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As Filed With The Securities And Exchange Commission On October 20, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Dime Bancorp, Inc.
(Exact Name of Registrant as Specified in its Charter)
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DELAWARE 11-3197414
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification No.)
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589 FIFTH AVENUE, NEW YORK, NEW YORK 10017; (212) 326-6170
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
JAMES E. KELLY, ESQ.
General Counsel
Dime Bancorp, Inc.
589 Fifth Avenue
3rd Floor
New York, New York 10017
(212) 326-6170
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
With Copies To:
MITCHELL S. EITEL, ESQ.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
Approximate Date of Commencement of Proposed Sale to the Public: Upon
exercisability of the Litigation Tracking Warrants described herein.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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Proposed
Proposed Maximum
Amount Maximum Aggregate Amount of
Title of Shares to be to be Offering Price Offering Registration
Registered Registered(1) Per Unit(2) Price(3) Fee(4)
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Common Stock, $0.01 par
value per share
(together with
preferred stock
purchase rights)(5)... 19,471,485 $0.01 $194,714.85 $51.41
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(Footnotes on following page)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT BECOMES
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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(Footnotes from cover page)
(1) This number is the estimated maximum number of shares of common stock, par
value $0.01 per share, of Dime Bancorp, Inc., a Delaware corporation
("Dime common stock"), issuable under this registration statement and has
been calculated by dividing the "adjusted litigation recovery" by the
"adjusted stock price." The "adjusted litigation recovery" is based on the
formula in this document and on an estimated recovery of $1,000,000,000
with expenses of $26,000,000 and estimated taxes of $449,988,000. The
"adjusted stock price" is estimated to be $22.875, the closing price of
Dime common stock on October 18, 2000. The number of LTWs estimated to be
issued or reserved for issuance on the distribution record date is
118,645,087, the number of LTWs that would have been issued or reserved
for issuance if the distribution record date was October 18, 2000.
(2) The proposed maximum offering price per share is based upon the exercise
price of the litigation tracking warrants for shares of Dime common stock,
which is $0.01 per whole share of Dime common stock for which LTWs are
exercisable.
(3) The proposed maximum aggregate offering price is equal to the number of
shares of Dime common stock registered multiplied by the proposed maximum
offering price per share (i.e. the exercise price per warrant).
(4) Pursuant to Rule 457(i) under the Securities Act of 1933, as amended, the
registration fee is based upon the offering price of the litigation
tracking warrants, a convertible security ($0.00), plus the maximum amount
of the additional consideration to be received in connection with the
exercise of the conversion privilege ($0.01 per whole share of Dime common
stock into which LTWs are exercisable).
(5) Each share of Dime common stock is accompanied by a preferred stock
purchase right that trades with the Dime common stock. The value
attributable to such rights, if any, is reflected in the market price of
Dime common stock. Prior to the occurrence of certain events, none of
which have occurred as of this date, the rights will not be exercisable or
evidenced separately from the Dime common stock.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell the common stock offered by this prospectus until the registration +
+statement we filed with the Securities and Exchange Commission is effective. +
+This prospectus is not an offer to sell our common stock and it is not +
+soliciting an offer to buy our common stock in any state where the offer or +
+sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion; Preliminary Prospectus Dated October 20, 2000
PROSPECTUS
19,471,485 Shares
Dime Bancorp, Inc.
Common Stock
On [ ], 2000, your board of directors declared a distribution of one
Litigation Tracking Warrant(TM), also known as an LTW(TM), for each share of
our common stock outstanding as of the close of business on [ ], 2000. Your
board also made provision for the distribution of one LTW for each share of our
common stock underlying each outstanding stock option previously granted.
This document relates to the shares of our common stock to be issued if and
when the LTWs are exercised. The LTWs are securities that represent the right
to purchase, upon the occurrence of a trigger, shares of our common stock equal
in total value to 85% of the net after-tax proceeds, if any, from the lawsuit
we have brought against the United States government. The first step of the
trigger is our receipt of damages in this litigation.
We are pursuing a lawsuit against the government for breach of contract and
unlawful taking of property without compensation in contravention of the United
States Constitution. Our legal claim arose as a result of changes imposed by
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to the
rules for computing the regulatory capital of thrift institutions such as our
subsidiary, The Dime Savings Bank of New York, FSB.
"Litigation Tracking Warrant" and "LTW" are trademarks of Credit Suisse First
Boston Corporation for use in connection with its investment banking services.
Our common stock, which underlies the LTWs, is listed on the New York Stock
Exchange under the trading symbol "DME." Our LTWs are listed on the [ ]
under the trading symbol "[ ]."
This document does not cover resales of any common stock received upon
exercise of the LTWs. No person is authorized to make any use of this document
in connection with any such resale or in connection with any other transaction
or the offer or sale of any other securities.
See "Risk Factors" beginning on page 4 for information you should consider.
Neither the LTWs nor our common stock are deposits or
other obligations of any bank or savings association and
neither the LTWs nor our common stock are insured or
guaranteed by the Federal Deposit Insurance Corporation
or any other governmental agency.
None of the SEC, the FDIC, the Office of Thrift
Supervision, any state securities commission nor any
other regulatory body has approved or disapproved of the
LTWs or our common stock or passed upon the accuracy or
adequacy of this document. Any representation to the
contrary is a criminal offense.
The date of this prospectus is [ ], 2000.
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TABLE OF CONTENTS
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Page
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SUMMARY.................................................................... 1
RISK FACTORS............................................................... 4
FORWARD-LOOKING STATEMENTS................................................. 6
INFORMATION ABOUT DIME BANCORP............................................. 7
RECENT DEVELOPMENTS........................................................ 7
USE OF PROCEEDS............................................................ 8
MARKET FOR OUR COMMON STOCK AND THE LTWS................................... 8
DISTRIBUTION OF THE LTWS................................................... 8
THE LITIGATION............................................................. 9
DESCRIPTION OF THE LTWS.................................................... 14
TAX CONSEQUENCES........................................................... 20
DESCRIPTION OF OUR CAPITAL STOCK........................................... 21
VALIDITY OF OUR COMMON STOCK............................................... 30
WHERE YOU CAN FIND MORE INFORMATION........................................ 30
EXPERTS.................................................................... 32
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SUMMARY
This summary highlights selected information from this document. It does not
contain all of the information that is important to you. We urge you to read
carefully the entire document and the other documents to which we refer to
fully understand this issuance. See "Where You Can Find More Information"
beginning on page 30.
Who is distributing the LTWs?
Dime Bancorp, Inc., a Delaware corporation and a savings and loan holding
company, is distributing the LTWs. Dime Bancorp is the parent company of Dime
Savings, a federally chartered savings bank.
Our headquarters are located at 589 Fifth Avenue, New York, New York 10017.
Our telephone number is (212) 326-6170. See "Information about Dime Bancorp"
beginning on page 7.
What are the LTWs?
The LTWs are securities that represent the right to purchase, upon the
occurrence of the trigger, shares of our common stock equal in total value to
85% of the net after-tax proceeds, if any, from our pending lawsuit against the
United States government. See "Description of the LTWs" beginning on page 14.
Why are we distributing the LTWs?
We are distributing the LTWs in an effort to pass along the potential value
of our claim against the government to our existing stockholders in the form of
tradeable securities. The distribution is part of our effort to improve returns
and provide enhanced value to our stockholders.
When are we distributing the LTWs?
Your board of directors fixed [ ], 2000 as the distribution record date
for determining who will receive the LTWs.
How will you get the LTWs?
As a stockholder of record on the distribution record date, you will receive
one LTW for each share of our common stock that you owned on the distribution
record date. If the shares of our common stock that you owned on the
distribution record date were held directly by you, then you will receive an
LTW certificate by mail at your address of record as soon as practicable
following the distribution record date. If the shares of our common stock that
you owned on the distribution record date were held in street name by your
broker, your broker will also hold your LTW certificate in street name. We have
also provided for the issuance of one LTW for each share of our common stock
underlying the options previously granted by us under our stock-based benefit
plans that were still outstanding on the distribution record date. Under the
terms of the investment made by Warburg, Pincus Equity Partners, L.P. and its
affiliates, Warburg will not receive any LTWs. See "Distribution of the LTWs"
beginning on page 8.
Why are we suing the government?
Dime Savings, as the successor to Anchor Savings Bank FSB, maintains a
lawsuit in the United States Court of Federal Claims against the government for
breach of contract and taking of property without compensation in contravention
of the Fifth Amendment to the United States Constitution. The action arose
because the passage of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations adopted by the OTS pursuant to that
law deprived Anchor Savings of the ability to include supervisory goodwill and
certain other assets when computing its regulatory capital, which is required
by law to be maintained at certain levels. The Federal Savings and Loan
Insurance Corporation had agreed to let Anchor Savings use these assets when
computing its regulatory capital. The direct effect was to cause Anchor Savings
to go from an institution that substantially exceeded its regulatory capital
requirement to one that was substantially below this requirement. As a result,
Anchor Savings was forced to curtail its activities and was required to sell
valuable assets under liquidation-like circumstances. We have claimed three
alternative measures of
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damages: expectancy damages totalling $980 million, restitution totalling $740
million and reliance damages totalling $512 million. See "The Litigation"
beginning on page 9.
What is the status of the litigation?
We have asked the Court of Federal Claims to enter partial summary judgment
against the government on the existence of a contract between the government
and Dime Savings and the inconsistency of the government's actions with that
contract. No date has been set for argument on our request. If the Claims Court
grants our request, we will then present evidence as to damages. Discovery by
both parties ended in May 2000. See "The Litigation" beginning on page 9.
Do we know whether or when we will be entitled to damages?
No. We do not know currently when the court will make a determination as to
liability or damages. We also do not know if any payment will be made by the
government to us, or how much that payment may be. See "The Litigation"
beginning on page 9.
What are the risk factors associated with the LTWs?
You should consider carefully the information contained under the "Risk
Factors" section of this document beginning on page 4, as well as the other
information included in this prospectus relevant to the LTWs.
What are the tax consequences of your receipt of the LTWs?
Although the matter is uncertain because of the absence of any direct
authority, we believe the distribution of the LTWs to you should be treated as
a tax-free stock dividend for federal income tax purposes and you should not be
required to include any amount in income for federal income tax purposes with
respect to such distribution. We intend to treat the distribution of the LTWs
for all reporting purposes in accordance with such characterization. It is
possible that the Internal Revenue Service may assert that the distribution of
the LTWs should be treated as a taxable stock dividend, in which case you would
be required to treat as ordinary dividend income the fair market value of the
LTWs on the date of distribution to the extent of your rateable share of our
current and accumulated earnings and profits. You are therefore urged to
consult your tax advisor as to the tax consequences of the distribution and
receipt of the LTWs. See "Tax Consequences" beginning on page 20.
Are the LTWs tradeable separately from our common stock?
Yes. The LTWs became tradeable on [ ], 2000.
Where are our common stock and the LTWs listed?
Our common stock is listed on the NYSE under the trading symbol "DME." The
LTWs are listed on [ ] under the trading symbol "[ ]."
As an LTW holder, will you be entitled to any voting rights, dividends,
liquidation preference or other special rights?
No, you will not be entitled to any voting rights, dividends, liquidation
preference or other special rights as a result of owning LTWs. In addition, you
will have no right to control the litigation. Any LTW holder who also owns
shares of our common stock will, of course, be entitled to the rights of a
common stockholder. See "Description of the LTWs" beginning on page 14.
When will you be able to exercise the LTWs?
You will not be able to exercise the LTWs until after receipt of notice of
the occurrence of the trigger. LTW holders will be able to exercise the LTWs to
purchase shares of our common stock for a period of 60 days after the date that
the triggering notice is first sent to LTW holders. After that period, the LTWs
will expire worthless. See "Description of the LTWs" beginning on page 14.
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When will the trigger occur?
The trigger will occur upon the completion of the following events:
. we receive a final recovery of damages in our litigation,
. we calculate the full amount of the adjusted litigation recovery, and
. we receive all regulatory approvals necessary to issue shares of our common
stock.
How will you be notified of the trigger?
Within 15 days of the occurrence of the trigger, if any, we will publicly
announce by means of a press release and by written notice mailed to each
record holder of LTWs that the trigger has occurred. See "Description of the
LTWs" beginning on page 14.
Upon the occurrence of the trigger, how many shares of our common stock will
you be able to purchase upon exercise of each LTW and how much will you have to
pay to exercise them?
Upon the occurrence of the trigger, you will receive the right to purchase
your pro rata portion of an amount of our common stock equal to the adjusted
litigation recovery divided by the product of (1) our adjusted stock price
multiplied by (2) the number of LTWs issued or reserved for issuance on the
distribution record date. Each LTW may be exercised upon payment of an amount
equal to the number of whole shares of our common stock into which your LTWs
are exercisable multiplied by $0.01.
For example, if the adjusted stock price of our common stock on the
occurrence of the trigger was $20.00, the number of LTWs issued or reserved for
issuance on the distribution record date was [110,000,000] and the adjusted
litigation recovery was $250 million, then the number of shares of our common
stock issuable upon exercise of each LTW would be 0.1136 ($250,000,000 / ($20 x
[110,000,000]) = 0.1136). If you owned 100 LTWs, you would multiply the number
of shares of our common stock issuable upon exercise of an LTW (0.1136) by the
number of LTWs you own (100), which totals 11.36 (0.1136 x 100 = 11.36). As a
result, upon the occurrence of the trigger you could purchase 11 shares of our
common stock and receive cash instead of the fractional share. To determine the
cash amount you would receive instead of your fractional share, you would
multiply the fractional share (0.36) by the sum of the adjusted stock price
($20.00) and the exercise price ($0.01), which totals $7.20 (0.36 x ($20.00 +
$0.01) = $7.20). To determine the cost of purchasing your shares, you would
multiply the number of whole shares of our common stock into which your LTWs
are exercisable (11) by the exercise price ($0.01), which totals $0.11 (11 x
$0.01 = $0.11). So if you owned 100 LTWs, upon their exercise, you would pay us
$0.11 and receive 11 shares of our common stock and $7.20 in cash.
To determine the total net value of the LTWs upon exercise, you would
multiply the number of shares you receive (11) by the sum of the adjusted stock
price ($20.00) and the exercise price ($0.01), add the amount of cash you
receive ($7.20) and subtract the total exercise price ($0.11), which totals
$227.20 (11 x ($20.00 + $0.01) + $7.20-$0.11 = $227.20). As a result, the total
net value of 100 LTWs would be $227.20, or $2.272 per LTW.
However, if the adjusted litigation recovery was zero, you would not be
entitled to purchase any shares of our common stock, and the LTWs would expire
worthless. See "Description of the LTWs--Determination of the Number of Shares
of Common Stock Issuable Upon Exercise of an LTW" beginning on page 14.
You should keep in mind that the LTWs may not trade at prices reflecting the
eventual litigation recovery or the eventual value per LTW. See "Risk Factors"
beginning on page 4.
How will we determine the adjusted litigation recovery?
The adjusted litigation recovery is equal to 85% of the amount obtained from
the following equation:
. amount of damages recovered in our litigation,
. minus our expenses in pursuing the litigation, obtaining payments and
issuing the LTWs, and
. minus the tax expense allocated to the recovery.
See "Description of the LTWs--Determination of the Adjusted Litigation
Recovery" beginning on page 15.
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RISK FACTORS
LTW holders should carefully consider the following risk factors, as well as
all the other information set forth in this document regarding us, our common
stock and the issuance of the LTWs.
If we cannot establish the government's liability, the LTWs will be worthless
We may not prevail in establishing the government's liability in our pending
litigation. Even if the Court of Federal Claims enters judgment in our favor,
that judgment could be overturned on appeal by the United States Court of
Appeals for the Federal Circuit or the United States Supreme Court. There have
been decisions in other cases with contractual fact patterns similar to that of
a 1996 Supreme Court decision, known as the Winstar case, in which the court
ruled that the government was liable for breach of contract. See "The
Litigation--Damages Decisions in Other Winstar-related Litigation" beginning on
page 12. While we believe that the contractual documentation and language
relating to our suit present similarities to the contractual fact patterns
presented in the Winstar case and in these other Winstar-related cases, we may
not succeed in our breach of contract claim.
The number of shares of our common stock that you may purchase when you
exercise your LTWs will depend on the amount of damages, if any, that we
recover from the government
Our litigation and other Winstar-related cases present issues as to the
amount and type of damages, if any, that the plaintiffs may be entitled to
receive. If we do not recover any damages from the government, then the LTWs
will be worthless. If we recover a small amount of damages, then you may be
able to exercise the LTWs for only a small number of shares, if any.
The government has argued in earlier cases that the plaintiffs' damages were
too speculative to permit a recovery of those damages. Although the government
has been found liable in some other Winstar-related cases, the damages, as
awarded by the trial courts, have ranged from $909 million to zero. Those
earlier damage awards have been appealed. In addition, we have claimed a type
of damages known as expectancy damages as part of our requested relief.
Although in other cases the Claims Court has held that, under proper facts,
expectancy damages may be appropriate, the Claims Court has yet to award
expectancy damages in any case. For a discussion of our damage claims, see "The
Litigation--Our Case" beginning on page 11. As a result, even if we prevail in
establishing the liability of the government, we cannot predict whether or when
we will recover any damages, or how much those damages may be if we do receive
any.
The number of shares of our common stock that you can purchase upon exercise of
your LTWs will be lowered by our litigation expenses and costs of this
issuance, as well as the tax expense allocated to the damages recovery
We expect to incur a variety of expenses in connection with our litigation,
including the fees and expenses of counsel, witnesses, experts and consultants,
and in issuing the LTWs, including legal, financial advisory and accounting
fees, printing and registration costs and the fees and expenses of the warrant
agent. If our litigation is protracted, our expenses may increase
significantly. We currently expect our expenses to be about $26 million. We
cannot know whether the recovery of damages, if any, will be sufficient to
cover these expenses. In calculating the adjusted litigation recovery, we will
subtract these expenses from any damages recovered. Furthermore, we will also
subtract the tax expense allocated to the damages recovered. In determining
such amount, we will use a tax rate that is based on the combined highest
federal, New York State and New York City income tax rates applicable to
financial institutions in the year or years in which the amount of damages is
fixed or determinable. The amount of such rate for 2000 is 46.2%, but is
subject to change. As a result, the higher our expenses and such taxes turn out
to be, the fewer shares of our common stock you will be entitled to purchase
when you exercise your LTWs.
We cannot be certain whether or when you will be able to exercise your LTWs to
purchase our common stock
We cannot predict how or when our litigation will be resolved finally and
all appeals exhausted or when, if ever, we will receive damages.
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The distribution of the LTWs may be taxable
We believe the distribution of the LTWs is tax-free to you and intend to
treat the distribution in such a manner. Because of the absence of any
statutory, judicial or administrative authority that directly discusses how the
distribution of LTWs should be treated for United States federal income tax
purposes, the IRS could attempt to characterize the distribution of the LTWs as
taxable to you. If the distribution of the LTWs is deemed to be taxable by the
IRS, you could be required to pay taxes on your receipt of the LTWs. For a
discussion of the possible tax consequences of the distribution to you, see
"Tax Consequences" beginning on page 20.
Regulatory restrictions on Dime Savings' ability to pay dividends or make
capital distributions may prevent it from distributing the damage award to Dime
Bancorp
Any damages we recover in our litigation will be paid by the government to
Dime Savings (the actual plaintiff in our case). As a federal savings
association, Dime Savings is subject to restrictions on dividends pursuant to
regulations of the OTS, its primary regulator, and may not make any capital
distributions to its parent company, Dime Bancorp, that would cause Dime
Savings to become "undercapitalized." See "Description of Our Capital Stock--
Common Stock--Limitations on Dime Savings' Ability to Make Capital
Distributions" beginning on page 22. The value of the LTWs and our common stock
may be affected if Dime Savings is unable to distribute the damage award to
Dime Bancorp, in the unlikely event that such distribution should be necessary
or be deemed necessary by us for any reason.
LTW holders have very limited rights
As an LTW holder, you have very limited rights to enforce, institute or
maintain any suit, action or proceeding against us relating to our litigation.
You have no voting rights, no liquidation preferences and no rights to
dividends or distributions other than the right to exercise your LTWs to
purchase shares of our common stock, based on the valuation formula, after the
occurrence of the trigger.
We control the litigation
We currently intend to continue pursuing our litigation and to seek a cash
recovery in the amount claimed, but because we will retain control of this
litigation, there can be no assurance that we will not make a different
determination in the future.
There is no established trading market for the LTWs, and the price of the LTWs
may be volatile
There is no current market for the LTWs, and we do not know whether an
active market for the LTWs will develop or be sustained. If such a market
develops, there can be no assurance as to the price at which the LTWs would
trade at any time and such price could be subject to rapid and substantial
change.
The price of the LTWs may depend on a number of factors, including, without
limitation:
. the nature of court decisions in our litigation and the other Winstar-
related cases that may go to trial prior to the completion of our
litigation,
. speculation about the outcome of our litigation and the other Winstar-
related cases, and
. settlement of any other Winstar-related cases.
Consequently, there could be wide fluctuations in the price of the LTWs over
short periods of time. In addition, the price of the LTWs will not necessarily
relate to the eventual value of the adjusted litigation recovery.
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An investment in the LTWs involves different risks and considerations from an
investment in the common stock of a savings and loan holding company such as
Dime Bancorp
If a market develops for the LTWs, the nature of an investment in the LTWs
will differ from the nature of an investment in a savings and loan holding
company such as Dime Bancorp. You may therefore determine that investment in
the LTWs does not suit your investment policies or, if you are a corporate or
institutional stockholder, that such investment may be restricted by your
charter. Such determinations by significant stockholders, or by a large number
of our stockholders, may result in rapid divestment of the LTWs causing
temporary selling pressure that would adversely affect the price of the LTWs.
There may only be limited information available regarding litigation
developments
We file annual reports on Form 10-K and quarterly reports on Form 10-Q with
the SEC and the NYSE, which may include an overview of the status of our
litigation. We will continue to do so, and we will also file reports on Form 8-
K upon the occurrence of a material judicial decision in, or in the event of
any agreement to settle, our litigation. Our ability to disclose details of our
litigation may be limited, however, by the inherent nature and rules of
judicial proceedings, including, among other things, proceedings and filings
that are sealed by the court, matters involving attorney-client privilege and
proceedings that are conducted on a confidential basis by agreement between us
and the government, such as settlement negotiations.
FORWARD-LOOKING STATEMENTS
This document contains a number of forward-looking statements regarding our
litigation, financial condition, results of operations and business. 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 distribution of the LTWs
or other transactions described in this document. You can find many of these
statements by looking for words such as "believes," "expects," "anticipates,"
"estimates," "intends," "plans," "may," "will," and "potential" and 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:
. 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 our 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 we do 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,
. technological changes may be more difficult or expensive than we
anticipate,
. success or consummation of new business initiatives may be more
difficult or expensive than we anticipate,
6
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. the valuations of our common stock and the LTWs may be more or less than
we expect, and
. the outcome of our litigation may be delayed and may be more or less
favorable than we expect, and our recovery of damages, if any, may be
more or less than we claimed or anticipated.
All subsequent written and oral forward-looking statements concerning
matters addressed in this document and attributable to us or any person acting
on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. We do 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.
INFORMATION ABOUT DIME BANCORP
Dime Bancorp is a Delaware corporation and a savings and loan holding
company. Dime Bancorp is the parent of Dime Savings, a federally chartered
savings bank currently servicing consumers and businesses through 127 branches
located throughout the greater New York City metropolitan area. Through Dime
Savings and its subsidiaries, including North American Mortgage Company, we
provide consumer loans, insurance products and mortgage banking services
throughout the United States. At December 31, 1999, Dime Bancorp had
consolidated assets of $23.9 billion, consolidated deposits of $14.3 billion
and consolidated stockholders' equity of $1.5 billion. At September 30, 2000,
Dime Bancorp had consolidated assets of $25.2 billion, consolidated deposits of
$13.9 billion and consolidated stockholders' equity of $1.8 billion.
Our headquarters are located at 589 Fifth Avenue, New York, New York 10017.
Our telephone number is (212) 326-6170.
RECENT DEVELOPMENTS
Stock Repurchase Program. On August 1, 2000, we commenced a "Dutch Auction"
tender offer to purchase approximately 13.6 million shares of our outstanding
common stock. On October 6, 2000, we announced the termination of the tender
offer and the replacement of the tender offer with a stock repurchase program
to purchase approximately 13.6 million shares in the open market or in
privately negotiated transactions. This stock repurchase program is described
in the press release included with our Form 8-K/A filed on October 12, 2000.
As we describe in "Description of Our Capital Stock--Investment by Warburg"
beginning on page 23, we have sold preferred stock and warrants to Warburg. If
our stock repurchase program is fully completed, the preferred stock issued to
Warburg should be offset by the stock repurchased in this program. Accordingly,
and assuming no other changes, if you continue to hold your stock, your
percentage ownership interest in us after the completion of the stock
repurchase program should be about the same as what your percentage ownership
interest was, or would have been, before Warburg's investment. No time limit
has been set for the completion of the stock repurchase program. Of course, we
may issue additional shares of our common stock and other securities at any
time, and these issuances will reduce your percentage ownership interest. We
also may purchase more of our stock in the future, which would have the effect
of increasing the percentage ownership interest in us represented by shares you
continue to hold.
Based on the current market price of our common stock, our advisors estimate
that the Warburg transaction, combined with our stock repurchase, will be
slightly dilutive to our earnings per share for periods beginning after we
complete our stock repurchase program, depending on the prices at which we
purchase our stock and assuming we are able to purchase all of the shares that
we plan to purchase. For periods before we purchase all of the shares we are
seeking in our stock repurchase program, we expect that there will be a
temporary reduction in our earnings per share because we have a greater number
of shares outstanding as a result of the Warburg investment.
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If we are able to purchase all of the shares we are seeking and if all of
the shares of preferred stock Warburg has purchased are converted into our
common stock, Warburg will own about 12.45% of our outstanding common stock. If
Warburg also completely exercises its warrants, its holdings will represent
about 22.14% of our outstanding common stock. These percentages will decrease
if we do not purchase the full amount of shares we are seeking under our stock
repurchase program.
USE OF PROCEEDS
We will use the net proceeds that we receive upon the exercise of the LTWs
for general corporate purposes.
MARKET FOR OUR COMMON STOCK AND THE LTWS
Our common stock is listed on the NYSE under the trading symbol "DME." The
LTWs are listed on [ ] under the trading symbol "[ ]."
DISTRIBUTION OF THE LTWS
We distributed one LTW for each share of our common stock outstanding on
[ ], 2000, the distribution record date, to all of our stockholders of
record on that date, except Warburg. As part of our overall compensation
program, we have previously granted options to purchase our common stock to our
employees and directors. We have reserved for issuance one LTW for each share
of our common stock underlying these stock options that remained outstanding on
the distribution record date.
If these stock options are exercised prior to the trigger, the option holder
will receive the number of shares of our common stock underlying the option
being exercised plus the number of LTWs that would have been received had the
option been exercised immediately before the distribution record date. If these
stock options are exercised on or after the trigger, the option holder will
receive the number of shares of our common stock underlying the option being
exercised plus the number of additional shares of our common stock (and cash
instead of any fractional shares) equal to the number of shares of our common
stock that the option holder would have received had the holder (i) exercised
the option immediately before the trigger and received a corresponding number
of LTWs and (ii) exercised the LTWs for shares of our common stock immediately
after the trigger. In the case of a stock option exercise on or after the
trigger, the exercise price of the option will be increased by the exercise
price of the LTWs deemed received, and exercised, with respect to that option.
Based on the number of shares of our common stock and stock options
outstanding on the distribution record date, the number of LTWs that have been
issued or reserved for issuance is approximately [ ]. We have issued [ ]
LTWs to our common stockholders and reserved [ ] LTWs for issuance to
holders of our stock options.
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<PAGE>
THE LITIGATION
Our litigation against the United States government involves complex factual
and legal issues over which the parties disagree. The following summary is not
a full description of those issues and addresses only developments through the
date of this document. The record of proceedings before the Claims Court
consists of hundreds of pages of procedural filings, which may be examined at
the Office of the Clerk of the Court located at 717 Madison Place, N.W. in
Washington, D.C. In addition, thousands of pages of depositions have been taken
and thousands more documents have been made available through discovery by us,
the government, and third parties.
Introduction
On January 13, 1995, Anchor Savings Bank FSB filed a case in the United
States Court of Federal Claims captioned Anchor Savings Bank FSB v. United
States, No. 95-39C, alleging breach of contract and taking of property without
compensation by the government in contravention of the Fifth Amendment to the
United States Constitution. Dime Savings assumed Anchor Savings' case upon the
consummation of the merger of Anchor Savings and its holding company, Anchor
Bancorp, Inc., with Dime Savings and Dime Bancorp, respectively. Anchor
Savings' claims arose from contracts with the government related to Anchor
Savings' acquisition between 1982 and 1985 of eight failing federally insured
savings and loan institutions. Four institutions were acquired with some direct
financial assistance from the Federal Savings and Loan Insurance Corporation, a
government agency that provided deposit insurance to savings and loans, and
four were acquired without direct financial assistance. All of the acquisitions
were considered supervisory cases by the FSLIC, which means that they were
arranged by the FSLIC. In acquiring the institutions, Anchor Savings assumed
liabilities determined to exceed the assets it acquired by over $650 million in
the aggregate at the dates of the respective acquisitions. The difference
between the fair values of the assets acquired and the liabilities assumed in
the transactions were recorded on Anchor Savings' books as an asset called
goodwill.
At the time of these acquisitions, the FSLIC had agreed that Anchor Savings
could include in its regulatory capital this goodwill, amortizable over a
number of years, as well as certain FSLIC contributions and certain capital
instruments. Without those agreements, Anchor Savings would not have made the
acquisitions.
When the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 was enacted, Anchor still had over $500 million of regulatory capital from
supervisory acquisitions on its books, including the supervisory goodwill and
other capital enhancements described above. Also, Anchor Savings had more than
20 years to amortize the remaining supervisory goodwill under its agreements
with the FSLIC. FIRREA required the remaining supervisory goodwill to be
eliminated immediately for purposes of calculating tangible capital and to be
phased out through December 31, 1994 for other regulatory capital purposes. In
addition, until the formation of Anchor Bancorp as the holding company for
Anchor Savings in 1991, FIRREA-mandated capital requirements impacted the $157
million associated with preferred stock that Anchor Savings issued to the FSLIC
as a result of one of the acquisitions. The elimination of the supervisory
goodwill and other components of regulatory capital damaged Anchor Savings by
creating severe limitations on its activities and requiring the sale of
valuable assets under liquidation-like circumstances.
Proceedings in the Claims Court
Our suit is one of 115 cases brought in the Claims Court with contractual
fact patterns similar to that of a 1996 decision by the United States Supreme
Court, known as the Winstar case, in which the Supreme Court held that the
government was liable for breach of contract. Following the Supreme Court's
decision, all of the Winstar-related cases, including our case, were assigned
to Judge Smith of the Claims Court. Judge Smith has issued an omnibus case
management order that controls the proceedings in all of these cases.
Under the omnibus order, we moved for partial summary judgment as to the
existence of contracts between Anchor Savings and the government and the
inconsistency of the government's actions with respect to those contracts. The
government has disputed the existence of these contracts and cross-moved for
summary
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judgment. The government also submitted a filing acknowledging that it is not
aware of any affirmative defenses it has against us. Initial briefing on these
motions was completed on August 1, 1997.
In August 1997, the Claims Court held a hearing on summary judgment motions
in four other Winstar-related cases. As part of those cases, the Claims Court
issued an order on December 22, 1997, ruling in favor of the plaintiffs on
eleven "common" issues. The Claims Court's order directed the government to
submit a "show cause" filing by February 20, 1998 asserting why judgment for
each of the plaintiffs in all of the Winstar-related cases, including us,
should not be entered on each of the common issues with respect to each pending
summary judgment motion. The government filed a response to the "show cause"
order but asserted that it might need further discovery as to certain issues.
At a status conference on March 11, 1998, the Claims Court directed each of the
plaintiffs with a pending summary judgment motion to submit a proposed form of
order for entry of judgment as to liability on the contract issues and an
accompanying brief by March 31, 1998 and directed the government to respond by
April 30, 1998 with a filing asserting any basis for not entering the order
proposed by the plaintiff. On March 31, 1998, we submitted a proposed order
imposing liability on the government as to each of our claims. On April 30,
1998, the government served its opposition to the entry of the order. Final
submissions were made by us on May 15, 1998 and by the government on May 22,
1998.
In September 1999, the government filed supplemental papers in support of
its pending summary judgment motion. We responded to such filings in early
November 1999, at which time the government again requested entry of summary
judgment on liability in its favor. No date has been set for argument on our
request to enter summary judgment.
In April 1998, thirty of the plaintiffs that elected to proceed with their
cases against the government were allowed to commence full discovery. We are
among these thirty plaintiffs, and we conducted discovery between April 1, 1998
and July 31, 1999. On October 29, 1999, we filed our experts' reports relating
to our damage claims with the government. On March 16, 2000, the government
filed the reports of its experts.
The Claims Court has entered summary judgment on liability, and proceeded to
trials on damages, in a number of Winstar-related cases where the plaintiffs
waived pre-trial discovery. In an order dated September 20, 2000, Judge Smith
announced his current intention to distribute the thirty cases that first
proceeded with discovery, including our case, to the other judges of the Claims
Court, for rulings on liability and consideration of damages issues. As of
[ ], 2000, the Claims Court has not issued any further opinions on
liability or damages or set trial dates in any of these cases.
After entry of judgment, either party may appeal a portion or all of the
decision to the United States Court of Appeals for the Federal Circuit.
Following the decision of the Federal Circuit, the unsuccessful party may
petition for a rehearing en banc by the entire Federal Circuit. Assuming such a
request for rehearing is denied, any proceedings in the Federal Circuit would
be expected to take approximately one year. Appeal from the final decision of
the Federal Circuit could be made to the Supreme Court, although the Supreme
Court could decide not to hear the case. As a result, we cannot predict the
amount or the timing of receipt of a damage award, if any is received.
Damages Theories Set Forth in Our Expert Reports
Assuming we receive a ruling on liability in our favor, we expect to present
evidence on three alternative damage theories at trial to determine the amount
of our damages.
"Expectancy damages" are intended to place the injured party in as good a
position as it would have been in had the contract been performed. Such damages
may include the loss of any monetary benefits that the injured party would have
received in the absence of the breach plus any other losses caused by the
breach of the contract, less any costs or losses avoided by the injured party
as a direct result of the breach.
"Restitution" is intended to restore to the injured party any benefits
conferred on the breaching party. The injured party's restitution interest is
ordinarily measured by the reasonable value of the benefits conferred by its
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performance of the contract on the breaching party, less any benefits received
by the injured party through the breaching party's partial performance up to
the date of the breach.
"Reliance damages" are intended to restore the injured party to the position
it would have been in if the contract had not been made. Reliance damages are
generally measured by the injured party's investment less the net benefit
realized from the cost of performance of the contract, plus additional expenses
incurred as a result of the breach. Damages are usually limited to those that
are a foreseeable result of the breach and require proof of the fact of damage
with reasonable certainty.
We have the burden of proving the amount of our expectancy damages, or the
value or cost of our performance as a basis for restitution or reliance
damages, by a preponderance of the evidence.
Since neither the contracts between Anchor Savings and the government nor
any statute provides for payment of prejudgment interest, prejudgment interest
is not recoverable, either for the period from the date of the breach through
the date of entry of judgment by the Claims Court or upon a judgment of the
Claims Court pending appeal. If the Federal Circuit affirms a judgment by the
Claims Court, we could receive interest at a statutorily specified rate on the
judgment from the time of the Federal Circuit decision through any subsequent
appeals to the date of payment.
Our Case
Following the adoption of FIRREA in 1989 and the resulting reductions of
Anchor Savings' regulatory capital due to the elimination of the contractual
supervisory goodwill, FSLIC contribution, and preferred stock from its
supervisory acquisitions, Anchor Savings was transformed from an institution
that substantially exceeded its regulatory capital requirements to one that was
significantly undercapitalized. Because Anchor Savings was unable to obtain any
material infusion of external capital, it had no choice but to restructure and
divest itself of significant valuable assets. While these strategies were
required to remedy the noncompliance with regulatory capital requirements
caused by FIRREA and avoid closure of Anchor Savings, they also had the effect
of significantly reducing Anchor Savings' long-term earnings.
Under our expectancy damages claim, we claim that the government's breach:
. forced the sale of Anchor Savings' mortgage conduit subsidiary, Residential
Funding Corporation, and the curtailment of Anchor Savings' remaining
mortgage banking business,
. forced the sale of large portions of Anchor Savings' branch franchise, and
. required Anchor Savings to incur additional "wounded bank" damages or costs.
We have claimed expectancy damages totaling approximately $980 million.
Under our restitution claim, we allege that the government received net
benefits from its contracts with Anchor Savings totaling approximately $740
million. Under the reliance measure of damages, we expect to present evidence
supporting our claim totaling approximately $512 million.
The Government's Case
The government contends that we were not damaged by the government's breach
because FIRREA did not cause Anchor Savings to shrink or otherwise sell assets.
The government contends that the lost profits we are claiming are speculative
and therefore not allowable. The government also contends that FIRREA did not
constrain Anchor Savings' ability to leverage capital or alternatively that the
ability to leverage capital had no value.
The government has argued that the breach benefitted Anchor Savings in
prompting it to exit from high risk lending activities in which it was engaged
prior to the breach. The government further contends that the breach forced
Anchor Savings to address core business problems.
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<PAGE>
The government has also argued that the principal assumptions underlying our
claim for past and future lost profits, which are that Anchor Savings would not
have sold Residential Funding or portions of its branch franchise absent the
government's breach, are invalid because, among other things:
. retention of Residential Funding implied a degree of interest rate risk
that would have been unacceptable to Anchor Savings' management, board
of directors and regulators,
. Anchor Savings would not have been able to provide Residential Funding
with sufficient low interest funds to ensure the successful operation of
Residential Funding's business,
. Anchor Savings lacked a business and cultural fit with Residential
Funding, and
. the poor strategic fit of the sold branches warranted the sales even
absent the breach.
The government has further argued that Anchor Savings could have avoided the
sale of Residential Funding, for example, by forming a holding company or
altering the mix of loans Residential Funding purchased. Alternatively, the
government has argued that Anchor Savings would have had to sell Residential
Funding due to non-breaching provisions of FIRREA and that the sales of
Residential Funding and the Anchor Savings branches were at fair market value,
thus precluding any damage claim.
In addition, the government has argued that we are not entitled to damages
based on our restitution and reliance claims because the benefits Anchor
Savings derived exceeded any cost that Anchor Savings incurred. The government
further asserts that the elements of our reliance damages are the same as those
for restitution and therefore not independently recoverable.
Damages Decisions in Other Winstar-related Cases
Various judges in the Claims Court have thus far rendered six decisions on
damages in Winstar-related cases. The first damages opinion was issued on April
9, 1999, in Glendale Federal Bank, FSB v. United States, Docket No. 90-772C.
Glendale claimed expectancy damages totaling $1.6 billion for lost profits
through the end of the contract's goodwill amortization period, increased cost
of funds, increased deposit insurance premiums, and OTS assessments and other
breach-related costs. Glendale claimed that it lost profits when the
government's breach of their contract prevented Glendale from fully leveraging
its pre-breach regulatory capital for growth and profit. Glendale sought
reliance damages of approximately $863 million for its pre-breach and post-
breach costs incurred in reliance that the government would perform. For
restitution damages, Glendale requested $2 billion for the benefits conferred
on the government by Glendale's performance, such as relieving FSLIC's
obligation to pay a failing thrift's excess liabilities, the investment
earnings on the insurance funds that FSLIC did not have to pay to the failing
thrift's depositors and creditors, and other payments made by Glendale. The
judge in Glendale concluded that Glendale had not proved its expectancy
damages, but awarded the plaintiff $909 million in restitution damages.
On April 16, 1999, the Claims Court issued its second damages decision. In
California Federal Bank v. United States, Docket No. 92-138C, the plaintiff
sought expectancy, reliance, and restitution damages based on theories similar
to those presented by Glendale, ranging between $725 million and $1.6 billion.
Following a pretrial hearing, the Claims Court ruled that California Federal
was not able to establish expectancy damages as a matter of law and precluded
California Federal from presenting expectancy damages proof at trial. After a
damages trial on California Federal's reliance and restitution claims, the
Claims Court ordered the government to pay California Federal restitution of
approximately $23 million under a theory of reimbursing California Federal for
the transaction costs necessary to raise new capital to replace the goodwill
eliminated by the government's breach of contract, which is called the cost of
replacement capital theory.
The Claims Court's third damages decision was issued on September 30, 1999,
in LaSalle Talman Bank, FSB v. United States, Docket No. 92-652C. In LaSalle
Talman, the plaintiff sought expectancy damages of $858.8 million relating
primarily to additional earnings from a merger that it claimed would have
occurred but for the government's breach of their contract. LaSalle Talman also
claimed approximately $1.2 billion in
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damages for the costs of acquiring replacement capital. Under its restitution
theory of damages, LaSalle Talman claimed $295.1 million for its assumption of
net liabilities in four supervisory mergers, less the benefits it received. The
Claims Court awarded LaSalle Talman approximately $5 million in damages for
miscellaneous expenses.
The Claims Court's fourth damages decision was issued on March 3, 2000, in
Landmark Land Company, Inc. v. United States, Docket No. 95-502C. Landmark
presented claims for the restitution of property and cash contributions it made
in its supervisory acquisition of a failing thrift, the lost profits or "use
value" relating to those contributions while in the government's control, and
non-overlapping reliance damages for additional contributions made to the
failing thrift. The Claims Court ordered the government to pay approximately
$21 million under either a restitution or reliance theory of damages for
Landmark's initial contribution. The Federal Deposit Insurance Corporation also
appeared as a plaintiff in Landmark, as receiver for the failed thrift. The
FDIC presented claims for $641.9 million in restitution damages for the net
value of assets contributed to a failing thrift and expectancy damages of $32.3
million for the value of supervisory goodwill eliminated by the government's
breach of their contract. The Claims Court ordered the government to pay the
FDIC approximately $18 million as restitution damages for the benefit conferred
on the government by its contribution to the failing thrift.
The Claims Court's fifth damages decision was issued on July 6, 2000, in
Bluebonnet Savings Bank, FSB v. United States, Docket No. 95-532C. Bluebonnet
presented an expectancy damages claim totaling $175.9 million based on the
increased costs of financing its supervisory acquisition following the
government's breach of their contract. The Claims Court held that Bluebonnet
was unable to prove its damages with reasonable certainty and declined to award
any damages.
The Claims Court's sixth damages decision was issued on July 21, 2000, in
Glass v. United States, Docket No. 92-428C. Shareholder plaintiffs in Glass
presented a claim for reliance damages seeking $5.8 million for the return of
the claimed market value of their investment and an additional $72,000 for the
transaction costs associated with the investment. Shareholder plaintiffs
additionally claimed restitution damages of $8.4 million for the benefit
conferred on the government by the contract. The Claims Court ordered the
government to pay shareholder plaintiffs $4.0 million for the fair market value
of their investment and the direct costs. The FDIC also appeared as a plaintiff
in Glass, as receiver for the failed thrift, and presented a claim of $2.1
million to $2.5 million in expectancy damages as measured by the replacement
value of goodwill that was destroyed by the passage of FIRREA. The Claims Court
ordered the government to pay the FDIC $2.1 million in damages, which was the
cash value of the goodwill remaining at the time of the government's breach of
their contract.
The Claims Court did not enter judgment for expectancy damages in any case,
although the Claims Court has consistently held that expectancy damages may be
appropriate. The determinations of damages by the Claims Court in the Glendale,
California Federal, LaSalle Talman, Landmark and Bluebonnet cases have been
appealed. On July 7, 2000, a three-judge panel of the Federal Circuit heard
arguments in the first two of these appeals, in the Glendale and California
Federal cases.
During the summer of 1998, there were settlements in a total of four of the
Winstar-related cases in which the government agreed to make payments to the
plaintiffs. In addition, there also was a settlement in a small case in
September 1999. We believe that the circumstances of the five settled cases
were materially different from our case, and we do not believe that these
settlements will affect the final outcome of our case. We are unaware of any
other pending settlements.
We continue to believe that our claim is meritorious, that it is one of the
more significant cases before the Claims Court and that we are entitled to non-
overlapping damages under any of the theories asserted, which are estimated to
exceed the goodwill remaining on Anchor Savings' books at the time FIRREA was
enacted. However, we are unable to predict the ultimate outcome of our case and
can give no assurance of whether we will receive a damage award, or as to the
amount or timing if any award is ultimately received.
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DESCRIPTION OF THE LTWS
The following summary of certain provisions of a warrant agreement we have
entered into with EquiServe Trust Company, N.A., as warrant agent, and the form
of certificate representing the LTWs does not purport to be complete and is
qualified in its entirety by reference to the warrant agreement and the form of
certificate, which have been filed with the SEC as exhibits to this document,
including the definitions in those documents of various terms.
Determination of the Number of Shares of Our Common Stock Issuable Upon
Exercise of an LTW
The LTWs will entitle LTW holders to purchase shares of our common stock
with an adjusted stock price equal to any adjusted litigation recovery. We
explain these terms below.
Upon the occurrence of the trigger, LTW holders will be entitled to purchase
shares of our common stock according to the following formula:
<TABLE>
<S> <C> <C> <C> <C>
One LTW = adjusted litigation recovery x 1
---------------------------- ----------------------------
adjusted stock price number of LTWs issued or
reserved for issuance on the
distribution record date
</TABLE>
For example, if the adjusted stock price of our common stock on the
occurrence of the trigger is $20.00, the number of LTWs issued or reserved for
issuance on the distribution record date was [110,000,000] and the adjusted
litigation recovery is $250 million, the number of shares of our common stock
issuable upon exercise of each LTW would be 0.1136:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
One LTW = $250,000,000 x 1 = 0.1136 shares
------------ -------------
$20.00 [110,000,000]
</TABLE>
If you own 100 LTWs, you would multiply the number of shares of our common
stock issuable upon exercise of an LTW (0.1136) by the number of LTWs you own
(100), which totals 11.36 shares (0.1136 x 100 = 11.36). As a result, upon the
occurrence of the trigger, you could purchase 11 shares of our common stock and
receive cash instead of the fractional share, calculated by multiplying the
fractional share (0.36) by the sum of the adjusted stock price ($20.00) and the
exercise price ($0.01), which totals $7.20 (0.36 x ($20.00 + $0.01) = $7.20).
To determine the cost of purchasing your shares, you would multiply the number
of whole shares of our common stock into which your LTWs are exercisable (11)
by the exercise price ($0.01), which totals $0.11 (11 x $0.01 = $0.11). So, if
you owned 100 LTWs, upon their exercise you would pay us $0.11 and receive 11
shares of our common stock and $7.20 in cash.
To determine the total net value of the LTWs upon exercise, you would
multiply the number of shares you receive (11) by the sum of the adjusted stock
price ($20.00) and the exercise price ($0.01), add the amount of cash you
receive ($7.20), and subtract the total exercise price ($0.11), which totals
$227.20 (11 x ($20.00 + $0.01) + $7.20 - $0.11 = $227.20). As a result, the
total net value of 100 LTWs would be $227.20, or $2.272 per LTW. You should
keep in mind that the LTWs may not trade at prices reflecting the eventual
amount we recover in our litigation or the eventual value per LTW. See "Risk
Factors" beginning on page 4.
However, if the adjusted litigation recovery was zero, you would not be
entitled to purchase any shares of our common stock and the LTWs would expire
worthless.
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Determination of the Adjusted Litigation Recovery
To determine the adjusted litigation recovery, we will apply the following
formula:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
adjusted (amount litigation &
litigation = 85% x recovered - LTW - taxes)
recovery expenses
</TABLE>
where:
. "amount recovered" equals the total amount of any cash payment and the
fair market value of any property we actually receive as damages
pursuant to a final, nonappealable judgment in or final settlement of
our litigation, including any post-judgment interest we actually receive
on any payment,
. "litigation and LTW expenses" equal the total expenses we incur, both
before and after the date of this document, in pursuing our litigation
and obtaining all damages payments, plus our total expenses incurred in
connection with the creation, issuance and trading of the LTWs,
including, legal, financial advisory and accounting fees, printing and
registration costs and the fees and expenses of the warrant agent, and
. "taxes" equal, irrespective of the actual amount of taxes imposed with
respect to the damages recovery, the product of (i) the amount of
damages recovered less the expenses in the litigation and LTW issuance
described in the preceding clauses and (ii) the combined highest
federal, New York State and New York City income tax rates applicable to
financial institutions in the year (or years) in which the amount of the
damages (in whole or in part) is fixed or determinable (after taking
into account the effect of the deductibility of such taxes for federal
and state income tax purposes); for 2000, such rate is 46.2%.
For example, if we recover $572.6 million in damages in our litigation, the
expenses in the litigation and LTWs are $26 million, and taxes are $252.5
million, then the adjusted litigation recovery would equal approximately $250
million.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
adjusted
litigation = 85% x ($572,600,000 - $26,000,000 - $252,529,200) = $249,960,180
recovery
</TABLE>
Our determination of the amounts to be deducted from the amount of damages
recovered and the amount of the adjusted litigation recovery will be final,
conclusive and binding on the LTW holders.
Determination of the Adjusted Stock Price
When we receive a recovery of damages, we will determine the adjusted stock
price of a share of our common stock on the 30th calendar day before the date
on which we receive the total amount of the recovery. For purposes of
calculating the adjusted stock price, the 30th calendar day before the total
amount of recovery has been received is the "determination date." If the 30th
calendar day before the total amount of recovery has been received is a day on
which [ ] is closed for business, then the determination date will be the
next succeeding day on which [ ] is open for business.
The "adjusted stock price" of a share of our common stock on this
determination date will equal
. the average of the daily closing prices of our common stock for the
thirty consecutive trading days ending on and including the
determination date
. minus the $0.01 exercise price.
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<PAGE>
Closing Price. The term "closing price" on any trading day means the closing
sale price for our common stock on such day, or in case no such sale takes
place on such day, the average of the reported closing bid and asked prices for
our common stock in each case on the NYSE Composite Tape (or any successor
composite tape reporting transactions on national securities exchanges), or, if
our common stock is not listed on the NYSE, on the principal national
securities exchange on which our common stock is listed or admitted to trading
(the national securities exchange on which the greatest number of shares of our
common stock has been traded during the five consecutive trading days ending on
and including the determination date), or, if not listed or admitted to trading
on any national securities exchange, the average of the closing bid and asked
prices of our common stock on the over-the-counter market on the day in
question as reported by NASDAQ, or a similar generally accepted reporting
service, or if not so available as determined in good faith by your board of
directors, on the basis of such relevant factors as it in good faith considers
appropriate.
Trading Day. The term "trading day" means a day on which the NYSE or NASDAQ
(or any of their successors) is open for the transaction of business.
Exercise Price. The exercise price is equal to $0.01 per whole share of our
common stock for which your LTWs are exercisable. Upon surrender of your LTWs
in exchange for our common stock, you will be required to pay an amount equal
to the exercise price multiplied by the number of whole shares of our common
stock for which your LTWs are exercisable. The amount of cash you pay is
included in the determination of the number of shares of our common stock and
cash, instead of any fractional shares, that you will receive upon exercise of
your LTWs.
Exercise of the LTWs
Trigger. Subject to the procedures we have established and described in this
document, you will be entitled to exercise your LTWs only after all of the
following events have occurred:
. we receive the total amount of the damages recovery in our litigation,
. we calculate the full amount of the adjusted litigation recovery, and
. we receive all regulatory approvals necessary to issue the shares of our
common stock.
The occurrence of all three of these events constitutes the "trigger." If
the damages recovery is payable by the government in installments, the trigger
will not occur until we receive the last installment of the recovery in its
entirety.
You will not be entitled to any interest or additional shares of our common
stock for the period of time between the date on which we receive any recovery
of damages and the date on which the LTWs become exercisable or are exercised.
Notice of Trigger. If the trigger occurs, we will publicly announce, not
more than 15 calendar days after its occurrence, by means of a press release
and by written notice mailed to each record holder of the LTWs:
. that the trigger has occurred,
. the total number of shares of our common stock for which all the LTWs
are exercisable,
. the number of shares of our common stock for which one LTW is
exercisable,
. the exercise price per LTW,
. the procedure for exercising the LTWs, and
. the date on which the LTWs will no longer be exercisable.
Expiration. Unless exercised, the LTWs will automatically expire on the
expiration date, which is the earlier of
. 60 calendar days after the date on which a notice that the LTWs are
exercisable is first sent to LTW holders, or
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. the date on which our litigation has been resolved in a manner such that
no shares of our common stock will be issuable under the terms of the
LTWs.
Procedure for Exercise. Your LTWs may be exercised before the expiration
date by surrendering the LTW certificates, with the accompanying form of
election to purchase properly completed and executed, together with payment of
the exercise price for each whole share purchased. You may pay the exercise
price in the form of a certified or official bank check or personal check
payable to the order of Dime Bancorp, Inc. Upon your surrender of the LTW
certificate, your payment of the exercise price and the warrant agent's receipt
of your election form, the warrant agent will deliver or cause to be delivered,
to you or to such other person as you designate in writing, stock certificates
representing the number of whole shares of our common stock issuable upon
exercise or other securities or property to which you are entitled under the
LTWs and warrant agreement, including, without limitation, any cash payable to
adjust for fractional interests in such shares issuable upon exercise. If you
exercise less than all of the LTWs evidenced by an LTW certificate, a new LTW
certificate will be issued for the remaining number of LTWs, but any LTWs
represented by such new LTW certificate must be exercised prior to the same
expiration date for the original LTWs.
No Fractional Shares. No fractional shares of our common stock will be
issued upon exercise of your LTWs. When you exercise your LTWs, you may be
entitled to a fractional share interest to the extent any portion of the LTWs
you exercised does not entitle you to a whole share of our common stock.
Instead of receiving a fractional share interest, you will receive an amount in
cash computed to the nearest whole cent equal to:
. such fraction
. multiplied by the sum of the adjusted stock price and $0.01.
Distribution Record Date. The distribution record date was [ ], the
date that your board of directors fixed for determining who is eligible to
receive the LTWs.
LTW Certificates
As soon as practicable after the date of this document, we will send LTW
certificates to each LTW holder as of the distribution record date. LTW
certificates will be issued in global form or registered form as definitive
certificates and no service charge will be made for registration of transfer or
exercise upon surrender of any LTW certificate at the office of the warrant
agent maintained for that purpose. We may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exercise of LTW certificates.
Adjustments
The LTWs will be adjusted in case of certain reclassifications,
redesignations, reorganizations or changes in our common stock or
consolidations or mergers in which we are involved or the sale of all or
substantially all of our assets. In such a case, each LTW will be exercisable
into the right to receive the kind of shares of stock or other securities or
property into or for which our common stock was converted or exchanged or which
was distributed to our stockholders in such transaction or event, so that each
LTW may be exercised for a number of shares of such stock or other securities
or an amount of property equal to
. the adjusted litigation recovery
. divided by the number of LTWs issued or reserved for issuance on the
distribution record date, [ ]
. divided by the adjusted stock price of the shares of the capital stock
or other securities or property for or into which one share of our
common stock was exchanged or converted.
For example, if we were to be acquired in a transaction where our
stockholders receive securities and, upon the occurrence of the trigger, the
adjusted stock price of the number of securities that one share of our
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common stock was converted into was $30, the number of LTWs issued or reserved
for issuance on the distribution record date was [110,000,000] and the adjusted
litigation recovery was $250 million, then, upon exercise of an LTW and the
payment of the exercise price, the holder of such LTW would receive 0.076 of a
share of such securities for each LTW.
The term "adjusted stock price," when used with respect to publicly traded
securities other than our common stock, means:
. the average daily closing prices of a unit of such securities for the
thirty consecutive trading days ending on and including the
determination date,
. minus the exercise price of $0.01.
The term "adjusted stock price," when used with respect to property other
than publicly traded securities, means the fair market value of the amount of
such property distributable in respect of one share of our common stock, as
determined in good faith by your board of directors, on the basis of such
relevant factors as it in good faith considers appropriate.
Rights of LTW Holders
We will retain control of the litigation against the government and will
retain 100% of the proceeds of any recovery of damages from our litigation. The
litigation will remain an asset of Dime Savings. We have reserved the right,
however, to pursue this litigation in any manner we deem appropriate. The LTW
holders will not have any rights against us for any decision regarding the
conduct of our litigation or the disposition of our claim for an amount less
than the amount claimed in damages in the ongoing trial in the Claims Court,
regardless of the effect on the value of the LTWs. Although we currently intend
to continue pursuing our litigation vigorously and to seek a cash recovery in
the amount claimed, there can be no assurance that we will not make a different
determination in the future.
All rights of action in respect of the LTWs will be vested in the registered
LTW holders; provided, however, that no registered LTW holder will have the
right to enforce, institute or maintain any suit, action or proceeding against
us to enforce, or otherwise act in respect of, the LTWs, unless
. that registered LTW holder has first given written notice to us of the
substance of such dispute, and registered LTW holders of at least 25% of
the issued and outstanding LTWs have given written notice to us of their
support for the institution of such proceedings to resolve such dispute,
. the LTW holder has sent written notice of the substance of such dispute
and of the support for the institution of such proceeding by such
holders to the warrant agent, and
. the warrant agent has not instituted appropriate proceedings with
respect to such dispute within 30 days following the date of such
written notice to the warrant agent,
it being understood and intended that no one or more registered LTW holders
will have the right in any manner whatsoever to affect, disturb or prejudice
the rights of any other registered LTW holders, or to obtain or to seek to
obtain priority or preference over any other LTW holders or to enforce any
rights of the LTW holders, except in the manner described above for the equal
and ratable benefit of all registered LTW holders.
Except as described above, the LTW holders will not have the right to
enforce, institute or maintain any suit, action or proceedings to enforce, or
otherwise act in respect of, the LTWs.
The LTW holders will have no voting rights, no liquidation preferences and
no rights to dividends or other distributions in their capacity as an LTW
holder.
Reservation of Shares of Our Common Stock
In the warrant agreement, we have agreed that we will use our best efforts
to cause to be reserved and kept available out of the authorized and unissued
shares of our common stock or any shares of our common
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stock held in treasury, a number of shares of our common stock sufficient to
permit the exercise in full of all outstanding LTWs. Under the registration
statement filed with the SEC, of which this document is a part, we have
registered [ ] shares of our common stock. We are authorized to issue 350
million shares of common stock under our certificate of incorporation, which we
estimate, based on various assumptions, will be sufficient to permit the
exercise in full of all LTWs expected to be outstanding. There can be no
assurance, however, that this will be the case.
If, upon the occurrence of the trigger, the number of shares of our common
stock authorized but unissued plus the number of shares held in treasury is
less than the number of shares necessary to permit the exercise of the LTWs in
full, we will be required by the terms of the warrant agreement either to
. repurchase from our stockholders shares of our common stock sufficient
to eliminate the shortfall, to the extent permitted by applicable law
and any material agreements then in effect to which we are a party, or
. call a special meeting of our stockholders to increase the number of
authorized shares of our common stock to a number sufficient to
eliminate the shortfall.
In addition, the expiration date of the LTWs will be automatically extended
to 60 days after
. the date on which the repurchase of our common stock is successfully
completed, or
. the effective date of the increase in the number of authorized shares of
our common stock.
Shares of our common stock issued upon exercise of the LTWs will, upon such
issuance, be fully paid and non-assessable, free of preemptive rights and free
from all taxes, liens, charges and security interests with respect to the
issuance thereof.
Amendment
From time to time, we and the warrant agent may amend or supplement the
warrant agreement. Only amendments or supplements that have an adverse effect
on the interests of the LTW holders will require the written consent of the LTW
holders. In most cases, that consent will be required from holders of a
majority of the then outstanding LTWs. In the case of an amendment that
increases the exercise price of the LTWs or decreases the number of shares of
our common stock or other securities or property issuable upon exercise of the
LTWs other than pursuant to adjustments provided for in the warrant agreement,
the consent of each LTW holder will be required.
Reports
So long as any of the LTWs remain outstanding, we will cause copies of our
annual report to stockholders and any other documents that we deem appropriate
to be filed with the warrant agent and mailed to the LTW holders at their
addresses appearing in the register of LTWs maintained by the warrant agent.
The Warrant Agent
EquiServe Trust Company, N.A. acts as warrant agent for the LTWs. The
warrant agent maintains books for registration and transfer of the LTWs. An
affiliate of EquiServe currently serves as our transfer agent. We and our
affiliates may obtain other services from the warrant agent and its affiliates
in the ordinary course of our respective businesses.
We have agreed to indemnify the warrant agent for any loss it incurs in
connection with the warrant agreement, other than any loss resulting from its
negligence, bad faith or willful misconduct. The warrant agent has agreed to
indemnify us for any loss we incur in connection with the warrant agreement
resulting from its negligence, bad faith or willful misconduct.
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TAX CONSEQUENCES
In the opinion of Sullivan & Cromwell, our counsel, the following summary
describes the material United States federal income tax consequences relating
to the distribution, receipt and ownership of an LTW. This summary is based
upon the Internal Revenue Code of 1986, as amended, Treasury regulations issued
thereunder, administrative pronouncements and judicial decisions, all as in
effect as of the date hereof and all of which are subject to change, possibly
with retroactive effect. This summary addresses only LTWs that are held as
capital assets and does not address all of the tax consequences that may be
relevant to holders of the LTWs in light of their particular circumstances or
to certain types of holders subject to special treatment under the Internal
Revenue Code, including, without limitation, certain financial institutions,
dealers in securities, currencies or commodities, traders in securities who
elect to apply a mark-to-market method of accounting, tax-exempt organizations,
persons whose functional currency is not the U.S. dollar, persons who hold an
LTW as a position in a "straddle" or as a part of a "hedging," "conversion" or
"constructive sale" transaction for federal income tax purposes. In addition,
the discussion below applies only to a holder of our common stock who acquires
the LTWs in the initial distribution and who is (i) a citizen or resident of
the United States, (ii) a domestic corporation, (iii) an estate the income of
which is includible in gross income for federal income tax purposes regardless
of its source or (iv) a trust whose administration is subject to the primary
supervision of a United States court and which has one or more United States
persons who have the authority to control all substantial decisions of the
trust. In this document, we refer to a stockholder that meets the preceding
criteria as a "U.S. holder." This summary does not address the state, local or
foreign tax consequences of the distribution, receipt and ownership of LTWs.
Distribution of the LTWs. Although the matter is uncertain because of the
absence of any direct authority, the distribution of the LTWs to a U.S. holder
should be treated as a tax-free stock dividend under Section 305(a) of the
Internal Revenue Code and, therefore, a U.S. holder should not be required to
include any amount in income with respect to such distribution. We intend to so
treat the distribution (including for reporting purposes). Except as discussed
below under "Alternative Characterization," the discussion below assumes that
the distribution of the LTWs will be so treated.
If the fair market value of an LTW on the date of distribution is less than
15% of the fair market value of a share of our common stock on that date (with
the fair market value for each based upon the average of the high and low
trading prices for each), a U.S. holder's tax basis in an LTW will be zero
unless the U.S. holder elects to allocate the holder's tax basis in our common
stock between the common stock and the LTWs in proportion to their relative
fair market values. This election would need to be made for all the LTWs
distributed to the U.S. holder, in the form of a statement attached to the U.S.
federal income tax return filed by the U.S. holder for the year in which the
U.S. holder receives the LTWs. If made, this election would be irrevocable. If,
on the date of distribution of the LTWs, the fair market value of an LTW is 15%
or more of the fair market value of a share of our common stock, a U.S. holder
will be required to allocate the holder's tax basis in Dime common stock
between the LTWs and the common stock in proportion to their relative fair
market values.
A U.S. holder's holding period for an LTW will include the U.S. holder's
holding period for the shares of common stock with respect to which the LTW was
distributed.
Sale or Exchange of the LTWs. Upon the sale or exchange of an LTW, a U.S.
holder will recognize gain or loss in an amount equal to the difference between
the amount realized upon the sale or exchange and the tax basis, if any, of the
LTW. Any gain or loss from the sale or exchange will be capital gain or loss,
and will be long-term capital gain or loss if the U.S. holder's holding period
for the LTW (determined in the manner described above) is more than one year.
Expiration of the LTWs. If the LTWs expire without exercise, no basis will
be allocated to the LTWs and no loss will be recognized upon their expiration.
In this case, a U.S. holder's basis in Dime common stock would not be reduced
as a result of the distribution of the LTWs.
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Exercise of the LTWs. A U.S. holder will not recognize gain or loss upon
exercise of an LTW, except that a U.S. holder will recognize short-term capital
gain or loss with respect to any cash received in lieu of a fractional share of
our common stock in an amount equal to the difference between the cash received
and the portion of the U.S. holder's basis allocable to the fractional share of
our common stock (determined in the manner described below) for which the cash
is received.
Tax Basis of Our Common Stock Acquired Upon Exercise of an LTW. The tax
basis of each share of our common stock acquired by an LTW exercise will equal
the sum of the exercise price for the LTW and the tax basis, if any, for the
LTW. The holding period of any share of our common stock acquired in this way
will begin with and include the date of the LTW exercise.
Alternative Characterization. The IRS may assert that the distribution of
the LTWs should be treated as a taxable stock dividend under Section 305(b) of
the Internal Revenue Code to the extent of our current and accumulated earnings
and profits because some of our stockholders and/or holders of rights with
respect to our stock will not receive LTWs with respect to their stock and/or
an adjustment to the exercise price of their rights with respect to their
stock. We believe, however, that this fact should not cause the distribution of
the LTWs to be a taxable stock dividend, because such stockholders and/or
holders of rights with respect to our stock will not receive any cash dividends
or other property in lieu of the LTWs and will not receive any dividends in
excess of the dividends paid to our stockholders who do receive the LTWs. There
is, however, no authority directly on point. If the IRS were to prevail in any
such an assertion, a U.S. holder would be required to treat as ordinary
dividend income the fair market value of the LTWs on the date of distribution
(based upon the average of the high and low trading prices for the LTWs on such
date) to the extent of the U.S. holder's ratable share of our current and
accumulated earnings and profits and would have a basis in an LTW equal to its
fair market value. U.S. holders are urged to consult their own tax advisors as
to the possibility that the IRS would treat the distribution of the LTWs as a
taxable stock dividend and as to the consequences to a U.S. holder of such
treatment.
DESCRIPTION OF OUR CAPITAL STOCK
In this section, we describe material features and rights of our capital
stock. This summary is qualified in its entirety by reference to applicable
Delaware law, Dime Bancorp's Amended and Restated Certificate of Incorporation
and by-laws, and the rights agreement, as described below. See "Where You Can
Find More Information" beginning on page 30.
Authorized Stock
Dime Bancorp's certificate of incorporation authorizes the issuance of up to
350 million shares of common stock and 40 million shares of preferred stock.
As of [ ], 2000, [ ] shares of our common stock and 13,607.664
shares of our Series B Voting Preferred Stock were outstanding. In addition,
[ ] shares of our common stock were held in the treasury, and [ ]
shares of our common stock were reserved for issuance pursuant to our various
stock based benefit plans and pursuant to outstanding warrants owned by
Warburg.
Common Stock
Voting. Each share of our common stock entitles the holder to one vote on
each matter submitted to our stockholders for their vote. Our stockholders do
not have cumulative voting rights. Our by-laws provide that, when a quorum is
present at any meeting, the vote of the holders of a majority of the stock that
has voting power present in person or represented by proxy will decide any
question brought before the meeting, unless a different vote is required by
law, our certificate of incorporation, a certificate of designation of any
series of our preferred stock or our by-laws.
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Dividends. Each share of our common stock entitles the holder to dividends
when, as and if declared by your board of directors, subject to any rights of
any holders of our preferred stock that may be outstanding. Dime Bancorp's
ability to pay dividends is limited by certain restrictions imposed on Delaware
corporations. Under these restrictions, dividends may be paid only out of a
surplus, as defined by the Delaware General Corporation Law or, if there is no
surplus, our net profits for the fiscal year in which the dividend is declared
and/or the preceding fiscal year.
Most of Dime Bancorp's cash flow comes from dividends and other capital
distributions, if any, from Dime Savings, and such dividends and other capital
distributions are subject to regulatory restrictions.
Limitations on Dime Savings' Ability to Make Capital Distributions. Savings
associations such as Dime Savings may not make capital distributions (or pay
management fees to their holding companies) if, following such distribution,
the savings association will be undercapitalized. In addition, OTS regulations
limit a savings association's ability to pay dividends and make other capital
distributions according to its level of capital and income. For this purpose,
"capital distributions" include
. distributions of cash or other property to stockholders (other than
stock dividends or rights to purchase stock),
. payments by the savings association to stockholders to repurchase,
redeem, retire or otherwise acquire any of its shares, including the
extension of credit to finance an affiliate's acquisition of the savings
association's shares,
. payments by the savings association to repurchase, redeem, retire or
otherwise acquire debt instruments included in the savings association's
total capital,
. direct or indirect payments of cash or other property to stockholders or
affiliates in connection with a corporate restructuring,
. any other distribution charged against the savings association's capital
accounts that would cause it to not be well capitalized following the
distribution, or
. any transaction that the OTS or the FDIC determines to be a distribution
of capital to owners of the savings association.
Under current OTS regulations, a savings association's ability to pay
dividends and make other capital distributions requires a notice or application
to the OTS in advance of payment. The OTS may disapprove the proposed capital
distribution if its payment would: make the association undercapitalized,
significantly undercapitalized, or critically undercapitalized; raise safety or
soundness concerns; or violate a statute, regulation, agreement with the OTS
(or with the FDIC), or a condition imposed in an OTS-approved application or
notice.
Assets upon Dissolution. Each share of our common stock entitles the holder
to participate equally and ratably in our remaining assets after a liquidation,
dissolution or winding up, subject to creditor's rights and any rights of any
holders of our preferred stock that may be outstanding.
No Preemptive or Conversion Rights. Our common stockholders do not have
preemptive rights to purchase or subscribe for any stock or other securities,
and there are no conversion rights, redemption rights or sinking fund
provisions with respect to our common stock.
Participating Preferred Stock Purchase Rights. Each issued share of our
common stock includes a right to purchase one-hundredth of a share of our
participating preferred stock in certain circumstances described in "Rights
Agreement" below.
Transfer Agent and Registrar. Fleet National Bank is the transfer agent and
registrar for our common stock.
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Preferred Stock
Shares of our preferred stock may be issued in one or more series as
determined by your board of directors. Your board of directors will determine
by resolution the powers, designations, preferences and relative,
participating, optional or other rights, if any, and the qualifications,
limitations or restrictions of any series of preferred stock, including the
number of shares, dividend rights, redemption rights, liquidation preferences,
voting rights and conversion rights.
In connection with the Warburg investment, we issued several different
securities including preferred stock and warrants to purchase preferred stock.
The material terms of these securities, including the Series B junior voting
preferred stock, the Series C junior nonvoting preferred stock and the Series D
junior nonvoting preferred stock, are set forth below.
Investment by Warburg
This section discusses the material terms of the Investment Agreement
between us and Warburg, dated July 6, 2000, and the securities issued by us to
Warburg in exchange for Warburg's $238 million investment. This information is
not complete and is qualified in its entirety by reference to the Investment
Agreement and its exhibits, which were filed with the SEC on a Form 8-K, dated
July 11, 2000 as amended on October 12, 2000. The Investment Agreement and its
exhibits are incorporated into this document by reference.
Warburg's investment was made over two closings. The first closing occurred
upon signing the Investment Agreement on July 6, 2000. The second closing
occurred on October 6, 2000 after necessary regulatory approvals had been
received. The transactions are described below.
First Closing. On July 6, 2000, Warburg purchased rights to 12,009.491
shares of Series B junior voting preferred stock, representing about 9.9%
of our outstanding common stock after issuance of the Series B stock, as
each share of Series B stock has the economic rights equivalent to 1,000
shares of our common stock, subject to antidilution adjustments. The rights
converted into shares of Series B stock upon early termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 on August 1, 2000. The Series B stock will convert into restricted
shares of our underlying common stock upon, among other events,
distribution of the LTWs. At the first closing, Warburg also purchased
warrants to acquire 8,142.738 shares of Series C junior nonvoting preferred
stock and warrants to acquire 3,866.753 shares of Series D junior nonvoting
preferred stock, each series referencing 1,000 shares of our common stock
per share of the series. The aggregate purchase price Warburg delivered to
us at the first closing was approximately $210 million.
Second Closing. On October 5, 2000, Warburg received a determination by
the OTS that Warburg does not control us. Given the receipt of this
necessary regulatory approval, on October 6, 2000, at the second closing of
the investment, Warburg purchased, for approximately $28 million, 1,598.173
additional shares of Series B stock and additional warrants to acquire
1,598.173 shares of Series D stock.
In total, after the completion of both closings for Warburg's investment,
Warburg owns 13,607.664 shares of Series B stock, warrants to acquire 8,142.738
shares of Series C stock and warrants to acquire 5,464.926 shares of Series D
stock.
Valuation. One way to think of the aggregate purchase price paid by Warburg
is that Warburg paid a price of $17.50 for the economic equivalent of one share
of our common stock and a warrant to purchase the economic equivalent of
another share at an exercise price of $21.50, with such shares and warrants
subject to a number of conditions, limits and rights. The warrants also have a
surrender right on a change of control of Dime that entitles Warburg to a
payment upon surrender even if there is a change of control at less than
$21.50.
Our financial advisors, Credit Suisse First Boston Corporation and Merrill
Lynch & Co., performed analyses of the securities Warburg was buying to assist
us in evaluating and considering the investment and
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presented their analyses to our board of directors prior to the signing of the
Investment Agreement. Both Credit Suisse First Boston and Merrill Lynch are
internationally recognized investment banking firms that were selected by us to
advise us on various matters, including the transaction with Warburg, based on
their reputations and experience. Both firms are familiar with us, having
worked on several engagements in recent years. Each of our advisors is
receiving compensation in connection with the Warburg transaction and other
matters on which they are advising us.
Our advisors concluded that, based on the market price of our common stock
at the time that Warburg agreed to make the investment, Warburg received
securities valued between $16.40 and $18.45 per underlying common share and
related warrant. We refer to this as the "per share value" of Warburg's
investment. We think this value compares favorably to the price of $17.50 per
share and warrant Warburg paid and suggests that Warburg paid values consistent
with the market value of our common stock at the time it agreed to make its
investment. We provide some of the details of our financial advisors' analyses
below. These analyses and estimates can vary greatly because they are based on
a number of judgments and assumptions regarding financial, economic and market
matters that are uncertain and beyond our control. Accordingly, if you have any
questions regarding the effects of Warburg's investment, you may want to
consult your own financial advisor.
Market Price of Our Common Stock. Our financial advisors began their
analysis with the market price of our common stock and noted that the
average closing price for the five trading days before we announced
Warburg's investment on July 6 was $16.60.
Transfer Restrictions and Illiquidity. Next, our financial advisors
considered the effect of the transfer restrictions that Warburg agreed to,
as well as the large size of the equity investment. They noted that the
transfer restrictions and the large percentage of the trading volume that
the investment represents should generally reduce the value of the
securities received by Warburg. They estimated that these transfer
restrictions reduced the per share value to Warburg of its investment by
about 10% to 15% of the average market price of our common stock, or $1.66
to $2.49. Our financial advisors based these estimates on their market
experience, although there were no directly comparable public valuations.
Other financial analysts may value these transfer restrictions differently,
which would change the estimated per share value of Warburg's investment.
The transfer restrictions are summarized below.
Warrants. Using the Black-Scholes method for valuing options, our
advisors then estimated the value of the warrants we were issuing to
Warburg. To do so, our financial advisors made several important
assumptions. In particular, they assumed a longer-term volatility in our
common stock of between 25% and 35% and reduced the value of the warrants
because the large amount of stock covered by them would likely be illiquid
and to give effect to the transfer restrictions Warburg has agreed to. As a
result, our advisors estimated that the warrants increased the per share
value to Warburg of its investment by between $2.83 and $4.05. The terms of
the warrants are summarized below.
You should note that the volatility our advisors assumed is lower than
the short-term volatility implied by the price of publicly traded options
on our common stock at the time Warburg agreed to make the investment and
lower than the volatility Warburg and we agreed to use to calculate a
purchase price if we are required by the Investment Agreement to buy back
the warrants from Warburg in the event of a change of control of Dime. Our
advisors believe the lower volatility is appropriate in light of the
differential in risk associated with the significantly longer seven-year
time period of the warrants relative to publicly traded options, which have
terms of less than one year. The per share value of Warburg's investment
would be increased, and the value of the investment from our perspective
would be decreased, if a higher volatility and/or a smaller adjustment for
the illiquidity of the underlying stock were used.
LTWs. Finally, our advisors considered that Warburg has agreed to give
up the right to receive the LTWs. Based on the trading value of comparable
securities issued by other thrifts, our financial advisors
24
<PAGE>
estimated that giving up the LTWs attributable to the shares they purchased
decreased the per share value Warburg received by about $0.54. This
valuation is based on a variety of assumptions that may or may not prove
accurate. We do not know whether the LTWs will trade at or near this
valuation. Accordingly, if you have any questions regarding the value of
the LTWs, you may want to consult your own financial advisor.
Other. Our advisors considered other aspects of Warburg's investment,
many of which are intangible, but did not assign a specific financial value
to them because they did not believe it was possible or meaningful to
attempt to do so. These included Warburg's agreement to limit its purchases
of our common stock and not to acquire control of us, Warburg's right to
surrender the warrants back to us if certain change of control events were
to occur, our agreement to appoint or elect one Warburg representative to
our board of directors, regulatory and market issues, and the fact that
none of the securities we sold to Warburg is currently convertible into
common stock. Some of these factors could be considered to be favorable to
Warburg and some of them could be considered to be unfavorable. In
addition, our advisors noted that they were not expressing any view as to
the merits of the Warburg investment relative to any alternative business
strategies or the effect of any other transaction in which we might engage.
Structure and Terms of Securities. To comply with regulatory requirements,
Warburg's investment was structured using several different securities. In
total, after the completion of both closings for Warburg's investment, Warburg
owns 13,607.664 shares of Series B stock, warrants to acquire 8,142.738 shares
of Series C stock and warrants to acquire 5,464.926 shares of Series D stock.
If all the securities purchased by Warburg were to be converted today into
shares of our common stock, they would amount to approximately 27.2 million
shares, or approximately 24.9%, of our outstanding common stock, before giving
effect to the new issuance of shares of common stock underlying the convertible
securities. None of these securities is in fact convertible into common stock
at this time. The material terms of these securities are described below.
Series B Stock. Each share of Series B stock is entitled to 1,000 votes
on all matters on which shares of our common stock are entitled to vote,
together with the common stock as a single class. Shares of Series B stock
are entitled to receive dividends the same as those paid on 1,000 shares of
our common stock, other than the distribution of the LTWs. In case of a
merger or similar transaction, shares of Series B stock will be exchanged
into equivalent securities of the acquiring company. Shares of Series B
stock will convert into shares of our common stock on the earliest of (1)
the issuance of the LTWs, (2) a change of control of Dime, (3) lapsing of
the transfer restrictions placed on the securities under certain provisions
of the Investment Agreement (for example, if we breach our material
obligations in the Investment Agreement), or (4) April 6, 2001.
Series C Stock. Shares of Series C stock are not entitled to vote,
except as required by law. Shares of Series C stock are entitled to receive
dividends, other than the distribution of the LTWs, the same as those paid
on 1,000 shares of our common stock. In case of a merger or similar
transaction, shares of Series C stock will be exchanged into equivalent
securities of the acquiring company. Upon the receipt of (1) written advice
of counsel that, under applicable federal banking laws, the shares of
Series C stock may be converted or (2) a certificate that Warburg is
transferring the shares pursuant to a widely dispersed sale, shares of
Series C stock are convertible into shares of our common stock, unless the
Series B stock has not yet converted into our common stock, in which case,
the shares of Series C stock will be convertible only into shares of Series
B stock. Warburg does not currently own any shares of Series C stock, but
owns only warrants to purchase shares of Series C stock.
Series D Stock. Shares of Series D stock are not entitled to vote,
except as required by law. Shares of Series D stock are entitled to receive
dividends, other than the distribution of the LTWs, the same as those paid
on 1,000 shares of our common stock. In case of a merger or similar
transaction involving Dime, shares of Series D stock will be exchanged into
equivalent securities of the acquiring company. Our Series D stock will not
be convertible into any other class of our stock unless we receive
stockholder approval of the issuance of over 20% of our common stock or
equivalents under NYSE rules. Upon such
25
<PAGE>
approval, the Series D stock will convert into Series C stock. The Series C
stock may then be converted into Series B stock or common stock if the
conversion of the Series C stock or Series B stock has already occurred. We
have agreed to use our reasonable best efforts to obtain this stockholder
approval prior to September 30, 2002. Warburg does not currently own any
shares of Series D stock, but owns only warrants to acquire Series D stock.
Warrants. The Series C warrants and Series D warrants will allow Warburg
to purchase Series C stock and Series D stock, respectively, at an exercise
price of $21.50 per underlying common share, subject to a number of
antidilution and other adjustments. All the warrants issued to Warburg
expire seven years after issuance. None of the warrants has any voting
rights. The warrants have a surrender right on a change of control of Dime
that entitles Warburg to a payment upon surrender even if there is a change
of control at less than $21.50.
As with the underlying Series C stock, the Series C warrants will be
exchanged when it is permissible for us to do so under the federal banking
laws and regulations or in the event that Warburg intends to transfer the
warrants in a widely dispersed sale. At such time, the Series C warrants
will be exchanged for Series B warrants if the Series B stock has not yet
converted into shares of our common stock. Otherwise, the Series C warrants
will be converted into warrants to purchase our common stock.
As with the underlying Series D stock, the Series D warrants will be
exchanged for Series C warrants upon the requisite approval by our
stockholders under NYSE rules.
We have a right of first offer on any sale of warrants by Warburg.
Warburg also has the right to sell, or surrender, any warrants to us
(pursuant to an agreed valuation methodology) upon the occurrence of
certain change of control events and has the right to sell, or surrender,
any Series D warrants to us (pursuant to an agreed valuation methodology)
if the appropriate stockholder approval under NYSE rules is not obtained by
September 30, 2003 or the other transfer restrictions on the warrants lapse
before then. The agreed valuation methodology will involve a calculation
using the Black-Scholes method for valuing options. The assumptions to be
used for this calculation include: a volatility rate of 40% (or 30% for a
sale back to us of the Series D warrants under the separate triggering
events for the Series D warrants), a dividend yield of 1.9% and an interest
rate of 6.25%. The exercise price will be assumed to be the exercise price
of the warrant at the occurrence of the event allowing the surrender and
the term of the warrant will be the remaining term of the warrant from the
date of that event. For purposes of acquisition transactions causing a
change of control of Dime, the underlying security price for the
calculation will reference the price to be paid per share in the
acquisition transaction; for other events permitting the surrender, the
underlying security price will be based on the 5-day average closing market
price for our common stock immediately after the event.
The warrants purchased by Warburg have a value even when the effective
exercise price per common share is higher than the market price of our
stock. This value is based, in part, on the seven-year term of the warrants
and could be reduced if a change of control of Dime occurs before the end
of the term. The surrender right was designed to offset this risk,
particularly in light of the existence of a hostile offer at a price
substantially lower than the effective exercise price of the warrants at
the time Warburg agreed to purchase the warrants. Although it will not
prevent offers by third parties to acquire us, the surrender right could
have the effect of reducing the ultimate price per share available to our
stockholders in an acquisition.
Given the assumptions used in the agreed-upon valuation methodology for
the surrender right, if
. Dime is acquired,
. Warburg exercises its right to surrender the warrants it bought from
us and causes us to buy them back, rather than holding the warrants,
which Warburg may do instead, and converting them later into the
same property that our other stockholders receive in the acquisition
transaction, and
. Warburg exercises the surrender right with respect to all of the
warrants it purchased from us,
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<PAGE>
then Warburg could potentially receive an amount in excess of the estimated
economic value of the warrants at the time it surrenders them to us. We
have the right under certain circumstances to pay to Warburg the surrender
value in our common stock; otherwise, it will be payable in cash. Based on
a number of assumptions discussed below, the surrender premium for the
warrants in a theoretical acquisition transaction is described in the table
below:
<TABLE>
<CAPTION>
Potential Payment to
Warburg on Surrender Potential Amount of
of Warrant (based on Surrender Payment in
agreed-upon Excess of Estimated
valuation Economic Value of
Acquisition Price Per Years Left Until methodology) Warrants
Dime Common Share Expiration of Warrants (in millions) (in millions)
--------------------- ---------------------- -------------------- --------------------
<S> <C> <C> <C>
6 $ 70 $29
$16.00 4 55 26
2 31 19
6 87 32
$18.00 4 70 31
2 45 24
6 105 36
$20.00 4 87 35
2 60 29
6 119 39
$21.50 4 101 37
2 73 33
6 134 42
$23.00 4 115 40
2 86 35
</TABLE>
For example, if we are acquired one year after the Warburg investment
was made, our financial advisors estimate that this premium (the amount
paid to Warburg in excess of the estimated economic value of the warrants)
could range from $29 million to $42 million before any taxes incurred by
Warburg on such amount, for acquisition prices between $16.00 and $23.00.
If we are acquired at that time, the full payment to Warburg on the
surrender of the warrants derived from the agreed-upon valuation
methodology could range from $70 million to $134 million for acquisition
prices between $16.00 and $23.00. As shown by the table, any surrender
value would decline with time because the warrants themselves generally
decline in value as the remaining term for their exercise shrinks from the
initial seven years.
The surrender premium was estimated as follows: Based on the agreed-upon
valuation methodology described above, we and our financial advisors
calculated the amount we would have to pay to Warburg if they surrendered
all of the warrants to us upon the occurrence of an acquisition
transaction. These amounts appear in the third column. From this number, we
subtracted the estimated economic value of the warrants at the time that
Warburg would be surrendering them to us. The excess appears in the fourth
column and represents the potential premium Warburg could receive on a
surrender of the warrants.
When we and our financial advisors estimated the economic value of the
warrants Warburg would be surrendering and subtracted that value from the
amount we would have to pay Warburg if Warburg chose to surrender the
warrants to us, we based the estimated valuation on a number of assumptions
that may or may not prove correct. These assumptions include (1) the
assumptions that our financial advisors used when valuing the warrants at
the time they were issued to Warburg, including an assumed 30% volatility,
which is the midpoint of the range of volatilities our financial advisors
used at that time, and (2) an assumption that, if Warburg were to hold on
to the warrants, the warrants would become exercisable for the stock of an
acquiror with characteristics comparable to our common stock.
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<PAGE>
Over different types of acquisition transactions or different types of
consideration paid for our common stock, the surrender premium may be
higher or lower depending upon the attributes of the stock or property
received by our stockholders, and therefore underlying the warrants if
Warburg chose to hold them, in the transaction. In addition, we do not know
whether or not we will be acquired during the exercise period of the
warrants or, if so, whether or not Warburg would exercise the surrender
right or, if it does, whether Warburg would exercise the right with regard
to all or only some of the warrants. Therefore, the values in this table
are highly speculative and Warburg may not receive a surrender premium at
all.
In addition to customary antidilution provisions for the warrants, we
have agreed to additional antidilution protections in two circumstances.
First, although the various series of stock that Warburg may acquire upon
exercise of the warrants do not have the right to receive LTWs, the
exercise price of the warrants may be adjusted if the average aggregate
market price of the LTWs is over $100 million for an agreed period of time
after the issuance of the LTWs. In this case, the exercise price of the
warrants will be adjusted downward for the aggregate market price over $100
million, but only in proportion to Warburg's ownership of us. Second, the
exercise price of the warrants may be adjusted downward, in proportion to
Warburg's ownership of us, for any payment potentially made by us to Hudson
United Bancorp in excess of $15 million under the Termination, Option
Cancellation and Settlement Agreement, dated April 28, 2000, between us and
Hudson regarding the termination of the then-pending merger between us and
Hudson, unless the payment relates to (1) a breach of representations by
Warburg regarding its ownership of us or (2) another subsequent
transaction, such as a merger or tender offer, approved or recommended by
our board of directors.
Other Material Provisions. The Investment Agreement contains a number of
other material provisions, which are summarized below:
Standstill Agreement. Until July 6, 2003, Warburg has agreed that it
will not purchase or acquire any shares of our common stock that would
result in its having control over us or owning in excess of 24.9% of our
outstanding voting shares. In addition, Warburg has agreed that it will not
take any action that would violate its standard agreement with the OTS to
refrain from controlling us.
Voting. Each share of Series B stock will be entitled to the same voting
rights as, and will vote together with, shares of our common stock (subject
to each share of Series B stock representing the equivalent of 1,000 shares
of our common stock). The Series C stock, Series D stock, the Series C
warrants and the Series D warrants do not carry voting rights. Warburg has
not entered into any voting agreement with us.
Preemptive Rights. As long as Warburg owns at least 5% of the
outstanding shares of our common stock (assuming the exercise of all
outstanding options and warrants and conversion of convertible preferred
stock), if we issue any common stock after the date of the investment,
Warburg has the right to purchase from us that amount of shares required
for it to maintain its proportionate interest in us. To the extent Warburg
utilizes this right to maintain its percentage ownership interest, it will
not be entitled to duplicative protection of antidilution adjustments under
the terms of the warrants.
Governance Matters. We have agreed to elect or appoint one person
nominated by Warburg to serve as a director of both Dime Bancorp and Dime
Savings. In addition, two Warburg representatives will be allowed to attend
and observe meetings of the board of directors of both Dime Bancorp and
Dime Savings, including meetings of any committees, but excluding executive
sessions of the boards of directors.
Warburg will relinquish the right to its board seat and will lose one
observer upon the sale or distribution of 75% or more of its shares of our
common stock (or securities representing common stock). In addition,
Warburg has agreed to relinquish its right to a board seat, but retain the
right to two observers, upon conversion by us to a bank holding company
(should such conversion occur), if such action is
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<PAGE>
necessary to satisfy Federal Reserve Board requirements. In such case,
however, Warburg will be afforded the option of selling down its interest
in us or taking other measures to reduce its voting interest in us and
retain its board seat.
Mr. Howard H. Newman, a managing director of Warburg, became a director
of Dime Bancorp's board on August 1, 2000. Mr. Newman became a director of
Dime Savings effective October 8, 2000.
Transfer Restrictions. With certain exceptions, shares of our stock and
warrants owned by Warburg will be restricted from transfer subject to,
among other things, a schedule whereby 20% of the shares will be freely
tradeable after one year; an additional 30% will be freely tradeable after
two years; and the balance will be freely tradeable after three years. In
addition, Warburg will be permitted to tender into tender or exchange
offers (1) on a pro rata basis with other stockholders, provided at least
60% of the shares sought in the tender or exchange offer have been tendered
by our other stockholders or (2) not opposed by your board of directors.
Warburg will be released from the transfer restrictions if, among other
things, (1) we breach our material obligations in the Investment Agreement
or (2) we execute documentation, or recommend an offer to stockholders,
that would result in a change in control of us.
We have agreed to register the securities acquired by Warburg as the
transfer restrictions expire.
Rights Agreement
Each share of our common stock has attached to it one right issued pursuant
to a stockholder protection rights agreement, dated October 20, 1995, as
amended, between Dime Bancorp and Dime Savings, as successor to The First
National Bank of Boston, as rights agent. Unless the context otherwise
requires, all references to our common stock in this document include the
associated preferred stock purchase rights.
Each right entitles its holder to purchase one-hundredth of a share of our
participating preferred stock 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 our 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.
The rights will not be exercisable until the business day following the
separation time. The rights will expire on the earlier of:
. immediately following our 2002 annual stockholders' meeting,
. their redemption, as described below,
. an exchange of the right for our common stock, as described below, or
. our merger into another corporation pursuant to an agreement entered
into prior to a flip-in date.
Your board may, at any time prior to the 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
29
<PAGE>
purchase shares of our 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 our
common stock, elect to exchange the rights for shares of our common stock at an
exchange ratio of one share of our common stock per right.
Under the rights agreement, we 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 agreement will not apply to a tender offer that has at least a
50% cash component for all shares and sufficient liquidity in any securities
component, provided that the offer is accepted by the beneficial owners of at
least 75% of our outstanding common stock. In addition, the rights agreement
does not apply to Warburg's investment.
The rights will not prevent our being taken over. The rights, however, may
have antitakeover effects. The rights may cause substantial dilution to a
person or group that acquires 20% or more of our outstanding common stock
unless the rights are first redeemed by your board.
VALIDITY OF OUR COMMON STOCK
The validity of the shares of common stock issuable upon exercise of the
LTWs will be passed upon for us by our counsel, Sullivan & Cromwell, New York,
New York.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information reporting requirements of the Securities
Exchange Act of 1934, and in accordance with such laws we file with the SEC
periodic reports, proxy statements and other information relating to our
business, financial condition and other matters.
The reports, statements and other information (including any exhibits,
amendments or supplements to such documents) we file may be inspected and
copied at the public reference facilities maintained by the SEC at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549; and at the following regional
offices of the SEC: 7 World Trade Center, Suite 1300, New York, New York 10048;
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of this material can also be obtained by mail, upon payment of
the SEC's customary charges, by writing to the Public Reference Section at 450
Fifth Street, N.W., Washington, D.C. 20549. The SEC also maintains a web site
on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC. These reports, statements and other information
concerning us can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
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<PAGE>
Incorporation by Reference
The rules of the SEC allow us to "incorporate by reference" information into
this document, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. These
documents contain important information about us.
<TABLE>
<CAPTION>
SEC Filings (File No. 001-13094) Period or Date Filed
-------------------------------- --------------------------------------
<S> <C>
Annual Report on Form 10-K........ Year ended December 31, 1999, as
amended by Form 10K/A filed on March
31, 2000
Quarterly Reports on Form 10-Q.... Quarters ended March 31, 2000 and
June 30, 2000
Reports on Form 8-K............... Reports filed January 20, 2000,
February 29, 2000, March 8, 2000 (2
reports filed on March 8, 2000), March
10, 2000, March 13, 2000 (2 reports
filed on March 13, 2000), March 14,
2000, March 21, 2000, April 19, 2000,
April 28, 2000, May 1, 2000, July 11,
2000 (as amended by Form 8-K/A filed
on October 12, 2000), July 12, 2000,
September 15, 2000 and October 17,
2000
Proxy Statement for 2000 Annual
Stockholders Meeting.............. Filed June 12, 2000
Soliciting Material Pursuant to
Rule 14a-12 on Schedule 14A....... Report filed August 17, 2000
The description of our common
stock set forth in the
registration statement on Form 8-A
filed pursuant to Section 12 of
the Securities Exchange Act,
including any amendment or report
filed with the SEC for the purpose
of updating this description...... Filed January 10, 1995
The description of the rights
agreement, contained in the
registration statement on Form 8-A
filed pursuant to Section 12 of
the Securities Exchange Act,
including any amendment or report
filed with the SEC for the purpose
of updating this description...... Filed November 3, 1995, as amended
June 23, 2000 and July 12, 2000
</TABLE>
We incorporate by reference into this document these reports and filings and
any additional documents that we may file with the SEC after the date of this
document. Those documents include periodic reports, such as annual reports on
Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as
well as proxy statements.
The documents incorporated by reference, including particularly our Annual
Report on Form 10-K for the year ended December 31, 1999, as amended, and our
Quarterly Reports on Form 10-Q filed since the 1999 Form 10-K, contain
financial statements and other information about our financial condition that
is being incorporated by reference into this document.
You can obtain any of the documents incorporated by reference into this
document from us without charge, excluding any exhibits to those documents, by
requesting them in writing or by telephone from us at Investor Relations
Department, 589 Fifth Avenue, New York, New York 10017, telephone: (212) 326-
6170.
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<PAGE>
Please be sure to include your complete name and address in your request. If
you request any incorporated documents, we will mail them to you by first class
mail, or another equally prompt means, within one business day after we receive
your request. In addition, you can obtain copies of these documents from the
SEC's web site. Such documents may also be inspected at the locations described
above.
EXPERTS
The consolidated financial statements of Dime Bancorp, Inc. and subsidiaries
as of December 31, 1999 and 1998, and for each of the years in the three-year
period ended December 31, 1999, have been incorporated by reference into this
document and in the registration statement of which it is a part in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference into this document, and upon the authority of such
firm as experts in accounting and auditing.
32
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated amounts of the expenses of and related to the offerings are as
follows:
<TABLE>
<S> <C>
Registration Fee--Securities and Exchange Commission................ $ *
Printing and engraving expenses..................................... *
Auditing and accounting fees and expenses........................... *
Legal fees and expenses............................................. *
Blue Sky fees and expenses.......................................... *
Stock exchange listing fees and expenses............................ *
Transfer agent fees and expenses.................................... *
Miscellaneous....................................................... *
----
Total............................................................. $ *
====
</TABLE>
--------
* To be supplied by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
Dime's certificate of incorporation provides that Dime's directors will not
be personally liable to Dime or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for
. any breach of the director's duty of loyalty to Dime or its
stockholders,
. acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law,
. unlawful dividends or distributions, or
. any transaction from which the director derived an improper personal
benefit.
Dime's certificate of incorporation further provides that, if Delaware law
is amended to further eliminate or limit the personal liability of directors,
then the liability of a director of Dime will be eliminated or limited to the
fullest extent permitted by Delaware law. Delaware law provides that, subject
to certain limitations in the case of suits brought by a corporation and
derivative suits brought by a corporation's stockholders in its name, a
corporation may indemnify any person who is made a party to any third party
suit or proceeding on account of being a director, officer, employee or agent
of the corporation against expenses, including attorney's fees, judgments,
fines and amounts paid in settlement reasonably incurred by him in connection
with the action, through, among other things, a majority vote of the directors
who were not parties to the suit or proceeding, if the person
. acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation; and
. in a criminal proceeding, had no reasonable cause to believe his conduct
was unlawful.
II-1
<PAGE>
Dime's certificate of incorporation provides that:
. in actions other than by or in the right of the corporation, Dime will,
to the extent permitted by applicable banking law or regulation,
indemnify any person who was or is a party or is threatened to be made a
party to any action because that person is or was or agreed to be a
director or officer of Dime, or is or was serving or agreed to serve at
the request of Dime as a director, officer, partner, trustee,
administrator or fiduciary of another entity, against any costs,
expenses, judgments, fines and amounts paid in settlement, if that
person acted in good faith and in a manner that person reasonably
believed to be in, or not opposed to, the best interests of Dime, and,
with respect to any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful. Expenses may be
advanced to these persons on the condition that they will be repaid if
the person is not entitled to be indemnified.
. in actions by or in the right of the corporation, Dime will, to the
extent permitted by applicable banking law or regulation, indemnify any
person who was or is a party or is threatened to be made a party to any
action by or in the right of Dime to procure a judgment in its favor
because that person is or was or has agreed to become a director or
officer of Dime, or is or was serving or has agreed to serve at the
request of Dime as a director, officer, partner, trustee, administrator
or fiduciary of another entity, against expenses actually and reasonably
incurred by that person in the defense or settlement of such action, if
he or she acted in good faith and in a manner that person reasonably
believed to be in, or not opposed to, the best interest of Dime, except
that no indemnification shall be made in respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to
Dime unless and only to the extent that the court in which such action
was brought determines that such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem
proper. Expenses may be advanced to these persons on the condition that
they will be repaid if the person is not entitled to be indemnified.
. to the extent that a director or officer of Dime has been successful in
defense of any action, that person must be indemnified against all
expenses actually and reasonably incurred by that person.
. Dime may, but is not required to, indemnify and advance expenses to an
employee or agent of Dime in defense of any action by reason of the fact
that such person is or was or has agreed to become an employee or agent
of Dime, or is or was serving or has agreed to serve at the request of
Dime as an employee or agent of another entity, against all costs
actually and reasonably incurred by that person.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT INDEX
<TABLE>
<C> <S>
3.1 Amended and Restated Certificate of Incorporation of Dime (incorporated
by reference to Exhibit 3.1 to Dime's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998, filed with the SEC on May 15, 1998 (SEC
file no. 001-13094)).
3.2 By-laws of Dime (incorporated by reference to Exhibit 3 to Dime's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, filed
with the SEC on August 14, 1997 (SEC file no. 001-13094)).
4.1 Form of Warrant Agreement, dated as of , 2000, between the Registrant
and [ ], pertaining to the Litigation Tracking Warrants.*
4.2 Form of Warrant Certificate (included in Exhibit 4.1).*
4.3 Form of Common Stock Certificate, incorporated by reference from Exhibit
5 to the Form 8-A filed on January 10, 1995.
5 Opinion of Sullivan & Cromwell regarding the validity of shares of Dime
common stock.*
8 Opinion of Sullivan & Cromwell regarding certain federal income tax
matters.*
23.1 Consent of Sullivan & Cromwell (included in opinions in Exhibit 5 and
Exhibit 8).*
23.2 Consent of KPMG LLP.
24 Power of Attorney.
</TABLE>
--------
*To be filed by amendment
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent not more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered here,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Dime Bancorp, Inc., certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on October 20,
2000.
Dime Bancorp, Inc.
/s/ Lawrence J. Toal
By: _________________________________
Name: Lawrence J. Toal
Title: Chief Executive Officer,
President and
Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of October 20, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<C> <S>
/s/ Lawrence J. Toal Chief Executive Officer, President,
___________________________________________ Chief Operating Officer and a
Lawrence J. Toal Director (Principal Executive
Officer)
* Chairman of the Board
___________________________________________
Anthony P. Terracciano
* A Director
___________________________________________
Derrick D. Cephas
* A Director
___________________________________________
Frederick C. Chen
* A Director
___________________________________________
J. Barclay Collins II
* A Director
___________________________________________
Richard W. Dalrymple
* A Director
___________________________________________
James F. Fulton
* A Director
___________________________________________
Fred B. Koons
* A Director
___________________________________________
Virginia M. Kopp
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
* A Director
___________________________________________
James M. Large, Jr.
* A Director
___________________________________________
John Morning
* A Director
___________________________________________
Howard H. Newman
* A Director
___________________________________________
Margaret Osmer-McQuade
* A Director
___________________________________________
Sally Hernandez-Pinero
* A Director
___________________________________________
Eugene G. Schulz, Jr.
* A Director
___________________________________________
Howard Smith
* A Director
___________________________________________
Dr. Norman R. Smith
* A Director
___________________________________________
Ira T. Wender
/s/ Anthony R. Burriesci Chief Financial Officer (Principal
___________________________________________ Financial Officer)
Anthony R. Burriesci
/s/ John F. Kennedy Controller (Principal Accounting
___________________________________________ Officer)
John F. Kennedy
</TABLE>
--------
*By: /s/ Lawrence J. Toal
Lawrence J. Toal
Attorney-in-fact
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Document Description
------- --------------------
<C> <S>
3.1 Amended and Restated Certificate of Incorporation of Dime
(incorporated by reference to Exhibit 3.1 to Dime's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1998, filed with the SEC
on May 15, 1998 (SEC file no. 001-13094)).
3.2 By-laws of Dime (incorporated by reference to Exhibit 3 to Dime's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997,
filed with the SEC on August 14, 1997 (SEC file no. 001-13094)).
4.1 Form of Warrant Agreement, dated as of , 2000, between the
Registrant and [ ], pertaining to the Litigation Tracking
Warrants.*
4.2 Form of Warrant Certificate (included in Exhibit 4.1).*
4.3 Form of Common Stock Certificate, incorporated by reference from
Exhibit 5 to Dime's Registration Statement on Form 8-A filed on
January 10, 1995.
5 Opinion of Sullivan & Cromwell regarding the validity of shares of
Dime common stock.*
8 Opinion of Sullivan & Cromwell regarding certain federal income tax
matters.*
23.1 Consent of Sullivan & Cromwell (included in opinions in Exhibit 5 and
Exhibit 8).*
23.2 Consent of KPMG LLP.
24 Power of Attorney.
</TABLE>
--------
* To be filed by amendment.
