SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(RULE 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 10)
DIME BANCORP, INC.
(Name of Subject Company)
DIME BANCORP, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
25429Q
(CUSIP Number of Class of Securities)
JAMES E. KELLY, ESQ.
GENERAL COUNSEL
DIME BANCORP, INC.
589 FIFTH AVENUE
3RD FLOOR
NEW YORK, NEW YORK 10017
(212) 326-6170
(Name, address and telephone number of person authorized to receive notice
and communications on behalf of the person(s) filing statement)
Copy to:
MITCHELL S. EITEL, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
[_] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
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This Amendment No. 10 amends and supplements the solicitation/
recommendation statement on Schedule 14D-9 filed with the Securities and
Exchange Commission on March 21, 2000, as subsequently amended on March 21,
2000, March 22, 2000, March 24, 2000, March 30, 2000, April 6, 2000, April 7,
2000, April 12, 2000, April 14, 2000 and May 1, 2000 (as so amended, the
"Schedule 14D-9"), by Dime Bancorp, Inc., a Delaware corporation ("Dime"), in
relation to the exchange offer disclosed in the Schedule TO, dated March 15,
2000 (as amended from time to time, the "Schedule TO"), of North Fork
Bancorporation, Inc., a Delaware corporation ("North Fork"), and Fleet Boston
Corporation, a Rhode Island corporation ("FleetBoston"), to exchange each issued
and outstanding share of Dime common stock, par value $0.01 per share, for
0.9302 of a share of North Fork common stock, par value $0.01 per share, and
$2.00 in cash, upon the terms and subject to the conditions described in the
Schedule TO, the Registration Statement filed on Form S-4 by North Fork on March
15, 2000 and the Prospectus relating to North Fork's common stock dated March
14, 2000 and contained therein (each of which may be amended from time to time
and each of which is an Exhibit and incorporated by reference into North Fork's
Schedule TO).
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Items 4 and 7 are hereby supplemented and amended by adding the following:
On May 2, 2000, Dime began sending to its shareholders the letter of
Lawrence J. Toal, dated May 2, 2000, that is included herewith as Exhibit
(a)(26) and is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
Item 8 is hereby supplemented and amended by adding the following:
On April 24, 2000, North Fork filed counterclaims against Dime and its
CEO, Larry Toal, in Dime's suit against North Fork in the United States District
Court for the Eastern District of New York. Among other things, North Fork's
counterclaims challenged the validity of statements made by Dime in press
releases on March 6 and 7, 2000 -- claims that North Fork had already raised in
the Delaware litigation. North Fork's counterclaims further focused on a series
of press releases and other public statements attributable to Dime, alleging
that those various statements were false and misleading. North Fork alleged that
this conduct violated Sections 14(a), 14(e) and, with respect to Mr. Toal, 20(a)
of the Securities Exchange Act of 1934. In connection with its counterclaims,
North Fork petitioned Magistrate Judge Pollak for expedited discovery. Dime
countered that the claims were baseless, and should be dismissed. After
expedited briefing on Friday, April 28, 2000, Magistrate Judge Pollak rejected
North Fork's request for expedited discovery, finding that North Fork's
counterclaims appeared deficient on their face, and that North Fork should not
be permitted to take expedited discovery of Dime on such claims.
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ITEM 9. EXHIBITS.
Item 9 is hereby supplemented and amended by adding the following:
Exhibit
Number Description
- ------ -----------
(a)(26) Letter to Shareholders dated May 2, 2000.
(i)(3) North Fork's counterclaims filed on April 24, 2000 in the United
States District Court for the Eastern District of New York
against Dime and its CEO, Larry Toal, in Dime's suit against
North Fork.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DIME BANCORP, INC.
By: /s/ James E. Kelly
--------------------
Name: James E. Kelly
Title: General Counsel
Dated: May 2, 2000
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EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
(a)(26) Letter to Shareholders dated May 2, 2000.
(i)(3) North Fork's counterclaims filed on April 24, 2000 in the United
States District Court for the Eastern District of New York
against Dime and its CEO, Larry Toal, in Dime's suit against
North Fork.
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Exhibit (a)(26)
[DIME LOGO]
DIME BANCORP, INC.
May 2, 2000
Dear Fellow Stockholder:
On Friday, April 28, 2000, Dime and Hudson United announced a mutual
decision to terminate their pending merger agreement. Therefore, the special
meeting of stockholders to vote on the proposed merger, scheduled for May 17th,
has been cancelled.
I want to assure you that Dime's Board of Directors and management team
are dedicated to realizing the full value of our franchise for the benefit of
our stockholders. Together with our financial and legal advisors, we will
undertake a comprehensive exploration of all strategic options.
We have a strong record of financial performance - including fifteen
consecutive quarters of higher operating earnings - and a solid balance sheet.
Our record first quarter earnings exceeded Wall Street expectations. Dime has
achieved a more commercial bank-like profile with its diversified earnings
stream and attractive loan and deposit mix. Dime's outstanding consumer and
business banking franchise serves some of the nation's most attractive markets,
and our North American Mortgage Company subsidiary has evolved into one of the
premier mortgage banks in the country.
I would also like to reiterate that Dime's Board of Directors has
rejected North Fork's hostile offer and believes that it is inadequate, based on
unachievable assumptions and fraught with risk. North Fork's failure to meet
Wall Street's estimates for its first quarter earnings only underscores these
risks. Dime is seven times larger than North Fork's next largest acquisition and
almost three times larger than all of its acquisitions over the past four years
combined.
We are confident that there are better strategic alternatives and we
urge you not to tender your shares to North Fork. If you have any questions or
require any assistance, please call Innisfree M&A Incorporated at
1-888-750-5834.
We have great confidence in Dime's future and thank you for your
continued support.
Sincerely yours,
/s/ Lawrence J. Toal
Lawrence J. Toal
Chief Executive Officer
Investors are urged to read Dime's solicitation/recommendation
statement filed with the Securities and Exchange Commission on Schedule 14D-9 on
March 21, 1999, and any amendments or supplements to the statement when they
become available, because they contain important information. Each of these
documents has been or will be filed with the SEC and investors may obtain them
for free from the SEC at the SEC's website (www.sec.gov) or from Dime by
directing such request to: Dime Bancorp, Inc., Investor Relations Dept., 589
Fifth Avenue, New York, NY, telephone (212-326-6170), or Innisfree M&A
Incorporated at (888) 750-5834.
Exhibit (i)(3)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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DIME BANCORP, INC., :
Plaintiff, :
v. :
NORTH FORK BANCORPORATION, INC. and : No. 00-CV-1651
JOHN A. KANAS, JOHN BOHLSEN, THOMAS (ERK)(CLP)
M. O'BRIEN, PARK T. ADIKES, IRVIN L. :
CHERASHORE, ALLAN C. DICKERSON, ANSWER AND COUNTER-
LLOYD A. GERARD, DANIEL M. HEALY, : CLAIMS OF NORTH FORK
PATRICK E. MALLOY, III, RAYMOND A. BANCORPORATION, INC.
NIELSON, JAMES F. REEVE, GEORGE H. : --------------------
ROWSOM, KURT R. SCHMELLER, and
RAYMOND W. TERRY, JR., :
Defendants. :
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NORTH FORK BANCORPORATION, INC., :
Counterclaim-plaintiff, :
v. :
DIME BANCORP, INC. and LAWRENCE J. :
TOAL,
:
Counterclaim-defendants.
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Defendant North Fork Bancorporation, Inc. ("North Fork"), by and
through its undersigned attorneys, Skadden, Arps, Slate, Meagher & Flom LLP,
responds as follows to plaintiff's amended complaint dated April 13, 2000 (the
"Amended Complaint"):
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1. Denies the allegations contained in paragraph 1, which are not
allegations of fact but impertinent allegations that are more appropriate in a
memorandum of law than in a pleading.
2. Denies the allegations contained in paragraph 2, except admits that
it has disclosed a section entitled "RISK FACTORS," and respectfully refers the
Court to North Fork's filings with the United States Securities and Exchange
Commission (the "SEC") for the true and complete terms therein.
3. Denies the allegations contained in paragraph 3, and respectfully
refers the Court to North Fork's filings with the SEC for the true and complete
terms therein.
4. Denies the allegations contained in paragraph 4, and respectfully
refers the Court to North Fork's filings with the SEC for the true and complete
terms therein.
5. Denies the allegations contained in paragraph 5.
6. Denies the allegations contained in paragraph 6.
7. Denies the allegations contained in paragraph 7.
8. Denies the allegations contained in paragraph 8.
9. Denies the allegations contained in paragraph 9, except admits that
plaintiff purports to base jurisdiction over the subject matter of this action
under Section 27 of the Securities Exchange Act of 1934 (the "Exchange Act"),
together with 28 U.S.C. ss.ss. 1367 and 1391; and declines to respond to so much
of the first and second
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sentences of paragraph 9 as constitutes legal conclusions on the ground that no
response is required thereto.
10. Denies the allegations contained in paragraph 10, and further avers
that such allegations constitute legal conclusions to which no response is
required thereto, except admits that plaintiff purports to assert venue in this
judicial district under Section 27 of the Exchange Act, together with 28 U.S.C.
ss. 1391.
11. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations contained in paragraph 11.
12. Admits the allegations contained in paragraph 12, except denies
that North Fork is properly a defendant in this action.
13. Admits the allegations contained in paragraph 13, except denies
that Mr. Kanas is properly a defendant in this action.
14. Admits the allegations contained in paragraph 14, except denies
that the individuals listed as defendants are properly defendants in this
action.
15. Declines to respond to so much of the first sentence of paragraph
15 as constitutes legal conclusions on the ground that no response is required
thereto; and denies the remaining allegations contained in paragraph 15.
16. Denies the allegations contained in paragraph 16.
17. Admits that certain of the Director Defendants signed North Fork's
Form S-4, filed with the SEC on March 14, 2000, and that Mr. Healy has signed
certain of North Fork's disclosure documents; denies the remaining allegations
contained in
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paragraph 17, and respectfully refers the Court to North Fork's Form S-4, filed
on March 14, 2000, for the true and complete terms therein.
18. Declines to respond to so much of paragraph 18 as constitutes
legal conclusions on the ground that no response is required thereto; and denies
the remaining allegations contained in paragraph 18.
19. Declines to respond to so much of the first sentence of paragraph
19 as constitutes legal conclusions on the ground that no response is required
thereto; and denies the remaining allegations contained in paragraph 19.
20. Denies the allegations contained in paragraph 20, except admits
that Dime and Hudson purportedly entered into a merger agreement, and
respectfully refers the Court to the Dime-Hudson Merger Agreement for the true
and complete terms and conditions therein.
21. Denies knowledge or information sufficient to form a belief as to
the truth of the allegation that the registration statement and proxy statement
were mailed to all of Dime's stockholders; denies the remaining allegations
contained in paragraph 21, and respectfully refers the Court to the Dime-Hudson
Merger Agreement for the true and complete terms therein.
22. Denies the allegations contained in the first sentence of paragraph
22, except admits that on March 5, 2000, North Fork made a public announcement
with respect to an exchange offer for Dime's outstanding shares, and
respectfully refers the Court to North Fork's March 5, 2000 press release for
the true and complete terms of that announcement.
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23. Admits that North Fork and Fleet have entered into a Stock Purchase
Agreement; denies the remaining allegations contained in paragraph 23, and
respectfully refers the Court to the North Fork-FleetBoston Stock Purchase
Agreement for the true and complete terms therein.
24. Admits that North Fork posted an announcement on its website which
related to the exchange offer, and respectfully refers the Court to North Fork's
website for the true and complete terms therein.
25. Admits that on March 6, 2000, certain media coverage appeared
relating to the announcement of a proposed North Fork exchange offer for Dime
shares; denies knowledge or information sufficient to form a belief as to the
truth of the remaining allegations contained in paragraph 25, and respectfully
refers the Court to the newspapers and so-called "[b]roadcast reports" to which
Dime refers for the true and complete content of those "[b]roadcast reports."
26. Admits the allegations contained in the first and second sentences
of paragraph 26; denies knowledge or information sufficient to form a belief as
to the truth of the allegations contained in the third sentence of paragraph 26;
denies the allegations contained in the fourth sentence of paragraph 26, except
admits that John Kanas indicated that "about 350 people [were] on the line;" and
respectfully refers the Court to the transcript on file with the SEC to which
Dime refers for the true and complete terms therein.
27. Denies the allegations contained in paragraph 27, except admits
that on Monday, March 6, North Fork filed certain materials with the SEC and
that, upon
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information and belief, FleetBoston filed a press release, and respectfully
refers the Court to North Fork's preliminary proxy materials and the FleetBoston
press release for the true and complete terms therein.
28. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations contained in paragraph 28, and respectfully refers
the Court to the March 7 Dime press release for the true and complete terms
therein.
29. Denies the allegations contained in paragraph 29, and respectfully
refers the Court to the March 9 Dime press release for the true and complete
terms therein.
30. Admits the allegations contained in paragraph 30.
31. Denies the allegations contained in paragraph 31, and respectfully
refers the Court to the March 21 announcement for the true and complete contents
thereof.
32. Denies the allegations contained in paragraph 32, except admits
that Dime commenced this action on March 21, 2000, and respectfully refers the
Court to the March 21 Complaint for the true and complete terms and allegations
therein.
33. Denies the allegations contained in the first, second and third
sentences of paragraph 33, except admits that, at a point in time, North Fork
filed a supplemental proxy statement and a revised registration statement (which
included a supplemental preliminary prospectus) and that North Fork had moved to
dismiss Dime's complaint. Denies the allegations contained in the first, second,
third, fourth and fifth sentences of the first bullet-point paragraph under
paragraph 33, and respectfully refers
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the Court to North Fork's SEC filings for the true and complete terms therein;
denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in the sixth sentence of the first bullet-point
paragraph under paragraph 33; denies the allegations contained in the first
sentence of the second bullet-point paragraph under paragraph 33, and
respectfully refers the Court to North Fork's SEC filings for the true and
complete terms therein; and denies the allegations contained in the second,
third and fourth sentences of the second bullet-point paragraph under paragraph
33; denies the allegations contained in the third bullet-point paragraph under
paragraph 33; denies the allegations contained in the fourth bullet-point
paragraph under paragraph 33.
34. Denies the allegations contained in the first sentence of paragraph
34 except admits that at some point in time Dime served a brief in opposition to
North Fork's motion to dismiss, and respectfully refers the Court to Dime's
brief for the true and complete terms therein; admits that North Fork filed an
Amendment No. 6 to its Tender Offer Statement on Schedule TO on April 11, 2000
("Supplemental Tender Offer Statement"); denies the allegations contained in the
second, third and fourth sentences of paragraph 34, and respectfully refers the
Court to North Fork's Supplemental Tender Offer Statement for the true and
complete terms therein.
35. In response to the allegations contained in paragraph 35, North
Fork repeats and realleges paragraphs 1 through 34 hereof as if fully set forth
herein.
36. Denies the allegations contained in paragraph 36, and respectfully
refers the Court to North Fork's Supplemental Tender Offer Statement for the
true and complete terms therein.
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37. Denies the allegations contained in paragraph 37, and respectfully
refers the Court to North Fork's Supplemental Tender Offer Statement for the
true and complete terms therein.
38. Denies knowledge or information sufficient to form a belief about
Dime's asserted "total annual compensation expense;" denies the remaining
allegations contained in paragraph 38, and respectfully refers the Court to
North Fork's Supplemental Tender Offer Statement for the true and complete terms
therein.
39. Denies the allegation contained in paragraph 39, and respectfully
refers the Court to North Fork's Supplemental Tender Offer Statement for the
true and complete terms therein.
40. Denies the allegations contained in paragraph 40, and respectfully
refers the Court to North Fork's SEC filings for the true and complete terms
therein.
41. Denies the allegations contained in paragraph 41, and respectfully
refers the Court to the March 22, 2000 article in The Daily Deal, and North
Fork's Form 8-K, dated March 13, 2000, for the true and complete terms therein.
42. Declines to respond to so much of paragraph 42 as constitutes legal
conclusions on the ground that no response is required thereto; denies knowledge
or information sufficient to form a belief as to the truth of Dime's belief that
"NAMCO is a major subsidiary;" and to the extent a response is required, denies
the allegations contained in paragraph 42.
43. Denies the allegations contained in the first sentence of paragraph
43; denies the allegations contained in the second sentence of paragraph 43,
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and respectfully refers the Court to the March 21, 2000 article in SNL Bank
Daily to which Dime refers for the true and complete terms therein.
44. Denies the allegations contained in the first and second sentences
of paragraph 44; denies the allegations contained in the third sentence of
paragraph 44, and respectfully refers the Court to the March 21, 2000 article in
SNL Bank Daily to which Dime refers for the true and complete terms therein.
45. Declines to respond to so much of paragraph 45 as constitutes legal
conclusions on the ground that no response is required thereto; to the extent a
response is required, denies the allegations contained in paragraph 45.
46. Declines to respond to so much of paragraph 46 as constitutes legal
conclusions on the ground that no response is required thereto; to the extent a
response is required, denies the allegations contained in paragraph 46, and
respectfully refers the Court to the articles in The Daily Deal and The American
Banker to which Dime refers for the true and complete terms therein.
47. Denies the allegations contained in paragraph 47.
48. In response to the allegations contained in paragraph 48, North
Fork is unable to respond to the extent that Dime purports to repeat and
reallege each and every allegation contained in paragraphs 1 through 62,
inasmuch as there are not 62 paragraphs in the entire amended complaint;
assuming that the reference to "62" is intended as "47," North Fork repeats and
realleges its answers to paragraphs 1 through 47 as if fully set forth herein.
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49. Declines to respond to so much of paragraph 49 as constitutes legal
conclusions on the ground that no response is required thereto; to the extent a
response is required, denies the allegations contained in paragraph 49.
50. Declines to respond to so much of paragraph 50 as constitutes legal
conclusions on the ground that no response is required thereto; to the extent a
response is required, denies the allegations contained in paragraph 50.
51. Denies the allegations contained in paragraph 51.
52. Denies the allegations contained in paragraph 52.
53. Denies the allegations contained in paragraph 53.
AS AND FOR A FIRST AFFIRMATIVE DEFENSE
54. To the extent that the Complaint purports to allege a cause of
action based upon fraud, it lacks the particularity required by Fed. R. Civ. P.
9(b) and Section 21D of the Exchange Act, 15 U.S.C. ss. 78u-4.
AS AND FOR A SECOND AFFIRMATIVE DEFENSE
55. Because of the presence of cautionary language, pursuant to the
"bespeaks caution" doctrine, Dime's claims based upon forward-looking statements
are non-actionable.
AS AND FOR A THIRD AFFIRMATIVE DEFENSE
56. Plaintiff's request for injunctive relief is barred under the
equitable doctrine of estoppel.
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AS AND FOR A FOURTH AFFIRMATIVE DEFENSE
57. Plaintiff's request for injunctive relief is barred under the
equitable doctrine of unclean hands.
AS AND FOR A FIFTH AFFIRMATIVE DEFENSE
58. The supplemental disclosures made by North Fork render Plaintiff's
claims moot.
AS AND FOR A SIXTH AFFIRMATIVE DEFENSE
AND FOR COUNTERCLAIMS FOR INJUNCTIVE AND OTHER
RELIEF AGAINST DIME BANCORP. INC. AND LAWRENCE J. TOAL
Counterclaim-plaintiff North Fork, by and through its undersigned
counsel, as and for its counterclaims against counterclaim-defendants Dime
Bancorp, Inc. ("Dime") and Lawrence J. Toal ("Toal"), alleges upon knowledge as
to itself and its own actions, and as to all matters of public record, and upon
information and belief based upon information known to North Fork as to all
other matters, as follows:
PRELIMINARY STATEMENT
59. On March 5, 2000, North Fork announced its intention to commence an
exchange offer for all of Dime's shares (the "Exchange Offer" or the "North Fork
Exchange Offer"). As of April 20, the North Fork Exchange Offer had a value 40%
greater than the implied value to Dime shareholders of a proposed merger between
Dime and Hudson United Bancorp ("Hudson"), a transaction that has received and
continues to receive the approval and blessing of Dime's Chairman and Chief
Executive Officer, counterclaim-defendant Toal, and the rest of the Dime board
of directors. Since March 5, counterclaim-defendant Dime, under the active
direction and
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control of Toal, has waged an all-out campaign against North Fork and the
Exchange Offer, out of fear that Dime shareholders would reject the proposed
Dime-Hudson merger. These fears have proven to be well-founded, as exemplified
in a March 13 Institutional Shareholder Services research report recommending
that Dime shareholders vote against the Dime-Hudson merger agreement, in light
of North Fork's Exchange Offer.
60. In an effort to stave off the inevitable, Dime has attempted to
interfere with the Exchange Offer on a number of fronts. Dime has delayed a
shareholder vote on the Dime-Hudson merger that was originally scheduled for
March 15, but was adjourned to March 24, and was adjourned again, by almost two
months to May 17. Dime has also commenced three separate court actions relating
to the Exchange Offer - two directly against North Fork (the instant action and
an action in Supreme Court, New York County, alleging violations of the Donnelly
Act) and one against one of North Fork's financial advisors, Salomon Smith
Barney (to which North Fork is not a party).
61. Dime and Toal have also made numerous materially false and
misleading statements and omissions to Dime shareholders.
Counterclaim-defendants' purpose for these false and misleading statements and
omissions is two-fold: (1) to taint the solicitation process and (2) to mislead
Dime shareholders into not tendering their shares into the Exchange Offer.
THE PARTIES
62. Counterclaim-plaintiff North Fork, a bank holding company, is a
publicly traded corporation organized and existing under the laws of the State
of
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Delaware, with its principal executive offices in Melville, New York. Through
its subsidiary, North Fork Bank (a New York state-chartered commercial bank),
North Fork provides a variety of banking and financial services to middle-market
and small business organizations, local government units, and retail customers
in the New York metropolitan area.
63. Counterclaim-defendant Dime is a savings and loan holding company
organized and existing under the laws of the State of Delaware, with its
principal executive offices in Manhattan.
64. Counterclaim-defendant Toal is the Chairman and Chief Executive
Officer of Dime. As alleged more fully below, certain of the false and
misleading statements upon which these counterclaims are based were made by
Toal; the remainder ere made by Dime with Toal's knowledge and active
involvement.
JURISDICTION
65. The counterclaims asserted herein arise under Sections 14(a), 14(e)
and 20(a) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C.
ss.78n(a) and (e), and 78t, and the rules and regulations promulgated
thereunder. This Court has jurisdiction over these counterclaims under Section
27 of the Exchange Act, 15 U.S.C. ss. 78aa, 28 U.S.C. ss.ss. 1367 and 1391, and
pursuant to principles of supplemental and ancillary jurisdiction.
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FACTUAL BACKGROUND
A. THE DIME-HUDSON MERGER AGREEMENT
66. On September 15, 1999, Dime and Hudson entered into a merger
agreement (the "Merger Agreement"), providing for a merger of Hudson and Dime
(the "Dime-Hudson Merger"). Under the Merger Agreement, each share of Hudson
would be converted into one share of the surviving entity, to be called "Dime
United Bancorp Inc.," and each share of Dime would be converted into 0.60255
Dime United shares.
67. Consummation of the Dime-Hudson Merger is conditioned upon, among
other things, approval of the Merger Agreement by Dime's shareholders. Based
upon the share prices of Dime and Hudson stock prior to the announcement of the
Merger Agreement, the transaction did not provide a premium to Dime
shareholders. After the announcement of the Merger Agreement, Dime's stock price
dropped 27%, from $17.75 per share on September 14, 1999 to $12.97 per share on
March 3, 2000 (the last trading day prior to the announcement of the North Fork
Exchange Offer). Since the announcement of North Fork's Exchange Offer, the
price of Dime's shares has risen, closing at $18.19 per share on the last
trading day before the filing of these Counterclaims. As of that date, the value
of North Fork's Exchange Offer to Dime shareholders was 40% greater than the
implied value to Dime shareholders of the Dime-Hudson Merger.
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B. THE NORTH FORK EXCHANGE OFFER AND FLEETBOSTON AGREEMENT
68. On March 5, 2000, North Fork announced its intention to commence
the Exchange Offer, pursuant to which each share of Dime stock would be
exchanged for 0.9302 shares of North Fork common stock and $2.00 in cash. The
Exchange Offer provided a 41% premium over the implied value to Dime's
shareholders of the Dime-Hudson Merger (based on the closing prices of North
Fork and Hudson common stock on the New York Stock Exchange on March 3, 2000).
Through the Exchange Offer and a proposed second step-merger, North Fork intends
to acquire control of, and ultimately the entire equity interest in, Dime.
However, the Exchange Offer is conditioned upon, among other things, Dime
shareholders' rejection of the Merger Agreement. Towards that end, North Fork
also announced that it intended to solicit proxies from Dime shareholders to
vote in opposition to the proposed Dime-Hudson Merger.
C. COUNTERCLAIM DEFENDANTS' RESPONSE TO THE NORTH FORK EXCHANGE OFFER IS TO
DECEIVE DIME SHAREHOLDERS THROUGH MATERIALLY FALSE AND MISLEADING
STATEMENTS
69. Counterclaim-defendants wasted no time in attempting to influence
Dime shareholders against North Fork and, thereby, protect a transaction whereby
counterclaim-defendant Toal would retain his position as Chairman and CEO. Among
other things:
o The March 6 Press Release
70. In a story reported over the Business Wire on Monday morning, March
6 at 1:05 a.m., only a few hours after North Fork first announced its Exchange
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Offer, and prior to any meeting of the Dime directors to consider the North Fork
Exchange Offer, counterclaim-defendant Toal responded swiftly and negatively to
North Fork's Exchange Offer, stating:
North Fork's offer is an attempt to destroy a transaction that is in
the best interest of Dime, its shareholders and the communities it
serves. . . . We are strongly committed to [the Hudson] transaction,
which will enhance the value of our company.
The press release continued, "Mr. Toal added that, as a matter of fiduciary
responsibility to Dime shareholders, a meeting would be scheduled to consider
North Fork's proposal in due course."
71. The March 6 press release was materially false and misleading in
that, among other things:
o it falsely suggests that Dime's position was a response to specific
facts relating to North Fork's Exchange Offer when, in fact, it was
the product of Toal's determination to oppose at all costs any
acquisition of Dime by North Fork;
o it purports to ascribe a motive to North Fork's conduct without
disclosing the basis (if any) upon which Dime's characterization of
North Fork's motive was based,
o it fails to disclose the bases (if any) for the statement that "[we
are strongly committed to this (the Dime-Hudson) transaction" in the
face of the financially superior North Fork Exchange Offer, and
o it falsely suggests that the Dime board would give consideration to
the North Fork Exchange Offer at a meeting "in due course" when, in
fact, and as events subsequently bore out, the Dime board's
consideration of the Exchange Offer was perfunctory and preordained.
o The March 7 Press Release
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72. Counterclaim-defendants' wrongful conduct continued the following
day. In a March 7 press release (the "March 7 Press Release"), Dime stated,
among other things, "that its board of directors ha[d] unanimously rejected,
both strategically and financially, the [North Fork Exchange Offer]." In
addition, the press release stated that "[t]he board recommend[ed] that Dime
shareholders not tender their shares to North Fork."
73. The March 7 Press Release contains materially false and misleading
information. For example, it states that:
We know North Fork's operations well, and have previously concluded
that a combination with North Fork would not be in the best interests of
our shareholders.
The statement "we have previously concluded that a combination with North Fork
would not be in the best interests of [Dime] shareholders," is materially false
and misleading because it implies that Dime's board made a prior determination
that such a merger would not be in the best interests of Dime's shareholders.
Based upon the preliminary status of North Fork's prior discussions with Dime,
Dime's board would likely not have made and therefore North Fork believes did
not make, such a determination. Dime also failed to disclose the basis or bases
upon which Dime had come to its purported previous "conclusion." Also, Dime
mischaracterizes the nature of North Fork's business. Dime had previously
included North Fork as one of a peer group of banks against which to compare the
projected financial performance of a combined Dime-Hudson entity. Dime's proxy
materials make it clear that perhaps the very reason for its proposed
transaction with Hudson was that such a transaction would purportedly move Dime
closer to a
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commercial banking business similar to that of the group of banks identified by
Dime - a group which included North Fork. Dime has not provided and cannot
possibly provide a believable explanation as to why only several months ago it
believed that North Fork was a high performing commercial bank worthy of
emulating, but now is asking its shareholders to reject the North Fork offer on
the basis that North Fork is impliedly an underperforming thrift rather than a
high performing bank.
o Dime's Proxy Statement Supplement and Investor Presentation Materials
74. On March 8, Dime filed a Form 8-K with the SEC. That report
contained (a) a supplement, dated March 7, 2000, to the joint proxy statement of
Dime and Hudson and (b) presentation materials for investors (the "investor
Presentation Materials"), each of which contained information with respect to
the North Fork Exchange Offer.
75. The 8-K and exhibits thereto also contain materially false and
misleading information. For example, page 2 of the Investor Presentation
Materials states that the Dime-Hudson Merger will result in "significant" price
to earnings ("P/E") multiple expansion. This statement is materially false and
misleading because, contrary to Dime's expectations, since the announcement of
the Dime-Hudson Merger, the price of Hudson's stock has declined from $29.25 per
share on September 14, 1999 to $21.00 per share on April 20, 2000 - a 28%
decline. One of Dime's primary justifications for the Dime-Hudson Merger was --
and continues to be -- the expectation that the Dime-Hudson Merger will result,
in a P/E multiple expansion for Dime stockholders. Based on the P/E multiples
afforded Hudson and Dime since the announcement of the Dime-Hudson
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Merger, the Dime-Hudson Merger has not only not produced Dime's anticipated
multiple expansion, but has had precisely the opposite effect -- it has resulted
in a significant contraction in the implied P/E multiple of the combined
Dime-Hudson. Accordingly, it is completely misleading for Dime to continue to
cite this multiple expansion as an expectation resulting from the Dime-Hudson
Merger when, as actual events have demonstrated, such expectation had no
reasonable basis in fact at the time it was made.
76. Page 2 of the Investor Presentation Materials states that the
merger with Hudson is "accretive" to earnings per share for Dime stockholders.
This statement is materially false and misleading because the Dime-Hudson Merger
is, in fact, dilutive to Dime stockholders by 6.8% in 2000 and -- at best--
approximately break even in 2001, even assuming all of Dime's cost savings are
achieved.
o The March 10 Newspaper Advertisement
77. On March 10, 2000, Dime caused an advertisement (the "March 10 Ad")
to be published in newspapers of general circulation, including The New York
Times and The Wall Street Journal. This advertisement contained materially false
and misleading information with respect to the North Fork Exchange Offer and the
Dime-Hudson Merger. Among other things, the March 10 Ad states that the
Dime-Hudson Merger "paves the way for potentially significant P/E multiple
expansion." This statement is materially false and misleading for the reasons
alleged above in paragraph 75.
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78. The March 10 Ad also states that the Dime-Hudson Merger is
"accretive" to earnings per share for Dime stockholders. This statement is
materially false and misleading for the reasons alleged above in paragraph 76.
o The March 15 Press Release
79. On March 15, Dime issued a press release (the "March 15 Press
Release") reacting to North Fork's March 14 filing of its Exchange Offer,
stating in conclusory fashion that the Exchange Offer "is disruptive, inadequate
and clearly not in the best interests of Dime shareholders."
80. The March 15 press release continues by describing certain "prior
discussions" between North Fork and Dime in the Summer of 1998 concerning a
potential business combination between the two companies. The March 15 Press
Release pertinently provides that:
We are deeply disappointed that North Fork has chosen to proceed with
an offer that has already been unanimously rejected, both strategically
and financially, by Dime's board of directors. The offer is disruptive,
inadequate and clearly not in the best interests of Dime shareholders.
As noted in North Fork's filing, we held prior discussions about a
potential merger of Dime and North Fork. These discussions occurred two
years ago. We mutually decided a combination did not make sense.
Nothing has changed. We continue to have grave concerns about the
consequences of North Fork's hostile offer on our shareholders,
customers and the communities we serve.
(emphasis added).
81. This statement is materially false and misleading. Among other
things, the statement that in 1998 North Fork and Dime had "mutually decided
that a combination did not make sense" was false. Dime further fails to disclose
the reasons
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why Dime determined not to pursue discussions with North Fork. In addition, the
statement is false and misleading for the reasons alleged above in paragraph 73.
o The March 21 Press Release
82. On March 21, Dime again issued a press release (the "March 21 Press
Release") announcing that its board of directors had unanimously rejected the
Exchange Offer as filed with the SEC. The March 21 Press Release pertinently
states:
The Dime board's conclusion that combining with North Fork makes no
strategic or financial sense is the same conclusion we reached a year
and a half ago when our two companies discussed a potential merger and
mutually agreed not to proceed . . . . Consistent with its fiduciary
duties, Dime's board of directors believes that it cannot approve North
Fork's offer, whether or not the proposed merger of equals with Hudson
United is completed.
(emphasis added)
83. These statements are materially false and misleading for the
reasons alleged above in paragraphs 73 and 81.
84. Perhaps influenced by the tide of the Dime shareholders' sentiment,
Dime also announced in the March 21 Press release that the Dime board decided to
delay the shareholder vote, by almost two months, from March 24 to May 17, 2000.
Dime's purported reason for the additional delay was to provide its shareholders
with "more information." This statement is materially false and misleading
because Dime postponed the shareholder vote only after it became clear that
Dime's shareholders would vote down the Dime-Hudson Merger. Dime's conduct since
then has demonstrated that it no longer believes the Dime-Hudson Merger to be a
viable alternative to the North Fork Exchange Offer, but Dime has failed to
disclose this
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determination to Dime shareholders. Among other things, Dime has failed to take
steps that ordinarily would be taken if Dime truly intended to seek to obtain
the needed vote of Dime shareholders for the Dime-Hudson Merger. This includes
Dime's failure to send additional proxy cards (or other materials related to the
Dime-Hudson Merger) to Dime shareholders subsequent to its March 21 announcement
of the adjournment of the shareholders' meeting to May 17 -- despite the fact
that Dime announced that it was adjourning the vote in order to provide its
shareholders with "more information." In fact, Dime last sent proxy cards to all
of its shareholders on or about March 8. On or about March 21, Dime sent a
letter to its shareholders promising that it would send additional materials
regarding the May 17 meeting to shareholders of record on March 30, 2000 -- yet
despite this commitment no such materials have been sent.
o The Purported Waiver of the "No-Talk" Provision
85. As part of the Merger Agreement between Dime and Hudson, Dime
agreed that it would not discuss any merger or acquisition proposal that might
be submitted by a third party with such third party (the "No Talk Provision").
The No Talk Provision did not contain any "fiduciary out" or "superior proposal"
exception that is normally contained in merger agreements between public
companies.
86. In light of the existence of the No Talk Provision, North Fork's
Chief Executive Officer wrote to Hudson's Chief Executive Officer requesting:
(i) Hudson's consent to North Fork entering into discussions with Dime and (ii)
a waiver of the restrictions on Dime's right to negotiate with North Fork.
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87. By letter dated April 10, 2000, Hudson's Chairman, President and
CEO wrote North Fork to advise that "we have been unable to reach an agreement
with Dime on the terms of the waiver."
88. The next day, Dime issued a press release that (as reported over
the PR Newswire) announced that:
although it had not received a copy of any correspondence from Hudson
to North Fork, the fact of the matter is that Dime advised Hudson in
writing last week that Dime did not object to Hudson granting an
unconditional waiver of the provision in the Dime-Hudson merger
agreement that restricts Dime's ability to talk to other parties
including North Fork.
A spokesman for Dime said, "So that there is no further confusion with
respect to this issue, Dime consents to Hudson United unconditionally
waiving the 'no talk' provision with respect to North Fork and all
other parties. The decision is solely for Hudson United to make."
(emphasis added)
89. The next day, Hudson issued a press release that, as reported over
the Business Wire, stated the following:
MAHWAH, NJ, April 12 (BUSINESS WIRE) - April 12,2000 - Hudson United
Bancorp (NYSE: HU-news) announced today that, consistent with its offer
made to Dime Bancorp, Inc. (NYSE: DME-news) last week, Hudson will, if
Dime agrees, waive the no-talk clause of its merger agreement with Dime
with respect to any third party bidder that provides an affirmation, in
a form acceptable to Hudson, of Hudson's rights under its stock option
agreement.
(emphasis added). The stock option agreement to which Hudson referred was an
option that Dime granted to Hudson at the time Dime entered into the Merger
Agreement, giving Hudson the right to buy Dime stock at a fixed price if a third
party were to acquire Dime (the "Option Agreement"). Under the applicable
provisions of the Option Agreement, if
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North Fork acquires control of Dime, Hudson will be entitled to surrender the
option to Dime in exchange for $50 million in cash.
90. Also on April 12, the following story appeared over Reuters:
MAHWAH, NJ, April 12 (Reuters) - Hudson United Bancorp (NYSE: HU-news) said
Wednesday it would waive the no-talk clause in its friendly $1.3 billion
bid for Dime Bancorp Inc. (NYSE: DME-news), as long as Hudson's rights
under its stock options agreement is affirmed.
A company spokesperson was not immediately able to provide the details of
the stock options agreement.
Acquisition target Dime said on Tuesday it would be willing to talk with
hostile suitor North Fork Bancorp (NYSE: NFB-news), or other interested
parties, if Dime's merger partner agreed. Dime was prohibited from speaking
with other potential partners under its merger agreement with Hudson, an
arrangement which North Fork said Dime may be using to fend off its $2.1
billion bid, which it launched two weeks ago.
Earlier Tuesday, North Fork said its efforts to hold takeover talks with
Dime were unsuccessful, prompting North Fork to accuse Dime of
"unconscionable behavior." But Dime responded by saying it informed Hudson
last week that it did not object to Hudson waiving the clause that
prohibits it from holding discussions with other suitors, North Fork
included.
91. On April 12, North Fork wrote to Hudson, affirming Hudson's rights
under the Option Agreement, and publicly announced that it had done so.
92. On April 13, 2000, an article appeared in Newsday discussing
Hudson's waiver of the No-Talk Provision stating, in part:
And a Dime Spokesman said once the waiver is finalized, Dime is willing to
talk to North Fork.
'Dime is prepared to talk if they're free to do so as a contractual
matter,' a spokesman said.
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93. Dime's statements to the press have created the false impression
that it has done whatever it needs to do to free itself of any contractual
provisions with Hudson restricting it from talking to North Fork about a
possible transaction and that it is willing to discuss a potential transaction
with North Fork. In truth and in fact, but not disclosed to Dime shareholders,
Dime has thus far refused to take all steps that Dime and Hudson believe are
necessary under the Merger Agreement to allow it to discuss a potential
transaction with North Fork and has failed to disclose to shareholders that, at
this moment, it is not willing to discuss such a potential transaction with
North Fork.
o Federal Reserve Board Approval of The Dime-Hudson Merger
94. At 6:23 p.m., on Wednesday, April 12, Dime issued a press release
announcing that "[t]he Federal Reserve Board on Wednesday signed off on Dime
Bancorp's proposed acquisition of Hudson United Bancorp." (emphasis added) This
press release is materially false and misleading because it fails to disclose
that the Federal Reserve Board specifically conditioned its approval on Dime
increasing its capital before June 30, 2000, so that the combined Dime-Hudson
would be "well-capitalized" under Federal Reserve Board guidelines.
IRREPARABLE INJURY
95. Through these materially false and misleading statements,
counterclaim-defendants seek to (i) improperly influence, the vote at the May
17, 2000 shareholder meeting, and (ii) improperly dissuade Dime shareholders
from tendering their shares into the North Fork Exchange Offer, in violation of
the federal disclosure rules. Counterclaim-defendants' conduct has irreparably
harmed and, unless enjoined, will
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continue to irreparably harm all Dime shareholders by forcing them to make
decisions with respect to their vote, and decisions with respect to whether to
tender their shares, on the basis of incomplete and materially false and
misleading information. Without an injunction, North Fork and Dime shareholders
will suffer immediate and irreparable harm as a direct consequence of Dime's
failure to comply with federal securities laws. North Fork's resulting injury is
not compensable in monetary damages and, therefore, it has no adequate remedy at
law.
AS AND FOR A FIRST
COUNTERCLAIM FOR RELIEF
(FOR VIOLATIONS BY COUNTERCLAIM-DEFENDANTS
OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 14A-9 PROMULGATED THEREUNDER)
96. North Fork repeats and realleges each and every allegation
contained in paragraphs 59 through 95 as if fully set forth herein.
97. Section 14(a) of the Exchange Act, 15 U.S.C. ss.78n(a), and SEC
Rule 14a-9, 17 C.F.R. ss.240. 14a-9, promulgated thereunder were intended to
ensure that the proxy solicitation process is truthful and to enable
shareholders to fully evaluate the information provided in proxy materials (and
other forms of solicitations). Rule 14a-9 provides that:
No solicitation subject to this regulation shall be made by means of any
proxy statement . . . . or other communication, written or oral, containing
any statement which at the time and in the light of the circumstances under
which it is made, is false or misleading with respect to any material fact,
or which omits to state any material fact necessary in order to make the
statements therein not false or misleading.
17 C.F.R. ss.240.14a-9.
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98. The statements set out above that were made by counterclaim-
defendants contain material omissions, and false and misleading statements about
material facts, as alleged above. Counterclaim defendants have thus violated
Section 14(a) of the Exchange Act and SEC Rule 14a-9.
99. North Fork has no adequate remedy at law.
AS AND FOR A SECOND
COUNTERCLAIM FOR RELIEF
(FOR VIOLATIONS BY COUNTERCLAIM-DEFENDANTS OF
SECTION 14(E) OF THE SECURITIES EXCHANGE ACT OF 1934)
100. North Fork repeats and realleges each and every allegation
contained in paragraphs 59 through 99 as if fully set forth herein.
101. Section 14(e) of the Exchange Act provides that:
It shall be unlawful for any person to make any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made, in the light of the circumstances under which they are
made, not misleading or to engage in any fraudulent, deceptive, or
manipulative acts of practices, in connection with any tender offer or
request or invitation for tenders, or any solicitation of security holders
in opposition to or in favor of any such offer, request or invitation.
15 U.S.C. ss.78n(e).
102. As alleged above, in an attempt to thwart the North Fork Exchange
Offer, counterclaim-defendants have knowingly omitted material information, and
have knowingly issued false and misleading statements concerning material
information, in an effort to convince Dime shareholders not to tender their
shares in favor of the North Fork Exchange Offer. Counterclaim defendants have
thereby violated Section 14(e) of the Exchange Act.
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103. North Fork does not have an adequate remedy at law.
AS AND FOR A THIRD
COUNTERCLAIM FOR RELIEF
(AGAINST COUNTERCLAIM-DEFENDANT TOAL UNDER
SECTION 20(A) OF THE SECURITIES EXCHANGE ACT OF 1934)
104. North Fork repeats and realleges each and every allegation
contained in paragraphs 59 through 103 as if fully set forth herein.
105. Section 20(a) of the Exchange Act, provides that:
Every person who, directly or indirectly, controls any person liable
under any provisions of this chapter or of any rule or regulation
thereunder shall also be liable jointly and severally with and to the same
extent as such controlled person to any person to whom such controlled
person is liable, unless the controlling person acted in good faith and did
not directly or indirectly induce the act or acts constituting the
violation or cause of action.
15 U.S.C. ss. 78t.
106. Toal is the Chairman and Chief Executive Officer of Dime. He
participated directly and indirectly in the making of Dime's materially false
and misleading statements and omissions as described above. In addition, as
Dime's CEO, Toal exerted control over others who made and participated in the
making of Dime's materially false and misleading statements and omissions.
Moreover, Toal made, or caused others to make, the materially false and
misleading statements and omissions with knowledge or reckless disregard as to
the truth or falsity of such statements and omissions. Toal was a culpable
participant in the dissemination of Dime's materially false and misleading
statements and omissions. As such, Toal was a control person of Dime and is
liable therefor for Dime's violations of the Securities Exchange Act.
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107. North Fork does not have an adequate remedy at law.
WHEREFORE, North Fork prays for judgment as follows:
A. Preliminarily and permanently enjoining counterclaim-defendants,
their officers, directors, employees, agents, and all others acting in concert
with them, from violating the provisions of Sections 14(a), 14(e) and 20(a) of
the Exchange Act;
B. Preliminarily and permanently enjoining counterclaim-defendants, and
each of them, from soliciting from any Dime shareholder any proxy, consent or
authorization to vote any shares of Dime unless and until
counterclaim-defendants comply, in full, with all applicable provisions of the
federal securities laws, and unless and until such time as the Court may
determine that the effects of counterclaim- defendants' unlawful conduct have
dissipated;
C. Preliminarily and permanently enjoining counterclaim-defendants, and
each of them, from voting the Dime proxies they acquired during the period that
they were in violation of the federal securities laws;
D. Requiring that counterclaim-defendants issue supplemental disclosure
to correct the false and misleading statements they have made, and to correct
the statements they have made that were rendered misleading by omissions of
material fact;
E. Awarding North Fork the costs and disbursements of this action; and
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F. Awarding such other and further relief as the Court may deem just
and proper.
Dated: April 24, 2000
New York, New York
/s/
--------------------------------------------
Jerome S. Hirsch (JH 5650)
Jay B. Kasner (JK 7910)
Jeremy Berman (JB 0378)
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
Four Times Square
New York, New York 10036
(212) 735-3000
Attorneys for Defendant Counterclaim-
Plaintiff North Fork Bancorporation, Inc.
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