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Filed Pursuant to Rule 425 under the Securities Act of 1933
Filer: Dime Bancorp, Inc.
Subject Company: Dime Bancorp, Inc.
Exchange Act File Number: 001-13094
Registration Statement Number: 333-96345
[DIME LOGO]
SUPPLEMENT TO PROXY STATEMENT OF DIME AND PROSPECTUS RELATING TO DIME COMMON
STOCK
Two days ago, North Fork Bancorporation, Inc. announced that it intends to:
- - Try to break up the planned merger of Dime and Hudson
- - Make a hostile bid for Dime alone, of 0.9302 shares of North Fork common stock
and $2.00 in cash for each share of Dime stock
Yesterday, North Fork filed documents to solicit proxies from Dime's
stockholders for votes against the Dime-Hudson merger. However, North Fork has
not yet commenced its offer for Dime stock and has not committed to any specific
time-frame.
DIME'S BOARD OF DIRECTORS HAS CONCLUDED THAT NORTH FORK'S OFFER IS
INADEQUATE AND NOT IN THE BEST INTERESTS OF DIME AND ITS STOCKHOLDERS.
DIME'S BOARD BELIEVES THAT, BECAUSE OF THIS CONCLUSION AND CONSISTENT WITH
ITS FIDUCIARY DUTIES, IT CANNOT APPROVE NORTH FORK'S OFFER -- WHETHER OR NOT THE
DIME-HUDSON MERGER IS COMPLETED. DIME STOCKHOLDERS SHOULD NOT CONSIDER NORTH
FORK'S OFFER AS AN AVAILABLE ALTERNATIVE TO THE PLANNED MERGER WITH HUDSON,
BECAUSE NORTH FORK HAS CONDITIONED ITS OFFER ON ACTIONS THAT REQUIRE THE
APPROVAL OF DIME'S BOARD.
DIME'S BOARD REMAINS FULLY COMMITTED TO THE MERGER WITH HUDSON AND
RECOMMENDS THAT DIME STOCKHOLDERS VOTE "FOR" ADOPTION OF THE MERGER AGREEMENT.
In reaffirming its recommendation, Dime's board considered many factors,
including the opinion of its financial advisor, Credit Suisse First Boston.
Credit Suisse First Boston has reiterated its opinion that the exchange ratio in
the Dime-Hudson merger is fair, from a financial point of view, to Dime
stockholders.
On March 6th, Hudson issued a statement confirming that it is committed to
consummation of the Dime-Hudson merger.
Quite simply, Dime's board believes North Fork's ill-conceived offer is
being made by the wrong company, at the wrong price and at the wrong time and is
unlikely to succeed:
- -WRONG COMPANY. A combined Dime-North Fork would be significantly
"thrift-like," undermining Dime's strategic transition to a commercial banking
enterprise. Moreover, a combined Dime-North Fork would have highly concentrated
branch locations.
- -WRONG PRICE. North Fork's proposed offer is highly dilutive to Dime's
stockholders, provides them with limited ownership in the combined company and
would have reflected a discount to Dime's stock price as recently as September
1999.
- -WRONG TIME. North Fork's hostilities undermine Dime's well-developed strategic
initiatives, preventing it from becoming a stronger competitor. The planned
Dime-Hudson merger will broaden Dime's franchise geographically, capitalize on
its brand identity, balance earnings composition and preserve the opportunity
to realize a "change in control" premium in the future, when valuations may be
superior.
- -UNLIKELY TO SUCCEED. North Fork has said it will impose significant conditions
on its offer, which we believe are unlikely to be satisfied. As noted, several
require approval by Dime's board, which has already rejected North Fork's
offer. Another requires Hudson's cooperation, and Hudson has declared that it
remains fully committed to the Dime-Hudson merger. Also, we believe regulatory
approval of North Fork's offer could be impeded by antitrust scrutiny. By
contrast, the Dime-Hudson merger process is well along the way to completion.
This supplement describes North Fork's announcement, the response of Dime's
board of directors and related matters. It supplements the
February 9, 2000 proxy statement/prospectus we sent to Dime and Hudson
stockholders in connection with the proposed Dime-Hudson merger. This supplement
should be read together with, and is not complete without the February 9th
document.
The date of this supplement is March 7, 2000. It is being mailed or
otherwise delivered to stockholders on or about March 8, 2000.
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REFERENCES TO ADDITIONAL INFORMATION
This supplement is not complete without reference to each of the following:
- the February 9, 2000 combined proxy statement/prospectus of Dime and
Hudson, which provides detailed information concerning the proposed
merger of Dime and Hudson
- the documents filed by Dime with the SEC since February 9, 2000
- the documents filed by Hudson with the SEC since February 9, 2000
This supplement incorporates each of these documents by reference. These
documents include periodic reports such as Current Reports on Form 8-K, as well
as proxy materials, each containing important business and financial information
about Dime and Hudson that are not included in this supplement.
This supplement also incorporates by reference investor presentation
materials filed by Dime on a Form 8-K, dated March 8, 2000, together with this
supplement. These materials also include important information about Dime,
Hudson and North Fork's offer.
You can obtain documents incorporated by reference in this supplement,
other than certain exhibits to those documents, by requesting them in writing or
by telephone from the appropriate company at the following addresses:
<TABLE>
<S> <C>
DIME BANCORP, INC. HUDSON UNITED BANCORP
c/o Innisfree M&A Incorporated 1000 MacArthur Boulevard
501 Madison Avenue Mahwah, New Jersey 07430
20th Floor Attention: D. Lynn Van Borkulo-Nuzzo,
New York, New York 10022 Esq.
Toll Free Phone: (888) 750-5834 Executive Vice President and
Corporate Secretary
Phone: (201) 236-2641
</TABLE>
You will not be charged for any of these documents that you request.
Investors are urged to read Dime and Hudson's proxy statement/prospectus,
and any amendments or supplements when they become available, as well as any
solicitation/recommendation statement that may be filed by Dime, because they
contain important information. Each of these documents has been or will be filed
with the SEC and investors may obtain a free copy of them at the SEC's Internet
web site at www.sec.gov. These documents may also be obtained for free from Dime
by directing such request to: Dime Bancorp, Inc., c/o Innisfree M&A
Incorporated, 501 Madison Avenue, 20th Floor, New York, New York 10022, Toll
Free Phone: (888) 750-5834.
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QUESTIONS AND ANSWERS ABOUT NORTH FORK'S PROPOSAL
Q: AS A DIME STOCKHOLDER, IS NORTH FORK'S OFFER AN ALTERNATIVE TO THE
PLANNED DIME-HUDSON MERGER?
A: Dime's stockholders should not consider North Fork's offer as an
alternative to Dime's planned merger with Hudson, because North Fork
has conditioned its offer on actions that require the approval of
Dime's board. Dime's board believes that, because it has concluded that
North Fork's offer is not in the best interests of Dime and Dime's
stockholders, it cannot approve the offer -- whether or not the Dime-
Hudson merger is completed.
Q: WHAT IF I RECEIVE A PROXY STATEMENT FROM NORTH FORK?
A: North Fork intends to mail a proxy statement to Dime stockholders
asking that you vote against the Dime-Hudson merger. Dime's board
strongly recommends that you not give North Fork your proxy because it
believes that the Dime-Hudson merger agreement is in the best interests
of Dime and its stockholders.
Q: IF I AM A DIME STOCKHOLDER AND HAVE NOT ALREADY SENT IN MY PROXY, WHAT
SHOULD I DO?
A: After you have carefully read this document, indicate on the white
proxy card we have included with this document how you want your shares
to be voted. Then sign and mail your white proxy card as soon as
possible.
We recommend you sign and mail the white proxy card we have enclosed
and NOT the "gold" proxy card you might receive from North Fork. These
gold proxy cards will be voted on behalf of North Fork.
Q: IF I AM A DIME STOCKHOLDER, HAVE ALREADY SENT IN MY PROXY AND DO NOT
WANT TO CHANGE MY VOTE, DO I NEED TO DO ANYTHING MORE?
A: No. You do not need to do anything more. If you have already sent in
your proxy, it will be voted at the meeting in accordance with your
instructions.
Q: IF I AM A DIME STOCKHOLDER, HAVE ALREADY SENT IN MY PROXY AND WANT TO
CHANGE MY VOTE, WHAT DO I NEED TO DO NOW?
A: If you have instructed a broker to vote your shares, you must follow
directions you receive from your broker to change your vote.
If you have not voted through a broker, there are three ways you can
change your vote:
- First, you may send a written notice to the person to whom you
submitted your proxy stating that you would like to revoke your
proxy.
- Second, you may complete and submit a new proxy. Any earlier proxies
will be revoked automatically.
- Third, you may attend the meeting and vote in person. Any earlier
proxy will be revoked. However, simply attending the meeting without
voting will not revoke your proxy.
Q: IF I SEND A GOLD PROXY CARD TO NORTH FORK, CAN I CHANGE MY VOTE?
A: Yes. You can change your vote by following the instructions under the
question above.
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BACKGROUND OF NORTH FORK'S OFFER
On September 15, 1999, following the process described on pages 25 through
27 of the February 9th proxy-statement/prospectus, Dime and Hudson announced
their entry into the Dime-Hudson merger agreement and their grant of stock
options to each other in connection with the merger agreement. On February 10,
2000, Dime and Hudson mailed the February 9th proxy statement/prospectus to
their respective stockholders. That document notified stockholders that Dime and
Hudson both would hold special stockholder meetings on March 15, 2000 to
consider their proposed merger.
On March 5, 2000, North Fork issued a press release announcing that it
intended to make an exchange offer for shares of Dime stock, subject to numerous
conditions. On March 6, 2000, North Fork's management, together with a
representative of FleetBoston Financial Corporation, held a conference call
during which North Fork's offer was described for analysts and investors. North
Fork also filed preliminary proxy materials with the SEC with which North Fork
proposes to solicit proxies from Dime stockholders to vote against approval of
the Dime-Hudson merger.
On March 6, 2000, North Fork filed a lawsuit in the Delaware Court of
Chancery against Dime, members of Dime's board of directors and Hudson,
challenging a number of the provisions in the merger agreement and alleging
breaches of fiduciary duties by Dime's board. Several lawsuits were also filed
by stockholders of Dime in the same court. Although we have not yet been served
with process in all of these actions, we believe that they generally allege
breaches of fiduciary duty by Dime's board and/or challenge the stock option
Dime granted to Hudson in connection with the merger agreement. On March 7,
2000, counsel for North Fork informed counsel for Dime and Hudson that North
Fork would file an action seeking to postpone the special meetings of Dime and
Hudson stockholders scheduled for March 15, 2000.
On March 6, 2000, each of Dime and Hudson issued a statement confirming
that it is committed to consummation of the merger of Dime and Hudson.
RECOMMENDATION OF DIME'S BOARD OF DIRECTORS
At a meeting on March 6, 2000, Dime's board of directors considered North
Fork's offer and the planned Dime-Hudson merger. After considering the
information published by North Fork and FleetBoston and receiving the advice of
Credit Suisse First Boston, Dime's financial advisor, and legal counsel, Dime's
board:
- Determined that North Fork's offer is inadequate and not in the best
interests of Dime and its stockholders
- Reaffirmed its commitment to the planned Dime-Hudson merger
- Reaffirmed its previous recommendation that Dime's stockholders vote
"FOR" adoption of the Dime-Hudson merger agreement
- Recommended that Dime's stockholders reject North Fork's offer by not
tendering their shares -- if and when North Fork actually commences its
offer
Dime's board believes that, because it has concluded that North Fork's
offer is not in the best interests of Dime and Dime's stockholders, it cannot
approve North Fork's offer -- whether or not the Dime-Hudson merger is
completed. Because North Fork has conditioned its offer on actions that require
the approval of Dime's board, Dime stockholders should not consider that offer
as an available alternative to the planned merger with Hudson.
Dime believes that none of its directors, executive officers, affiliates or
subsidiaries intend to tender a single share of Dime stock in North Fork's
offer, if and when commenced.
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REASONS FOR THE RECOMMENDATION
Dime's board believes that North Fork's hostile, unsolicited and highly
conditional offer is being made by the wrong company, at the wrong price and at
the wrong time and is unlikely to succeed. More specifically, in reaching its
conclusions Dime's board took into account a number of factors, including the
following.
The board's reasons for recommending the Dime-Hudson merger to Dime's
stockholders have been explained in the February 9th proxy statement/prospectus.
In the board's view, its analysis of the benefits of the Dime-Hudson merger have
not been altered by North Fork's actions.
- - WRONG COMPANY
- Thrift characteristics. Dime's board noted that North Fork has grown
primarily through acquisitions of thrifts and through balance sheet
leverage. Consequently, while North Fork is nominally a commercial bank,
Dime's board believes the character of North Fork's business is more that
of a thrift institution. As a result, North Fork's offer would undermine
Dime's long-term strategy to shift from a traditional savings association
to a more commercial bank-like profile.
- Potential for reduced price-to-earnings multiple of North Fork common
stock. Dime's board analyzed the historical and current market prices of
North Fork common stock and concluded that a Dime-North Fork combination
could result in a decrease in North Fork's price-to-earnings multiple. In
this regard, the board considered that the market valuation of North Fork
does not adequately reflect the thrift-like characteristics of its
business and earnings stream, and that the combination of Dime and North
Fork could substantially exacerbate this trend.
By comparison, as described on pages 28 and 29 of the February 9th proxy
statement/prospectus, Dime's board believes that a combination with
Hudson could result in an increase in the price-to-earnings multiple at
which Dime stock currently trades.
- Narrow market. Dime's board noted that a combined Dime-North Fork would
have highly concentrated branch locations, primarily in New York City and
Long Island. In contrast, the planned Dime-Hudson merger presents the
combined entity with a significant presence in upstate New York,
Connecticut, Southern New Jersey and the greater Philadelphia
metropolitan area.
- - WRONG PRICE
- Highly dilutive to Dime's earnings per share. Dime's board noted that
North Fork's offer will be highly dilutive to earnings per share in 2000
and 2001 based on North Fork's own assumptions. After giving effect to
North Fork's arrangements with FleetBoston, the dilution to earnings
could be even higher in the future. In contrast, the planned Dime-Hudson
merger should be modestly accretive to earnings per share by 2001 on
realization of identified cost savings, even without taking into account
any revenue enhancements.
- Opportunistic implied premium. Dime's board observed that the premium
implied by North Fork's offer relative to Dime's stock price was
significantly affected by North Fork's timing. It noted that North Fork's
offer would have reflected a discount to Dime's stock price as recently
as September 1999 and that the average premium over Dime's stock price
during 1999 implied by North Fork's offer would have been only about 7%.
- Overly aggressive cost savings and revenue estimates. Dime's board
believed that North Fork's proposed expense reductions are overly
aggressive and unrealistic. It noted that North Fork's estimated expense
reductions equaled about 64% of Dime's expense base excluding mortgage
banking operations. With respect to revenue estimates, Dime's board
observed that North Fork did not estimate any reduction in revenue
despite the proposed sale to a FleetBoston subsidiary of 17 retail
banking offices of Dime that, as of December 31, 1999, had total deposits
of approximately
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$2 billion and the customer attrition associated with potentially
significant branch closings and reductions in service.
Dime's Board also noted that the sale to FleetBoston would be at a
deposit premium of only 8%, well below normal market terms.
- Limited ownership. Dime's board considered that, based on North Fork's
offer and market capitalization as of March 3, 2000 when taking into
account the dilutive effect of the securities sold to FleetBoston, Dime
stockholders would only own about 34.5% of a combined Dime-North Fork
despite the fact that Dime would be contributing 60% of the assets to the
combined company and over 45% of its projected net income. In contrast,
Dime stockholders would own about 56% of a combined Dime-Hudson.
- - WRONG TIME
For the many reasons described on pages 27 through 31 of the February 9th
proxy statement/prospectus, Dime's board concluded that the Dime-Hudson
merger would accelerate the strategic plans of Dime and was in the best
interests of Dime and its stockholders. In particular, the board believes
that the planned Dime-Hudson merger will broaden Dime's franchise,
capitalize on its brand identity and balance its earnings composition. In
addition, Dime's board believes that the Dime-Hudson merger will provide
the opportunity to realize a "change in control" premium in the future,
when valuations may be superior.
However, North Fork's proposal by its terms undermines Dime's strategic
initiative and, in the view of Dime's board, could prevent Dime from
becoming a stronger competitor. Moreover, North Fork's hostile proposal is
a drain on Dime's corporate resources at a time when Dime could otherwise
be focusing on integration and the opportunities provided by the planned
Dime-Hudson merger.
UNLIKELY TO SUCCEED
North Fork has stated that it believes that it could not close a
transaction with Dime until at least the end of the third quarter of 2000.
Even this schedule assumes that all conditions to its offer are satisfied
in time to permit such an ambitious schedule.
First, several of the conditions North Fork has said it will place on its
offer are entirely within Dime's control. In particular, North Fork is
requiring that Dime's board:
- Approve North Fork's offer and enter into a definitive merger agreement
with North Fork
- Redeem Dime's long-standing Stockholder Protection Rights Agreement or
otherwise render it inapplicable to North Fork's offer
- Act to render Section 203 of Delaware's corporate law inapplicable to
North Fork's offer
- Not engage in any transaction that impairs North Fork's ability to
acquire Dime or otherwise diminish the expected economic value to North
Fork of the acquisition of Dime.
As a result of its conclusion that North Fork's offer is inadequate and not
in the best interests of Dime and its stockholders, Dime's board believes
that, consistent with its fiduciary duties, it cannot approve North Fork's
offer -- whether or not the Dime-Hudson merger is completed. Therefore it
is very unlikely that North Fork's offer would succeed on the terms
proposed.
Second, one of North Fork's conditions requires Hudson to surrender the
option it received from Dime in connection with the Dime-Hudson merger
agreement for no more than $50 million in cash. Hudson, however, has
publicly stated its commitment to completing the proposed merger with Dime.
Third, Dime's board has been advised that North Fork's offer, including
FleetBoston's role therein, could be subject to a significant antitrust
issue. Recent actions by the antitrust enforcement authorities suggest that
Suffolk County, New York may be considered a separate banking market. In
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that event, North Fork's offer and FleetBoston's role therein would create
a significant antitrust issue because a combined North
Fork-Dime-FleetBoston would have a market share in Suffolk County exceeding
40%. This could result in lengthy delay or failure of North Fork's proposed
offer.
OPINION OF DIME'S FINANCIAL ADVISOR
At the March 6th meeting of Dime's board, Credit Suisse First Boston
reconfirmed its opinion that as of March 6, 2000, the Dime exchange ratio in the
planned Dime-Hudson merger is fair to Dime stockholders from a financial point
of view. In confirming its opinion, Credit Suisse First Boston updated selected
analyses it performed in connection with its September 12, 1999 oral opinion and
February 9, 2000 written opinion to similar effect. Those earlier opinions are
described in the February 9th proxy statement/prospectus, and a copy of the
written opinion dated February 9, 2000 appears as Annex D to the February 9th
proxy statement/prospectus.
Annex A to this supplement is a complete copy of the March 6, 2000 Credit
Suisse First Boston opinion, which describes the procedures followed,
assumptions made, matters considered and limitations on the review undertaken in
connection with that opinion. Dime stockholders should read the entire opinion.
The March 6, 2000 Credit Suisse First Boston opinion is directed to the
Dime board of directors. It relates only to the fairness of the Dime exchange
ratio to Dime stockholders from a financial point of view, does not address any
other aspect of the planned Dime-Hudson merger or any related transaction and
does not constitute a recommendation to Dime stockholders as to how to vote at
the Dime special meeting. Credit Suisse First Boston has consented to the
inclusion of the March 6, 2000 Credit Suisse First Boston opinion as Annex A and
has reviewed and consented to the inclusion of this disclosure related to the
opinion.
DIME'S RESPONSE
Dime is not currently undertaking any negotiations in response to North
Fork's offer that relate to any tender offer, merger, reorganization,
liquidation, asset sale or transfer, or material change in dividend rate or
policy or indebtedness or capitalization of Dime or any of its subsidiaries.
QUESTIONS
Any Dime stockholder having questions regarding voting his or her shares
should call Dime's proxy solicitor, Innisfree M&A Incorporated, toll free at
1-888-750-5834.
Any Hudson stockholder having questions regarding voting his or her shares
should call D. Lynn Van Borkulo-Nuzzo, Esq., Executive Vice President and
Corporate Secretary of Hudson, at (201) 236-2641.
INFORMATION ABOUT NORTH FORK AND NORTH FORK'S OFFER
NORTH FORK
North Fork is a Delaware corporation with its principal executive offices
located at 275 Broad Hollow Road, Melville, New York 11747. The telephone number
of North Fork at this location is (516) 844-1004.
North Fork is a bank holding company registered under the Bank Holding
Company Act of 1956. North Fork's primary subsidiary is North Fork Bank, a New
York State-chartered, FDIC-insured commercial bank. North Fork is subject to the
informational filing requirements of the Securities Exchange Act of 1934 and is
obligated to file reports, proxy statements and other information with the SEC
relating to its business, financial condition and other matters. North Fork
common stock is listed on the NYSE under the symbol "NFB".
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NORTH FORK'S OFFER
On March 5, 2000, North Fork announced that it intends to:
- Commence a hostile offer to exchange each outstanding share of Dime stock
for 0.9302 shares of North Fork common stock and $2.00 in cash
- Negotiate a definitive merger agreement pursuant to which Dime would,
after North Fork's exchange offer, merge with a wholly owned subsidiary
of North Fork and each share of Dime stock not owned by North Fork would
be converted into the right to receive 0.9302 shares of North Fork common
stock and $2.00 in cash
The purpose of these transactions is to enable North Fork to acquire
control of, and ultimately the entire equity interest in, Dime. North Fork's
offer is intended to facilitate the acquisition of a majority of the outstanding
shares of Dime stock. The proposed Dime-North Fork merger is designed to allow
North Fork to acquire all shares of Dime stock not exchanged pursuant to North
Fork's offer.
Based on the closing price of North Fork common stock on the NYSE on March
3, 2000, North Fork's offer represented a market price of about $17.00 per Dime
share. On the other hand, the closing price of Dime common stock on March 3,
2000 was $12.94 and, based on the NYSE closing price of Hudson common stock on
March 3, 2000, the implied market price of a Dime share in the Dime-Hudson
merger was about $12.09. These prices will fluctuate over time, and when you
vote you will not know the value of what you would receive in the proposed
Dime-Hudson merger or in North Fork's proposed offer.
On March 6, 2000, North Fork filed with the SEC preliminary proxy materials
intended to be mailed to Dime stockholders asking that Dime stockholders vote
against the proposed merger between Dime and Hudson.
CONDITIONS TO NORTH FORK'S OFFER
Although North Fork has not yet commenced its formal offer for Dime stock,
it announced that its offer will be conditioned on, among other things, the
following:
- Dime's stockholders having validly tendered and not withdrawn prior to
the expiration of North Fork's offer that number of shares of Dime stock
which, together with the shares of Dime stock beneficially owned by North
Fork for its own account, constitutes a majority of the shares of Dime
stock outstanding on a fully diluted basis
- Dime's stockholders not having adopted the merger agreement between Dime
and Hudson
- North Fork being satisfied, in its sole judgment, that the merger
agreement between Dime and Hudson has been validly terminated
- Dime having entered into a definitive merger agreement with North Fork to
provide for the acquisition of Dime pursuant to North Fork's offer and
the proposed Dime-North Fork merger
- North Fork's stockholders approving the issuance of North Fork common
stock pursuant to North Fork's offer under applicable NYSE rules
- North Fork being satisfied, in its sole judgment, that Dime's Stockholder
Protection Rights Plan does not apply to North Fork's offer and the
proposed Dime-North Fork merger
- North Fork being satisfied, in its sole judgment, that the provisions of
Section 203 of Delaware's corporate law do not apply to North Fork's
offer and the proposed Dime-North Fork merger
- All regulatory approvals required to consummate North Fork's offer having
been obtained and remaining in full force and effect without the
imposition of any condition or restriction that would be materially
adverse to North Fork and Dime on a combined basis, and all statutory
waiting periods in respect thereof having expired
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- North Fork being satisfied, in its sole judgment, that the stock option
issued by Dime to Hudson in connection with the Dime-Hudson merger
agreement has been surrendered to Dime for an amount not to exceed $50
million in cash
- Dime not having entered into or effectuated any other agreement or
transaction with any person or entity having the effect of impairing
North Fork's ability to acquire Dime or otherwise diminishing the
expected economic value to North Fork of the acquisition of Dime
North Fork has stated that there can be no assurance as to whether the
conditions to its offer will be satisfied and, if so, as to the timing of
satisfaction of such conditions.
We believe that the highly conditional nature of North Fork's offer
indicates a low likelihood of completion. By contrast, unless Dime's
stockholders allow North Fork to disrupt our transaction, the proposed
Dime-Hudson merger process is on track for a currently planned closing by the
end of March.
ARRANGEMENTS WITH FLEETBOSTON
FleetBoston Financial Corporation is a Rhode Island corporation with its
principal executive office at One Federal Street, Boston, Massachusetts 02110.
It is a diversified financial services company formed by the merger on October
1, 1999 of BankBoston Corporation with and into FleetBoston Financial Group,
Inc.
In connection with North Fork's offer, representatives of North Fork
initiated discussions with representatives of FleetBoston to ascertain
FleetBoston's interest in making a related equity investment in North Fork. On
March 5, 2000, North Fork entered into a stock purchase agreement with
FleetBoston. Pursuant to the stock purchase agreement, FleetBoston agreed to pay
a total of $250 million to purchase:
- 250,000 shares of North Fork's 7.5% series B non-cumulative convertible
preferred stock
- Common stock purchase rights to acquire 7,500,000 shares of North Fork
common stock
The North Fork preferred stock will be convertible into shares of North
Fork common stock at a conversion price of $18.69 per common share, subject to
antidilution adjustments. The North Fork purchase rights will be exercisable for
ten years after their issuance at a price of $17.88 per North Fork common share,
subject to antidilution adjustments. If North Fork consummates its offer for
Dime stock, completes the proposed Dime-North Fork merger and issues the
preferred stock and the rights to FleetBoston, FleetBoston would beneficially
own approximately 7% of the then-outstanding North Fork common stock.
Completion of FleetBoston's purchase of North Fork's preferred stock and
rights is subject to conditions, including:
- Satisfaction of the conditions to North Fork's offer for Dime shares
(without substantial change in the terms and conditions of the offer)
- Acceptance for exchange of shares of Dime stock tendered in North Fork's
offer
- Receipt and effectiveness of all regulatory approvals required to
complete the purchase and the expiration of all related statutory waiting
periods, without the imposition of any condition or restriction that
would be materially adverse to FleetBoston
In the stock purchase agreement, North Fork agreed, subject to the
consummation of North Fork's offer for Dime, to cause Dime to sell to a
FleetBoston subsidiary 17 retail banking offices of Dime that, as of December
31, 1999, had total deposits of approximately $2.0 billion. North Fork has
stated that the branch sale transaction would be for a 8% deposit premium.
Consummation of the transaction will be subject to:
- The execution of a definitive branch sale agreement, which FleetBoston
and North Fork have agreed to negotiate in good faith and enter into
reasonably promptly following the consummation of North Fork's offer
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- The receipt and effectiveness of all necessary regulatory approvals
- The satisfaction of other customary closing conditions.
North Fork stated that it is expected that the branch sale would be completed
within 120 days of the closing of North Fork's offer.
If North Fork does not acquire Dime and if FleetBoston acquires a majority
interest in Dime on or before December 31, 2001, FleetBoston has agreed to cause
Dime to sell to North Fork 5 branches with total deposits of approximately $500
million as of December 31, 1999. Consummation of any such transaction would be
subject to conditions comparable to those applicable to the branch purchase by
FleetBoston.
Other than as contemplated in the stock purchase agreement, FleetBoston has
agreed that for a period of two years it will not:
- Acquire beneficial ownership of any North Fork voting securities
- Make any public announcement with respect to, or submit to North Fork,
any proposal for the acquisition of any North Fork voting securities or
with respect to a merger or other business combination involving North
Fork, unless North Fork has made a prior written request to FleetBoston
to submit such proposal
- Participate in any solicitation of proxies to vote any North Fork voting
securities
In addition, FleetBoston has agreed that until December 31, 2001, it will not:
- Acquire, or offer to acquire, any voting securities or assets of Dime or
Hudson
- Make any public announcement with respect to, or submit to Dime or
Hudson, any proposal for the acquisition of any voting securities of Dime
or Hudson, respectively, or for a merger or other business combination
involving Dime or Hudson
From and after the earlier of the termination of the stock purchase agreement or
March 31, 2001, FleetBoston may terminate the provisions relating to Dime and
Hudson by providing notice to North Fork and paying North Fork a fee of $2.5
million. If FleetBoston acquires a majority interest in Dime on or prior to
December 31, 2001, FleetBoston must pay to North Fork an additional fee of $2.5
million.
Under the stock purchase agreement, North Fork must pay FleetBoston a fee
of $2.5 million on the earlier of the termination of the stock purchase
agreement or March 31, 2001, if at such time North Fork has not acquired a
majority interest in Dime. If North Fork acquires a majority of the equity
interest in Dime on or prior to the later of the termination of the stock
purchase agreement or March 31, 2001, North Fork must pay to FleetBoston a fee
of $5.0 million on the date of the closing of such acquisition, or a fee of $2.5
million if North Fork has paid the $2.5 million fee referred to in the previous
sentence.
North Fork has also agreed to indemnify FleetBoston for breaches of the
representations or covenants in the stock purchase agreement and for losses
(including litigation expenses) arising out of North Fork's solicitation of
proxies from holders of Dime stock and North Fork's offer.
The stock purchase agreement may be terminated by mutual consent. In
addition, either North Fork or FleetBoston may terminate the stock purchase
agreement if the acquisition of Dime stock pursuant to North Fork's offer has
not been consummated by March 31, 2001, if Dime's and Hudson's stockholders
approve the Dime-Hudson merger, or if North Fork publicly announces the
abandonment of its efforts to acquire Dime.
North Fork has stated that there can be no assurance as to the timing of
the satisfaction of the conditions to the consummation of the transactions
contemplated by the stock purchase agreement.
10
<PAGE> 11
INFORMATION REGARDING NORTH FORK AND FLEETBOSTON
The information in this supplement regarding North Fork, North Fork's offer
and North Fork's arrangements with FleetBoston is based entirely on North Fork's
and FleetBoston's documents filed with the SEC as of March 7th. We make no
guarantee as to the accuracy of the information contained in these documents.
This supplement incorporates by reference the documents listed below that
have been filed with the SEC. These documents contain important information
regarding North Fork, North Fork's offer and North Fork's arrangements with
FleetBoston.
- Communications by North Fork, filed on March 6, 2000, pursuant to the
SEC's Rule 425 under the Securities Act of 1933
- Preliminary Proxy Solicitation Material of North Fork, filed on March 6,
2000, pursuant to the SEC's Rule 14a-12 under the Securities Exchange Act
of 1934
- Schedule TO of FleetBoston, filed on March 6, 2000
The information in this supplement regarding North Fork, North Fork's offer and
North Fork's arrangements with FleetBoston is not complete and is qualified
entirely by reference to these documents.
SOLICITATION OF PROXIES ON BEHALF OF DIME
Dime will bear the cost of soliciting proxies from its stockholders, except
that Dime has agreed with Hudson that each will pay one-half of the costs and
expenses of preparing, printing and mailing the February 9th proxy
statement/prospectus, including this supplement, and all filing and other fees
relating to the merger paid to the SEC. In addition to solicitation of proxies
by mail, Dime has requested that banks, brokers and other record holders send
proxies and proxy material to the beneficial owners of Dime stock and secure
their voting instructions, if necessary. Dime will reimburse the record holders
for their reasonable expenses in taking those actions. Dime has also made
arrangements with Innisfree M&A Incorporated to assist in soliciting proxies and
has agreed to pay them $9,000 plus reasonable expenses for these services. If
necessary, Dime may also use several of its regular employees, who will not be
specially compensated, to solicit proxies from Dime stockholders, either
personally or by telephone, telegram, facsimile or letter.
Dime has employed Credit Suisse First Boston as its financial advisor in
connection with the proposed merger of Dime and Hudson pursuant to the terms of
the engagement described in the February 9th proxy statement/prospectus. During
the course of such engagement, Credit Suisse First Boston and its
representatives may participate in activities or recommendations designed to
solicit proxies from Dime's stockholders. Representatives of Credit Suisse First
Boston may include Michael Martin and Oliver Sarkozy, Managing Directors. Credit
Suisse First Boston does not admit that it or any of its partners, managing
directors, directors, officers, employees, affiliates or controlling persons, if
any, is a "participant" in the solicitation as defined in Schedule 14A under the
Exchange Act, or that the rules under the Exchange Act or Schedule 14A require
the disclosure of this information about them. The terms of the engagement and
information about Credit Suisse First Boston's participation in trading and
holding Dime and Hudson stock was described in the February 9th proxy
statement/prospectus.
STATUS OF REGULATORY APPROVAL OF DIME-HUDSON MERGER
The regulatory approval process for the Dime-Hudson merger is at an
advanced stage:
- An application under the Bank Holding Company Act of 1956 was accepted
for processing by the Board of Governors of the Federal Reserve System as
of December 8, 1999.
- An application to the Federal Deposit Insurance Corporation for
permission to merge Dime Savings Bank and Hudson United Bank was declared
informationally complete as of December 10, 1999.
11
<PAGE> 12
- The public comment periods with respect to the Federal Reserve and the
FDIC applications have all lapsed.
- Applications were filed with the New Jersey Department of Banking and
Insurance on December 9, 1999. Requests have been made by public
protestants for the New Jersey Department to hold a public hearing on
these applications. The New Jersey Department has not yet ruled on these
requests.
In this light, the regulatory approval required for the Dime-Hudson merger
are expected very shortly. By contrast, North Fork and FleetBoston have not yet
made any of the filings with federal or state regulators required in order to
complete North Fork's offer. We believe that such filings will include
applications or notices to the Federal Reserve and the Office of Thrift
Supervision.
LITIGATION
On March 6, 2000, North Fork filed a lawsuit in the Delaware Court of
Chancery against Dime, members of Dime's board of directors and Hudson,
challenging a number of the provisions in the Dime-Hudson merger agreement and
alleging breaches of fiduciary duties by Dime's board of directors. The
complaint seeks, among other things, an order invalidating certain provisions of
the Dime-Hudson merger agreement. These provisions include:
- Dime's agreement not to engage in any discussions with, or provide
confidential information to, any person making an offer to merge with or
acquire Dime, until the completion of the merger with Hudson
- The board's agreement to recommend that Dime stockholders adopt the
Dime-Hudson merger agreement
- Dime's agreement not to terminate the Dime-Hudson merger agreement if
Dime's stockholders fail to adopt its terms
Several class action lawsuits were also filed by stockholders of Dime in
the same court. Although we have not yet been served with process in all of
these actions, we believe they challenge:
- The stock option Dime granted to Hudson in connection with the
Dime-Hudson merger agreement
- The benefits to Dime's directors and officers that will result from the
merger with Hudson
- The failure of Dime's board to consider North Fork's offer
We intend vigorously to defend these actions and believe that they are
without merit. We may also commence actions against North Fork or FleetBoston.
FORWARD-LOOKING STATEMENTS
This document contains a number of forward-looking statements regarding the
financial condition, results of operations and business of Dime, Hudson and
North Fork. These statements may be made directly in this document or may be
incorporated in this document by reference to other documents. These statements
may also include references to periods following the completion of the
Dime-Hudson merger or North Fork's offer. You can find many of these statements
by looking for words such as "believes," "expects," "anticipates," "estimates,"
"potential" or similar expressions. These forward-looking statements involve
substantial risks and uncertainties. Some of the factors that may cause actual
results to differ materially from those contemplated by the forward-looking
statements include, but are not limited to, the following possibilities:
- combining the businesses of Dime and Hudson and retaining key personnel
may be more difficult or more costly than we expect;
12
<PAGE> 13
- revenues after the Dime-Hudson merger may be lower than we expect, or our
operating costs may be higher than we expect;
- expected cost savings from the Dime-Hudson merger may not be fully
realized, may not be realized at all or may not be realized within the
expected time frame;
- required regulatory approvals for the Dime-Hudson merger may not be
received within the expected time frame or received at all;
- combining the businesses of Dime and North Fork and retaining key
personnel may be less difficult or costly than we expect;
- revenues of a combined Dime-North Fork may be higher than we expect, or
its operating costs may be lower than we expect;
- required regulatory approvals for North Fork's offer may be obtained more
quickly than we expect;
- market reaction to a combined Dime-Hudson or a combined Dime-North Fork
may be different than we expect;
- the timing and occurrence or non-occurrence of events may be subject to
circumstances beyond our control;
- there may be increases in competitive pressure among financial
institutions or from non-financial institutions;
- changes in the interest rate environment may reduce interest margins or
may adversely affect mortgage banking operations;
- changes in deposit flows, loan demand or real estate values may adversely
affect a company's business;
- changes in accounting principles, policies or guidelines may cause our
financial condition to be perceived differently;
- general economic conditions, either nationally or in some or all of the
states in which the combined company will be doing business, or
conditions in securities markets, the banking industry or the mortgage
banking industry, may be less favorable than we currently anticipate;
- legislation or regulatory changes may adversely affect our business; or
- technological changes may be more difficult or expensive than
anticipated.
All subsequent written and oral forward-looking statements concerning the
proposed Dime-Hudson merger, North Fork's proposed offer or other matters
addressed in this supplement and attributable to Dime or Hudson or any person
acting on their behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to in this section. Neither Dime nor
Hudson undertakes 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.
13
<PAGE> 14
ANNEX A
[Credit Suisse/First Boston Letterhead]
March 6, 2000
Board of Directors
Dime Bancorp, Inc.
589 Fifth Avenue
New York, New York 10017
Ladies and Gentlemen:
You have asked us to advise you with respect to the fairness to the stockholders
of Dime Bancorp, Inc. (the "Company") from a financial point of view of the
consideration to be received by such stockholders pursuant to the terms of the
Agreement and Plan of Merger, dated as of September 15, 1999, as amended and
restated as of December 27, 1999 (the "Merger Agreement"), between the Company
and Hudson United Bancorp ("Hudson"). The Merger Agreement provides for the
merger (the "Merger") of Hudson with and into the Company, with the Company as
the surviving corporation (the "Surviving Corporation"). In the Merger, each
outstanding share of common stock, par value $0.01 per share, of the Company
(the "Dime Common Stock") will be converted into 0.60255 shares (the "Exchange
Ratio") of common stock of the Surviving Corporation, par value $0.01 per share
(the "Surviving Corporation Common Stock"). Each outstanding share of common
stock, no par value per share, of Hudson will be converted into one share of
Surviving Corporation Common Stock.
In arriving at our opinion, we have reviewed certain publicly available business
and financial information relating to the Company and Hudson, as well as the
Merger Agreement. We have also reviewed certain other information, including
financial forecasts for 1999, provided to us by the Company and Hudson, and have
met with the Company's and Hudson's managements to discuss the business and
prospects of their respective companies.
We have also considered certain financial and stock market data of the Company
and Hudson, and we have compared those data with similar data for other publicly
held companies in businesses similar to the Company and Hudson and we have
considered the financial terms of certain other business combinations and other
transactions which have recently been effected. In addition, we have reviewed
the Schedule 14A filings by North Fork Bancorporation, Inc. ("North Fork") with
the Securities and Exchange Commission on March 6, 2000 which describe the terms
of North Fork's proposal to acquire the Company (the "North Fork Proposal"). We
also considered such other information, financial studies, analyses and
investigations and financial, economic and market criteria which we deemed
relevant.
In connection with our review, we have not assumed any responsibility for
independent verification of any of the foregoing information and have relied on
its being complete and accurate in all material respects. With respect to the
financial forecasts, we have assumed that they have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
Company's and Hudson's managements as to the future financial performance of the
Company and Hudson and as to the cost savings and other potential synergies
(including the amount, timing and achievability thereof) anticipated to result
from the Merger. In addition, we have not been requested to make, and have not
made, an independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of the Company or Hudson, nor have we been furnished
with any such evaluations or appraisals.
Our opinion is necessarily based upon financial, economic, market and other
conditions as they exist and can be evaluated on the date hereof. We are not
expressing any opinion as to the actual value of the Surviving Corporation
Common Stock when issued to the Company's stockholders pursuant to the Merger or
the prices at which the Surviving Corporation Common Stock will trade subsequent
to the Merger.
<PAGE> 15
We have acted as financial advisor to the Company in connection with the Merger
and will receive a fee for our services, a significant portion of which is
contingent upon the consummation of the Merger.
In the past, we have performed certain investment banking services for the
Company and have received customary fees for such services.
In the ordinary course of our business, we and our affiliates may actively trade
the debt and equity securities of both the Company and Hudson for our and such
affiliates' own accounts and for the accounts of customers and, accordingly, may
at any time hold a long or short position in such securities.
It is understood that this letter is for the information of the Board of
Directors of the Company in connection with its consideration of the Merger and
does not constitute a recommendation to any stockholder as to how such
stockholder should vote on any matter relating to the Merger or the North Fork
Proposal.
Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the Exchange Ratio is fair to the stockholders of the Company from a
financial point of view.
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ P. OLIVIER SARKOZY
--------------------------------------------------------
P. Olivier Sarkozy
A-2
<PAGE> 16
REVOCABLE PROXY
DIME BANCORP, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 15, 2000.
The undersigned hereby appoints Lawrence J. Toal and James E. Kelly as
proxies, severally, each with the power to appoint a substitute, and hereby
authorizes them to represent and vote all the shares of Common Stock of Dime
Bancorp, Inc. held of record by the undersigned on February 4, 2000 as directed
and, in their discretion, on all other matters that may properly come before the
Special Meeting of Stockholders to be held on March 15, 2000 and any
adjournments or postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ADOPTION
OF THE AGREEMENT AND PLAN OF MERGER, DATED AS OF SEPTEMBER 15, 1999, BETWEEN
HUDSON UNITED BANCORP AND DIME BANCORP, INC, AS AMENDED AND RESTATED ON DECEMBER
27, 1999.
TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE SEE REVERSE SIDE
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 1.
1. Adoption of the Agreement and Plan of Merger, dated as of September 15, 1999,
between Hudson United Bancorp and Dime Bancorp, Inc, as amended and restated
on December 27, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In their discretion, upon such other matters as may properly come before the
Special Meeting.
MARK HERE IF YOU PLAN TO ATTEND THE
MEETING [ ]
MAIL HERE FOR ADDRESS CHANGE AND NOTE
AT LEFT [ ]
PLEASE SIGN, DATE, AND RETURN THIS
CARD PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE SIGN EXACTLY AS YOUR
NAME APPEARS HEREON. WHEN SHARES ARE
HELD BY JOINT TENANTS, BOTH SHOULD
SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR
GUARDIAN, PLEASE GIVE FULL TITLE AS
SUCH. IF A CORPORATION, PLEASE SIGN
FULL CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.
SIGNATURE: DATE: __________________ SIGNATURE: DATE: __________________
<PAGE> 17
FORWARD-LOOKING STATEMENTS
- --------------------------------------------------------------------------------
THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS REGARDING DIME,
HUDSON AND NORTH FORK, INCLUDING STATEMENTS ABOUT STRATEGIES, PLANS AND
OBJECTIVES, AS WELL AS ESTIMATES AND STATEMENTS BASED ON UNDERLYING
ESTIMATES OF THE FUTURE FINANCIAL CONDITION, PERFORMANCE AND OPERATING
EFFICIENCIES ON A PRO FORMA BASIS AND COST SAVINGS AND REVENUE
ENHANCEMENTS AND ACCRETION TO REPORTED EARNINGS THAT WILL BE REALIZED
FROM THE DIME-HUDSON MERGER OR NORTH FORK'S OFFER.
A VARIETY OF FACTORS COULD CAUSE ACTUAL RESULTS AND EXPERIENCE TO
DIFFER MATERIALLY FROM THE ANTICIPATED RESULTS OR OTHER EXPECTATIONS
EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE
SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING:
o Risks and uncertainties related to the consummation of the
Dime-Hudson merger or North Fork's offer, including
realization of expected cost savings;
o Realization of the level of revenues following the
Dime-Hudson merger or North Fork's offer;
o Integration costs or difficulties;
o Competition from both financial and non-financial
institutions;
o Changes in interest rates, deposit flows, loan demand and
real estate values;
o Changes in legislation or regulation;
o Changes in accounting principles, policies or guidelines;
o The timing and occurrence (or non-occurrence) of transactions
and events that may be subject to circumstances beyond the
control of Dime, Hudson or North Fork; and
o Other economic, competitive, governmental, regulatory and
technological factors affecting Dime, Hudson or North Fork,
specifically or the banking industry or economy generally.
NEITHER DIME NOR HUDSON ASSUMES ANY OBLIGATION TO UPDATE THESE
FORWARD-LOOKING STATEMENTS OR TO UPDATE THE REASONS WHY ACTUAL RESULTS
COULD DIFFER FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS.
1
[DIME LOGO]
<PAGE> 18
OVERVIEW
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------- -----------------------------------------------
DIME UNITED NFB(1) PROPOSAL
- ----------------------------------------- -----------------------------------------------
<S> <C>
o EPS accretive to Dime shareholders o Highly EPS dilutive to Dime shareholders
o Predicated on conservative assumptions o Reliant on unachievable assumptions
o Higher quality earnings stream o Increasingly thrift-like earnings stream
o Transaction less than one month from o Proposal highly uncertain given multitude of
completion contingencies. Timing no earlier than end
of 3rd Quarter, 2000
o Low execution risk - transition plan
completed o High execution risk given in-market and
hostile nature of acquisition
o Significant P/E multiple expansion -
improved franchise value o Possibility of significant P/E multiple
contraction
- ----------------------------------------- -----------------------------------------------
(1) North Fork Bancorporation, Inc.
</TABLE>
2
DIME
<PAGE> 19
NFB PROPOSAL - WHAT NFB WANTS YOU TO BELIEVE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------- ---------------------------------------------------------------------------------
THE CLAIM IS: THE FACTS ARE:
- -------------------------- ---------------------------------------------------------------------------------
<S> <C>
SIGNIFICANTLY ACCRETIVE Using NFB's assumptions, the NFB Proposal 15% EPS dilutive to Dime's
shareholders in 2001
SIGNIFICANT PREMIUM Would have represented a discount to Dime's share price as little as 6
months ago and an average premium of less than 10% during all of 1999
ACHIEVABLE ASSUMPTIONS Cost savings assumptions represent 64% of Dime's operating expense
base (excluding NAMCO(1)), implying a 15% marginal efficiency ratio for
Dime. No revenue run-off taken into account, despite anticipated sale to
FleetBoston of 14% of Dime's deposit base
LOW RISK TRANSACTION NFB's unrealistically high level of projected cost savings, when coupled with
hostile nature of proposal, underscores high degree of execution risk
A REAL OFFER NFB has a history of abandoning unsolicited approaches. NFB Proposal is
highly contingent upon terms and conditions which will not be met
RELEVANT PRIOR ACQUISITION Dime is more than seven times the size of the largest transaction NFB has
EXPERIENCE ever completed and three times the size of all their acquisitions put together
</TABLE>
(1) North American Mortgage Company.
3
[DIME LOGO]
<PAGE> 20
NFB PROPOSAL - HIGHLY EPS DILUTIVE
- -------------------------------------------------------------------------------
DIME UNITED TRANSACTION YIELDS A SUPERIOR EARNINGS STREAM FOR DIME
STOCKHOLDERS:
o Implicit dilution in NFB proposal understated, given "hidden"
dilution inherent in FleetBoston financing structure
[BAR CHART]
2000 2001
----- -----
$2.39(3) $2.66(4)
Dime United(1) $2.28 $2.67
NFB/Dime(2) $1.75 $2.26
(1) As disclosed in Dime United's September 1999 investor
presentation.
(2) Based on NFB assumptions provided in March 6, 2000 investor
presentation. Includes the benefit to Dime shareholders of
reinvesting the $2.00 in cash per share received from NFB at
an after-tax rate of 4.5%.
(3) Dime 2000 stand alone EPS estimate as disclosed in Dime
United's September 1999 investor presentation.
(4) Dime 2001 stand alone EPS estimate as disclosed in Dime
United's September 1999 investor presentation.
4
[DIME LOGO]
<PAGE> 21
NFB'S COST SAVINGS ARE UNACHIEVABLE
- --------------------------------------------------------------------------------
ESTIMATED COST SAVINGS EQUAL 64% OF DIME'S OPERATING EXPENSES
(EXCLUDING NAMCO) AND REPRESENT 86% OF NFB'S EXPENSE BASE:
o Implies a marginal efficiency ratio of less than 15% for Dime
(excluding NAMCO) and 4% if looked at on the basis of NFB's
operating expenses
o No revenue run-off projected despite anticipated sale of 14%
of Dime's most attractive deposits to FleetBoston for a below
market premium
ESTIMATED EXPENSE SAVINGS
(DOLLARS IN MILLIONS)
----------------------------------------------------------------------
NFB PROPOSAL
----------------------------------------------------------------------
Dime's Total Non-Interest Expense Base $724
Less: NAMCO(1) (431)
Less: Intangible amortization (32)
Dime's "Core Bank" Expense Base 261
Cost Savings Assumptions(2) 167
Pro Forma Expense Base 94
% OF DIME "CORE BANK" EXPENSE BASE 63.7%
IMPLIED MARGINAL EFFICIENCY RATIO ON "CORE BANK" 14.7(3)
----------------------------------------------------------------------
Note: Expenses are based on Fourth Quarter 1999 financial data unless
otherwise noted.
(1) Based on detail for mortgage banking operations in the
September 30, 1999 10-Q. Includes amortization of mortgage
servicing rights..
(2) Based on $100 million after tax estimate provided by NFB,
adjusted to pretax amount assuming a 40% tax rate.
(3) Pro forma expense base divided by net revenues of Dime
excluding NAMCO.
5
[DIME LOGO]
<PAGE> 22
JSB FINANCIAL, INC.(1)/RELIANCE BANCORP(2) TRANSACTIONS MAGNIFY RISK
- --------------------------------------------------------------------------------
NFB ASSUMPTIONS AS DISCLOSED IN INVESTOR PRESENTATIONS
(DOLLARS IN MILLIONS)
-----------------------------------------------------------------------
RELIANCE JSB DIME TOTAL
-----------------------------------------------------------------------
Cost Savings $22.8 $20.2 $167.0 $210.0
Revenue Enhancement 5.0 7.2 - 12.2
Tax Efficiencies 3.2 7.2 - 10.5
Portfolio Optimization - 8.7 - 8.7
----- ----- ------ ------
Total Pre-tax Synergies 31.0 43.3 167.0 241.4
Core Expense Base $36.3 $28.9 $261.0 $326.2
RESULTING RATIOS:
Synergies/Core Expense Base 85.4% 149.8% 63.7% 74.0%
Cost Savings/Core Expense Base 62.8 69.9 63.7 64.4
-----------------------------------------------------------------------
(1) Jamaica Savings Bank ("JSB").
(2) Reliance Federal Savings Bank ("Reliance").
6
[DIME LOGO]
<PAGE> 23
NFB Would More Than Quadruple in Size
- -------------------------------------------------------------------------------
Acquired Assets as % of NFB(1)
(Dollars in Millions)
[BAR CHART]
NFB 12/31/97 $ 6,829
New York Bancorp $ 3,284 50%
Reliance $ 1,613 14%
JSB $ 2,452 21%
Dime $23,921 198%
(1) As a % of NFB's assets at the quarter end prior to
announcement.
- --------------------------------------------------------------------------------
Total Assets(1)
(Dollars in Millions)
[BAR CHART]
NFB 12/31/97 $ 6,829
NFB Pro Forma $37,430 448% More than NFB 12/31/97
(1) Includes deposit sale to FleetBoston, purchase
accounting adjustments and deleveraging balance
sheet.
7
[DIME LOGO]
<PAGE> 24
PREMIUM IN NFB PROPOSAL IS MISLEADING
- --------------------------------------------------------------------------------
IMPLIED PREMIUM IN NFB PROPOSAL INFLATED BY DIME'S CURRENTLY DEPRESSED
STOCK PRICE:
o NFB Proposal would have reflected a discount to Dime's stock
price as recently as September '99
[LINE CHART]
----------------------------------
Value of
NFB
Dime Proposal
----------------------------------
12/31/97 30.25 22.93
3/31/98 30.06 25.80
6/30/98 29.94 24.73
9/30/98 25.31 20.60
12/31/98 26.25 24.27
3/31/99 23.19 21.65
6/30/99 20.13 21.88
9/30/99 17.50 20.14
12/31/99 15.13 18.16
3/3/00 12.94 17.00
8
[DIME LOGO]
<PAGE> 25
IN-MARKET TRANSACTIONS HAVE PERFORMED POORLY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAJOR IN-MARKET TRANSACTIONS
------------------------------------------------------------------------------------------------------------------------
ANNOUNCE DATE ACQUIROR TARGET PREMIUM % COST EXPECTED PRETAX PROFIT STOCK
PAID SAVINGS(1) SHORTFALL(2) PERFORMANCE OF
---------------------- ACQUIROR VS. BKX(3)
($MM) %
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
06/06/99 Zions First Security 55% 15% NM NM (17.1)%
03/17/98 Washington Mutual H.F. Ahmanson 23 40 $(811) (21)% (33.0)
11/18/97 First Union CoreStates 17 46 (1,606) (24) (37.9)
08/29/97 NationsBank Barnett Banks 24 55 (2,256) (25) (29.9)
03/06/97 Washington Mutual Great Western 39 33 (575) (17) (43.4)
--------------------------------------------------------------------------------------------------------
Average 32% 38% - (22)% (32.1)%
NFB PROPOSAL DIME 41% 86% - - -
------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Announced cost savings as a percentage of the smaller
company's annual expense base.
(2) Based on difference between current analyst estimates or
actual results and management estimates provided in the
investor presentations.
(3) Keefe, Bruyette and Woods Bank Stock Index.
9
[DIME LOGO]
<PAGE> 26
NFB PROPOSAL HIGHLY UNCERTAIN & UNLIKELY TO SUCCEED
- --------------------------------------------------------------------------------
= Dime Board of Directors rejected NFB proposal on both
strategic and financial grounds
= More than 50% of all hostile exchange offers in the banking
industry have been withdrawn before completion
= NFB has a long history of undertaking hostile approaches on
which they have not followed through
= Nothing compels NFB to follow-through with the offer
- --------------------------------------------------------------------------------
IT IS HIGHLY UNLIKELY THAT DIME'S SHAREHOLDERS WILL EVER GET TO ACT ON
THE NFB PROPOSAL, EVEN IF THE HUDSON UNITED DEAL IS VOTED DOWN
- --------------------------------------------------------------------------------
10
[DIME LOGO]
<PAGE> 27
NFB PROPOSAL DESTROYS SHAREHOLDER VALUE
- --------------------------------------------------------------------------------
Value of 10 year warrants issued to FleetBoston $50 - $70 MM
Breakup fee payable to Hudson United 50
Excess restructuring charge (after tax) 100
Sale of $2 billion in deposits to FleetBoston at
below market premiums(1) 100
--------------
TOTAL SHAREHOLDER VALUE DESTROYED $300 - $320 MM
AS A % OF NFB PROPOSED VALUE(2) 16% - 17%
(1) Represents a 5% incremental premium over the 8% deposit
premium purchase price disclosed in NFB Proposal, for a 13%
total market-based deposit premium.
(2) Based on $17.00 per Dime share.
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<PAGE> 28
DIME UNITED - A SUPERIOR FRANCHISE
- --------------------------------------------------------------------------------
THE COMBINATION WITH HUDSON UNITED CREATES A MORE COMPELLING FRANCHISE:
o Dime United will have a powerful branch network encompassing
a four state region from Philadelphia to Hartford
o Greater presence in more affluent areas, particularly in New
Jersey and Connecticut
o 40% of NFB Proposal franchise highly concentrated in just two
counties
DIME UNITED NFB PROPOSAL
[GRAPHIC BRANCH MAP OF DIME UNITED] [GRAPHIC BRANCH MAP OF NFB PROPOSAL]
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<PAGE> 29
DIME UNITED - A SUPERIOR FRANCHISE
- --------------------------------------------------------------------------------
BALANCED GEOGRAPHIC DIVERSIFICATION
DIME UNITED DEPOSITS
[PIE CHART]
Connecticut 8%
New Jersey 27%
New York 59%
Pennsylvania 6%
NFB/DIME DEPOSITS
[PIE CHART]
Connecticut 2%
New Jersey 10%
New York 88%
MORE AFFLUENT DEMOGRAPHICS AND MARKETS
% OF DEPOSITS IN AFFLUENT MARKETS(1)
[BAR CHART]
Dime United 72%
NFB/Dime 64%
(1) Defined as counties with median household income greater than
U.S. median.
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<PAGE> 30
DIME SHAREHOLDERS GET LESS FROM NFB PROPOSAL
- --------------------------------------------------------------------------------
CONTRIBUTION ANALYSIS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
DIME UNITED NFB/DIME
--------------------------- ---------------------------
DIME % OVER- DIME % OVER-
CONTRIBUTION CONTRIBUTION CONTRIBUTION CONTRIBUTION
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Assets 71.2% 27% 59.5% 72%
Tangible Common Equity 64.1 15 48.6 41
2000E Net Income 63.7 14 45.0 31
2000E Net Income Including Synergies(1) 57.1 2 53.1 54
-------------------------------------------------------------------------------------------------------------
Dime Pro Forma Ownership 55.9% - 34.5%(2) -
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 100% of synergies ascribed to target institution.
(2) Pro forma for ownership ascribed to FleetBoston.
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A THRIFT IN A BANK'S CLOTHING
- --------------------------------------------------------------------------------
NFB'S GROWTH HAS PRINCIPALLY BEEN ACHIEVED THROUGH THRIFT ACQUISITIONS
AND INCREASES IN BALANCE SHEET LEVERAGE:
ALL NFB ACQUISITIONS SINCE 1995
(DOLLARS IN MILLIONS)
- -------------------------------------------------------------------------------
TRANSACTION TOTAL ASSETS TOTAL DEPOSITS
- -------------------------------------------------------------------------------
Northside Savings Bank - Thrift $1,580 $1,227
Branford Savings Bank - Thrift 177 158
New York Bancorp - Thrift 3,284 1,691
Jamaica Savings Bank - Thrift 1,613 1,119
Reliance Federal - Thrift 2,452 1,549
-------- --------
TOTAL THRIFTS ACQUIRED $9,106 $5,744
NFB Total Balance Sheet Pro Forma 12/31/99 $16,266 $9,157
% THRIFT COMPOSITION OF NFB 56% 63%
- -------------------------------------------------------------------------------
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NET INTEREST MARGIN INFLUENCES P/E MULTIPLE
- --------------------------------------------------------------------------------
NET INTEREST MARGIN(1)
[BAR CHART]
135 bp reduction
----------------
1997 1998 1999 Pro Forma(2)
---- ---- ---- ------------
NFB 4.69% 4.48% 4.16% 3.34%
87 bp Increase
--------------
1997 1998 1999 Pro Forma(3)
---- ---- ---- ------------
Dime 2.51% 2.68% 2.91% 3.38%
(1) As originally reported.
(2) Pro forma for Dime, JSB, and Reliance.
(3) Dime United pro forma.
- --------------------------------------------------------------------------------
2000 P/E MULTIPLE
[GRAPHIC OMITTED]
-----------------------------------------------
| |
| ----------------- |
| | Bank Peer | |
| | Average P/E(1) | |
| ----------------- |
9.1x |----------------------------------------------|
| ------ / |
| | NFB | / |
| | 8.8x | / |
| ------ \ / |
| 32% Decrease \ / |
| \ / 75% Increase |
| \ / |
| \/ |
| / \ |
| / \ |
6.0x |----------------------------------------------|
| ---------- / ----------------- |
| | Dime | | Thrift Peer | |
| | United | | Average P/E(2) | |
| | 5.2x | ----------------- |
| ---------- |
----------------------------------------------
(1) Includes Summit Bancorp, Associated Banc-Corp, and M&T Bank
Corp.
(2) Includes Astoria Financial Corp., Sovereign Bancorp,
Washington Mutual, and Golden State Bancorp.
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<PAGE> 33
DIME UNITED TRANSACTION STRATEGICALLY SUPERIOR
- -------------------------------------------------------------------------------
= Provides greater upside potential through multiple expansion
= Broadens franchise geographically into new markets
(Pennsylvania, Upstate NY and Connecticut) while greatly
enhancing its New Jersey presence
= Capitalizes on Dime's strong retail brand identity
= Balances and diversifies Dime's earnings stream. Accelerates
Dime's progression towards a commercial bank profile
= Dime shareholders preserve the opportunity to realize a
"change of control" premium for the more valuable Dime United
franchise
- --------------------------------------------------------------------------------
DIME UNITED TRANSACTION SUPERIOR FOR DIME SHAREHOLDERS
- --------------------------------------------------------------------------------
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<PAGE> 34
OTHER DOCUMENTS
- --------------------------------------------------------------------------------
INVESTORS ARE URGED TO READ DIME AND HUDSON'S PROXY
STATEMENT/PROSPECTUS, INCLUDING THE SUPPLEMENT DATED MARCH 7, 2000 AND
ANY OTHER AMENDMENTS OR SUPPLEMENTS WHEN THEY BECOME AVAILABLE, AS WELL
AS ANY SOLICITATION/RECOMMENDATION STATEMENT THAT MAY BE FILED BY DIME,
BECAUSE THEY CONTAIN IMPORTANT INFORMATION. EACH OF THESE DOCUMENTS HAS
BEEN OR WILL BE FILED WITH THE SEC AND INVESTORS MAY OBTAIN A FREE COPY
OF THEM AT THE SEC'S INTERNET WEB SITE AT WWW.SEC.GOV. THESE DOCUMENTS
MAY ALSO BE OBTAINED FOR FREE FROM DIME BY DIRECTING SUCH REQUEST TO:
DIME BANCORP, INC., C/O INNISFREE M&A INCORPORATED, 501 MADISON AVENUE,
20TH FLOOR, NEW YORK, NEW YORK 10022, TOLL FREE PHONE: (888) 750-5834.
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<PAGE> 35
INFORMATION ABOUT NORTH FORK AND FLEETBOSTON
- --------------------------------------------------------------------------------
THE INFORMATION IN THIS PRESENTATION REGARDING NORTH FORK, NORTH FORK'S
OFFER AND NORTH FORK'S ARRANGEMENTS WITH FLEETBOSTON IS BASED ENTIRELY
ON, AND IS QUALIFIED ENTIRELY BY REFERENCE TO, NORTH FORK'S AND
FLEETBOSTON'S DOCUMENTS FILED WITH THE SEC AS OF MARCH 7TH.
THESE DOCUMENTS INCLUDE:
o Communications by North Fork, filed on March 6, 2000,
pursuant to the SEC's Rule 425 under the Securities Act of
1933
o Preliminary Proxy Solicitation Material by North Fork, filed
on March 6, 2000, pursuant to the SEC's Rule 14a-12 under the
Securities Exchange Act of 1934
o Schedule TO by FleetBoston, filed on March 6, 2000
DIME AND HUDSON MAKE NO GUARANTEE AS TO THE ACCURACY OF THE INFORMATION
CONTAINED IN THESE DOCUMENTS.
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