"significant premium" its offer represents. As we explained above, the
premium implied by North Fork's offer is significantly affected by
North Fork's timing and North Fork's offer would have reflected a
discount to Dime's stock price as recently as August 1999. Your board
also noted all of the factors it identified under "wrong price" above.
-- Purported better long-term growth prospects. North Fork declares that
its offer will provide you with better long-term growth prospects. In
the view of your board, however, none of the factors that North Fork
has given to support its assertion relate to "growth". Moreover,
according to I/B/E/S, as of March 16th the average long-term earnings
per share growth estimate for Dime was 12% and only 11% for North
Fork. Your board also considered that North Fork just completed two
acquisitions that could negatively affect its long-term growth
prospects because the board believes the cost savings and revenue
enhancement estimates are excessive and very unlikely to be achieved.
-- Purported low execution risk. North Fork asserts that its offer has
low execution risk. As noted above, however, even North Fork's Chief
Executive Officer admitted that Dime's "big" size was a "self-evident"
risk for North Fork. The board also considered that the thrift
institutions recently acquired by North Fork did not have Dime's broad
range of consumer and commercial products and services. For example,
neither of these thrifts had significant consumer finance, commercial
banking, automobile finance or venture capital operations -- areas in
which Dime is very active. Finally, your board expressed concern that
high attrition and low employee morale concerning a hostile merger
with North Fork would pose serious integration risks to a combined
North Fork-Dime.
-- Cash dividends. North Fork's current dividend would provide Dime
stockholders with a higher dividend rate. However, your board believes
this factor must be viewed in light of the substantial dilution that
would result from North Fork's offer, as well as the other factors
listed here.
Your board did not assign specific weights to the foregoing factors and
individual directors may have given different weights to different factors.
Throughout its deliberations, your board received the advice of its legal and
financial advisors and other advisors who were retained to advise the board in
connection with North Fork's hostile offer.
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<PAGE> 10
ACTIONS IN RESPONSE TO NORTH FORK'S HOSTILE OFFER
POSTPONING DIME-HUDSON MEETING
Based on recent events, your board has concluded that it would be in the
best interests of Dime's stockholders to postpone the currently scheduled March
24th special meeting of stockholders until May 17, 2000. We intend to send out
additional materials and proxy cards to record holders as of March 30, 2000 as
soon as we are able under SEC guidelines.
We believe this postponement is necessary because our stockholders need
time to consider all the information being disseminated into the market by North
Fork as well as our responses to that information. In particular, we believe
that the materials recently published by North Fork contain numerous erroneous
and misleading statements that North Fork will choose, or be required, to
correct.
In deciding to take this action, your Board considered the effect of a
postponement on both North Fork's offer and the Dime-Hudson merger and concluded
that the ability of both transactions to move forward would not be impeded.
Neither the Hudson-Dime merger nor North Fork's offer is capable of being
consummated at this time. For one thing, neither has yet received all the
necessary regulatory approvals. Indeed, North Fork has only just filed its
regulatory application, and their approval process is likely to take many
months. (Approvals for the Dime-Hudson merger are expected shortly.) In
addition, North Fork's registration statement must be declared effective by the
SEC -- a process which we do not believe could under any conceivable
circumstance be completed for several weeks -- before North Fork could purchase
any Dime shares. Because the conditions to North Fork's offer include actions
that require the approval of your board and because your board has rejected the
offer, we also believe that there also is no near-term prospect of North Fork
successfully completing its current offer. In any event, our merger agreement
with Hudson continues in effect until June 30, 2000 regardless of whether the
stockholder vote is held on March 24th or any other date before June 30th.
Therefore, absent unforeseen and extremely unlikely circumstances, North Fork
could not complete its offer or close any related transactions any time soon. In
fact, the pro forma financial information in North Fork's exchange offer
materials assume a September 30, 2000 closing. We note also that North Fork
itself had sought just such a postponement in its Delaware court actions before
our March 24th meeting was scheduled. Therefore, our postponement would not
affect the timing of a closing of North Fork's offer or related transactions in
the unlikely event that they were to proceed.
STRATEGIC TRANSACTIONS
Your board is committed to the proposed merger with Hudson, and Dime is
party to a merger agreement with Hudson that currently precludes it from
undertaking or engaging in any negotiations with a third party that relate to
any tender offer, merger, reorganization, liquidation, asset sale or transfer,
or material change in dividend rate or policy or indebtedness or capitalization
of Dime or any of its subsidiaries, whether or not in response to North Fork's
offer. There are no transactions, board resolutions, agreements in principle or
signed contracts that have been entered into in response to North Fork's offer
that relate to any of the matters discussed in the previous sentence.
If the merger with Hudson is, for whatever reason, not completed and the
merger agreement is terminated, it would be your board's intention then to
explore all strategic options available to it at that time in order to enhance
stockholder value. This could include undertaking, or engaging in negotiations
relating to, any of the actions or transactions described in the preceding
paragraph.
The stock option issued to Hudson at the time we entered into our merger
agreement could have the effect of discouraging offers to acquire Dime for a
period of 18 months after termination of the merger agreement. The presence of
this option, of course, did not preclude North Fork from making such an offer.
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<PAGE> 11
LITIGATION AGAINST NORTH FORK AND FLEETBOSTON
On March 10, 2000, we filed suit in the Supreme Court of the State of New
York, County of New York against North Fork and FleetBoston. The complaint
alleges violations of New York's antitrust laws, including a conspiracy between
North Fork and FleetBoston to:
-- diminish competition in a variety of banking markets,
-- diminish competition for the purchase of banks and thrifts in some
markets, and
-- eliminate a stronger competitor.
In addition, the complaint alleges that FleetBoston's divestiture of branches
from the Fleet Financial-BankBoston Corporation merger to Sovereign Bancorp,
Inc. is part of the conspiracy as Sovereign is not capable of competing
effectively in markets with FleetBoston and FleetBoston may use monopoly profits
gained in those markets to fund the North Fork exchange offer. The suit asks the
court to:
-- enjoin North Fork and FleetBoston from acting in concert to acquire
Dime or otherwise interfere with the proposed Dime-Hudson merger,
-- enjoin the proposed branch divestiture from FleetBoston to Sovereign
and require divestiture to a banking organization with a reasonable
opportunity to improve competition in the markets served, and
-- declare violations of the New York antitrust laws.
This lawsuit is discussed further below.
BACKGROUND
BACKGROUND OF NORTH FORK'S HOSTILE OFFER
From time to time, we have considered the possibility of various forms of
strategic combinations with a variety of financial institutions. We have
evaluated the potential strategic fit with institutions based on their lines of
business, prospects, management and geographic location and concentration.
As part of these ongoing efforts, we engaged in preliminary explorations of
a merger with North Fork in 1998, but North Fork and we determined not to
proceed with a merger. At the time of these talks, North Fork and we entered
into confidentiality agreements and exchanged information. These agreements
contained "standstill" provisions generally prohibiting either of us from
submitting an acquisition proposal for the other or making an offer for shares
of the other's stock. These "standstill" provisions expired on February 19,
2000.
On September 15, 1999, Hudson and we announced our entry into the
Dime-Hudson merger agreement and our grant of stock options to each other in
connection with the merger agreement. On February 10, 2000, Hudson and we mailed
our February 9th proxy statement/prospectus to our respective stockholders. This
document notified stockholders that we both intended to hold special
stockholders meetings on March 15, 2000 to consider the proposed merger.
On March 5, 2000, North Fork issued a press release announcing that it
intended to make a hostile bid for your Dime shares, subject to numerous
conditions, and that it intended to bust up the Dime-Hudson merger. On March 6,
2000, North Fork filed preliminary proxy materials with the SEC with which it
proposed to solicit proxies to vote against approval of the Dime-Hudson merger
and filed a lawsuit against Dime, members of Dime's board of directors and
Hudson.
On March 8, 2000, we mailed a supplement to our February 9th proxy
statement/prospectus stating, among other things, that we recommended that Dime
stockholders not tender shares of Dime stock in North Fork's offer, if and when
it commenced.
On March 9, 2000, North Fork filed suit to force us to delay the special
meeting of stockholders at which you were to consider the Dime-Hudson merger.
Later that day, Hudson and we announced that we were both voluntarily postponing
our stockholders meetings to allow information to disseminate.
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<PAGE> 12
On March 13, 2000, North Fork mailed definitive proxy solicitation
materials to our stockholders. These materials solicit proxies against the
Dime-Hudson merger.
On March 15, 2000, North Fork formally commenced its hostile exchange offer
for your Dime shares.
BACKGROUND TO YOUR BOARD'S RECOMMENDATION
Your board has been considering North Fork's offer since March 6, 2000, the
day after North Fork first announced that it intended to make a hostile offer
for your shares.
North Fork formally commenced its offer on March 15, 2000. Because of SEC
requirements, North Fork released a great deal of new, material information in
connection with beginning its offer.
On March 19, 2000, your board met again to reconsider the offer in light of
the new materials North Fork released. At that meeting, your board carefully
considered the information published by North Fork and FleetBoston and received
the advice of Dime's management, of Credit Suisse First Boston and Merrill
Lynch, Dime's financial advisors, of legal counsel and of other advisors who
were retained to advise the board in connection with North Fork's hostile offer.
After careful consideration, your board unanimously:
-- determined that North Fork's offer is inadequate and not in the best
interests of Dime and its stockholders, and
-- recommended that you reject North Fork's offer by not tendering your
shares.
The reasons for our conclusions are outlined in this document.
ANTI-TAKEOVER CONSIDERATIONS
RIGHTS AGREEMENT
Each share of Dime common stock has attached to it one right issued
pursuant to a stockholder protection rights agreement, dated October 20, 1995,
between Dime and the First National Bank of Boston, as rights agent. The current
rights agent is a subsidiary of FleetBoston, although Dime may change the rights
agent.
Each right entitles its holder to purchase one-hundredth of a share of
participating preferred stock of Dime at an exercise price of $50, subject to
adjustment, after the separation time, which is after the close of business on
the earlier of:
-- the tenth business day after commencement of a tender or exchange offer
that, if consummated, would result in a person becoming an acquiring
person, which is defined in the rights agreement as a person
beneficially owning 20% or more of the outstanding shares of Dime common
stock and
-- the tenth business day after the first date of public announcement that
a person has become an acquiring person, which is also called the
flip-in date.
North Fork's offer would have resulted in Dime's rights separating. Your
board has acted to delay the separation time pursuant to provisions of the
rights agreement.
The rights will not be exercisable until the business day following the
separation time. The rights will expire on the earlier of:
-- the close of business on November 6, 2005,
-- redemption, as described below,
-- an exchange for common stock, as described below, or
-- the merger of Dime into another corporation pursuant to an agreement
entered into prior to a flip-in date.
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Your board of directors may, at any time prior to occurrence of a flip-in
date, redeem all the rights at a price of $0.01 per right.
If a flip-in date occurs, each right, other than those held by the
acquiring person or any affiliate or associate of the acquiring person or by any
transferees of any of these persons, will constitute the right to purchase
shares of Dime common stock having an aggregate market price equal to $100 in
cash, subject to adjustment. In addition, your board of directors may at any
time between a flip-in date and the time that an acquiring person becomes the
beneficial owner of more than 50% of the outstanding shares of Dime common stock
elect to exchange the rights for shares of Dime common stock at an exchange
ratio of one share of Dime common stock per right.
Under the rights agreement, Dime may not consolidate or merge, or engage in
other similar 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 the right to purchase common stock of the acquiring person having an
aggregate market price equal to $100 in cash, subject to adjustment.
The rights will not prevent a takeover of Dime. The rights, however, may
have antitakeover effects. The rights may cause substantial dilution to a person
or group that acquires 20% or more of the outstanding Dime common stock unless
the rights are first redeemed by your board of directors.
A description of the rights agreement specifying the terms of the rights
has been included in reports filed by Dime with the SEC. The description above
does not purport to be a complete description and it is qualified in all
respects by reference to the rights agreement included in Dime's Form 8-A filed
with the SEC on November 3, 1995.
DELAWARE TAKEOVER STATUTE
Section 203 of the Delaware General Corporation Law prohibits business
combinations, including mergers, sales and leases of assets, issuances of
securities and similar transactions by a corporation or a subsidiary, with an
interested stockholder, which is someone who beneficially owns 15% or more of a
corporation's voting stock, within three years after the person or entity
becomes an interested stockholder, unless:
- the transaction that caused the person to become an interested
stockholder was approved by the board of directors of the target prior to
the transaction,
- after the completion of the transaction in which the person becomes an
interested stockholder, the interested stockholder holds at least 85% of
the voting stock of the corporation not including (a) shares held by
persons who are both officers and directors of the issuing corporation
and (b) shares held by specified employee benefit plans,
- after the person becomes an interested stockholder, the business
combination is approved by the board of directors and holders of at least
66 2/3% of the outstanding voting stock, excluding shares held by the
interested stockholder, or
- the transaction is one of specified 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, as specified in the Delaware General
Corporation Law.
This summary of Section 203 of the Delaware General Corporation Law does
not purport to be complete and is qualified in all respects by reference to the
provisions of Section 203 of the Delaware General Corporation Law.
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<PAGE> 14
ANTITAKEOVER PROVISIONS IN DIME'S CERTIFICATE OF INCORPORATION AND BY-LAWS
Dime's certificate of incorporation and by-laws contain several provisions
that may limit the ability to acquire control of Dime without negotiations with
Dime's board. These provisions include:
- authorized but yet unissued common and preferred stock,
- the division of Dime's board of directors into three staggered classes,
- no cumulative voting for election of Dime's directors,
- the board's power to determine the size of the board and to fill
vacancies,
- the need for a supermajority stockholder vote to remove directors for
cause and to amend the by-laws and important provisions of the
certificate of incorporation,
- the ability of only the board, not the stockholders, to call special
meetings, and
- the need for approval by all stockholders to proceed with actions by
written consent.
These provisions are discussed at greater length in our February 9th proxy
statement/prospectus.
AGREEMENT NOT TO SOLICIT OTHER OFFERS
In our merger agreement with Hudson, we agreed that we will not, and will
cause our subsidiaries and representatives and subsidiaries' representatives not
to, initiate, solicit or encourage any inquiries or any offer relating to a
merger, acquisition or other transaction involving the purchase of all or a
substantial part of the assets or any equity securities of Dime or its
subsidiaries. We also agreed not to negotiate or provide any confidential
information relating to any such acquisition proposal. We agreed that we will
immediately advise the other party following the receipt of any acquisition
proposal. The effect of these provisions will lapse if the merger agreement is
terminated.
STOCK OPTION AGREEMENT
As an inducement for Hudson to enter into the merger agreement, Dime agreed
to grant Hudson an option to purchase shares of Dime stock. The option agreement
was filed as an annex to our February 9th proxy statement/prospectus, and the
following description is qualified by reference to the full agreement.
Under the option, Hudson can purchase up to 22,271,682 shares of Dime
stock. Although these numbers are subject to adjustment in certain cases,
including the issuance of additional shares, they will never exceed 19.9% of the
number of shares of Dime stock outstanding immediately before exercise of the
option. The exercise price of the option is $17 3/4 per share of Dime stock, but
the per share option price is subject to adjustment in certain cases, including
stock dividends, recapitalizations and other changes in capitalization. The
exercise price was determined by using the closing price for Dime stock on
September 14, 1999, the day before the merger was announced.
Hudson issued a substantially identical option to Dime, which if it were to
be triggered would allow Dime to purchase up to 8,139,081 shares of Hudson
common stock on similar terms.
Purpose of the Stock Option Agreement. Arrangements such as the stock
option agreement are customarily entered into in connection with announced
mergers involving publicly traded companies to increase the likelihood that the
transactions will be completed in accordance with their terms and to compensate
the grantee for the efforts undertaken and the expenses and losses incurred by
it if the transaction is not completed. The stock option agreement may have the
effect of discouraging offers by third parties to acquire Dime, even if those
persons are prepared to offer consideration to Dime's stockholders that has a
greater value than what these stockholders will receive in the Dime-Hudson
merger. Also, following consultation with independent accountants, we believe
that the exercise or repurchase of the stock option is likely to prohibit
another acquiror from accounting for any acquisition of Dime using the
pooling-of-interests accounting method for a period of two years. Nonetheless,
North Fork was willing to make its offer for Dime, although it has conditioned
its offer on Hudson agreeing to surrender the option for no more than $50
million.
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Exercise and Expiration. Hudson can exercise its option if both an initial
triggering event and a subsequent triggering event occur prior to the occurrence
of an exercise termination event, as these terms are described below. The
purchase of any shares of Dime stock pursuant to the options is subject to
compliance with applicable law and cannot be made if Hudson is in material
breach of obligations it has undertaken in the merger agreement.
The option agreement describes a number of different events as initial
triggering events. Generally, an initial triggering event will occur when Dime
enters into, proposes to enter into, or is the subject of an acquisition
transaction or a proposed acquisition transaction. North Fork's filing of its
official offer documents constituted an initial triggering event.
The stock option agreement generally defines the term subsequent triggering
event to mean any of the following events or transactions:
- the acquisition by a third party of beneficial ownership of 25% or more
of the outstanding common stock of Dime or
- Dime or any of its subsidiaries, without the prior written consent of
Hudson, enters into an agreement to engage in certain types of
acquisition transactions with a third party, or the board of directors of
Dime recommends that its stockholders approve or accept any acquisition
transaction, other than the merger.
The stock option agreement defines the term exercise termination event to
mean any of the following:
- completion of the merger;
- termination of the merger agreement in accordance with its terms if
before an initial triggering event, provided that this would not include
a termination of the merger agreement by Hudson based on a willful breach
by Dime of a representation, warranty, covenant or other agreement
contained in the merger agreement; or
- the passage of 18 months, subject to extension in order to obtain
required regulatory approvals, after termination of the merger agreement
if the termination follows the occurrence of an initial triggering event
or is a termination of the merger agreement by Hudson based on a willful
breach by Dime of a representation, warranty, covenant or other agreement
contained in the merger agreement.
The option may be exercised in whole or in part within six months following
the subsequent triggering event. The right to exercise the option and certain
other rights under the stock option agreement is subject to an extension in
order to obtain required regulatory approvals and comply with applicable
regulatory waiting periods and to avoid liability under the short-swing trading
restrictions contained in Section 16(b) of the Securities Exchange Act. The
option price and the number of shares issuable under the option are subject to
adjustment in the event of specified changes in the capital stock of Dime.
Nevertheless, Hudson may not exercise the option if it is in material breach of
any of certain covenants or agreements under the merger agreement.
Rights of the Grantee of the Option. At any time after a repurchase event,
as this term is described below, upon the request of Hudson, Dime may be
required to repurchase the option and all or any part of the shares issued under
the option. The repurchase of the option will be at a price per share equal to
the amount by which the option repurchase price, as that term is defined in the
stock option agreement, exceeds the option price. The term repurchase event is
defined to mean:
- the acquisition by any third party of beneficial ownership of 50% or more
of the outstanding shares of Dime's common stock or
- the consummation of certain other acquisition transactions.
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<PAGE> 16
The stock option agreement also provides that Hudson may, at any time
within 90 days after a repurchase event, surrender the option and any shares
issued under the option for a cash fee equal to $50 million, adjusted if there
have been purchases of stock under the option and gains on sales of stock
purchased under the option. This cash fee establishes an effective minimum value
of the option. The actual value of the option to Hudson may substantially exceed
$50 million. Therefore, Hudson may be unwilling to fulfill North Fork's
condition that Hudson agree to surrender the option for no more than $50
million.
If prior to an exercise termination event Dime enters into certain
transactions in which it is not the surviving corporation, certain fundamental
changes in its capital stock occur, or Dime sells all or substantially all of
its or its significant subsidiaries' assets, the option will be converted into
or exchangeable for a substitute option, at Hudson's election, of:
- the continuing or surviving person of a consolidation or merger,
- the acquiring person in a plan of exchange in which Dime is acquired,
- the issuer in a merger or plan of exchange in which Dime is the acquiring
person,
- the transferee of all or substantially all of the assets of Dime or its
significant subsidiary, or
- any person that controls any of these entities, as the case may be.
The substitute option will have the same terms and conditions as the
original option. However, if the terms of the substitute option cannot be the
same as those of the option by law, the terms of the substitute option will be
as similar as possible and at least as advantageous to the grantee.
LITIGATION
On March 6th, North Fork filed a lawsuit in the Delaware Court of Chancery
against Dime, members of Dime's board of directors and Hudson, challenging a
number of the provisions in the Dime-Hudson merger agreement and alleging, among
other things, breaches of fiduciary duties by Dime's board of directors. The
complaint seeks, among other things, an order invalidating certain provisions of
the Dime-Hudson merger agreement. These provisions include:
- Dime's agreement not to engage in any discussions with, or provide
confidential information to, any person making an offer to merge with or
acquire Dime, until the completion of the merger with Hudson,
- the board's agreement to recommend that Dime's stockholders adopt the
Dime-Hudson merger agreement and
- Dime's agreement not to terminate the Dime-Hudson merger agreement if
Dime's stockholders fail to adopt its terms.
On March 9th, North Fork amended its complaint to include allegations of
breach of fiduciary duties by Dime's board of directors for compelling a
premature stockholder vote on the Dime-Hudson merger and of false and misleading
statements in a proxy statement/prospectus supplement dated March 7th. After
Dime postponed its stockholder meeting on the Dime-Hudson merger from March 15th
to March 24th, North Fork withdrew its additional motion for a temporary
restraining order to enjoin the March 15th meeting, but reserved its right to
proceed in the future.
On March 17th, North Fork moved for an expedited hearing and partial
summary judgment with respect to its challenges to the provisions of the
Dime-Hudson merger agreement. Dime intends to oppose these motions.
Dime is the subject of at least 14 putative class action lawsuits filed on
or after March 6th by stockholders of Dime (12 in the Delaware Court of
Chancery, 1 in the Supreme Court of the State of New York, County of Queens and
1 in the Supreme Court of the State of New York, County of New
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York). These class action lawsuits allege, among other things, breaches of
fiduciary duties by the directors of Dime and challenge:
- the stock option Dime granted to Hudson in connection with the
Dime-Hudson merger agreement, which we described above
- purported benefits to Dime's directors and officers that will result from
the merger with Hudson and
- the rejection by Dime's board of North Fork's offer.
On March 10th, the stockholder plaintiffs in some of the putative class
action lawsuits filed a motion for partial summary judgment seeking a
determination voiding the provisions of the merger agreement concerning Dime's
agreement (1) not to engage in discussions with others, (2) to recommend the
merger to Dime's stockholders, and (3) not to terminate the merger agreement
until June 30, 2000. No action has been taken to date on the stockholder
plaintiffs' motion.
Dime intends to defend these actions vigorously and believes that they are
without merit.
On March 10th Dime filed suit in the Supreme Court of the State of New
York, County of New York against North Fork and FleetBoston. This suit is
described above. On March 13th, North Fork filed a motion in the Delaware Court
of Chancery to enjoin Dime's prosecution of the action filed in New York County,
alleging that such action must be brought as counterclaims in North Fork's
lawsuit in the Delaware Court of Chancery. On March 17th, Dime filed a response
opposing this motion. On March 20th, the Delaware Court of Chancery refused to
enjoin Dime from prosecuting its antitrust claims in the New York courts. We
intend to proceed vigorously with this prosecution.
INFORMATION ABOUT DIME, ITS AFFILIATES AND ITS ADVISORS
DIME AND DIME COMMON STOCK
Dime Bancorp, Inc. is a Delaware corporation. The principal executive
offices of Dime are located at 589 Fifth Avenue, New York, New York 10017. The
telephone number of Dime at this location is (212) 326-6170.
North Fork's exchange offer relates to the common stock, par value $0.01
per share, of Dime, including the associated preferred stock purchase rights
under the stockholders protection rights plan discussed above. As of February
29, 2000, 111,240,660 shares of Dime common stock were outstanding.
Dime is the subject company to North Fork's exchange offer and has filed a
Schedule 14D-9 with the SEC in response. The Schedule 14D-9 contains or
incorporates by reference exhibits with additional information. You may obtain a
free copy of the document at the SEC's Internet web site at www.sec.gov. This
document may also be obtained for free from us by calling our representative,
Innisfree, at 1-888-750-5834. Dime also may make available some information,
such as press releases or other documents, relating to North Fork's offer on the
Internet, at www.dime.com.
Dime will bear the cost of any solicitations of, or communications or
recommendations to, its stockholders regarding the North Fork exchange offer. If
necessary, in soliciting or making a recommendation with respect to the North
Fork exchange offer to its stockholders, Dime may use several of its regular
employees, who may contact you either personally or by telephone, facsimile or
letter and who will not be specially compensated.
Dime will also request that banks, brokers and other record holders send
solicitation or recommendation material, including this document, to the
beneficial owners of Dime common stock, if necessary. Dime will reimburse the
record holders for their reasonable expenses in taking those actions in the
ordinary course of their business.
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<PAGE> 18
DIME'S ADVISORS
Credit Suisse First Boston. On September 1, 1999, Dime retained Credit
Suisse First Boston as its financial advisor in connection with the proposed
merger with Hudson. Dime agreed to pay Credit Suisse First Boston a total fee of
$11 million, $2 million of which was payable upon execution of the Dime-Hudson
merger agreement, $2 million of which was payable upon mailing of the
Dime-Hudson proxy statement/prospectus and the remaining $7 million of which
would be payable upon consummation of the Dime-Hudson merger.
On March 6, 2000, Dime and Credit Suisse First Boston entered into a letter
agreement engaging Credit Suisse First Boston as lead financial advisor with
respect to the North Fork offer and any strategic initiatives that Dime may
initiate as a result of the North Fork offer. During the course of this
engagement, Credit Suisse First Boston and its representatives may participate
in activities or conduct analyses designed to assist Dime in soliciting or
making recommendations to Dime's stockholders and may render opinions to Dime.
Dime agreed to pay Credit Suisse First Boston the following fees:
- $1 million payable on March 6, 2000
- $1 million payable on March 31, 2000 or on the date of the stockholder
vote for the Dime-Hudson merger, whichever is earlier
- $2 million if Dime's stockholders approve the Dime-Hudson merger
- $2 million if North Fork's offer is withdrawn, terminated or expires
- if, during the engagement or within 18 months after it, any third party
(including North Fork) acquires Dime, acquires 50% or more of Dime's
outstanding voting stock or acquires all or a substantial portion of
Dime's assets, or Dime enters into an agreement for any similar
transaction, a transaction fee of 0.75% of the total consideration in the
transaction, payable in installments (all other fees described above will
be credited against this transaction fee)
- market-rate fees for any advisory services not covered by other fees
Dime and Credit Suisse First Boston have agreed, however, that, assuming the
Dime-Hudson merger is completed, Credit Suisse First Boston will not receive
fees greater than the maximum total under the September 1, 1999 letter.
Dime has also agreed to indemnify Credit Suisse First Boston and related
persons and entities against various liabilities, including liabilities under
federal securities laws, arising out of Credit Suisse First Boston's engagement
and to reimburse Credit Suisse First Boston for its reasonable out-of-pocket
expenses, including reasonable fees and expenses of its legal counsel.
Dime has also agreed to offer Credit Suisse First Boston a lead role when
considering any restructuring, financing, foreign exchange, derivatives
transaction, public offering or private placement in connection with the
transactions contemplated by Credit Suisse First Boston's engagement.
In the ordinary course of its business, Credit Suisse First Boston and its
affiliates may actively trade the debt and equity securities of Dime, Hudson,
North Fork and FleetBoston and their affiliates for their own accounts and for
the accounts of customers and, accordingly, may at any time hold a long or short
position in these securities. In the past, Credit Suisse First Boston provided
financial advisory and financial services to Dime and FleetBoston and their
affiliates and received customary fees for those services.
Merrill Lynch. Pursuant to a letter agreement, dated March 15, 2000, Dime
retained Merrill Lynch to serve as financial advisor in connection with North
Fork's exchange offer. In its engagement, Merrill
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<PAGE> 19
Lynch and its representatives may participate in activities or conduct analyses
designed to assist Dime in soliciting or making recommendations to Dime's
stockholders. Dime has agreed to pay Merrill Lynch:
- $250,000 on March 15, 2000
- $2 million upon North Fork abandoning its current offer for Dime (to be
credited against any additional fees below)
- if, during Merrill Lynch's engagement or within 18 months after it, but
no later than December 31, 2001, any acquisition transaction (other than
the Dime-Hudson merger) is completed or Dime enters into a definitive
agreement which results in an acquisition transaction (not including the
Dime-Hudson merger), an additional fee of 0.50% of the total purchase
price in the acquisition transaction payable in installments at signing
and closing
- if Dime does not enter into or complete an acquisition transaction
(including the Dime-Hudson merger) prior to December 31, 2001, a fee of
$5 million payable on December 31, 2001 (and any fees which Merrill Lynch
may receive as financial advisor in the divestiture of any of Dime's
businesses will be credited against this fee)
- if, after receiving stockholder approval of the Dime-Hudson merger, any
party makes an unsolicited offer for Dime and Dime does not enter into
any acquisition transaction prior to December 31, 2001, a fee of $5
million payable on December 31, 2001 (and any fees which Merrill Lynch
may receive as financial advisor in the divestiture of any of Dime's
businesses will be credited against this fee)
None of the fees described in the third, fourth or fifth points above will
be paid if the Dime-Hudson merger is completed.
Dime also has agreed to reimburse Merrill Lynch for its reasonable
out-of-pocket expenses incurred in connection with Merrill Lynch's activities
under the letter agreement, including the reasonable fees and disbursements of
its legal counsel. Dime also has agreed to indemnify Merrill Lynch and its
affiliates and their respective directors, officers, employees, agents or
controlling persons against losses, claims, damages and liabilities (including
reasonable expenses incurred) to which these parties may become subject,
including under federal securities laws, and related to or arising out of the
Dime-Hudson merger, the North Fork exchange offer, any acquisition transaction
and the services of Merrill Lynch under the letter agreement, other than for bad
faith or gross negligence on the part of Merrill Lynch.
In addition, during Merrill Lynch's engagement, Dime has agreed to offer a
co-lead role to Merrill Lynch in any financing, public offering, private
placement, tender offer, repurchase, recapitalization, extraordinary dividend,
spin-off, divestiture, consent solicitation or foreign exchange or derivatives
transaction in connection with Merrill Lynch's engagement.
In the ordinary course of its business, Merrill Lynch and its affiliates
may actively trade the debt and equity securities of Dime, FleetBoston and North
Fork for their own accounts and for the accounts of customers and, accordingly,
may at any time hold a long or short position in these securities. In the past,
Merrill Lynch provided financial advisory and financial services to Dime and
FleetBoston and their affiliates and received customary fees for those services.
Financial Advisor Opinions. The opinions of Credit Suisse First Boston and
Merrill Lynch attached in Annex A, to the effect that North Fork's offer is
inadequate to Dime's stockholders from a financial point of view, are addressed
to Dime's board of directors, address only the adequacy from a financial point
of view of the consideration offered in the North Fork offer, and do not
constitute a recommendation as to whether Dime's stockholders should tender
their shares in the North Fork offer or vote with respect to any matter related
thereto.
Innisfree M&A Incorporated. Dime also made arrangements with Innisfree M&A
Incorporated to assist in soliciting proxies in Dime's proposed merger with
Hudson and had agreed to pay them $9,000 plus reasonable expenses for these
services. Dime has continued to retain Innisfree to assist Dime in connection
with its communications with stockholders with respect to North Fork's exchange
offer. Dime
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is currently discussing revised or additional fee arrangements with Innisfree
for services in connection with North Fork's offer.
Gavin Anderson & Company. Dime also retains Gavin Anderson & Company as
its regular public relations firm for public and press announcements. In the
context of the North Fork exchange offer, Gavin Anderson will assist Dime with
its communications to stockholders and the public. Gavin Anderson receives
compensation based on the time it has spent on the project and is reimbursed for
reasonable expenses. As part of the ongoing retention arrangement, Dime pays
Gavin Anderson a minimum retainer of $10,000 per month, all of which is applied
to the hourly fees charged for their services.
The Abernathy MacGregor Group. The Abernathy MacGregor Group, a public
relations firm, has typically been retained by Dime in conjunction with special
financial projects. In September 1999, Dime retained Abernathy MacGregor for one
year in connection with public and press relations and presentations regarding
the proposed Dime-Hudson merger. In the context of the North Fork exchange
offer, Abernathy MacGregor will assist Dime with its communications to
stockholders and the public. Abernathy MacGregor receives compensation based on
the time it has spent on the project and is reimbursed for reasonable expenses.
As part of the retention arrangement, Dime pays Abernathy MacGregor a minimum
retainer of $5,000 per month, all of which is applied to the hourly fees charged
for their services.
OTHER ARRANGEMENTS, AGREEMENTS OR CONFLICTS OF INTEREST
Except as set forth below, to the best knowledge of Dime, there are no
material agreements, arrangements or understandings and no actual or potential
conflicts of interest between Dime or its affiliates and:
- Dime's executive officers, directors or affiliates,
- North Fork or North Fork's executive officers, directors or affiliates or
- FleetBoston or FleetBoston's executive officers, directors or affiliates.
Arrangements between Dime and its affiliates and its executive officers,
directors or affiliates. Annex B describes arrangements between Dime and its
executive officers, directors or affiliates.
Annex C describes the transactions in Dime's common stock by its executive
officers, directors, affiliates or subsidiaries in the 60 days before the date
of this document. Dime has not engaged in any transaction in its own common
stock in the 60 days before the date of this document other than as counterparty
to the restricted stock purchases described in Annex C.
Arrangements between Dime and its affiliates and North Fork and its
executive officers, directors or affiliates. As discussed above, North Fork and
Dime engaged in preliminary explorations of a merger with North Fork in 1998. At
the time of these talks, North Fork and Dime entered into confidentiality
agreements. These agreements contained "standstill" provisions that expired on
February 19, 2000.
Derrick Cephas, a director of Dime, is a partner of the law firm of
Cadwalader, Wickersham & Taft. The Cadwalader firm provides legal advice to one
of North Fork's directors.
Arrangements between Dime and its affiliates and FleetBoston and its
directors, executive officers and affiliates. Subsidiaries of FleetBoston are
parties to arrangements with Dime. BankBoston, N.A. is currently the transfer
agent and registrar for Dime common stock. In addition, Dime and BankBoston,
N.A. are in discussions regarding naming BankBoston as exchange agent for the
Dime-Hudson merger. Furthermore, the stockholder protection rights agreement
discussed in this document names The First National Bank of Boston, which has
since changed its name to Fleet National Bank, as current rights agent.
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INFORMATION ABOUT NORTH FORK AND FLEETBOSTON
North Fork Bancorporation, Inc. is a Delaware corporation. North Fork has
commenced an offer to exchange each outstanding share of Dime common stock for
0.9302 of a share of North Fork common stock, par value $0.01 per share, and
$2.00 in cash. In a Schedule TO filed March 15, 2000 announcing the formal
exchange offer, North Fork has stated that Fleet Boston Corporation is also a
filing person with respect to the exchange offer, but that FleetBoston disclaims
that it is a "bidder" in the exchange offer.
The March 15th Schedule TO indicates that North Fork's principal executive
offices are located at 275 Broad Hollow Road, Melville, New York 11747 and that
the telephone number of North Fork at this location is (516) 844-1004. The March
15th Schedule TO indicates that FleetBoston's principal executive offices are
located at One Federal Street, Boston, Massachusetts 02110 and that the
telephone number of FleetBoston at this location is (617) 346-4000.
FORWARD-LOOKING STATEMENTS
This document contains a number of forward-looking statements regarding the
financial condition, results of operations and business of Dime, Hudson, North
Fork and FleetBoston. These statements may be made directly in this document or
may be incorporated in this document by reference to other documents. These
statements may also include references to periods following the completion of
the Dime-Hudson merger or North Fork's offer. You can find many of these
statements by looking for words such as "believes," "expects," "anticipates,"
"estimates," "potential" or similar expressions. These forward-looking
statements involve substantial risks and uncertainties. Some of the factors that
may cause actual results to differ materially from those contemplated by the
forward-looking statements include, but are not limited to, the following
possibilities:
- revenues of a combined Dime-North Fork may be higher than we expect, or
its operating costs may be lower than we expect,
- required regulatory approvals for North Fork's offer may be obtained more
quickly than we expect,
- market reaction to a combined Dime-Hudson or a combined Dime-North Fork
may be different than we expect,
- the timing and occurrence or non-occurrence of events may be subject to
circumstances beyond our control,
- there may be increases in competitive pressure among financial
institutions or from non-financial institutions,
- changes in the interest rate environment may reduce interest margins or
may adversely affect mortgage banking operations,
- changes in deposit flows, loan demand or real estate values may adversely
affect a company's business,
- changes in accounting principles, policies or guidelines may cause our
financial condition to be perceived differently,
- general economic conditions, either nationally or in some or all of the
states in which Dime, a combined Dime-Hudson or a combined Dime-North
Fork would be doing business, or conditions in securities markets, the
banking industry or the mortgage banking industry, may be less favorable
than we currently anticipate,
- legislation or regulatory changes may adversely affect our business and
- technological changes may be more difficult or expensive than
anticipated.
All subsequent written and oral forward-looking statements concerning the
proposed Dime-Hudson merger, North Fork's proposed offer or other matters
addressed in this document and attributable to Dime
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or any person acting on its behalf are expressly qualified in their entirety by
the cautionary statements contained or referred to in this section. Dime does
not undertake any obligation to release publicly any revisions to such
forward-looking statements to reflect events or circumstances after the date of
this document or to reflect the occurrence of unanticipated events.
ANNEXES
<TABLE>
<S> <C> <C>
Annex A -- Opinions of Credit Suisse First Boston Corporation and
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Annex B -- Information Regarding Arrangements with Dime's Executive
Officers, Directors and Affiliates
Annex C -- Transactions by Dime's Executive Officers, Directors and
Affiliates in Dime Common Stock in last 60 days
</TABLE>
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ANNEX A
[CREDIT SUISSE/FIRST BOSTON LETTERHEAD]
March 19, 2000
Board of Directors
Dime Bancorp, Inc.
589 Fifth Avenue
New York, New York 10017
Ladies and Gentlemen:
You have asked us to advise you with respect to the adequacy to the stockholders
of Dime Bancorp, Inc. (the "Company") from a financial point of view of the
consideration offered by North Fork Bancorporation, Inc. ("NFB") pursuant to its
offer to exchange each outstanding share of common stock, par value $0.01 per
share, of the Company (the "Dime Common Stock") for a per share consideration of
0.9302 shares of common stock, par value $0.01 per share, of NFB (the "NFB
Common Stock") and $2.00 in cash upon the terms and subject to the conditions
set forth in the preliminary prospectus dated March 14, 2000 (the "Preliminary
Prospectus") and the related letter of transmittal (collectively, the "NFB
Offer"). The terms of the NFB Offer are set forth more fully in the Schedule TO
filed by NFB and Fleet Boston Corporation with the Securities and Exchange
Commission on March 15, 2000 and as amended thereafter (the "Schedule TO").
In arriving at our opinion, we have reviewed certain publicly available business
and financial information relating to the Company and NFB. We have also reviewed
certain other information, including financial forecasts for the Company for
2000, provided to us by the Company and have met with the Company's management
to discuss its business and prospects. In addition, we have reviewed the
Preliminary Prospectus, the Schedule TO and certain related documents.
We have also considered certain financial and stock market data of the Company
and NFB, and we have compared those data with similar data for other publicly
held companies in businesses similar to the Company and NFB, and we have
considered the financial terms of certain other business combinations and other
transactions which have recently been effected. We also considered such other
information, financial studies, analyses and investigations and financial,
economic and market criteria which we deemed relevant.
In connection with our review, we have not assumed any responsibility for
independent verification of any of the foregoing information and have relied on
its being complete and accurate in all material respects. With respect to the
financial forecasts of the Company, we have assumed that they have been
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the Company's management as to the future financial performance
of the Company. As to the cost savings (including the amount, timing and
achievability thereof) which NFB has publicly announced that it expects to
achieve as a result of the NFB Offer and related transactions, we have relied on
NFB's public filings and in doing so express no view as to the reasonableness or
achievability thereof. In addition, we have not been requested to make, and have
not made, an independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of the Company or NFB, nor have we been furnished with
any such evaluations or appraisals. We are not experts in the evaluation of
allowances for loan losses, and we have neither made an independent evaluation
of the adequacy of the allowances for loan losses of the Company or NFB, nor
have we reviewed any individual credit files of the Company or NFB or been
requested to conduct such a review, and, as a result, we have assumed that the
respective allowances for loan losses for the Company and NFB are adequate to
cover such losses.
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Our opinion is necessarily based upon financial, economic, market and other
conditions as they exist and can be evaluated on the date hereof.
We are acting as financial advisor to the Company in connection with the NFB
Offer and the Company's previously announced proposed merger with Hudson United
Bancorp and will receive a fee for our services.
In the past, we have performed certain investment banking services for the
Company and have received customary fees for such services.
In the ordinary course of our business, we and our affiliates may actively trade
the debt and equity securities of the Company, NFB and Fleet Boston Corporation
and its affiliates for our and such affiliates' own accounts and for the
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities.
It is understood that this letter is for the information of the Board of
Directors of the Company in connection with its consideration of the NFB Offer
and does not constitute a recommendation to any stockholder of the Company as to
whether such stockholder should tender any shares of Dime Common Stock pursuant
to the NFB Offer or vote with respect to any matter related thereto.
Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the consideration offered in the NFB Offer is inadequate to the
stockholders of the Company from a financial point of view.
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ P. OLIVIER SARKOZY
--------------------------------------------------------
P. Olivier Sarkozy
Managing Director
A-2
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Investment Banking
Corporate and Institutional
Client Group
World Financial Center
North Tower
New York, New York
10281-1325
(LOGO) 212 449 1000
March 19, 2000
Board of Directors
Dime Bancorp, Inc.
589 Fifth Avenue
New York, NY 10017
Members of the Board:
We understand that North Fork Bancorporation, Inc. ("North Fork") has commenced
an offer to exchange each outstanding share of Dime Bancorp, Inc. ("Dime")
common stock, par value $0.01 per share (the "Dime Common Stock"), for 0.9302
shares of North Fork common stock, par value $0.01 per share (the "North Fork
Common Stock"), and $2.00 in cash (the "Offer Consideration") upon the terms and
subject to the conditions set forth in the preliminary prospectus dated March
14, 2000 (the "Preliminary Prospectus") and the related letter of transmittal
(collectively, the "North Fork Offer"). The terms of the North Fork Offer are
set forth more fully in the Schedule TO filed by North Fork and by Fleet Boston
Corporation ("Fleet Boston") with the Securities and Exchange Commission on
March 15, 2000 and as amended thereafter (the "Schedule TO").
You have asked us whether, in our opinion, the Offer Consideration is adequate
from a financial point of view to the stockholders of Dime.
In arriving at the opinion set forth below, we have, among other things:
(1) Reviewed certain publicly available business and financial information
relating to Dime and North Fork that we deemed to be relevant;
(2) Reviewed certain information, including financial forecasts, relating
to the business, earnings, assets, liabilities and prospects of Dime
furnished to us by senior management of Dime;
(3) Conducted discussions with members of senior management and
representatives of Dime concerning the matters described in clause (1)
(as to Dime) and clause (2) above, as well as their views regarding
Dime's businesses and prospects and the effects thereon of
consummation of the North Fork Offer and the transactions contemplated
therein;
(4) Reviewed the market prices and valuation multiples for the Dime Common
Stock and the North Fork Common Stock and compared them with those of
certain publicly traded companies that we deemed to be relevant;
(5) Reviewed the respective publicly reported financial condition and
results of operations of Dime and North Fork and compared them with
those of certain publicly traded companies that we deemed to be
relevant;
(6) Compared the proposed financial terms of the North Fork Offer with the
financial terms of certain other transactions that we deemed to be
relevant;
(7) Considered, based upon information provided to us by Dime and certain
publicly available financial information for North Fork, the pro forma
impact of the North Fork Offer and related
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(LOGO)
transactions on the earnings and book value per share, consolidated
capitalization and certain balance sheet and profitability ratios of North Fork;
(8) Reviewed the Proxy Statement and Prospectus dated February 9, 2000 of
Dime and Hudson United Bancorp and the Appendices thereto, including
the Agreement and Plan of Merger, dated as of September 15, 1999 and
amended and restated on December 27, 1999, between Dime and Hudson
United Bancorp, as set forth therein;
(9) Reviewed the Preliminary Prospectus, the Schedule TO and certain
related documents;
(10) Reviewed certain communications publicly filed by Dime and North Fork;
and
(11) Reviewed such other financial studies and analyses and took into
account such other matters as we deemed necessary, including our
assessment of general economic, market and monetary conditions.
In preparing our opinion, we have assumed and relied on the accuracy and
completeness of all information supplied or otherwise made available to us,
discussed with or reviewed by or for us, or publicly available, and we have not
assumed any responsibility for independently verifying such information or
undertaken an independent evaluation or appraisal of the assets or liabilities
of Dime or North Fork or been furnished with any such evaluation or appraisal.
We are not experts in the evaluation of allowances for loan losses, and we have
neither made an independent evaluation of the adequacy of the allowances for
loan losses of Dime or North Fork, nor have we reviewed any individual credit
files of Dime or North Fork or been requested to conduct such a review, and, as
a result, we have assumed that the respective allowances for loan losses for
Dime and North Fork are adequate to cover such losses. In addition, we have not
assumed any obligation to conduct, nor have we conducted, any physical
inspection of the properties or facilities of Dime or North Fork. We have also
assumed and relied upon, with respect to North Fork, publicly available
forecasts and forecasted information (including estimates of future cost savings
anticipated to result from the consummation of the North Fork Offer and related
transactions) contained in certain communications from North Fork that were made
available to the public and filed with the Securities and Exchange Commission,
although in doing so we express no view as to the reasonableness or
achievability thereof. With respect to the financial and operating information,
including without limitation financial forecasts, valuations of contingencies
and projections regarding under-performing and non-performing assets, net
charge-offs, adequacy of reserves and future economic conditions, furnished to
or discussed with us by Dime, we have assumed that they have been reasonably
prepared and reflect the best currently available estimates and judgments of the
senior management of Dime as to the future financial and operating performance
of Dime.
Our opinion is necessarily based upon market, economic and other conditions as
in effect on, and on the information made available to us as of, the date
hereof. We have not been asked to provide, nor are we providing, any opinion
regarding Dime's previously announced proposed merger with Hudson United
Bancorp.
We have been retained by the Board of Directors of Dime to act as financial
advisor to Dime in connection with the North Fork Offer and will receive a fee
from Dime for our services. In addition, Dime has agreed to indemnify us for
certain liabilities arising out of our engagement. We have in the past provided
financial advisory, investment banking and other services to Dime and Fleet
Boston and their affiliates and may continue to do so and have received and may
receive fees for the rendering of such services, and we may continue to provide
such services in the future. In the ordinary course of our business, we also may
actively trade the Dime Common Stock and other securities of Dime and its
affiliates, the North Fork Common Stock and other securities of North Fork and
its affiliates and the common stock and other securities of Fleet Boston and its
affiliates for our own account and for the
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(LOGO)
accounts of our customers, and, accordingly, may at any time hold long or short
positions in such securities.
This opinion is for the sole and exclusive use and benefit of the Board of
Directors of Dime and does not constitute a recommendation to any Dime
stockholder as to whether such stockholder should tender any shares of Dime
Common Stock pursuant to the North Fork Offer or vote with respect to any matter
related thereto. It is further understood that this opinion will not be
reproduced summarized, described or referred to or given to any person without
Merrill Lynch's prior written consent.
On the basis of and subject to the foregoing, we are of the opinion that, as of
the date hereof, the Offer Consideration is inadequate from a financial point of
view to the stockholders of Dime.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
A-5
<PAGE> 28
ANNEX B
DIME EXECUTIVE OFFICER, DIRECTOR AND AFFILIATE ARRANGEMENTS
Certain contracts, agreements, arrangements or understandings between Dime
and its executive officers, directors or affiliates are described in Dime's 1999
proxy statement, dated March 31, 1999, for its annual meeting held April 29,
1999. The 1999 proxy statement is incorporated by reference into this document.
The information below updates information from the 1999 proxy statement for the
sections entitled "Compensation Committee Report on Executive Compensation,"
"Executive Compensation," "Employment Contracts and Termination of Employment
and Change-in-Control Arrangements," and "Stock Ownership of Management".
Sections of the 1999 proxy statement entitled "Director Compensation," "Certain
Transactions," and "Loans to Management" have not changed (other than to change
dates) and are incorporated by reference into this document.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During 1999, the primary responsibility for determining the compensation of
Dime's executive officers was held by the Compensation Committee, subject to
review and appropriate approval by the Board of Directors.
Principles. For 1999, the Compensation Committee's guiding principles for
its compensation program reflect the same objectives as had been set in prior
years: (1) to enable Dime to recruit and retain the highest quality executive
talent available to it; and (2) to motivate Dime's executives to achieve and
sustain a superior level of corporate performance, since consistently superior
performance will result in superior returns to Stockholders. Recruitment and
retention objectives are addressed by providing total compensation opportunities
that are competitive relative to the market with which Dime competes for talent.
In that regard, Dime recognizes that its own growth in recent years and its
expanded emphasis on commercial banking activities, as well as the enormous
changes taking place within the banking industry and the increasing competition
from other segments of the financial services industry, have significantly
broadened the range of institutions with which it can --and must -- compete for
talent. Thus, the Compensation Committee believes that an important component of
its guiding principles must also be frequent monitoring of competitive practices
and an openness to adapting Dime's compensation practices to meet changing
conditions within the broad financial services industry and to foster Dime's
objectives of increasing its commercial banking orientation.
While operating within a competitive framework, the Compensation Committee
pursues its motivational objectives by giving greater emphasis to those
components of the total compensation package that reward performance, in order
to reinforce the linkage of rewards with the achievement of business results
and, ultimately, with the financial interests of stockholders. Thus, while the
principal components of compensation (base salary, annual incentive and
long-term incentive), as well as benefits, are generally set at or near
competitive levels, emphasis is placed on variable pay, with the intention that
total actual pay be aligned with performance relative to Dime's short- and
long-term objectives. The effect of this pay-for-performance orientation should
be that truly superior performance will result in total compensation that
exceeds the median total compensation range of the comparative group, while
mediocre performance will result in total compensation that is less than the
median range of that group. In particular, as the ultimate measure of
performance is return to stockholders, the compensation program, particularly
for more senior executives, should be designed to ensure that management has a
substantial proprietary financial interest in the return realized by
stockholders.
B-1
<PAGE> 29
Practices. Because of the scope and complexity of Dime's activities in a
rapidly changing financial services industry, it is imperative that Dime
attract, retain and motivate the most qualified and talented executives
available to it. Dime competes for executives with a variety of financial
services companies, including commercial banks and other institutional lenders,
large thrifts, mortgage banking companies and investment banking firms. The
Compensation Committee, based in part on a thorough analysis of Dime's executive
compensation levels by independent outside compensation consultants and assisted
by third-party data collection and analysis, annually reviews Dime's executive
compensation practices within the framework discussed above and compares them
with the executive compensation practices of other financial services companies
with which Dime competes for executive talent.
As discussed in last year's Compensation Committee report, Dime in late
1997 undertook a thorough review of its compensation practices following the
acquisition of North American Mortgage Company, and the results of that review
were reflected in executive compensation for 1998. For 1999, Dime continued the
practices it had followed in the prior year. Thus, Dime's independent
compensation consultants analyzed publicly reported senior management
compensation at a peer group of institutions (both thrifts and banks) throughout
the country, which for 1999 consisted of 13 institutions, with median assets of
$24.9 billion. This data was then adjusted upward to reflect the generally
higher cash compensation levels in the New York City Metropolitan Area. They
then further assessed publicly reported compensation at five New York-based
money-center/superregional banks (adjusted downward to reflect size and revenue
differentials), in order to take into account the fact that Dime now draws much
of its executive talent from the large commercial banks located in New York
City, as evidenced by the significant number of Dime's executive officers who
have previously served in senior positions at such institutions immediately
prior to joining Dime. Finally, for those senior officer positions where
comparable publicly reported peer group and money-center/superregional bank data
was generally not readily available, published survey data was analyzed,
including information on financial services companies comparable in asset size
to the peer group and to the money-center/ superregional group (adjusted on the
same basis described above). A functional matching approach was used to compare
each of the executive positions at Dime to market-surveyed positions based on
similarity of responsibilities, with appropriate adjustments being made as
necessary to reflect any differences therein. All data analyzed was, if
necessary, adjusted upward to take into account any time differential from the
periods for which the data was reported. The information from these various
analyses then provided the starting point for the Compensation Committee's
approach to fixing the principal components of executive compensation for 1999.
With respect to base salaries, the foregoing analysis showed that the base
salaries of most of Dime's senior officers were below both peer group and money
center/superregional bank medians. For 1999, salaries for executive officers
were adjusted upward by, on average, approximately 11%, but generally remained
below the average of the peer group and money-center/super-regional bank medians
described above. For 1999, consistent with these increases, the annual salary
for Mr. Toal, the Chief Executive Officer, was increased by 10% to $825,000,
which was slightly above the average of the peer group and
money-center/superregional bank medians.
With respect to incentives, and as described above, a fundamental tenet of
Dime's incentive compensation philosophy is to reward performance based
primarily on objective standards. Short-term incentives, payable in cash, are
geared to the accomplishment of Dime's key annual business plan objectives.
For 1999, cash incentives were awarded to senior officers under Dime's
stockholder-approved Senior Officer Incentive Plan. Under this plan, for a given
performance period (usually a calendar year), the Compensation Committee at the
beginning of the performance period designates officers who are eligible to
participate and specifies one or more levels of performance goals. These
performance goals must be based upon one or more of earnings per share, return
on equity and return on assets. The Compensation
B-2
<PAGE> 30
Committee then establishes individual target incentive opportunities for each
participating officer, as well as a preset formula for determining the range
within which incentive levels may vary with the level of the performance goals
reached. The amounts that would otherwise be payable under the plan based on the
level of performance goals reached may then be decreased, but not increased, in
the discretion of the Compensation Committee. This plan is intended to qualify
awards payable thereunder as "qualified performance-based compensation" under
Section 162(m) of the Internal Revenue Code, thereby ensuring full deductibility
of compensation payable under the plan to any executive officers whose total
compensation may exceed $1 million.
For 1999, all of the executive officers named in the Summary Compensation
Table were designated as participants in the Senior Officer Incentive Plan.
Performance goals for 1999, as for 1998, were based on the greater of Dime's
earnings per share or adjusted earnings per share (such an adjustment would
generally eliminate any extraordinary items, as determined in accordance with
generally accepted accounting principles, certain restructuring charges and
charges relating to discontinued operations, any profit or loss attributable to
business operations of an entity acquired by Dime during the performance period,
and any good will expense attributable to such acquired entity, that would
otherwise be included in earnings per share). Depending on the level of
performance goal achieved, a participant's incentive award could range between 0
and 200% of his or her individual target incentive (subject to a maximum annual
individual award limit with respect to awards under the Senior Officer Incentive
Plan of $1,500,000). In order to assist the Committee in setting individual
target incentives, Dime's independent compensation consultants analyzed the same
sources as discussed above with respect to the determination of annual salaries,
using for comparison purposes a three year average of publicly reported
compensation (expressed as a percentage of base salary), without adjustment, for
the executive officers named in the Summary Compensation Table. For 1999,
individual targets for plan participants were on average close to the median of
the peer group, although generally well below the median of the
money-center/superregional bank group. For 1999, Mr. Toal's target incentive
under the plan remained at 100% of his annual salary. This percentage, which was
determined on a basis consistent with plan participant target incentive
opportunities generally, was well below the midpoint of the combined survey
analysis. For 1999, Dime reported record earnings per share, substantially
exceeding the performance targets under the plan, and therefore participants
qualified for award opportunities of 200% of target incentive amount (subject to
maximum award limits under the plan). In then considering whether and to what
extent to use its discretion to reduce the cash incentives for which the
participants in the Senior Officer Incentive Plan were otherwise eligible, the
Compensation Committee considered at length the extent to which the significant
drop in Dime's stock price during 1999 should weigh against not only
management's success in producing earnings per share in excess of the targets
set forth in the plan, but also Dime's other significant operating achievements
during the year. In particular, the Compensation Committee noted such factors
as:
- attaining a 14% growth in annual operating earnings per share, and
continuing a streak of 14 consecutive quarters of rising operating
earnings, despite a difficult rate environment and sharply declining
mortgage banking activity;
- significant increases for 1999 in nearly all major performance measures,
including return on equity and return on assets, from 1998, itself a
record year; and
- the substantial expansion of Dime's commercial banking businesses during
1999, including a 73% increase in consumer loan originations and a 217%
increase in business loan originations, in part as a result of the
strategic acquisitions during the year of Citibank's auto finance
business and of KeyBank's commercial banking franchise on Long Island,
resulting in an increase in non-residential loans from 30% to 46% of
loans outstanding during the course of the year.
B-3
<PAGE> 31
The Compensation Committee further considered that the purposes of
short-term incentives, which drive accomplishment of annual business goals,
should not be conflated with those of long-term incentives, which assure that a
significant portion of an executive's potential compensation is conditioned upon
the achievement and maintenance -- over multi-year periods -- of returns to
stockholders.
After weighing all these factors, the Compensation Committee concluded that
it was important to maintain the link between the accomplishment of clearly
defined and pre-set business objectives and a specific component of annual
compensation. In this regard, it was clear that, for 1999, management had not
only met but substantially exceeded these annual operating targets. While this
in turn led the Compensation Committee to conclude that the payment of
incentives as provided for in the plan was warranted, the Compensation Committee
also concluded that maximum awards under the plan, even if otherwise earned,
should not be paid where the return to stockholders for the year had been below
par. Accordingly, awards to executive officers under the plan were reduced. In
the case of Mr. Toal, the incentive awarded for 1999 was $1,125,000, as compared
with a maximum award of $1,500,000 for which he was eligible under the plan.
Long-term incentives are provided in the form of stock and stock-based
grants. As discussed in last year's Compensation Committee Report, the
Compensation Committee has adopted an equity stake approach, which seeks to
establish a desirable level of equity participation for senior executives,
expressed as a percentage of Dime's common stock outstanding that is to be
subject to annual option grants, with the appropriate percentage of Dime's
common stock to be subject to such grants being determined by reference to
competitive practices. For 1999, the Compensation Committee determined to
maintain the same stock option grant guidelines as for 1998 (with adjustments
being made to individual grants based on considerations including individual
performance and experience). For 1999, as for 1998, grants were made in the form
of non-qualified options to purchase Dime's common stock. These non-qualified
options generally vest over a three year period (subject to accelerated vesting
in certain circumstances, including a change in control), have expiration dates
11 years from the date of grant and have exercise prices equal to the fair
market value per share of Dime's common stock on the date of grant, which was
deemed to be the closing price of such stock on the New York Stock Exchange on
that date. In January 1999, Mr. Toal received non-qualified options to purchase
120,000 shares of Dime's common stock at fair market value on the date of grant,
an increase over the 94,800 non-qualified options awarded to Mr. Toal in 1998,
but still substantially below the average of the peer group and
money-center/superregional bank medians described above. The Compensation
Committee believes that this increase in the number of stock options granted was
consistent with the Compensation Committee's preference for emphasizing
long-term incentive compensation, the value of which is tied to stockholder
return.
Also, although not an aspect of cash or incentive compensation, Dime seeks
to attract and retain executives by providing a variety of benefit plans and
programs generally designed to be competitive with those provided by other
financial services companies. See "Executive Compensation" for a description of
these plans and programs as currently in effect.
The Compensation Committee's policy is to structure executive compensation
in a time and manner intended to limit the likelihood that current compensation
will exceed the limits for deductibility prescribed by Section 162(m) of the
Internal Revenue Code. In furtherance of this policy, Dime adopted, with
stockholder approval, the Senior Officer Incentive Plan, under which cash
incentive awards to senior officers are made in a manner intended to qualify
them for full deductibility under the Internal Revenue Code. This policy
continued to be operative for 1999; however, the Compensation Committee retains
discretion to make exceptions to this policy, and in determining whether to do
so the Compensation Committee may consider a number of factors, including the
tax position of Dime, the materiality of amounts likely to be involved and any
potential ramifications of the loss of flexibility to respond to unforeseeable
changes in circumstances.
B-4
<PAGE> 32
Finally, in determining compensation levels and targets within the
framework discussed above, the Compensation Committee takes into full account
applicable regulatory restrictions on the compensation of executive officers.
Executive compensation is a constantly evolving field. The Compensation
Committee monitors trends in this area, as well as changes in law, regulation
and accounting practice, that may affect either its compensation philosophy or
its practices. Accordingly, the Compensation Committee at all times reserves the
right to alter its approach in response to changing conditions. In particular,
the Compensation Committee expects that for 2000, in the wake of Dime's merger
with Hudson United Bancorp, the past compensation practices of both Dime and
Hudson will be carefully re-evaluated with a view to determining the practices
that will best suit the combined institution, Dime United.
THE COMPENSATION COMMITTEE:
Ira T. Wender, Chairman
Derrick D. Cephas
J. Barclay Collins II
Margaret Osmer-Mcquade
Dr. Paul A. Qualben
Howard Smith
Dr. Norman R. Smith
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
services in all capacities to Dime for the fiscal years ended December 31, 1999,
1998 and 1997 of those persons who were, at December 31, 1999, (a) the Chief
Executive Officer of Dime and (b) the other four most highly compensated
executive officers of Dime (collectively with the Chief Executive Officer, the
"named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------ -------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION AWARDS(2) OPTIONS/SARS COMPENSATION(3)
- --------------------------- ---- -------- ---------- ------------ ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence J. Toal(4)............. 1999 $825,000 $1,125,000 $ 0 $ 0 120,000 $ 48,321
Chief Executive Officer 1998 750,000 1,204,810(5) 5,617 1,631,070 94,800 164,581
1997 650,000 800,000 0 0 78,000 39,000
Anthony R. Burriesci(6)......... 1999 400,000 479,683 3,070 0 40,000 23,002
Chief Financial Officer 1998 375,000 401,620(7) 4,666 699,840 36,700 56,769
1997 166,923 385,000(8) 20,776 577,500 90,000 0
Richard A. Mirro................ 1999 400,000 400,000 2,087 0 40,000 25,375
Chief Executive Officer 1998 375,000 502,310(9) 3,696 62,226 36,700 20,125
Mortgage Banking 1997 350,000 395,000(10) 8,349 0 54,500 0
Peyton R. Patterson............. 1999 325,000 303,747 3,070 0 30,000 18,869
General Manager, 1998 275,000 201,040(11) 4,876 441,180 24,600 49,312
Retail Banking 1997 225,000 170,000 0 0 16,000 8,827
Carlos R. Munoz................. 1999 350,000 230,000 3,070 0 35,000 20,311
Chief Credit and Risk 1998 325,000 231,250(12) 4,302 522,450 33,400 55,086
Management Officer 1997 300,000 175,000 0 0 18,000 18,000
</TABLE>
- -------------------------
(1) Bonuses are reported in the year that the named executive officer rendered
the services to which the bonus relates, even though the amounts shown may
actually be paid to the named executive officer in a subsequent year.
(2) Except as noted, restricted stock awards generally vest in three equal
installments on the third, fourth, and fifth anniversary of the date of
grant. At December 31, 1999, Mr. Toal held 58,807 shares of restricted
stock having a value of $830,649 (3,207 shares of which were scheduled to
vest in equal installments on January 30, 2000 and January 30, 2001); Mr.
Burriesci held 37,047 shares of restricted stock having a value of $523,289
(1,080 shares of which were scheduled to vest in equal installments on
January 30, 2000 and January 30, 2001 and 11,667 shares of which were
scheduled to vest on January 24, 2000); Mr. Mirro held 14,874 shares of
restricted stock having a value of $210,095 (1,540 shares of which were
scheduled to vest in equal
B-5
<PAGE> 33
installments on January 29, 2000 and January 29, 2001); Ms. Patterson held
19,328 shares of restricted stock having a value of $273,008 (694 shares
of which were scheduled to vest in equal installments on January 30, 2000
and January 30, 2001); and Mr. Munoz held 21,601 shares of restricted
stock having a value of $305,114 (834 shares of which were scheduled to
vest in equal installments on January 30, 2000 and January 30, 2001).
Dividends are paid, and other distributions made, on all shares of
restricted stock to the same extent that dividends are declared and paid,
or other distributions are made, on shares of Dime's common stock in
general, provided such shares of restricted stock are held on the record
date determined for the payment of dividends, or the making of other
distributions, if any, on Dime's common stock.
(3) For the year ended December 31, 1999, the amounts set forth reflect
matching and supplemental allocations by Dime Bancorp on behalf of each of
the named executive officers under certain defined contribution plans and
arrangements.
(4) Mr. Toal became Chief Executive Officer of Dime Bancorp (and Chairman of
the Board and Chief Executive Officer of Dime Savings) on January 1, 1997
and Chairman of the Board of Dime Bancorp on April 30, 1998.
(5) The amount shown represents an incentive bonus for 1998 of $1,200,000 and
a cash award equal to the purchase price of 4,810 shares of restricted
stock.
(6) Mr. Burriesci joined Dime Bancorp in July 1997 at an annual rate of salary
of $350,000.
(7) The amount shown represents an incentive bonus for 1998 of $400,000 and a
cash award equal to the purchase price of 1,620 shares of restricted
stock.
(8) The amount shown represents a $150,000 cash bonus paid to Mr. Burriesci
upon joining Dime Bancorp in July 1997, an incentive bonus for 1997 of
$200,000, and a cash award equal to the purchase price of 35,000 shares of
restricted stock.
(9) The amount shown represents an incentive bonus for 1998 of $500,000 and a
cash award equal to the purchase price of 2,310 shares of restricted
stock.
(10) The amount shown represents an incentive bonus for 1997 of $375,000 and a
cash award equal to the purchase price of 20,000 shares of restricted
stock.
(11) The amount shown represents an incentive bonus for 1998 of $200,000 and a
cash award equal to the purchase price of 1,040 shares of restricted
stock.
(12) The amount shown represents an incentive bonus for 1998 of $230,000 and a
cash award equal to the purchase price of 1,250 shares of restricted
stock.
The following table contains information concerning the grant of options to
purchase Dime's common stock and limited tandem stock appreciation rights
("SARs") to the named executive officers during the year ended December 31,
1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO GRANT DATE
OPTIONS/SARS EMPLOYEES IN EXERCISE OR BASE PRESENT
NAME GRANTED(1) FISCAL YEAR(2) PRICE ($/SH) EXPIRATION DATE VALUE($)(3)(4)
- ---- ------------ -------------- ---------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Lawrence J. Toal............ 120,000 4.35% $24.25 1/29/10 $1,990,440
Anthony R. Burriesci........ 40,000 1.45 24.25 1/29/10 663,480
Richard A. Mirro............ 40,000 1.45 23.875 1/28/10 653,220
Peyton R. Patterson......... 30,000 1.09 24.25 1/29/10 497,610
Carlos R. Munoz............. 35,000 1.27 24.25 1/29/10 580,545
</TABLE>
- ---------------
(1) The options shown become exercisable at a rate of one-third per year
commencing one year from the date of the grant. All of the awards reflected
in the table consisted of options with limited tandem SARs. The tandem SARs
shown are only exercisable within the 60-day period following the occurrence
of certain specified changes in ownership or control of Dime Bancorp or
certain of its subsidiaries and are payable on the basis of the highest
price paid for Dime's common stock during the 90-day period ending on the
day of the change in ownership or control.
(2) The percentage set forth in this column reflects the relationship between
the number of options (with limited tandem SARs) granted to the named
executive officer and the number of options (whether or not with limited
tandem SARs) granted to all employees in the fiscal year.
B-6
<PAGE> 34
(3) The estimated value shown, which was determined by application of the
Black-Scholes option pricing model, was developed solely for purposes of
comparative disclosure in accordance with the regulations of the Securities
and Exchange Commission and does not necessarily reflect Dime Bancorp's view
of the appropriate value or methodology for purposes of financial reporting.
Use of this model should not be viewed in any way as a forecast of the
future performance of Dime's common stock, volatility or dividend policy. No
adjustments have been made for forfeitures or non-transferability.
(4) The estimated present value of the options shown is based upon historical
experience and for the options granted to each of the named executive
officers, except Mr. Mirro, is $16.587 per share. The estimated present
value of the options shown for Mr. Mirro is $16.330 per share. Volatility
calculated over 180 trading days prior to the date of grant was: .59.
Risk-Free Rate of Return, representing the interest rate on a United States
Treasury security with a maturity date corresponding to the term of the
options: 5.11%.
Dividend Yield for the each of the options granted is .786%.
Time of Exercise for all options shown: 11 years.
The following table sets forth information with respect to exercised
options during 1999, as well as the aggregate number of unexercised options to
purchase Dime's common stock granted in all years to the named executive
officers and held by them as of December 31, 1999 and the value of unexercised
in-the-money options (i.e., options that had a positive spread between the
exercise price of such option and the fair market value of Dime's common stock)
as of December 31, 1999. Dime has not granted any freestanding SARs to the named
executive officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS AT
DECEMBER 31, 1999 DECEMBER 31, 1999
---------------------- --------------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- ---------------------- --------------------
<S> <C> <C> <C> <C>
Lawrence J. Toal......... 0 $ 0 448,658/209,200 $3,178,242/0
Anthony R. Burriesci..... 0 0 72,233/94,467 0/0
Richard A. Mirro......... 0 0 66,733/64,467 0/0
Peyton R. Patterson...... 6,667 40,835 13,533/51,734 0/0
Carlos R. Munoz.......... 12,000 11,250 29,333/63,267 65,975/0
</TABLE>
B-7
<PAGE> 35
The following table shows the estimated annual pension benefits payable to
a covered member at normal retirement age (age 65) under the Retirement Plan of
Dime Bancorp, Inc. and the Benefit Restoration Plan of The Dime Savings Bank of
New York, FSB based on compensation covered under the plans and years of
creditable service with Dime Savings or certain affiliates of Dime. The Benefit
Restoration Plan provides benefits that would otherwise be denied a member
because of certain limitations on benefits under the Retirement Plan imposed by
the Internal Revenue Code.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF CREDITABLE SERVICE
--------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 125,000........................... $ 32,813 $ 43,750 $ 54,688 $ 65,625 $ 75,000
150,000.......................... 39,375 52,500 65,625 78,750 90,000
175,000.......................... 45,938 61,250 76,563 91,875 105,000
200,000.......................... 52,500 70,000 87,500 105,000 120,000
225,000.......................... 59,063 78,750 98,438 118,125 135,000
250,000.......................... 65,625 87,500 109,375 131,250 150,000
300,000.......................... 78,750 105,000 131,250 157,500 180,000
350,000.......................... 91,875 122,500 153,125 183,750 210,000
400,000.......................... 105,000 140,000 175,000 210,000 240,000
450,000.......................... 118,125 157,500 196,875 236,250 270,000
500,000.......................... 131,250 175,000 218,750 262,500 300,000
600,000.......................... 157,500 210,000 262,500 315,000 360,000
700,000.......................... 183,750 245,000 306,250 367,500 420,000
800,000.......................... 210,000 280,000 350,000 420,000 480,000
900,000.......................... 236,250 315,000 393,750 472,500 540,000
1,000,000.......................... 262,500 350,000 437,500 525,000 600,000
</TABLE>
A member's compensation covered by the plans is the product of 12 times his
or her average monthly compensation for the 36 consecutive months of service
during which the member's compensation was the highest or, if the member's
service is less than 36 months, then for the entire period of service. For these
purposes, covered compensation for the named executive officers includes salary,
but not bonus and other annual compensation, reported in the "Annual
Compensation" columns of the Summary Compensation Table. The benefit levels set
forth in the Pension Plan Table are based on the years of creditable service
shown in the table, continued existence of the plans without material change,
and payment of benefits in the form of a single life annuity (rather than in
other available forms). The benefits listed in the Pension Plan Table are not
subject to any reduction for Social Security contributions or benefits or any
other offset (although certain minimum benefits provided under the plans with
respect to certain prior service are subject to a deduction measured by Social
Security benefits, or by an offset with respect to compensation earned that is
not in excess of Social Security covered compensation). However, such benefits
reflect the application of the maximum benefit limit under the plans of 60% of
covered compensation.
Dime also maintains the Dime Bancorp, Inc. Supplemental Executive
Retirement Plan ("SERP"). The SERP provides for an annual benefit equal to a
pension goal percentage (between 30% and 60%) multiplied by Average Compensation
(as defined) payable over the life of each SERP participant after the
participant's retirement at or after age 65 or, in certain instances, a reduced
50% or 100% joint and survivor annuity form of benefit. Additional forms of
benefit, including 5-,10-, or 15- year-certain life annuities, are available,
and the Compensation Committee can direct that an actuarially equivalent lump
sum be paid at termination of service in lieu of an annuity. For these purposes,
unless otherwise provided by the Compensation Committee within the SERP's
parameters, Average Compensation is the highest average annual base salary and
certain other taxable cash-based compensation (other than sign-on bonus or other
amounts paid in connection with grants of rights to purchase restricted stock)
earned over three
B-8
<PAGE> 36
consecutive years out of the participant's last ten years of employment (or such
other period designated by the Compensation Committee), with incentive
compensation deemed allocated and paid over the period over which it was earned.
The SERP benefit is offset by other retirement benefits provided under qualified
defined benefit plans of Dime Bancorp and Dime Savings (such as the Retirement
Plan), as well as the Benefit Restoration Plan and other contractual benefits to
the extent they relate to the benefits under a Dime qualified defined benefit
plan. The SERP provides that benefits may commence, in a reduced amount, if the
participant terminates service before age 65 but, unless the Compensation
Committee directs otherwise, no earlier than age 55. The SERP also provides for
a death benefit to be paid to a participant's surviving spouse or minor children
in the event that the participant dies prior to the start of his or her benefits
under the SERP. Death benefits will not commence to be paid until the month that
the participant would have attained age 55 had he or she lived. Benefits under
the SERP generally vest based on the period of employment by the participant,
with partial vesting after five years, increasing to full vesting after ten
years. The SERP counts service both before and during SERP participation for
these purposes. Accelerated vesting applies in the event of certain terminations
of employment after a change in control (as defined) and the Compensation
Committee can alter the vesting schedule (but with limits on such alteration
rights upon a change in control). Except with respect to vesting rights, and
except to the extent that compensation considered under the SERP may increase
over a period of time, the SERP benefit does not increase based on years of
service.
Mr. Toal's SERP goal was set at 60% by amendment of his employment
agreement effective as of October 22, 1999. As of December 31, 1999, therefore,
Mr. Toal had accrued a SERP benefit (which will be offset by his Retirement Plan
and related Benefit Restoration Plan benefits), commencing at age 65 in the form
of a single life annuity, of approximately $1,070,000. Mr. Toal was then 80%
vested in that benefit.
Mr. Burriesci has a SERP goal that has been set at 50%. Under Mr.
Burriesci's employment agreement, he is also provided with a benefit based on a
doubling of Retirement Plan and related Benefit Restoration Plan accruals
(offset by actual Retirement Plan and related Benefit Restoration Plan benefits)
during the first ten years of his employment, with that benefit vesting after
three years. Those benefits (in which Mr. Burriesci is not yet vested) will act
as an offset of Mr. Burriesci's SERP benefit. Based on compensation earned
through December 31, 1999, Mr. Burriesci's SERP benefit, which will be offset by
Retirement Plan and related Benefit Restoration Plan benefits, as well as the
additional contractual benefit described above, commencing at age 65 in the form
of a single life annuity, is approximately $404,321. Mr. Burriesci has not yet
vested in that benefit.
Each of Messrs. Mirro and Munoz and Ms. Patterson has a SERP goal that has
been set at 50%. Based on compensation earned through December 31, 1999, the
SERP benefit (which will be offset by Retirement Plan and related Benefit
Restoration Plan benefits) accrued, commencing at age 65 in the form of a single
life annuity, by Mr. Mirro is approximately $400,000, by Mr. Munoz is
approximately $268,333 and by Ms. Patterson is approximately $249,791. As of
December 31, 1999, none of these officers was vested in their respective SERP
benefits.
The respective completed years of creditable service under the Retirement
Plan and, as appropriate, the Benefit Restoration Plan and the years of service
for vesting in SERP benefits as of December 31, 1999 for each of the named
officers is as follows: Lawrence J. Toal, eight years; Anthony R. Burriesci, two
years; Richard A. Mirro, three years; Peyton R. Patterson, three years; and
Carlos R. Munoz, four years.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The 1999 proxy statement disclosed information regarding employment
contracts and termination of employment and change-in-control arrangements.
Other than as set forth below, there have been no changes to the information
disclosed in the 1999 proxy statement and the 1999 proxy statement is
incorporated by reference into this document. In addition to the employment
agreements of executives set forth in the 1999 proxy statement, Dime Savings has
employment agreements with each of Mr. Mirro and Ms. Patterson.
B-9
<PAGE> 37
In addition, a discussion of employment agreements, severance agreements,
change-in-control agreements and other employee benefit arrangements was
included on pages 55-63 of the February 9th proxy statement/prospectus under the
heading "The Merger - Interests of Management and Directors in the Merger." This
update on employment and other agreements is qualified by reference to the
discussion in the February 9th proxy statement/prospectus.
Mr. Toal's Agreement. Mr. Toal's employment agreement was amended
effective October 22, 1999 in connection with the Dime-Hudson merger. This
amendment was discussed in the February 9th proxy statement/prospectus relating
to the Dime-Hudson merger under the section entitled "The Merger -- Interests of
Management and Directors in the Merger -- New Employment Arrangements." This
update on employment and other agreements is qualified by reference to the
discussion in the February 9th proxy/statement prospectus.
Agreement with Mr. Mirro. Effective as of December 21, 1998, Dime Savings
entered into an employment agreement with Mr. Mirro, which replaced a previous
agreement. The term of Mr. Mirro's agreement currently extends to March 1, 2003,
with automatic renewal applying each March 1st, absent earlier non-renewal.
Mr. Mirro's agreement provides that he will serve as Chief Executive
Officer of Dime Savings' mortgage banking subsidiary, North American Mortgage
Company, with his salary as Chief Executive Officer of North American at a
minimum rate of $375,000 subject to periodic review and possible increase, or up
to a 25% decrease.
Pursuant to the terms of his employment agreement, Mr. Mirro also
participates in the SERP, with a pension goal of not less than 50% of average
SERP-covered compensation (as more fully described above). In the event of Mr.
Mirro's permanent disability, Dime Savings will pay Mr. Mirro his annual salary
for up to one year, less the maximum benefit available under Dime insurance
coverage, and will generally continue to provide certain benefits for the
remaining term of Mr. Mirro's agreement then in effect.
If Mr. Mirro's employment is terminated without cause, Dime Savings will
continue to pay Mr. Mirro his annual salary (as in effect at the termination
date) plus his target bonus amount (as in effect for the year of the
termination) for two years, as well as generally continue certain benefits for
the same period. In such circumstance, Mr. Mirro's stock options and restricted
stock will also fully vest. If Mr. Mirro's principal place of employment is
moved more than 75 miles from Tampa, Florida, he has the right, for a 30-day
period, to treat such relocation as a termination by Dime Savings without cause,
entitling him to these termination benefits. He also has a right to these
termination benefits if his agreement is not renewed, if, within 30 days of his
receipt of notice of non-renewal, he elects to treat the non-renewal as an
involuntary termination.
Mr. Mirro's agreement also provides for enhanced severance benefits
(generally in lieu of the termination benefits described above) in certain
circumstances following a change in control (defined in the same manner as under
Mr. Toal's agreement). If, after a covered change in control, Mr. Mirro's
employment is terminated by Mr. Mirro during the term of his agreement in effect
at the time of the change in control after a decrease in his annual salary (to a
level below that which applied before the change in control) or a material
downgrading of his duties or responsibilities from those in effect immediately
prior to the change in control, the enhanced severance benefits will be payable.
The enhanced severance benefits will also be payable if Mr. Mirro terminates his
employment for any reason during the 90-day period starting six months after
certain change in control events, provided that Mr. Mirro gives notice of his
intent to so terminate within 30-days after the change in control. (The period
between Mr. Mirro's notice and the termination date is referred to as the notice
period.) If Dime Savings involuntarily terminates Mr. Mirro's employment within
the notice period described above (including the providing of a notice of
non-renewal of Mr. Mirro's agreement) by any means other than at the direction
of Mr. Toal in his capacity as Chairman of the Board of Directors, Chief
Executive Officer or President of the Bank (but other than for cause), or even
if by Mr. Toal in such capacity but for reasons other than Mr. Mirro's
performance (other than for cause), the enhanced severance benefits will be
payable. If Dime
B-10
<PAGE> 38
Savings involuntarily terminates Mr. Mirro's employment other than during the
notice period but during the remaining term of his agreement in effect at the
time of the change in control, for any reason (other than for cause), and by any
permitted means (including the providing of a notice of non-renewal of Mr.
Mirro's agreement), the enhanced severance benefits will be payable.
Where the enhanced severance benefits are payable, they will include (i)
payment equal to three times the sum or Mr. Mirro's annual salary and target
cash incentives for which Mr. Mirro was eligible (for the year in question)
immediately before the termination, and (ii) continuation of life, disability,
medical and dental insurance coverage for the remaining term of his agreement at
the time of the termination, subject to certain conditions. Mr. Mirro's
agreement also includes a provision for exercisability of all vested options for
the remainder of their terms and continued vesting (to the extent not otherwise
subject to accelerated vesting) and exercisability of all non-vested options as
if there had not been a termination of service upon a change in control (to the
extent permitted by the relevant plan under which the options were granted). In
the event of a termination of service triggering change in control benefits, Mr.
Mirro will be eligible for a payment to make up any amount forfeited under Dime
Bancorp's Retirement 401(k) Plan and the related provisions of the Benefit
Restoration Plan. If Mr. Mirro is involuntarily terminated within the term in
effect at the time of a change in control, or if he terminates his employment
after a material downgrading of his duties or responsibilities from those in
effect immediately prior to the change in control or a reduction in his salary,
he will fully vest in his SERP benefits. If he otherwise voluntarily terminates
his employment in a manner making him eligible for the enhanced severance
benefits, he will be entitled to a benefit calculated as if he were fully vested
in Dime Savings' defined benefit pension plan and the related provisions of the
Benefit Restoration Plan (but which benefit would constitute an offset of any
other SERP benefits that may be payable to him).
If Mr. Mirro provides notice of his intent to terminate his employment
within 30 days after a change in control, with that termination to take effect
during the 90-day period starting six months after the change in control (with
the period between Mr. Mirro's notice and his announced termination date
referred to again as the notice period), and Dime Savings terminates Mr. Mirro's
employment during the notice period by action of Mr. Toal in his capacity as
Chairman of the Board, Chief Executive Officer or President of Dime Savings, for
reasons of Mr. Mirro's performance (but not constituting termination for cause),
Mr. Mirro will be entitled to all of the enhanced severance benefits that
otherwise apply in the event of an involuntary termination after a change in
control as described above, except that instead of receiving a payment equal to
three times the sum of his annual salary and target cash incentives for which he
was eligible (for the year in question) immediately before the termination, the
payment will be equal to two times such sum.
Ms. Patterson's Agreement. Ms. Patterson is a party to an employment
agreement with Dime Savings, with a current term until March 1, 2003. Her
agreement was entered into as of January 30, 1998 and replaced an earlier
agreement. This agreement provides for automatic renewal each March 1st, absent
earlier non-renewal.
Ms. Patterson is also party to an Agreement Regarding Initial Employment
Terms, dated June 11, 1996, that provides for a promise of long-term incentive
awards equal in value to 60% of base pay, to the extent approved by the
Compensation Committee, and provides for certain perquisites. The remaining
provisions of Ms. Patterson's employment agreement are identical to those set
forth in Dime's 1999 proxy statement for Messrs. Munoz and D. James Daras.
B-11
<PAGE> 39
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 20, 2000 (except as
noted below) as to Dime's common stock owned by (a) each of Dime's current
directors, (b) each of the named executive officers, and (c) all of Dime's
directors and executive officers as a group.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER
(AND ADDRESS OF OWNERS OF SHARES OF COMMON STOCK PERCENT OF OUTSTANDING
MORE THAN 5%) BENEFICIALLY OWNED(1) COMMON STOCK
------------------------- ---------------------- ----------------------
<S> <C> <C>
Lawrence J. Toal.............................. 912,384(2) *
Derrick D. Cephas............................. 11,000(3) *
Frederick C. Chen............................. 21,860 *
J. Barclay Collins II......................... 9,000 *
Richard W. Dalrymple.......................... 18,549(4) *
James F. Fulton............................... 13,162(5) *
Sally Hernandez-Pinero........................ 6,100 *
Fred B. Koons................................. 114,359(4) *
Virginia M. Kopp.............................. 15,245(6) *
James M. Large, Jr............................ 407,276 *
John Morning.................................. 7,905 *
Margaret Osmer-McQuade........................ 28,738(7) *
Paul A. Qualben............................... 30,006 *
Eugene G. Schulz, Jr.......................... 17,158 *
Howard Smith.................................. 58,000 *
Norman R. Smith............................... 9,000 *
Ira T. Wender................................. 25,875 *
Anthony R. Burriesci.......................... 218,786 *
Richard A. Mirro.............................. 181,981(4) *
Carlos R. Munoz............................... 106,482 *
Peyton R. Patterson........................... 105,432 *
All directors and executive officers as a
group (24 persons).......................... 2,823,225(4) 2.54%
</TABLE>
- ---------------
* Less than 1%.
(1) The directors, executive officers, and group named in the table above have
sole or shared voting power or investment power with respect to the shares
listed in the table. Certain of such shares are restricted stock that may be
subject to repurchase by Dime under certain circumstances. The share amounts
listed include shares of Dime's common stock that the following persons have
the right to acquire within 60 days from March 17, 2000: Lawrence J. Toal;
546,258; each of Derrick D. Cephas, Frederick C. Chen, James F. Fulton,
Sally Hernandez-Pinero, Virginia M. Kopp, John Morning, Margaret
Osmer-McQuade, Paul A. Qualben, and Ira T. Wender, 1,000; each of J. Barclay
Collins II, Richard W. Dalrymple, Eugene G. Schulz, Jr., Howard Smith, and
Norman R. Smith, 4,000; James M. Large, Jr., 256,334; Fred B. Koons, 62,799;
Anthony R. Burriesci, 127,799; Richard A. Mirro, 92,299; Carlos R. Munoz,
58,132; Peyton R. Patterson, 37,067; and all current directors and executive
officers as a group, 1,495,587.
(2) Includes 334 shares held by Mr. Toal's spouse, as to which he disclaims
beneficial ownership.
(3) Includes an aggregate of 2,000 shares owned by or in trust for Mr. Cephas'
children, as to which he disclaims beneficial ownership.
(4) Includes shares held by the Trustee of Dime's 401(k) plan with respect to
the account of the individual or certain members of the group based on
reports dated as of December 31, 1999.
(5) Includes an aggregate of 832 shares owned by or in trust for Mr. Fulton's
spouse, as to which he disclaims beneficial ownership.
(6) Includes an aggregate of 3,000 shares owned by or in trust for Mrs. Kopp's
spouse, as to which she disclaims beneficial ownership.
(7) Includes 7,000 shares owned in trust for Ms. Osmer-McQuade's spouse, as to
which she disclaims beneficial ownership.
B-12
<PAGE> 40
ANNEX C
STOCK TRANSACTIONS DURING LAST 60 DAYS
Since January 20, 2000, the following purchases of restricted shares of
Dime common stock were effected, in each case directly from Dime. The purchase
price per share was $0.01 and purchases were effected by exercise of rights to
purchase restricted stock previously granted under stockholder-approved
stock-based benefit plans.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF RESTRICTED
NAME DATE OF PURCHASE STOCK
- ---- ---------------- ----------------
<S> <C> <C>
Derrick D. Cephas, Director................................. 3/1 2,000 shares
Frederick C. Chen, Director................................. 3/6 2,000 shares
J. Barclay Collins II, Director............................. 3/1 2,000 shares
Richard W. Dalrymple, Director.............................. 3/1 2,000 shares
James F. Fulton, Director................................... 2/29 2,000 shares
Margaret Osmer McQuade, Director............................ 3/1 2,000 shares
John Morning, Director...................................... 3/1 2,000 shares
Sally Hernandez-Pinero, Director............................ 3/16 2,000 shares
Howard Smith, Director...................................... 2/25 2,000 shares
Norman R. Smith, Director................................... 3/2 2,000 shares
Ira T. Wender, Director..................................... 3/3 2,000 shares
Lawrence J. Toal, Chairman of the Board, Director, Chief
Executive Officer and President........................... 3/13 159,750 shares
Gene C. Brooks, Director of the Office of the Corporate
Secretary and Senior Legal Advisor........................ 3/13 31,425 shares
Anthony R. Burriesci, Chief Financial Officer............... 3/1 65,200 shares
D. James Daras, Treasurer................................... 2/24 44,625 shares
James E. Kelly, General Counsel............................. 3/1 35,975 shares
Richard A. Mirro, Chief Executive Officer of Mortgage
Banking................................................... 3/20 66,700 shares
Peyton R. Patterson, General Manager of Consumer Financial
Services.................................................. 2/24 47,025 shares
</TABLE>
- ---------------
C-1
