As filed with the Securities and Exchange Commission on July 29, 2004
Registration No. 333-______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------------------
DIME COMMUNITY BANCSHARES, INC. DIME COMMUNITY CAPITAL TRUST I
(Exact name of Registrant (Exact name of Co-Registrant
as specified in its charter) as specified in its charter)
DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
6035 6719
(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
11-3297463 51-6555113
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
209 HAVEMEYER STREET
BROOKLYN, NEW YORK 11211
(718) 782-6200
(Address, including zip code,
and telephone number,
including area code, of Registrant's and Co-Registrant's
principal executive offices)
VINCENT F. PALAGIANO
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
DIME COMMUNITY BANCSHARES, INC.
209 HAVEMEYER STREET
BROOKLYN, NEW YORK 11211
(718) 782-6200
(Name, address, including zip code, and telephone number,
including area code, of agents for service)
KENNETH J. MAHON
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
DIME COMMUNITY BANCSHARES, INC.
209 HAVEMEYER STREET
BROOKLYN, NEW YORK 11211
(718) 782-6200
(Name, address, including zip code, and telephone number,
including area code, of agents for service)
COPIES TO:
ROBERT C. AZAROW, ESQ.
OMER S. J. WILLIAMS, ESQ.
THACHER PROFFITT & WOOD LLP
TWO WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10281
(212) 912-7400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------------------
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT (1) OFFERING PRICE (1) REGISTRATION FEE
Exchange of Capital Securities of Dime Community Capital Trust I.... 70,000 $1,000 $70,000,000 $8,869
Exchange of Debt Securities of Dime Community Bancshares, Inc (2)...
Dime Community Bancshares, Inc Exchange Guarantee with respect to
Exchange Capital Securities (2).....................................
Total(3)............................................... 70,000 $1,000 $70,000,000 (4) $8,869
====================================================================================================================================
(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Exchange Debt Securities
of Dime Community Bancshares, Inc. distributed upon any liquidation of Dime
Community Capital Trust I, and no separate consideration will be received
for the Dime Community Bancshares, Inc. Exchange Guarantee.
(3) This Registration Statement is deemed to cover rights of holders of
Exchange Debt Securities under the Indenture, the rights of holders of
Exchange Capital Securities of Dime Community Capital Trust I under the
Second Amended and Restated Declaration of Trust, the rights of holders of
such Exchange Capital Securities under the Exchange Guarantee and certain
backup undertakings in this Registration Statement.
(4) Such amount represents the liquidation amount of the Exchange Capital
Securities to be exchanged hereunder and the principal amount of Exchange
Debt Securities that may be distributed to holders of such Exchange Capital
Securities upon any liquidation of Dime Community Capital Trust I.
------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.
-2-
PROSPECTUS
DIME COMMUNITY CAPITAL TRUST I
OFFER TO EXCHANGE ITS 7.0% CAPITAL SECURITIES, SERIES B
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 7.0% CAPITAL SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER ORIGINAL CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED
IN THIS PROSPECTUS, BY
[LOGO OF DIME COMMUNITY BANCSHARES, INC.]
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME ON _______, 2004, UNLESS EXTENDED.
Dime Community Capital Trust I, referred to as the Trust, is offering
and selling upon the terms and subject to the conditions described in this
prospectus, as amended and supplemented from time to time, and in the
accompanying letter of transmittal, which together constitute the exchange
offer, to exchange up to and including $70,000,000 aggregate liquidation amount
of its 7.0% capital securities, Series B, referred to as the exchange capital
securities, which have been registered under the Securities Act of 1933, as
amended, by a registration statement of which this prospectus is a part, for a
like amount of its outstanding 7.0% capital securities, Series A, referred to as
the original capital securities, of which $70,000,000 aggregate liquidation
amount are issued and outstanding.
This prospectus and the letter of transmittal are first being mailed to
all holders of the original capital securities, on or about _______, 2004.
YOU SHOULD READ "RISK FACTORS" BEGINNING ON PAGE 16 TO READ ABOUT THE
RISKS THAT YOU SHOULD CONSIDER IN DECIDING WHETHER TO TENDER THE ORIGINAL
CAPITAL SECURITIES IN THE EXCHANGE OFFER.
THESE SECURITIES ARE NOT DEPOSITS OR ACCOUNTS AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION, REFERRED TO AS THE SEC,
NOR ANY STATE SECURITIES COMMISSION OR REGULATOR HAS APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT
IS ILLEGAL FOR ANYONE TO TELL YOU OTHERWISE.
THE DATE OF THIS PROSPECTUS IS _____, 2004.
AVAILABLE INFORMATION
Dime Community Bancshares, Inc. files reports, proxy statements and
other information with the SEC under the Securities Exchange Act of 1934, as
amended, referred to as the Exchange Act. You may read and copy this information
at prescribed rates at the following location of the SEC:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
You can also obtain additional information about the operation of the
SEC's public reference facilities by calling the SEC at 1-800-SEC-0330. The SEC
also maintains an Internet world wide web site that contains reports, proxy
statements and other information about issuers like us who file electronically
with the SEC. The address of that site is HTTP://WWW.SEC.GOV.
The common stock of Dime Community is traded on The Nasdaq National
Market and quoted under the symbol DCOM. You can also inspect information about
Dime Community by visiting The Nasdaq National Market web site
(HTTP://WWW.NASDAQ.COM). Our web site is HTTP://WWW.DSBWDIRECT.COM. Information
contained in our web site does not constitute part of this prospectus.
NO SEPARATE FINANCIAL STATEMENTS OF THE TRUST HAVE BEEN INCLUDED IN
THIS PROSPECTUS AND NO SEPARATE FINANCIAL STATEMENTS WILL BE PREPARED IN THE
FUTURE. WE DO NOT CONSIDER THAT SUCH FINANCIAL STATEMENTS WOULD BE MATERIAL TO
HOLDERS OF THE EXCHANGE CAPITAL SECURITIES OFFERED BY THIS PROSPECTUS BECAUSE
THE TRUST IS A NEWLY-FORMED SPECIAL PURPOSE ENTITY, HAS NO OPERATING HISTORY OR
INDEPENDENT OPERATIONS, IS NOT ENGAGED IN AND DOES NOT PROPOSE TO ENGAGE IN ANY
ACTIVITY OTHER THAN HOLDING AS TRUST ASSETS OUR EXCHANGE DEBT SECURITIES,
ISSUING THE EXCHANGE CAPITAL SECURITIES TO INVESTORS AND COMMON SECURITIES TO
DIME COMMUNITY AND ENGAGING IN INCIDENTAL ACTIVITIES. THE OBLIGATIONS OF THE
TRUST TO MAKE PAYMENTS UNDER THE EXCHANGE CAPITAL SECURITIES ARE FULLY AND
UNCONDITIONALLY GUARANTEED BY DIME COMMUNITY AS AND TO THE EXTENT SET FORTH
UNDER "DESCRIPTION OF EXCHANGE GUARANTEE." TAKEN TOGETHER, DIME COMMUNITY'S
OBLIGATIONS UNDER THE EXCHANGE DEBT SECURITIES, THE INDENTURE, THE TRUST
AGREEMENT AND THE EXCHANGE GUARANTEE WILL PROVIDE, ON A SUBORDINATED BASIS, A
FULL, IRREVOCABLE AND UNCONDITIONAL GUARANTEE OF THE TRUST'S PAYMENTS OF
DISTRIBUTIONS AND OTHER AMOUNTS DUE ON THE EXCHANGE CAPITAL SECURITIES. DIME
COMMUNITY DOES NOT EXPECT THAT THE TRUST WILL FILE REPORTS, PROXY STATEMENTS AND
OTHER INFORMATION UNDER THE EXCHANGE ACT WITH THE SEC.
This prospectus constitutes a part of a registration statement on Form
S-4 filed by us and the Trust with the SEC under the Securities Act of 1933, as
amended, also referred to as the Securities Act. This prospectus does not
contain all the information set forth in the registration statement, certain
parts of which are omitted in accordance with the rules and regulations of the
SEC, and reference is made to the registration statement and to the exhibits
relating to such registration statement for further information with respect to
Dime Community and the exchange capital securities. Any statements contained in
this prospectus concerning the provisions of any document are not necessarily
complete, and, in each instance, reference is made to the copy of such document
filed as an exhibit to the registration statement or otherwise filed with the
SEC. Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating information into this prospectus by reference,
which means that we are disclosing important information to you by referring you
to documents filed with the SEC. The information incorporated by reference is
considered to be a part of this prospectus, except as discussed below. The
following documents that we have filed with the SEC are incorporated into this
prospectus by reference:
o DIME COMMUNITY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
2003;
o DIME COMMUNITY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH
31, 2004; AND
o DIME COMMUNITY'S CURRENT REPORT ON FORM 8-K DATED JUNE 9, 2004.
o DIME COMMUNITY'S CURRENT REPORT ON FORM 8-K DATED JULY 23, 2004.
In addition, we also incorporate by reference all future filings we make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this prospectus and prior to the termination of the offering of the
exchange capital securities offered by this prospectus from the date of filing
of such document. These documents include periodic reports, such as Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K (other than Current Reports furnished under Item 9 of Form 8-K), as well as
proxy statements. However, any statement contained in this prospectus or in a
document incorporated or deemed to be incorporated by reference in this
prospectus shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this prospectus or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference in this prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
The information incorporated by reference contains information about us
and our financial condition and performance and is an important part of this
prospectus.
You can obtain any of the documents incorporated by reference in this
prospectus through us, or from the SEC through the SEC's Internet world wide web
site at the address specified above. Documents incorporated by reference in this
prospectus are available without charge, excluding any exhibits to those
documents, by writing or telephoning us at:
Dime Community Bancshares, Inc.
209 Havemeyer Street
Brooklyn, NY 11211
Attention: Investor Relations
(718) 782-6200
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone to
give any information or make any representation about us that is different from,
or in addition to, those contained or incorporated by reference in this
prospectus. If anyone does give you any additional or different information, you
should not rely on it. If you are in a jurisdiction where offers to sell, or
solicitations of offers to purchase, the exchange capital securities are
unlawful, or if you are a person to whom it is unlawful to direct these types of
activities, then the offer presented in this prospectus does not extend to you.
The information contained or incorporated by reference in this prospectus speaks
only as of the date of this document unless the information specifically
indicates that another date applies.
FORWARD LOOKING STATEMENTS
This prospectus, including information included or incorporated by
reference, contains statements which are not historical facts but
"forward-looking statements," as that term is defined in the Private Securities
Litigation Reform Act of 1995, with respect to our financial condition, results
of operations, plans, objectives, future
2
performance and business. These statements may be identified by the use of the
words "anticipate," "believe," "could," "estimate," "expect," "intend," "may,"
"outlook," "plan," "potential," "predict," "project," "should," "will," "would"
and similar terms and phrases, including references to assumptions.
The forward-looking statements contained in this prospectus are based
on various assumptions and analyses made by us in light of our management's
experience and its perception of historical trends, current conditions and
expected future developments, as well as other factors it believes are
appropriate under the circumstances. These statements are not guarantees of
future performance and are subject to risks, uncertainties and other factors
(many of which are beyond our control) that could cause actual results to differ
materially from future results expressed or implied by such forward-looking
statements. These factors include, without limitation, the following:
o the timing and occurrence or non-occurrence of events may be
subject to circumstances beyond our control;
o there may be increases in competitive pressure among financial
institutions or from non-financial institutions;
o changes in the interest rate environment may reduce net interest
margins;
o changes in deposit flows, loan demand or real estate values may
adversely affect our business;
o changes in accounting principles, policies or guidelines may
cause our financial condition to be perceived differently;
o general economic conditions, either nationally or locally in some
or all areas in which we do business, or conditions in the
securities markets or the banking industry may be less favorable
than we currently anticipate;
o legislation or regulatory changes may adversely affect our
business;
o technological changes may be more difficult or expensive than we
anticipate;
o success or consummation of new business initiatives may be more
difficult or expensive than we anticipate; or
o litigation or other matters before regulatory agencies, whether
currently existing or commencing in the future, may delay the
occurrence or non-occurrence of events longer than we anticipate.
The forward-looking statements are made as of the date of this
prospectus, and, except as required by applicable law, we assume no obligation
to update the forward-looking statements or to update the reasons why actual
results could differ from those projected in the forward-looking statements. The
statements in the "Risk Factors" section of this prospectus are cautionary
statements identifying important factors, including certain risks and
uncertainties, that could cause our results to vary materially from the future
results covered in such forward-looking statements. You should consider these
risks and uncertainties in evaluating the forward-looking statements and you
should not place undue reliance on these statements.
3
SUMMARY
The following information is a summary of the significant terms of the
offering of exchange capital securities made by this prospectus. You should
carefully read this prospectus to understand fully the terms of the exchange
capital securities, as well as the tax and other considerations that are
important to you in making a decision about whether to exchange your original
capital securities for the exchange capital securities. You should pay special
attention to the "Risk Factors" section beginning on page 16 of this prospectus
to determine whether an investment in the exchange capital securities is
appropriate for you.
Unless otherwise indicated or unless the context requires otherwise,
all references in this prospectus to "Dime Community," "we," "us," "our" or
similar references mean Dime Community Bancshares, Inc. and references to "Dime
of Williamsburgh" or "Bank" means The Dime Savings Bank of Williamsburgh.
DIME COMMUNITY BANCSHARES, INC.
Dime Community Bancshares, Inc., is a Delaware corporation and is the
unitary savings and loan association holding company for The Dime Savings Bank
of Williamsburgh, a federally chartered stock savings bank. At March 31, 2004,
on a consolidated basis, we had total assets of $3.37 billion, deposits of $2.27
billion and total stockholders' equity of $275.8 million.
The Bank's principal business has been, and continues to be, gathering
deposits from customers primarily within its market area, and investing those
deposits primarily in multi-family residential mortgage loans, commercial real
estate loans, one- to four-family residential mortgage loans, construction
loans, consumer loans, mortgage-backed securities, referred to as MBS,
obligations of the U.S. Government and Government Sponsored Entities, and
corporate debt and equity securities. The Bank's revenues are derived
principally from interest on its loan and securities portfolios. The Bank's
primary sources of funds are: deposits; loan amortization, prepayments and
maturities; MBS amortization, prepayments and maturities; investment securities
maturities; advances from the Federal Home Loan Bank of New York; securities
sold under agreement to repurchase borrowings; and the sale of real estate loans
to the secondary market.
The Bank's primary strategy is to increase its household and deposit
market shares in the communities that it serves, either through direct
marketing, acquisitions or purchases of deposits. The Bank also seeks to
increase its product and service utilization for each individual depositor. In
addition, the Bank's primary strategy includes the origination of, and
investment in, mortgage loans with an emphasis on multi-family residential
loans. Multi-family residential lending is a significant business of the Bank,
reflecting the fact that much of the housing in its primary lending area is
multi-family housing. The Bank also strives to provide a stable source of
liquidity and earnings through the purchase of investment grade securities;
seeks to maintain the asset quality of its loans and other investments; and uses
appropriate portfolio and asset/liability management techniques in an effort to
manage the effects of interest rate volatility on its profitability and capital.
Management of the Bank believes that multi-family residential loans
provide advantages as investment assets. Initially, they offer a higher yield
than one-to four-family loans or investment securities of comparable maturities
or terms to repricing. Origination and processing costs for the Bank's
multi-family residential and commercial real estate loans are lower per thousand
dollars of originations than comparable one- to four-family loan costs. In
addition, the Bank's market area generally has provided a stable flow of new and
refinanced multi-family residential loan originations. In order to address the
higher credit risk associated with multi-family residential lending, the Bank
has developed underwriting standards that it believes are reliable in order to
maintain consistent credit quality for its new loans. For further information
regarding our operating strategies, you should read the sections titled
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our Annual Report on Form 10-K for the year ended
December 31, 2003, which is incorporated into this prospectus by reference.
As a publicly-held unitary savings and loan holding company, Dime
Community is required to file certain reports with, and otherwise comply with
the rules and regulations of, the SEC under the federal securities laws and of
the Office of Thrift Supervision, referred to as the OTS. Dime of Williamsburgh
is subject to extensive regulation, examination, and supervision by the OTS, as
its chartering agency, and the Federal Deposit Insurance Corporation, referred
to as the FDIC, as its deposit insurer.
4
Dime Community's principal executive offices are located at Dime
Community Bancshares, Inc., 209 Havemeyer Street, Brooklyn, New York 11211, and
its telephone number is (718) 782-6200.
Additional information about Dime Community and its subsidiaries is
included in documents incorporated by reference in this prospectus. You should
refer to "Available Information."
DIME COMMUNITY CAPITAL TRUST I
Dime Community Capital Trust I is a statutory trust created under
Delaware law upon the filing of a certificate of trust with the Delaware
Secretary of State. The Trust's business and affairs are conducted by the
institutional trustee, the Delaware trustee and three individual administrators
who are officers of Dime Community. The Trust exists for the exclusive purposes
of:
o issuing and selling the original capital securities and the
exchange capital securities, collectively referred to as the
capital securities;
o using the proceeds from the sale of the capital securities and
the common securities to acquire fixed rate junior subordinated
deferrable interest debt securities, referred to as the junior
subordinated debt securities, issued by Dime Community; and
o engaging in only those other activities necessary, advisable or
incidental to the above.
Accordingly, the junior subordinated debt securities are the sole assets of the
Trust, and payments under the junior subordinated debt securities are the sole
revenues of the Trust.
All of the common securities of the Trust are owned by Dime Community.
5
THE EXCHANGE OFFER
THE EXCHANGE OFFER.................... Up to and including $70,000,000
aggregate liquidation amount of
exchange capital securities are being
offered in exchange for a like
aggregate liquidation amount of
original capital securities. Original
capital securities may be tendered for
exchange in whole or in part in a
liquidation amount of $100,000 (100
original capital securities) or any
integral multiple of $1,000 (one
original capital security) in excess of
$100,000. Under the exchange offer, we
will exchange as soon as practicable
after the date of this prospectus our
$70,000,000 aggregate principal amount
of junior subordinated debt securities,
Series A, also referred to as the
original junior subordinated debt
securities, for a like aggregate
principal amount of our junior
subordinated debt securities, Series B,
also referred to as the exchange debt
securities. We refer to the original
junior subordinated debt securities and
the exchange debt securities
collectively as the junior subordinated
debt securities. Together with the
Trust, we are making the exchange offer
in order to satisfy our respective
obligations under the registration
rights agreement relating to the
original capital securities. For a
description of the procedures for
tendering original capital securities,
please read "The Exchange
Offer--Procedures for Tendering
Original Capital Securities."
EXPIRATION DATE....................... 5:00 p.m., New York City time, on
_______, 2004 unless the exchange offer
is extended by us and the Trust, in
which case the expiration date will be
the latest date and time to which the
exchange offer is extended.
CONDITIONS TO THE EXCHANGE OFFER...... The exchange offer is subject to
certain conditions, which may be waived
by us and the Trust in our sole
discretion. The exchange offer is not
conditioned upon any minimum
liquidation amount of original capital
securities being tendered.
TERMS OF THE EXCHANGE OFFER........... We and the Trust reserve the right in
our sole and absolute discretion,
subject to applicable law, at any time
and from time to time, (i) to delay the
acceptance of the original capital
securities, (ii) to terminate the
exchange offer if certain specified
conditions have not been satisfied,
(iii) to extend the expiration date of
the exchange offer and retain all
original capital securities tendered as
a result of the exchange offer,
subject, however, to the right of
holders of original capital securities
to withdraw their tendered original
capital securities or (iv) to waive any
condition or otherwise amend the terms
of the exchange offer in any respect.
WITHDRAWAL RIGHTS..................... Tenders of original capital securities
may be withdrawn at any time on or
prior to the expiration date by
delivering a written notice of such
withdrawal to the exchange agent in
conformity with certain procedures as
set forth under "The Exchange
Offer--Withdrawal Rights."
6
PROCEDURES FOR TENDERING ORIGINAL
CAPITAL SECURITIES..................... Certain brokers, dealers, commercial
banks, trust companies and other
nominees who hold original capital
securities through The Depository Trust
Company, or DTC, must effect tenders by
book entry transfer through DTC's
Automated Tender Offer Program, or
ATOP. Beneficial owners of original
capital securities registered in the
name of a broker, dealer, commercial
bank, trust company or other nominee
are urged to contact such person or
entity promptly if they wish to tender
original capital securities under the
exchange offer. Tendering holders of
original capital securities that do not
use ATOP must complete and sign a
letter of transmittal in accordance
with the instructions contained in such
letter and forward the same by mail,
facsimile transmission or hand
delivery, together with any other
required documents, to the exchange
agent, either with the certificates of
the original capital securities to be
tendered or in compliance with the
specified procedures for guaranteed
delivery of original capital
securities. Tendering holders of
original capital securities that use
ATOP will, by so doing, acknowledge
that they are bound by the terms of the
letter of transmittal. Letters of
transmittal and certificates
representing original capital
securities should not be sent to us or
the Trust. Such documents should only
be sent to the exchange agent.
RESALES OF EXCHANGE CAPITAL
SECURITIES.................. We and the Trust are making the
exchange offer in reliance on the
position of the staff of the SEC as set
forth in certain interpretive letters
addressed to third parties in other
transactions. However, neither we nor
the Trust has sought our own
interpretive letter and there can be no
assurance that the staff of the SEC
would make a similar determination with
respect to the exchange offer as it has
in such interpretive letters to third
parties. Based on these interpretations
by the staff of the SEC, and subject to
the two immediately following
sentences, we and the Trust believe
that the exchange capital securities
issued under this exchange offer in
exchange for original capital
securities may be offered for resale,
resold and otherwise transferred by a
holder of such exchange capital
securities, other than a holder who is
a broker-dealer, without further
compliance with the registration and
prospectus delivery requirements of the
Securities Act, provided that such
exchange capital securities are
acquired in the ordinary course of such
holder's business and that such holder
is not participating, and has no
arrangement or understanding with any
person to participate, in a
distribution, within the meaning of the
Securities Act, of such exchange
capital securities. However, any holder
of original capital securities who is
an affiliate of us or the Trust or who
intends to participate in the exchange
offer for the purpose of distributing
the exchange capital securities, or any
broker-dealer who purchased the
original capital securities from the
Trust to resell pursuant to Rule 144A
or any other available exemption under
the Securities Act:
o will not be able to rely on
the interpretations of the
staff of the SEC set forth in
the above mentioned
interpretive letters;
o will not be permitted or
entitled to tender such
original capital securities in
the exchange offer; and
o must comply with the
registration and prospectus
delivery requirements of the
Securities Act in connection
with any sale or other
transfer of such original
capital securities unless such
sale is made in
7
reliance on an exemption from
such requirements.
In addition, as described in this
prospectus, if any broker-dealer holds
original capital securities acquired
for its own account as a result of
market-making or other trading
activities and exchanges such original
capital securities for exchange capital
securities, then such broker-dealer
must deliver a prospectus meeting the
requirements of the Securities Act in
connection with any resales of such
exchange capital securities. Each
holder of original capital securities
who wishes to exchange original capital
securities for exchange capital
securities in the exchange offer will
be required to represent that:
o it is not an affiliate of us
or the Trust;
o any exchange capital
securities to be received by
it are being acquired in the
ordinary course of its
business;
o it has no arrangement or
understanding with any person
to participate in a
distribution, within the
meaning of the Securities Act,
of such exchange capital
securities; and
o if such holder is not a
broker-dealer, such holder is
not engaged in, and does not
intend to engage in, a
distribution, within the
meaning of the Securities Act
of such exchange capital
securities.
Each broker-dealer that receives
exchange capital securities for its own
account in exchange for original
capital securities, where such original
capital securities were acquired by
such broker-dealer as a result of
market-making activities or other
trading activities, must acknowledge
that it will deliver a prospectus
meeting the requirements of the
Exchange Act in connection with any
resale of such exchange capital
securities. You should read "Plan of
Distribution."
The letter of transmittal states that,
by so acknowledging and by delivering a
prospectus, a broker- dealer will not
be deemed to admit that it is an
underwriter within the meaning of the
Securities Act. Based on the position
taken by the staff of the SEC in the
interpretive letters referred to above,
we and the Trust believe that
participating broker-dealers who
acquired original capital securities
for their own accounts as a result of
market-making activities or other
trading activities may fulfill their
prospectus delivery requirements with
respect to the exchange capital
securities received upon exchange of
such original capital securities, other
than original capital securities that
represent an unsold allotment from the
initial sale of the original capital
securities, with a prospectus meeting
the requirements of the Securities Act,
which may be the prospectus prepared
for an exchange offer so long as it
contains a description of the plan of
distribution with respect to the resale
of such exchange capital securities.
Accordingly, this prospectus, as it may
be amended or supplemented from time to
time, may be used by a participating
broker-dealer in connection with
resales of exchange capital securities
received in exchange for original
capital securities
8
where such original capital securities
were acquired by such participating
broker-dealer for its own account as a
result of market-making or other
trading activities. Subject to certain
provisions set forth in the
registration rights agreement and to
the limitations described in this
prospectus under "The Exchange
Offer--Resales of Exchange Capital
Securities," we and the Trust have
agreed that this prospectus, as it may
be amended or supplemented from time to
time, may be used by a participating
broker-dealer in connection with
resales of such exchange capital
securities for a period ending 90 days
after the expiration date, subject to
extension under certain limited
circumstances, or, if earlier, when all
such exchange capital securities have
been disposed of by such participating
broker-dealer. Any participating
broker-dealer who is an affiliate of us
or the Trust may not rely on such
interpretive letters and must comply
with the registration and prospectus
delivery requirements of the Securities
Act in connection with any resale
transaction.
EXCHANGE AGENT........................ The exchange agent with respect to the
exchange offer is the institutional
trustee of the Trust, Wilmington Trust
Company. The address, telephone and
facsimile numbers of the exchange agent
are set forth in this prospectus under
"The Exchange Offer--Exchange Agent"
and in the letter of transmittal.
USE OF PROCEEDS....................... Neither we nor the Trust will receive
any cash proceeds from the issuance of
the exchange capital securities.
CERTAIN FEDERAL INCOME
TAX CONSIDERATIONS.................... The exchange of original capital
securities for exchange capital
securities will not be a taxable
exchange for federal income tax
purposes and you should not recognize
any taxable gain or loss or any
interest income as a result of such
exchange.
ERISA CONSIDERATIONS.................. You should review the information set
forth in this prospectus under "ERISA
Considerations" prior to tendering
original capital securities in the
exchange offer.
9
THE EXCHANGE CAPITAL SECURITIES
SECURITIES OFFERED.................... Up to $70,000,000 aggregate liquidation
amount of exchange capital securities,
liquidation amount $1,000 per exchange
capital security, will have been
registered under the Securities Act.
The exchange capital securities will be
issued under the second amended and
restated declaration of trust, dated as
of July 29, 2004, relating to the Trust
by and among us, as Sponsor, Wilmington
Trust Company, as institutional
trustee, Wilmington Trust Company, as
Delaware trustee, and the
administrators, also referred to as the
trust agreement. The exchange capital
securities and any original capital
securities that remain outstanding
after consummation of the exchange
offer will vote together as a single
class for purposes of determining
whether holders of the requisite
percentage in outstanding liquidation
amount have taken certain actions or
exercised certain rights under the
trust agreement. The terms of the
exchange capital securities are
identical in all material respects to
the terms of the original capital
securities, except that the exchange
capital securities have been registered
under the Securities Act, will not be
subject to certain restrictions on
transfer applicable to the original
capital securities and will not provide
for any increase in the distribution
rate.
DISTRIBUTIONS......................... You will be entitled to receive
cumulative cash distributions at the
annual rate of 7.0% of the liquidation
amount of $1,000 per exchange capital
security. Distributions will accumulate
from the date the Trust issued the
original capital securities and will be
paid quarterly in arrears on January
15th, April 15th, July 15th and October
15th of each year, beginning on July
15, 2004. The record dates will be the
15th calendar day immediately preceding
any payment date. Because the exchange
offer will be consummated after June
30, 2004, which is the record date for
the July 15, 2004 payment date,
distributions were paid on the original
capital securities accumulated from and
after March 19, 2004 through July 14,
2004, and distributions will be paid on
the exchange capital securities from
and after July 15, 2004. The first
interest payment date for the exchange
debt securities will be October 15,
2004. The amount of each distribution
with respect to the exchange capital
securities will include amounts accrued
to, but excluding, the date the
distribution is due. Because of the
foregoing procedures regarding
distributions, the amount of the
distributions received by holders whose
original capital securities are
accepted for exchange will not be
affected by the exchange.
EXTENSION PERIODS..................... So long as no event of default relating
to the exchange debt securities has
occurred and is continuing, we have the
right, at one or more times, to defer
interest payments on the exchange debt
securities for up to 20 consecutive
quarterly periods. All such extensions
will end on an interest payment date
and will not extend beyond April 14,
2034, the stated maturity date of the
exchange debt securities, any optional
redemption date or special event
redemption date. During an extension
period, we are restricted, among other
matters, from paying dividends or
making distributions on our capital
stock or redeeming, repurchasing or
acquiring or making liquidation
payments with respect to our capital
stock, except in limited circumstances.
If we defer interest payments on the
exchange debt securities, the Trust
will also defer quarterly distributions
on the exchange capital securities
during the extension period. During
this extension period, the
10
exchange debt securities will continue
to accrue interest and the capital
securities will continue to accumulate
distributions. During any extension
period, distributions will continue to
accrue on the capital securities and on
any accrued and unpaid distributions,
compounded quarterly from the relevant
distribution date. If the Trust defers
distributions, you will still be
required to accrue interest income and
include it in your gross income for
U.S. federal income tax purposes, even
if you are a cash basis taxpayer.
RANKING........................... Our obligations under the exchange debt
securities are unsecured and
subordinated to payment of our senior
debt, to the extent and in the manner
set forth in the indenture governing
the exchange debt securities, referred
to as the indenture, and will be
effectively subordinated to all of the
existing and future liabilities and
preferred equity of our subsidiaries,
including Dime of Williamsburgh's
deposit liabilities. At March 31, 2004,
we had $25 million of senior debt
outstanding, consisting entirely of our
subordinated notes payable, and our
subsidiaries had $3.00 billion of total
liabilities and preferred equity
outstanding.
EXCHANGE GUARANTEE................... We are offering to exchange our
guarantee, also referred to as the
exchange guarantee, of payments of cash
distributions and payments in
liquidation of the Trust or redemption
of the exchange capital securities for
the existing guarantee, also referred
to as the original guarantee, in
respect of the original capital
securities. We refer to the original
guarantee and the exchange guarantee
collectively as the guarantees. Under
the trust agreement creating the Trust,
our exchange debt securities and
related indenture and our exchange
guarantee, we will, on a subordinated
basis, fully, irrevocably and
unconditionally guarantee:
o payment of distributions on
the exchange capital
securities;
o payments on liquidation of the
Trust; and
o payments on maturity or
earlier redemption of the
exchange capital securities.
If we do not make a payment on the
exchange debt securities, the Trust
will not have sufficient funds to make
the related payment on the exchange
capital securities. Our exchange
guarantee does not assure the payment
of distributions or other amounts when
the Trust does not have sufficient
funds to make that payment. Our
obligations under the exchange
guarantee are unsecured and junior in
right to all present and future senior
debt and will be effectively
subordinated to all of the existing and
future liabilities and preferred equity
of our subsidiaries, including Dime of
Williamsburgh's deposit liabilities.
Taken together, our obligations under
the exchange guarantee, the exchange
debt securities, the indenture and the
second amended and restated declaration
of trust, referred to as the trust
agreement, will provide, on a
subordinated basis, a full, irrevocable
and unconditional guarantee of the
Trust's payments of distributions and
other amounts due on the capital
securities.
11
DISTRIBUTION OF EXCHANGE
DEBT SECURITIES.................... At any time, we will have the right to
liquidate the Trust and cause the
exchange debt securities to be
distributed to holders of exchange
capital securities and common
securities in liquidation of the Trust,
subject to receipt of any required
regulatory approval and an opinion of
counsel that such liquidation and
distribution will not result in a
taxable event to holders. The exchange
debt securities will have terms and
conditions identical to the exchange
capital securities. If we elect to
liquidate the Trust and thereby cause
the exchange debt securities to be
distributed to holders of the exchange
capital securities we will, for
instance, have the same rights, subject
to the receipt of any required
regulatory approval, to redeem such
exchange debt securities as if the
exchange debt securities were held by
the Trust.
In the event of the involuntary or
voluntary liquidation, dissolution,
winding up or termination of the Trust
in which the exchange debt securities
are not distributed to holders, then
the holders of the exchange capital
securities will be entitled to receive,
for each exchange capital security
after satisfaction of creditors of the
Trust, a liquidation amount of $1,000
plus accumulated and unpaid
distributions thereon to, but
excluding, the date of payment. The
Trust will be able to make this
distribution in cash only if the
exchange debt securities are redeemed
by us.
MATURITY AND REDEMPTION............... The exchange debt securities will
mature on April 14, 2034, unless
redeemed prior to such date if certain
conditions are met. The Trust will
redeem the exchange capital securities
when we pay the exchange debt
securities at maturity or upon any
earlier redemption of the exchange debt
securities.
We may redeem all or part of the
exchange debt securities at any time on
or after April 15, 2009. In addition,
we may redeem the exchange debt
securities at our option, in whole but
not in part, prior to April 15, 2009
if:
o certain tax events occur;
o there is a change in the
manner in which the exchange
capital securities would be
treated for regulatory capital
purposes; or
o there is a change in the
Investment Company Act of
1940, referred to as the
Investment Company Act, that
requires the Trust to register
under that law.
We may have to obtain regulatory
approvals, including the approval of
the OTS, before we redeem any exchange
debt securities prior to maturity.
If we redeem the exchange debt
securities on or after April 15, 2009,
you will receive the liquidation amount
of $1,000 per exchange capital security
plus any accrued and unpaid
distributions, including additional
distributions accrued during an
extension period and not paid to the
date of redemption. If such redemption
occurs prior to April 15, 2009, you
will be entitled to a redemption price
calculated as a premium. For more
information, please refer to
"Description of Exchange Debt
Securities -- Special Event
Redemption."
TRANSFER RESTRICTION.................. The exchange capital securities will be
issued, and may be transferred,
12
only in blocks having a liquidation
amount of not less than $100,000 (100
exchange capital securities). Any such
transfer of exchange capital securities
in a block having a liquidation amount
of less than $100,000 shall be deemed
to be void and of no legal effect
whatsoever.
ABSENCE OF MARKET FOR THE
EXCHANGE CAPITAL SECURITIES........... The exchange capital securities will be
a new issue of securities for which
currently there is no market. Although
the initial purchaser intends to make a
market in the exchange capital
securities in a manner permitted under
applicable securities laws, the initial
purchaser is not obligated to do so and
any such market making may be
discontinued at any time without
notice. Accordingly, there can be no
assurance as to the development,
maintenance or liquidity of any trading
market for the exchange capital
securities. We do not intend to seek a
listing of the exchange capital
securities on any national securities
exchange or on The Nasdaq Stock Market.
The exchange capital securities are
expected to be eligible for quotation
on the Private Offering, Resales and
Trading through Automated Linkages
(PORTAL) System of the National
Association of Securities Dealers, Inc.
For more information, you should read
"Plan of Distribution."
RATINGS............................... Neither the original capital securities
nor the exchange capital securities
have been rated by a rating agency.
ERISA CONSIDERATIONS.................. For a discussion of certain prohibited
transactions and fiduciary duty issues
pertaining to purchases by or on behalf
of an employee benefit plan, you should
read "ERISA Considerations."
VOTING RIGHTS......................... As a holder of the exchange capital
securities, you will have no voting
rights, except in limited
circumstances. You should read
"Description of Exchange Capital
Securities Voting Rights; Amendment of
the Trust Agreement" for more
information.
RISK FACTORS.......................... For a discussion of considerations
relevant to an investment in the
exchange capital securities or the
exchange of original capital securities
for exchange capital securities which
should be carefully considered by you,
you should read Risk Factors.
13
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
The selected consolidated financial and other data presented below are
derived in part from, and should be read in conjunction with, our
consolidated financial statements, related notes and other financial
information incorporated into this prospectus by reference. On July 18,
2002, our Board of Directors approved a change in our fiscal year end
from June 30 to December 31. In order to further assist in the
interpretive reading of the data below, we have added information
related to the unaudited twelve month period ended December 31, 2002
and the unaudited six month period ended December 31, 2001. You should
refer to "Available Information."
AT OR FOR
AT OR FOR THE
THE TWELVE AT OR FOR
THREE MONTHS THE
MONTHS ENDED TWELVE AT OR FOR
ENDED DECEMBER MONTHS ENDED THE SIX MONTHS
MARCH 31, 31, DECEMBER 31, ENDED DECEMBER 31, AT OR FOR THE TWELVE MONTHS ENDED JUNE 30,
-----------------------------------------------------------------------------------------------------------
2004 2003 2002 2002 2001 2002 2001 2000 1999(10)
-----------------------------------------------------------------------------------------------------------
Dollars in Thousands
FINANCIAL CONDITION
DATA:
Total assets........ $ 3,372,951 $2,971,661 $ 2,946,374 $2,946,374 $ 2,779,882 $2,810,132 $ 2,721,744 $ 2,502,139 2,247,615
Loans, net (1)....... 2,272,535 2,177,622 2,154,619 2,154,619 2,040,070 2,104,884 1,944,902 1,706,515 1,368,260
Mortgage-backed
securities......... 751,738 462,737 362,952 362,952 364,375 291,488 438,447 442,690 525,667
Investment
securities (2)..... 71,632 64,517 140,279 140,279 137,614 173,818 139,523 181,033 206,611
Federal funds sold
and other
short-term
investments......... 93,616 95,286 114,291 114,291 73,279 76,474 36,619 9,449 11,011
Goodwill............. 55,638 55,638 55,638 55,638 55,638 55,638 55,638 60,254 64,871
Deposits............. 2,272,667 2,041,678 1,927,175 1,927,175 1,595,362 1,780,034 1,428,432 1,219,148 1,238,933
Borrowings........... 721,977 571,675 675,541 675,541 872,547 697,717 995,288 1,014,027 731,660
Stockholders'
equity ............ 275,848 283,919 265,737 265,737 243,917 249,741 227,116 207,169 211,695
Tangible
stockholders'
equity ............. 217,804 228,026 206,325 206,325 180,954 189,827 164,513 149,464 145,562
OPERATING DATA:
Interest income...... $ 39,045 $ 169,115 $ 181,914 $ 90,469 $ 93,136 $ 184,581 $ 181,648 $ 165,623 135,390
Interest expense on
deposits and
borrowings.......... 14,929 71,063 91,790 43,278 53,732 102,244 114,043 98,820 77,219
Net interest income.. 24,116 98,052 90,124 47,191 39,404 82,337 67,605 66,803 58,171
Provision for losses. 60 288 240 120 120 240 740 240 240
Net interest income
after
provision for loan
losses.............. 24,056 97,764 89,884 47,071 39,284 82,097 66,865 66,563 57,931
Non-interest income.. 5,617 25,122 19,999 10,765 5,603 14,837 9,292 5,043 6,438
Non-interest expense 10,365 40,809 38,696 20,368 17,103 35,431 35,096 34,015 30,493
Income before income 19,308 82,077 71,187 37,468 27,784 61,503 41,061 37,591 33,876
tax.
Income tax expense .. 6,968 30,801 26,565 14,008 10,269 22,826 15,821 15,217 14,015
Net income .......... 12,340 51,276 44,622 23,460 17,515 38,677 25,240 22,374 19,861
FINANCIAL RATIOS AND
OTHER
DATA: (3)
Return on average
assets ............. 1.60% 1.67% 1.57% 1.62% 1.27% 1.40% 0.97% 0.93% 1.02%
Return on average
stockholders'
equity ............. 17.72 18.76 17.65 18.17 14.97 16.07 11.67 10.65 10.34
Stockholders' equity
to total assets at
end of period....... 8.18 9.55 9.02 9.02 8.77 8.89 8.34 8.28 9.42
Tangible equity to
tangible assets at
end of period....... 6.57 7.82 7.15 7.15 6.66 6.90 6.19 6.11 6.67
Loans to deposits at
end of period....... 100.65 107.39 112.60 112.60 128.85 119.11 137.24 141.18 111.66
Loans to
interest-earning
assets at end of
period.............. 71.38 77.89 77.85 77.85 78.13 79.65 76.13 73.10 65.05
Net interest spread
(4)................. 3.05 3.08 2.93 3.07 2.61 2.70 2.32 2.48 2.61
Net interest margin
(5)................. 3.29 3.36 3.33 3.41 3.01 3.12 2.76 2.91 3.11
Average
interest-earning
assets to average
interest-bearing
liabilities......... 111.46 111.60 111.64 111.88 110.58 110.99 109.33 110.04 112.33
Non-interest expense
to average assets... 1.34 1.33 1.36 1.40 1.24 1.28 1.35 1.41 1.57
Core non-interest
expense to average
assets (6).......... 1.31 1.30 1.28 1.37 1.21 1.25 1.14 1.24 1.37
Efficiency ratio (7). 35.55 33.05 36.49 36.41 38.09 37.29 46.25 46.33 47.84
14
Core efficiency
ratio (6) (7)....... 34.84 32.38 34.44 35.67 37.17 36.42 39.08 40.77 41.96
Effective tax rate... 36.09 37.53 37.32 37.39 36.96 37.11 38.53 40.48 41.37
Dividend payout ratio 39.39 30.10 25.00 25.81 27.14 24.61 33.63 34.74 30.36
PER SHARE DATA:
Diluted earnings per
share.............. $ 0.33 $ 2.06 $ 1.76 $ 0.93 $ 0.70 $ 1.54 $ 1.00 $ 0.84 $ 0.75
Cash dividends paid
per share........... 0.13 0.62 0.44 0.24 0.19 0.38 0.34 0.29 0.23
Book value per share. 7.37 11.17 10.36 10.36 9.46 9.68 8.91 7.89 7.36
Tangible book value
per share........... 5.82 8.97 8.04 8.04 7.01 7.35 6.45 5.69 5.06
ASSET QUALITY RATIOS
AND OTHER DATA:
Net charge-offs...... $ 30 $ 29 $ 274 $ 32 $ 87 $ 329 $ 66 $ 536 $ 201
Total non-performing
loans .............. 1,381 525 2,116 2,116 1,899 2,123 3,058 4,421 3,001
Other real estate
owned, net.......... - - 134 134 179 114 370 381 866
Non-performing loans
to total loans ..... 0.06% 0.02% 0.10% 0.10% 0.09% 0.10% 0.16% 0.26% 0.22%
Non-performing loans
and real estate
owned to total
assets ............. 0.04 0.02 0.08 0.08 0.07 0.08 0.13 0.19 0.17
ALLOWANCE FOR LOAN
LOSSES TO:
Non-performing loans 1,085.59% 2,860.57% 730.53% 730.53% 815.80% 723.98% 505.53% 334.43% 502.53%
Total loans (8)...... 0.66 0.68 0.71 0.71 0.75 0.72 0.79 0.86 1.09
REGULATORY CAPITAL
RATIOS:
(BANK ONLY)
Tangible capital..... 7.16% 7.97% 7.19% 7.19% 6.69% 6.91% 6.10% 5.76% 5.83%
Core capital......... 7.16 7.97 7.19 7.19 6.69 6.91 6.10 5.76 5.83
Risk-based capital... 14.45 15.03 13.17 13.17 13.17 12.94 12.57 11.62 11.45
EARNINGS TO FIXED
CHARGES RATIOS (9):
Including interest
on deposits......... 2.29x 2.15x 1.78x 1.87x 1.52x 1.60x 1.36x 1.38x 1.44x
Excluding interest
on deposits......... 4.26 3.50 2.49 2.73 2.02 2.16 1.64 1.70 2.03
FULL SERVICE BRANCHES 20 20 20 20 18 20 18 18 19
(1) Loans, net represents gross loans (including loans held for sale) less
net deferred loan fees and allowance for loan losses.
(2) Amount includes investment in Federal Home Loan Bank of New York
capital stock.
(3) With the exception of end of period ratios, all ratios are based on
average daily balances during the indicated periods. Asset Quality
Ratios and Regulatory Capital Ratios are end of period ratios.
(4) The net interest spread represents the difference between the
weighted-average yield on interest-earning assets and the
weighted-average cost of interest-bearing liabilities.
(5) The net interest margin represents net interest income as a percentage
of average interest-earning assets.
(6) In calculating these ratios, amortization expense related to goodwill
and the core deposit intangible is excluded from non-interest expense.
(7) The efficiency ratio represents non-interest expense as a percentage of
the sum of net interest income and non-interest income, excluding any
gains or losses on sales of assets.
(8) Total loans represents loans, net, plus the allowance for loan losses.
(9) For purposes of computing the ratios of earnings to fixed charges,
earnings represent income before taxes, extraordinary items and the
cumulative effect of accounting changes plus fixed charges. Fixed
charges represent total interest expense, including and excluding
interest on deposits.
(10)On January 21, 1999, Dime Community completed the acquisition of
Financial Bancorp, Inc., the holding company of Financial Federal
Savings Bank, F.S.B., referred to as the FIBC Acquisition. The
consolidated operating results for the twelve months ended June 30,
1999 reflected the addition of earnings from the FIBC Acquisition for
the period January 21, 1999 through June 30, 1999. The FIBC Acquisition
was accounted for as a purchase transaction, generating $44.2 million
of goodwill.
15
RISK FACTORS
YOU SHOULD CAREFULLY REVIEW THE INFORMATION CONTAINED ELSEWHERE OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND SHOULD PARTICULARLY CONSIDER
THE FOLLOWING FACTORS, WHICH DO NOT NECESSARILY APPEAR IN THE ORDER OF
IMPORTANCE. INVESTORS SHOULD CONSIDER ALL OF THESE FACTORS TO BE IMPORTANT.
BECAUSE HOLDERS OF THE EXCHANGE CAPITAL SECURITIES MAY RECEIVE EXCHANGE DEBT
SECURITIES IN EXCHANGE THEREFOR UPON LIQUIDATION OF THE TRUST, PROSPECTIVE
PURCHASERS OF THE EXHANGE CAPITAL SECURITIES ARE ALSO MAKING AN INVESTMENT
DECISION WITH REGARD TO THE EXCHANGE DEBT SECURITIES AND SHOULD CAREFULLY REVIEW
ALL THE INFORMATION REGARDING THE EXCHANGE DEBT SECURITIES CONTAINED IN THIS
PROSPECTUS.
RISKS RELATED TO YOUR INVESTMENT IN THE EXCHANGE CAPITAL SECURITIES
YOU ARE SUBJECT TO REPAYMENT RISK BECAUSE THE ADOPTION OF RECENTLY PROPOSED
REGULATORY CAPITAL TREATMENT CHANGES COULD RESULT IN A REDEMPTION OF THE
EXCHANGE CAPITAL SECURITIES.
In late 2003, the Financial Accounting Standards Board, referred to as
the FASB, issued Interpretation No. 46 (revised December 2003), CONSOLIDATION OF
VARIABLE INTEREST ENTITIES, referred to as FIN 46(R), which addresses
consolidation of variable interest entities. Generally, such entities must be
consolidated by their primary beneficiary if the entities do not effectively
disperse risks among the parties involved. As a result of adopting FIN 46(R),
Dime Community has not consolidated the Trust.
On May 6, 2004, the Federal Reserve Board, referred to as the FRB,
issued proposed rules that would continue to allow trust preferred securities to
be included in "Tier 1" regulatory capital, subject to stricter quantitative and
qualitative limits. Currently, trust preferred securities and qualifying
perpetual preferred stock are limited in the aggregate to no more than 25% of a
bank holding company's core capital elements. As proposed, the FRB's rule would
retain trust preferred securities as an element of Tier 1 regulatory capital,
but with stricter quantitative limitations following a three-year transition
period. Under the proposed rule, as of March 31, 2007, the aggregate amount of
trust preferred securities and cumulative perpetual preferred stock, as well as
certain additional elements of Tier 1 capital, which are identified in the
proposed rule, may not exceed 25% of a bank holding company's Tier 1 capital,
net of goodwill. As of the date of this prospectus, the 25% limitation is
limited to the aggregate amount of only trust preferred securities and
cumulative perpetual preferred stock, and is calculated on a basis that includes
goodwill. The proposed rule, if adopted, would effectively limit the amount of
trust preferred securities that may be included in Tier 1 capital.
The proposed rule also requires that the terms of the subordinated debt
issued to the trust must conform to the requirements of the FRB's subordinated
debt policy statement, which establishes the requirements for subordinated debt
to receive Tier 2 capital treatment. The proposed rule also states that with
respect to trust preferred securities issued prior to May 31, 2004 (such as the
original capital securities), the underlying subordinated debt need not comply
with the FRB subordinated debt policy statement, provided the non-complying
terms (i) have been commonly used by banking organizations, (ii) do not provide
an unreasonably high degree of protection to the holder in circumstances other
than bankruptcy, and (iii) do not effectively allow the holder in due course to
stand ahead of senior or subordinated debt holders in the event of bankruptcy.
Although we believe that the terms of the original subordinated debt fall within
these safe harbor provisions for pre-May 31, 2004 issuances, there can be no
assurance that the FRB would concur or that the final rule adopted by the FRB
will retain or modify the safe harbor provisions and the grandfather date.
Further, there can be no assurance that the FRB will treat the exchange debt
securities the same as the original debt securities for purposes of the safe
harbor provisions and the grandfather date.
There can be no assurance that the final rule adopted by the FRB will
be as proposed or that the FRB will not further or otherwise limit the amount of
trust preferred securities that may be included in Tier 1 capital. In addition,
there can be no assurance that any changes to the current capital treatment of
trust preferred securities would not trigger a capital event under the Indenture
or provide incentive for Dime Community to redeem the exchange debt securities
in accordance with their terms, in each case resulting in the redemption of
exchange capital securities.
Although Dime Community, as a savings and loan holding company, is not
subject to holding company capital requirements, if Tier 1 capital treatment
were to be disallowed by the FRB in the future, then a special event redemption
would occur and Dime Community would be able to redeem the exchange debt
securities thereby causing a mandatory redemption of the exchange capital
securities. Under such circumstance, no additional
16
cash distributions would be paid on the exchange capital securities after they
were redeemed and you would lose whatever future potential income you may have
expected to receive as a holder of the exchange capital securities and you may
not be able to reinvest the redemption proceeds at a similar yield. If a special
event redemption occurs prior to April 15, 2009, the redemption price would be
at a premium, as set forth in "Description of Exchange Capital Securities --
Redemption" and "Description of Exchange Debt Securities -- Special Event
Redemption".
THE TRUST WILL NOT BE ABLE TO MAKE PAYMENTS ON THE EXCHANGE CAPITAL SECURITIES
TO YOU IF IT DOES NOT RECEIVE PAYMENTS FROM US ON THE EXCHANGE DEBT SECURITIES.
The ability of the Trust to make payments due on the exchange capital
securities is solely dependent on us making payments on the exchange debt
securities as and when required. If we default on our obligations to pay
principal or interest on the exchange debt securities, the Trust will not have
sufficient funds to make distribution, redemption or liquidation payments on the
exchange capital securities. As a result, you will not be able to rely upon our
guarantee for payment of these amounts. Instead, you may seek legal redress
against us directly to collect payments owed to you or rely on the institutional
trustee to enforce the rights of the Trust under the exchange debt securities
against us.
Further, the exchange capital securities, the exchange guarantee, the
exchange debt securities and the indenture do not limit our ability to incur
additional debt, including debt that is senior to the exchange debt securities
in priority of payment, or the ability of our subsidiaries to incur debt or
issue preferred equity.
For more information on payments under the exchange guarantee and the
exchange debt securities, you should read "Description of Exchange Debt
Securities -- Subordination" and "Description of Exchange Guarantee -- Status of
the Exchange Guarantee."
WE CANNOT MAKE PAYMENTS UNDER THE EXCHANGE GUARANTEE OR THE EXCHANGE DEBT
SECURITIES IF WE DEFAULT ON OUR OBLIGATIONS THAT ARE MORE SENIOR.
Our obligations under the exchange guarantee and the exchange debt
securities are unsecured and rank:
o junior to all of our other borrowings, except those borrowings
that by their terms are equal;
o junior to all of our subsidiaries' liabilities, including Dime of
Williamsburgh's deposit accounts and preferred equity; and
o senior to our common stock and preferred stock, if any.
This means that we cannot pay under the exchange guarantee or the
exchange debt securities if we default on payments on our senior debt. In
addition, if the maturity of our senior debt is accelerated, we cannot pay under
the exchange guarantee or the exchange debt securities until all of our
accelerated senior debt is paid in full. Finally, if we liquidate, go bankrupt
or dissolve, we would not be permitted to pay under the exchange guarantee and
the exchange debt securities until we have paid all of our senior liabilities.
At March 31, 2004, we had $25 million of senior debt outstanding.
DIME OF WILLIAMSBURGH'S ABILITY TO PAY DIVIDENDS OR LEND FUNDS TO ITS AFFILIATES
IS SUBJECT TO REGULATORY LIMITATIONS WHICH MAY PREVENT DIME COMMUNITY FROM
MAKING PAYMENTS UNDER THE EXCHANGE DEBT SECURITIES.
We are a savings and loan association holding company regulated by the
OTS, and almost all of our operating assets are owned by Dime of Williamsburgh.
Dime of Williamsburgh is regulated by both the FDIC and the OTS. We are a legal
entity separate and distinct from our subsidiaries. Holders of exchange debt
securities should look only to us for payments on the exchange debt securities.
We rely primarily on dividends from Dime of Williamsburgh to meet our
obligations for payment of corporate expenses, to pay cash dividends to our
common stockholders, to engage in share repurchase programs and to pay principal
of and interest on our debt, including principal of and interest on the exchange
debt securities. The OTS limits all capital distributions by Dime of
Williamsburgh directly or indirectly to us, including dividend
17
payments. As the subsidiary of a savings and loan association holding company,
Dime of Williamsburgh must file a notice with the OTS for each capital
distribution. However, if the total amount of all capital distributions
(including each proposed capital distribution) for the applicable calendar year
exceeds net income for that year to date plus the retained net income for the
preceding two years, then Dime of Williamsburgh must file an application to
receive the approval of the OTS for the proposed capital distribution. As of
March 31, 2004, approximately $34.0 million was available for the payment of
dividends to us without submission of an application for approval from the OTS.
In addition to the OTS limits, Dime of Williamsburgh may not pay
dividends to us if, after paying those dividends, it would fail to meet the
required minimum levels under risk-based capital guidelines and the minimum
leverage and tangible capital ratio requirements. Under the prompt corrective
action provisions of the Federal Deposit Insurance Act, Dime of Williamsburgh is
prohibited from making capital distributions, including the payment of
dividends, if, after making any capital distribution, Dime of Williamsburgh
would become undercapitalized as defined under the Federal Deposit Insurance
Act. Based on Dime of Williamsburgh's current financial condition, we do not
expect that this provision will have any impact on the ability of Dime of
Williamsburgh to pay dividends to us. Payment of dividends by Dime of
Williamsburgh may also be restricted at any time at the discretion of the
appropriate regulator if it deems the payment to constitute an unsafe or unsound
banking practice.
We cannot assure you that Dime of Williamsburgh will be able to pay
dividends to us at past levels, or at all, in the future. For additional
information, you should read the section titled "Regulation" in our Annual
Report on Form 10-K for the year ended December 31, 2003 which is incorporated
into this prospectus by reference.
In addition to regulatory restrictions on the payment of dividends,
Dime of Williamsburgh is subject to certain restrictions imposed by federal law
on any extensions of credit it makes to its affiliates and on investments in
stock or other securities of its affiliates. We are considered an affiliate of
Dime of Williamsburgh. These restrictions prevent affiliates of Dime of
Williamsburgh, including us, from borrowing from Dime of Williamsburgh, unless
various types of collateral secure the loans. Federal law limits the aggregate
amount of loans to and investments in any single affiliate to 10% of Dime of
Williamsburgh's capital stock and surplus and also limits the aggregate amount
of loans to and investments in all affiliates to 20% of Dime of Williamsburgh's
capital stock and surplus. As of March 31, 2004, approximately $28.9 million of
credit was available to us under these limitations.
Also, as a holding company, our right to receive any distribution of
assets of any subsidiary, upon such subsidiary's liquidation or reorganization
or otherwise (and thus your right to benefit indirectly from such distribution),
is subject to the prior claims of creditors and preferred equity holders of that
subsidiary, except to the extent we are also recognized as a creditor of that
subsidiary. For example, if Dime of Williamsburgh, our only direct banking
subsidiary, is liquidated or reorganized, depositors of Dime of Williamsburgh
would have the right to receive distributions from Dime of Williamsburgh before
us unless we were also recognized as a creditor of Dime of Williamsburgh. At
March 31, 2004, Dime of Williamsburgh had total liabilities, including deposits
and preferred equity, of $3.00 billion.
If we do not receive sufficient cash dividends or other funds from Dime
of Williamsburgh, then it is unlikely that we will have sufficient funds to make
payments on the exchange debt securities, thereby leaving insufficient funds for
the Trust to make payments to you on your exchange capital securities.
WE CAN DEFER INTEREST PAYMENTS ON THE EXCHANGE DEBT SECURITIES, CAUSING YOUR
PAYMENTS UNDER THE EXCHANGE CAPITAL SECURITIES TO STOP, WHICH WILL HAVE TAX
CONSEQUENCES TO YOU AND MAY AFFECT THE MARKET PRICE OF THE EXCHANGE CAPITAL
SECURITIES.
We have the right, at one or more times, unless an event of default
exists relating to the exchange debt securities, to defer interest payments on
the exchange debt securities for up to 20 consecutive quarterly periods, but not
beyond April 14, 2034 or any date of earlier redemption. If we defer interest
payments, the Trust will defer paying distributions to you on your exchange
capital securities during the extension period. During any extension period,
distributions will continue to accrue on the exchange capital securities and on
any accrued and unpaid distributions, compounded quarterly from the relevant
distribution date at the applicable distribution rate. During this time, we will
be prohibited from declaring or paying cash dividends on our common stock and
preferred stock,
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if any, and making payments on our debt securities which rank equal to the
exchange debt securities, if any. For more information, you should also read
"Description of Exchange Capital Securities -- Distributions."
When any extension period ends, we are required to pay all interest
then accrued and unpaid on the exchange debt securities, in which event we may
elect to begin a new extension period subject to the limitations described
above. There is no limitation on the number of times that we may elect to begin
an extension period. You should read "Description of Exchange Capital Securities
-- Distributions" and "Description of Exchange Debt Securities -- Option to
Extend Interest Payment Date."
If we exercise our right to defer payments of interest on the exchange
debt securities, you will be required to accrue income (as original issue
discount) in respect of the deferred stated interest allocable to your exchange
capital securities for U.S. federal income tax purposes, even though such
interest will not be distributed to you. If you dispose of your exchange capital
securities prior to the record date for payments on the exchange capital
securities, you may have adverse tax consequences. Under these circumstances,
you will be required to include accrued but unpaid interest and liquidated
damages, if any, on the exchange debt securities allocable to the exchange
capital securities through the date of disposition in your income. If interest
and liquidated damages, if any, on the exchange debt securities are included in
income under the original issue discount provisions, you would add this amount
to your adjusted tax basis in your share of the underlying exchange debt
securities deemed disposed. If your selling price is less than your adjusted tax
basis, which will include all accrued but unpaid original issue discount
interest and liquidated damages, if any, included in your income, you could
recognize a capital loss which cannot be applied to offset ordinary income for
U.S. federal income tax purposes, subject to exceptions. For more information on
possible adverse tax consequences to you, you should read "Certain U.S. Federal
Income Tax Consequences -- Interest Income and Original Issue Discount" and " --
Sales or Redemptions of Exchange Capital Securities."
As a result of our right to defer interest payments, the market price
of the exchange capital securities, which represent preferred beneficial
interests in the Trust, may be more volatile than the market prices of other
securities that are not subject to such extension options. We do not currently
intend to exercise our right to defer interest payments on the exchange debt
securities. However, if we exercise this right in the future, the market price
of the exchange capital securities is likely to be affected. The exchange
capital securities may trade at a price that does not fully reflect the value of
accrued but unpaid interest on the exchange debt securities. If you sell your
exchange capital securities during an extension period, you may not receive the
same return on your investment as someone else who continues to hold the
exchange capital securities.
DISTRIBUTION OF EXCHANGE DEBT SECURITIES MAY HAVE A POSSIBLE ADVERSE EFFECT ON
TRADING PRICES.
We have the right to dissolve the Trust at any time if such dissolution
and any distribution of the exchange debt securities would not result in a
taxable event to the holders of the exchange capital securities. If we dissolve
the Trust, the Trust will be liquidated by distribution of the exchange debt
securities to holders of the exchange capital securities and the common
securities.
Under current U.S. federal income tax laws, a distribution of exchange
debt securities to you on the dissolution of the Trust would not be a taxable
event to you. However, if the Trust was to be classified for U.S. federal income
tax purposes as an association taxable as a corporation at the time it is
dissolved, the distribution of exchange debt securities to you would be a
taxable event. In addition, if there is a change in law, a distribution of
exchange debt securities to you on the dissolution of the Trust could also be a
taxable event.
Your investment in the exchange capital securities may decrease in
value if the exchange debt securities are distributed to you in liquidation of
the Trust. We cannot predict the liquidity or market prices for the exchange
debt securities that may be distributed. Accordingly, the exchange debt
securities that you receive upon a distribution, or the exchange capital
securities you hold pending such distribution, may trade at a discount to the
price that you paid to purchase the exchange capital securities. Because you may
receive the exchange debt securities, you must also make an investment decision
with regard to the exchange debt securities. You should carefully review all of
the information regarding the exchange debt securities contained in this
prospectus.
19
IN THE EVENT WE REDEEM THE EXCHANGE DEBT SECURITIES BEFORE THEIR STATED
MATURITY, YOU MAY NOT BE ABLE TO REINVEST YOUR PRINCIPAL AT THE SAME OR A HIGHER
RATE OF RETURN.
Under the following circumstances, we may redeem the exchange debt
securities before their stated maturity:
o We may redeem the exchange debt securities, in whole or in part,
at any time on or after April 15, 2009.
o We may redeem the exchange debt securities in whole, but not in
part, within 90 days after certain occurrences at any time prior
to April 15, 2009. These occurrences may include adverse tax,
investment company or bank regulatory developments. You should
read "Description of Exchange Debt Securities -- Special Event
Redemption."
You should assume that we will exercise our redemption option if we are
able to obtain capital at a lower cost than we must pay on the exchange debt
securities or if it is otherwise in our interest to redeem the exchange debt
securities. If the exchange debt securities are redeemed, the Trust must redeem
exchange capital securities and common securities having an aggregate
liquidation amount equal to the aggregate principal amount of exchange debt
securities redeemed, and you may be required to reinvest your principal at a
time when you may not be able to earn a return that is as high as you were
earning on the exchange capital securities.
YOU WILL HAVE LIMITED VOTING RIGHTS.
As a holder of exchange capital securities, you will have limited
voting rights. You can vote only to modify certain terms of the exchange capital
securities or to remove the institutional and Delaware trustees of the Trust
upon a limited number of events. We, along with the institutional trustee and
the administrators, may amend the trust agreement, without your consent, even if
these actions adversely affect your interests, to ensure that the Trust:
o will continue to be classified as a grantor trust for U.S.
federal income tax purposes; and
o will not be required to register as an "investment company" under
the Investment Company Act.
You will not have any voting rights regarding us or the administrators
or with respect to any matters submitted to a vote of the holders of the common
securities. You should read "Description of Exchange Capital Securities --
Removal of Trustees" and " -- Voting Rights; Amendment of the Trust Agreement"
for more information on your limited voting rights.
THE LIMITED COVENANTS RELATING TO THE EXCHANGE CAPITAL SECURITIES AND THE
EXCHANGE DEBT SECURITIES DO NOT PROTECT YOU.
The covenants in the governing documents relating to the exchange
capital securities and the exchange debt securities are limited. As a result,
the governing documents do not protect you in the event of an adverse change in
our financial condition or results of operations and do not prohibit us from
entering into a highly leveraged or similar transaction. You should not consider
the terms of the governing documents to be a significant factor in evaluating
whether we will be able to comply with our obligations under the exchange debt
securities or the exchange guarantee. In addition, the governing documents do
not limit our ability, or the ability of our subsidiaries, to incur additional
debt, including senior debt.
TRADING CHARACTERISTICS OF THE EXCHANGE CAPITAL SECURITIES MAY CREATE ADVERSE
TAX CONSEQUENCES FOR YOU.
The exchange capital securities may trade at a price that does not
reflect the value of the accrued but unpaid interest on the underlying exchange
debt securities. If you dispose of your exchange capital securities between the
record date for payments on the exchange capital securities, you may have
adverse tax consequences. Under these circumstances, you will be required to
include accrued but unpaid interest on the exchange debt securities allocable to
the exchange capital securities through the date of disposition in your income.
If interest on the exchange debt
20
securities is included in income under the original issue discount provisions,
you would add this amount to your adjusted tax basis in your share of the
underlying exchange debt securities deemed disposed. If your selling price is
less than your adjusted tax basis, which will include all accrued but unpaid
original issue discount interest included in your income, you could recognize a
capital loss which cannot be applied to offset ordinary income for federal
income tax purposes, subject to exceptions. You should read "Certain Federal
Income Tax Consequences--Interest Income and Original Issue Discount" and "--
Sales or Redemptions of Exchange Capital Securities" for more information on
possible adverse tax consequences to you.
YOUR FAILURE TO EXCHANGE ORIGINAL CAPITAL SECURITIES MAY ADVERSELY AFFECT YOUR
ABILITY TO SELL SUCH SECURITIES.
The original capital securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption from the applicable securities laws or in a transaction
not subject to such laws, and in each case in compliance with certain other
conditions and restrictions. Original capital securities which remain
outstanding after consummation of the exchange offer will continue to bear a
legend reflecting such restrictions on transfer. In addition, upon consummation
of the exchange offer, holders of original capital securities which remain
outstanding will not be entitled to any rights to have such original capital
securities registered under the Securities Act or to any similar rights under
the registration rights agreement, subject to certain limited exceptions. We and
the Trust do not intend to register under the Securities Act any original
capital securities which remain outstanding after consummation of the exchange
offer, subject to such limited exceptions, if applicable. To the extent that
original capital securities are tendered and accepted in the exchange offer,
your ability to sell untendered original capital securities could be adversely
affected.
The exchange capital securities and any original capital securities
which remain outstanding after consummation of the exchange offer will vote
together as a single class for purposes of determining whether holders of the
requisite percentage in outstanding liquidation amount thereof have taken
certain actions or exercised certain rights under the trust agreement. You
should read "Description of Exchange Capital Securities--Voting Rights;
Amendment of the Trust Agreement."
THE ABSENCE OF A PUBLIC MARKET AND RESTRICTIONS ON RESALE OF THE EXCHANGE
CAPITAL SECURITIES MAY ADVERSELY AFFECT YOUR ABILITY TO SELL SUCH SECURITIES.
The original capital securities were issued to, and we believe such
securities are currently owned by, a relatively small number of beneficial
owners. The original capital securities have not been registered under the
Securities Act and will be subject to restrictions on transferability if they
are not exchanged for the exchange capital securities. Although the exchange
capital securities may be resold or otherwise transferred by the holders, who
are not affiliates of Dime Community or the Trust, without compliance with the
registration requirements under the Securities Act, they will constitute a new
issue of securities with no established trading market and will be transferable
only in blocks having a liquidation amount of not less than $100,000 (100
exchange capital securities).
If a public trading market develops, future trading prices of the
exchange capital securities will depend on many factors, including, among
others, prevailing interest rates, our operating results and the market for
similar securities. The initial purchaser has informed the Trust and us that it
intends to make a market in the capital securities. However, the initial
purchaser is not obligated to do so and any such activity may be terminated at
any time without notice to the holders of the exchange capital securities. In
addition, any market making activity will be subject to the limits of the
Securities Act and may be limited during the pendency of the exchange offer.
Accordingly, we cannot assure you that an active public or other market will
develop for the exchange capital securities, or as to the liquidity of or the
trading market for the exchange capital securities. If an active public market
does not develop, the market price and liquidity of the exchange capital
securities may be adversely affected. In addition, neither we nor the Trust
intend to apply for listing of the exchange capital securities on any securities
exchange or for quotation through the Nasdaq Stock Market, Inc. You should read
"Plan of Distribution."
Notwithstanding the registration of the exchange capital securities in
the exchange offer, holders who are `affiliates" (as defined under Rule 405 of
the Securities Act) of us or the Trust may publicly offer for sale or resell the
exchange capital securities only in compliance with the provisions of Rule 144
under the Securities Act.
21
Each broker-dealer that receives exchange capital securities for its
own account in exchange for original capital securities, where such original
capital securities were acquired by such broker-dealer as a result of market-
making activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such exchange capital
securities. You should read "Plan of Distribution."
"WE ARE NOT OBLIGATED TO NOTIFY YOU OF DEFECTS OR IRREGULARITIES IN THE EXCHANGE
OFFER PROCEDURES.
Subject to conditions set forth under "The Exchange Offer--Conditions
to the Exchange Offer," issuance of the exchange capital securities in exchange
for original capital securities under the exchange offer will be made only after
a timely receipt by the Trust of:
o a book-entry confirmation evidencing the tender of such original
capital securities through ATOP; or
o certificates representing such original capital securities, a
properly completed and duly executed letter of transmittal, with
any required signature guarantees, and all other required
documents.
Therefore, holders of the original capital securities desiring to
tender such original capital securities should allow sufficient time to ensure
timely delivery. You should read "The Exchange Offer--Acceptance for Exchange
and Issuance of Exchange Capital Securities" and "-- Procedures for Tendering
Original Capital Securities." Neither we nor the Trust is under any duty to give
notification of defects or irregularities with respect to the tenders of
original capital securities for exchange.
RISK FACTORS RELATING TO DIME COMMUNITY BANCSHARES, INC.
OUR FOCUS ON MULTI-FAMILY AND COMMERCIAL REAL ESTATE LENDING MAY SUBJECT US TO
GREATER RISK OF AN ADVERSE IMPACT ON OUR OPERATIONS FROM A DOWNTURN IN THE
ECONOMY.
At March 31, 2004, Dime of Williamsburgh had multi-family loans
totaling $1.80 billion in its portfolio, comprising 78.8% of the gross loan
portfolio. Of Dime of Williamsburgh's multi-family loans, $1.59 billion, or
88.8%, were secured by apartment buildings and $208.9 million, or 11.6%, were
secured by underlying cooperatives. Multi-family loans are generally viewed as
exposing Dime of Williamsburgh to a greater risk of loss than one- to
four-family residential loans and typically involve higher loan principal
amounts. At March 31, 2004, Dime of Williamsburgh had 254 multi-family and
commercial real-estate loans with principal balances greater than $2.0 million,
representing an aggregate principal balance of $922.4 million. Although each
multi-family loan is generally non-recourse, is underwritten based on the cash
flow generated by the property and has a loan to value ratio of less than 75%,
in a downturn in the economy, a borrower experiencing financial difficulties on
one income producing property may default on all outstanding loans even if the
properties securing the other loans are generating positive cash flow. These
large loans, while underwritten to the same standards as all other multi-family
and commercial real estate loans, tend to expose Dime of Williamsburgh to a
higher degree of risk due to the potential impact of losses from any one loan or
concentration of loans to one borrower relative to the size of Dime of
Williamsburgh's capital position. As of March 31, 2004, none of these large
loans or concentrations of loans to one borrower were in arrears nor in the
process of foreclosure.
As part of Dime Community's strategic plan, it has increased its
emphasis on commercial real estate loans over the past five years. A substantial
portion of these commercial real estate loans are secured by mixed use
properties. At March 31, 2004, $339.0 million, or 14.8%, of Dime of
Williamsburgh's gross loans consisted of commercial real estate loans as
compared to $88.8 million, or 6.41% in 1999. Loans secured by commercial real
estate properties are generally larger and involve a greater degree of risk than
residential mortgage (one- to four-family) and multi-family loans. Because
payments on loans secured by commercial real estate properties are often
dependent on successful operation or management of the properties, repayment of
such loans are generally subject to a greater extent to the then prevailing
conditions in the real estate market or the economy. Unlike mortgage loans,
which generally are made on the basis of the borrower's ability to make
repayment from his or her employment or other income, and which are secured by
real property whose value tends to be more readily ascertainable, commercial
real estate loans are of higher risk and typically are made on the basis of the
borrower's ability to make repayment from the cash flow of the borrower's
business. As a result, the availability of funds for the repayment of
22
commercial real estate loans may be substantially dependent on the success of
the business itself. Furthermore, any collateral securing such loans may
depreciate over time, may be difficult to appraise and may fluctuate in value
based on the success of the business.
Multi-family and commercial real estate loans also involve a greater
risk than one- to four- family residential mortgage loans because they usually
have unpredictable cash flows and are more difficult to evaluate and monitor.
Repayment of multi-family and commercial real estate loans is dependent, in
large part, on sufficient cash flow from the property to cover operating
expenses and debt service. Economic and real estate conditions and government
regulations, such as rent control and rent stabilization laws, which are outside
the control of the borrower or Dime of Williamsburgh, could impair the value of
the security for the loan or the future cash flow of such properties. As a
result, rental income might not rise sufficiently over time to meet increases in
the loan rate at repricing or increases in overhead expenses (I.E., utilities,
taxes, etc.). As a result, impaired loans are difficult to identify before they
become problematic. In addition, if the cash flow from a property is reduced
(for example, if leases are not obtained or renewed), the borrower's ability to
repay the loan and the value of the security for the loan may be impaired.
During the period July 1, 1998 through March 31, 2004, Dime of Williamsburgh's
charge-offs related to its multi-family and commercial real estate loan
portfolios totaled $217,000. As of March 31, 2004, Dime of Williamsburgh had no
non-performing multi-family residential loans. We cannot assure you that, in the
event of an economic downturn, we will not experience a significant increase in
non-performing multi-family and commercial real estate loans or in charge-offs
related to our multi-family and commercial real estate loan portfolio.
Although Dime of Williamsburgh seeks to minimize the above risks
through its underwriting and credit administration policies, there can be no
assurance that such risks would not materialize, in which event Dime Community's
results of operations, financial condition, cash flows, business and prospects
could be materially adversely affected.
DEPENDENCE ON ECONOMIC AND REAL ESTATE CONDITIONS AND GEOGRAPHIC CONCENTRATION
IN MARKET AREA.
The Bank gathers deposits primarily from the communities and
neighborhoods in close proximity to its branches. The Bank's primary lending
area is the New York City metropolitan area, although its overall lending area
is much larger, and extends approximately 150 miles in each direction from its
corporate headquarters in Brooklyn. The majority of the Bank's mortgage loans
are secured by properties located in its primary lending area, and approximately
75% of these loans are secured by real estate properties located in the New York
City boroughs of Brooklyn, Queens and Manhattan.
As a result of this geographic concentration, Dime of Williamsburgh's
results of operations depend largely upon economic conditions in this area. A
deterioration in economic conditions in the New York metropolitan area could
have a material adverse impact on the quality of Dime of Williamsburgh's loan
portfolio and the demand for its products and services, and, accordingly, on our
results of operations, cash flows, business, financial condition and prospects.
Dime of Williamsburgh's loan portfolio is predominantly secured by real
estate. Dime of Williamsburgh's properties and substantially all of the real and
personal property securing loans in Dime of Williamsburgh's portfolio are
located in the New York metropolitan area. Conditions in the real estate
markets, in which the collateral for Dime of Williamsburgh's mortgage loans are
located, strongly influence the level of Dime of Williamsburgh's non-performing
loans and the value of its collateral. Real estate values are affected by, among
other things, changes in general or local economic conditions, supply and
demand, changes in governmental rules or policies, the availability of loans to
potential purchasers and acts of nature. Declines in real estate markets have in
the past and may in the future negatively impact our results of operations, cash
flows, business, financial condition and prospects. As of March 31, 2004, Dime
of Williamsburgh had $1.4 million in non-performing assets.
Dime of Williamsburgh's allowance for loan losses is maintained at a
level considered adequate by management to absorb inherent losses in its loan
portfolio. The amount of inherent loan losses which could be ultimately realized
is susceptible to changes in economic, operating and other conditions, including
changes in interest rates, that could be beyond Dime of Williamsburgh's control.
Such losses could exceed current estimates. Although management believes that
Dime of Williamsburgh's allowance for loan losses is adequate, there can be no
assurance that the allowance will prove sufficient to cover actual loan losses
should such losses be realized. At March 31, 2004, the allowance for loan losses
as a percentage of total loans was 0.66%.
23
A decline in economic or real estate conditions in the New York
metropolitan area, as well as the other factors described above, would also
adversely affect Dime Community's ability to manage its owned facilities. In
particular, such factors could result in declines in rents and loss of tenants
and negatively impact the marketability and value of such facilities.
INCREASES IN INTEREST RATES MAY REDUCE OUR PROFITABILITY.
Dime of Williamsburgh's primary source of income is its net interest
income, which is the difference between the interest income earned on its
interest earning assets and the interest expense incurred on its interest
bearing liabilities. At March 31, 2004, our one year interest rate sensitivity
gap (the difference between our interest rate sensitive assets maturing or
repricing within one year and our interest rate sensitive liabilities maturing
or repricing within one year, expressed as a percentage of total assets) was
negative 16%. In a rising interest rate environment, an institution with a
negative gap would generally be expected, absent the effects of other factors,
to experience a greater increase in its cost of liabilities relative to its
yield on assets, and thus decrease an institution's net interest income. In
addition, the actual amount of time before mortgage loans and MBS are repaid can
be significantly impacted by changes in mortgage redemption rates and market
interest rates. Mortgage redemption rates will vary due to a number of factors,
including the regional economy in the area where the underlying mortgages were
originated, seasonal factors, demographic variables and the assumability of the
underlying mortgages. However, the major factors affecting redemption rates are
prevailing interest rates, related mortgage refinancing opportunities and
competition. During the low interest rate environment that prevailed in 2002 and
2003, the Bank experienced high volumes of prepayments on its fixed mortgage
loans and MBS as borrowers sought to refinance at the lower rates. This resulted
in our average yield on interest-bearing assets declining 92 basis points in
2003 compared to 2002. In a rising rate environment, we will expect the levels
of prepayments to decline significantly. In contrast, at March 31, 2004 we had
$202.5 million in borrowings due to mature or reprice within a year and $714
million of certificates of deposit scheduled to mature within one year.
Based on our historical experience, if interest rates were to rise we
would expect that the demand for multi-family loans would decline. As a result,
we would expect that the Bank's loan origination volume would decrease and,
consequently, negatively impact our interest income. In addition, if interest
rates were to rise quickly and result in an economic downturn, we would expect
the level of our non-performing loans to increase. Such an increase in
non-performing loans may result in an increase in our allowance for loan losses
and possible charge-offs, which would negatively impact our net income.
As a federal savings bank, Dime of Williamsburgh is required to monitor
changes in the net present value of the expected future cash flows of its assets
and liabilities, which is referred to as net portfolio value or NPV. In
addition, we monitor our NPV ratio, which is our NPV divided by the estimated
market value of total assets. The NPV ratio can be viewed as a corollary to the
Bank's capital ratios. To monitor our overall sensitivity to changes in interest
rates, we simulate the effect of instantaneous changes in interest rates of up
to 200 basis points on our assets and liabilities. As of March 31, 2004, an
immediate increase in interest rates of 200 basis points would have reduced our
NPV by approximately 22.16%, resulting in an NPV ratio of 8.89%. There can be no
assurance that future changes in our mix of assets and liabilities will not
result in more extensive declines in our NPV and NPV ratio.
Interest rates do and will continue to fluctuate, and we cannot predict
future Federal Reserve actions or other factors that will cause rates to change.
RISKS RELATED TO CHANGES IN LAWS, GOVERNMENT REGULATION AND MONETARY POLICY.
Dime Community and Dime of Williamsburgh are subject to extensive
supervision, regulation and examination by the OTS, as Dime of Williamsburgh's
chartering agency, and by the FDIC, as its deposit insurer. Such regulation
limits the manner in which Dime Community and Dime of Williamsburgh conduct
business, undertake new investments and activities and obtain financing. This
regulation is designed primarily for the protection of the deposit insurance
funds and the Bank's depositors, and not to benefit Dime of Williamsburgh's
other or our creditors. The regulatory structure also gives the regulatory
authorities extensive discretion in connection with their supervisory and
enforcement activities and examination policies, including policies with respect
to capital levels, the classification of assets and the establishment of
adequate loan loss reserves for regulatory purposes.
24
For further information regarding the laws and regulations that affect
us and Dime of Williamsburgh, you should read the section titled "Regulation" in
our Annual Report on Form 10-K for the year ended December 31, 2003, which is
incorporated into this prospectus by reference.
Financial institution regulation has been the subject of significant
legislation in recent years, and may be the subject of further significant
legislation in the future, none of which is in the control of Dime Community or
Dime of Williamsburgh. Significant new laws or changes in, or repeals of,
existing laws may cause Dime Community's results of operations to differ
materially. Further, federal monetary policy, particularly as implemented
through the OTS, significantly affects credit conditions for Dime Community,
primarily through open market operations in United States government securities,
the discount rate for bank borrowings and reserve requirements. A material
change in any of these conditions would have a material impact on Dime of
Williamsburgh, and therefore, on Dime Community's results of operations.
COMPETITION FROM OTHER FINANCIAL INSTITUTIONS IN ORIGINATING LOANS AND
ATTRACTING DEPOSITS MAY ADVERSELY AFFECT OUR PROFITABILITY.
Dime of Williamsburgh's retail banking and a significant portion of its
lending business is concentrated in the New York metropolitan area. The New York
City banking environment is extremely competitive. The Bank's competition for
loans exists principally from savings banks, commercial banks, mortgage banks
and insurance companies. The Bank has faced sustained competition for the
origination of multi-family residential and commercial real estate loans, which
together comprised 93.6% of the Bank's loan portfolio at March 31, 2004.
Management anticipates that the current level of competition for multi-family
residential and commercial real estate loans will continue for the foreseeable
future, and this competition may inhibit the Bank's ability to maintain its
current level and pricing of such loans.
The Bank gathers deposits in direct competition with commercial banks,
savings banks and brokerage firms, many among the largest in the nation. In
addition, it must also compete for deposit monies against the stock markets and
mutual funds, especially during periods of strong performance in the U.S. equity
markets. Over the previous decade, consolidation in the financial services
industry, coupled with the emergence of Internet banking, has altered the
deposit gathering landscape and may increase competitive pressures on the Bank.
25
USE OF PROCEEDS
Neither we nor the Trust will receive any cash proceeds from the
issuance of the exchange capital securities and the exchange guarantee. In
consideration for issuing the exchange capital securities in exchange for
original capital securities as described in this prospectus, the Trust will
receive original capital securities in like liquidation amount. The original
capital securities surrendered in exchange for the exchange capital securities
will be retired and canceled.
All of the proceeds from the sale by the Trust of its original capital
securities and common securities were invested by the Trust in the original
junior subordinated debt securities. The net proceeds we received from the sale
of the $70,000,000 aggregate principal amount of our original junior
subordinated debt securities, were approximately $69,689,000 million, net of
estimated commissions and other estimated offering expenses. We used
approximately $62.0 million of the net proceeds to purchase investment
securities.
ACCOUNTING TREATMENT
In January 2003, the FASB issued FIN 46 which provides guidance for
determining when an entity should consolidate another entity that meets the
definition of a variable interest entity. FIN 46 requires a variable interest
entity to be consolidated if the company will absorb a majority of the expected
losses, will receive a majority of the expected residual returns or both. Under
this new guidance, the Trust will be considered to be a variable interest entity
that does not satisfy the conditions for consolidation by Dime Community.
Accordingly, for financial reporting purposes, we will treat the Trust as an
unconsolidated subsidiary and, in our consolidated balance sheet, report the
aggregate principal amount of the junior subordinated debt securities we issue
to the Trust as liabilities, with offsetting assets for the cash and common
securities we receive from the Trust. In our consolidated statements of
operations, we will report interest payable on the junior subordinated debt
securities as interest expense, offset by distributions we receive on the common
securities.
Future reports we file under the Exchange Act will include a footnote
to the consolidated financial statements stating that:
o we own 100% of the outstanding common securities of the Trust;
o the Trust is not consolidated in our financial statements;
o the sole assets of the Trust are the junior subordinated debt
securities (specifying the principal amount, interest rate and
maturity date of such junior subordinated debt securities); and
o our obligations under the trust agreement, the junior
subordinated debt securities and related indenture and the
guarantee, in the aggregate, constitute a full and unconditional
guarantee by us of the obligations of the Trust under the capital
securities.
We expect that the Trust will not be required to provide separate
reports under the Exchange Act.
26
CAPITALIZATION
The following table sets forth the actual consolidated capitalization
of Dime Community and its subsidiaries at March 31, 2004. The table should be
read in conjunction with Dime Community's consolidated financial statements and
notes thereto, included in the documents incorporated by reference herein. You
should refer to "Available Information."
MARCH 31,
2004
--------------
ACTUAL
(In thousands)
LONG-TERM BORROWINGS:
Federal Home Loan Bank of New York advances due beyond one year $ 371,500
Securities sold under agreements to repurchase due beyond one year 50,708
Subordinated notes payable 25,000
Junior Subordinated Debt Securities, net of Common Securities (1) 70,000
------------
TOTAL LONG TERM BORROWINGS $ 517,208
------------
STOCKHOLDERS' EQUITY:
Preferred stock ($0.01 par, 9,000,000 shares authorized, -----
none issued or outstanding at March 31, 2004
and December 31, 2003)
Common stock ($0.01 par, 125,000,000 shares authorized,
49,496,551 shares and 49,160,657 shares issued at March 31,
2004 and December 31, 2003, respectively,
and 37,409,181 shares and 38,115,111 shares outstanding
at
March 31, 2004 and December 31, 2003, respectively) $ 495
Additional paid-in capital 189,430
Retained earnings 239,275
Accumulated other comprehensive (loss) income, net of 1,521
deferred taxes
Unallocated common stock of Employee Stock Ownership (5,089)
Plan
Unearned and unallocated common stock of Recognition and (2,590)
Retention Plan
Common stock held by Benefit Maintenance Plan (5,584)
Treasury stock, at cost (12,087,370 shares and 11,045,546
shares at March 31, 2004 and 2003, respectively) (141,610)
------------
TOTAL STOCKHOLDERS' EQUITY $ 275,848
------------
TOTAL LONG-TERM BORROWINGS AND STOCKHOLDERS' EQUITY $ 793,056
------------
_________________________
(1) As discussed under "Accounting Treatment", we are reporting the $72.2
aggregate principal amount of the junior subordinated debt securities
we issue to the Trust as liabilities and record offsetting assets for
the $70.0 million of cash and $2.2 million of common securities
received from the Trust in our consolidated balance sheet. The $70
million aggregate liquidation amount of the original capital securities
is equal to the aggregate principal amount of the junior subordinated
debt securities less the aggregate liquidation amount of the common
securities.
27
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges were as follows
for the periods indicated.
AT OR FOR
AT OR FOR THE THE TWELVE
THREE MONTHS MONTHS ENDED AT OR FOR THE TWELVE
ENDED MARCH 31, DECEMBER 31, MONTHS ENDED JUNE 30,
--------------- ----------------------- ------------------------------------------
2004 2003 2002 2002 2001 2000 1999
--------------- ----------- ----------- ----------- ----------- --------- --------
RATIO OF EARNINGS TO FIXED
CHARGES (1):
Including interest on deposits.. 2.29x 2.15x 1.78x 1.60x 1.36x 1.38x 1.44x
Excluding interest on deposits . 4.26x 3.50x 2.49x 2.16x 1.64x 1.70x 2.03x
_________________________
(1) For purposes of computing the ratios of earnings to fixed charges, earnings
represent income before taxes, extraordinary items and the cumulative
effect of accounting charges plus fixed charges. Fixed charges represent
total interest expense, including and excluding interest on deposits.
28
DIME COMMUNITY BANCSHARES, INC.
Dime Community Bancshares, Inc. is a Delaware corporation and is the
unitary savings and loan association holding company for Dime of Williamsburgh,
a federally chartered stock savings bank.
At March 31, 2004, we had total assets of $3.37 billion, consisting
primarily of $2.27 billion in total loans, net and $752 million in MBS.
Multi-family residential mortgage loans comprised $1.80 billion of our $2.27
billion loan portfolio. As of March 31, 2004, on a consolidated basis, we had
total liabilities of $3.00 billion, consisting primarily of deposits of $2.27
billion, 57.4% of which were core deposits (savings, money market, NOW and
non-interest bearing checking accounts) and $722.0 million of borrowed funds,
and total stockholders' equity of $275.8 million.
Dime Community neither owns nor leases any property but instead uses
the premises and equipment of the Bank. Dime Community does not employ any
persons other than certain officers of the Bank who do not receive any
additional compensation as officers of Dime Community. Dime Community utilizes
the support staff of the Bank from time to time, as required. Additional
employees may be hired as deemed appropriate by Dime Community's management.
The Bank's principal business has been, and continues to be, gathering
deposits from customers primarily within its market area, and investing those
deposits primarily in multi-family residential mortgage loans, commercial real
estate loans, one- to four-family residential mortgage loans, construction
loans, consumer loans, MBS, obligations of the U.S. Government and Government
Sponsored Entities, and corporate debt and equity securities. The Bank's
revenues are derived principally from interest on its loan and securities
portfolios. The Bank's primary sources of funds are deposits; loan amortization,
prepayments and maturities; MBS amortization, prepayments and maturities;
investment securities maturities; advances from the Federal Home Loan Bank of
New York; securities sold under agreement to repurchase borrowings; and the sale
of real estate loans to the secondary market.
The Bank's primary strategy is to increase its household and deposit
market shares in the communities that it serves, either through direct
marketing, acquisitions or purchases of deposits. The Bank also seeks to
increase its product and service utilization for each individual depositor. In
addition, the Bank's primary strategy includes the origination of, and
investment in, mortgage loans, with an emphasis on multi-family residential
loans. Multi-family residential lending is a significant business of the Bank,
reflecting the fact that much of the housing in its primary lending area is
multi-family housing. The Bank also strives to provide a stable source of
liquidity and earnings through the purchase of investment grade securities;
seeks to maintain the asset quality of its loans and other investments; and uses
appropriate portfolio and asset/liability management techniques in an effort to
manage the effects of interest rate volatility on its profitability and capital.
Management of the Bank believes that multi-family residential loans provide
advantages as investment assets. Initially, they offer a higher yield than
one-to four-family loans or investment securities of comparable maturities or
terms to repricing. Origination and processing costs for the Bank's multi-family
residential and commercial real estate loans are lower per thousand dollars of
originations than comparable one- to four-family loan costs. In addition, the
Bank's market area generally has provided a stable flow of new and refinanced
multi-family residential loan originations. In order to address the higher
credit risk associated with multi-family residential lending, the Bank has
developed underwriting standards that it believes are reliable in order to
maintain consistent credit quality for its new loans. For further information
regarding our operating strategies, you should read the sections titled
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our Annual Report on Form 10-K for the year ended
December 31, 2003, which is incorporated into this prospectus by reference.
As a publicly-held unitary savings and loan holding company, Dime
Community is required to file certain reports with, and otherwise comply with,
the rules and regulations of the SEC under the federal securities laws and of
the OTS. Dime of Williamsburgh is subject to extensive regulation, examination
and supervision by the OTS, as its chartering agency, and the FDIC, as its
deposit insurer.
Dime Community's principal executive offices are located at Dime
Community Bancshares, Inc., 209 Havemeyer Street, Brooklyn, New York 11211, and
its telephone number is (718) 782-6200.
Additional information about Dime Community and its subsidiaries is
included in documents incorporated by reference in this prospectus. You should
refer to "Available Information."
29
DIME COMMUNITY CAPITAL TRUST I
The Trust is a statutory trust created under Delaware law upon the
filing of a certificate of trust with the Delaware Secretary of State. The Trust
exists for the exclusive purposes of:
o issuing and selling the capital securities and the common
securities;
o using the proceeds from the sale of the capital securities and
the common securities to acquire the junior subordinated debt
securities; and
o engaging in only those other activities necessary, advisable or
incidental thereto, including the exchange offer.
The junior subordinated debt securities are the sole assets of the
Trust, and, accordingly, payments under the junior subordinated debt securities
will be the sole revenues of the Trust. We own all of the common securities of
the Trust. The common securities will rank equal, and payments will be made
thereon PRO RATA, with the capital securities, except that upon the occurrence
and continuance of an event of default under the trust agreement, our rights as
holder of the common securities to payments in respect of distributions and
payments upon liquidation, redemption or otherwise will be subordinated to the
rights of the holders of the capital securities. You should read "Description of
Exchange Capital Securities -- Subordination of Common Securities."
We own common securities in a liquidation amount equal to at least 3%
of the total capital of the Trust. The Trust has a term of approximately 35
years, but may dissolve earlier as provided in the trust agreement. The Trust's
business and affairs are conducted by the administrators and the trustees, each
of whom we appoint as holder of the common securities. The trustees for the
Trust are Wilmington Trust Company, as the institutional trustee and as the
Delaware trustee. The three administrators are our officers. Wilmington Trust
Company, as institutional trustee, acts as sole indenture trustee under the
trust agreement. Wilmington Trust Company also acts as guarantee trustee under
the guarantee. You should read "Description of Exchange Guarantee" and
"Description of Exchange Debt Securities." The holder of the common securities
of the Trust or, if an event of default under the trust agreement has occurred
and is continuing, the holders of a majority in liquidation amount of the
capital securities, will be entitled to appoint, remove or replace the
institutional trustee and/or the Delaware trustee. In no event will the holders
of the capital securities have the right to vote to appoint, remove or replace
the administrators; such voting rights will be vested exclusively in the holder
of the common securities.
The duties and obligations of each trustee are governed by the trust
agreement. As issuer of the junior subordinated debt securities, we will pay all
fees, expenses, debts and obligations (other than the payments due on the
capital securities) related to the Trust and the offering of the exchange
capital securities and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of the Trust. The principal executive office of the
Trust is c/o Dime Community Bancshares, Inc., 209 Havemeyer Street, Brooklyn,
New York 11211 and its telephone number is (718) 782-6200.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the original capital securities, we and
the Trust entered into the registration rights agreement with the initial
purchaser, under which we and the Trust agreed to file and to use our best
efforts to cause to become effective with the SEC a registration statement with
respect to the exchange of the original capital securities for exchange capital
securities with terms identical in all material respects to the terms of the
original capital securities. A copy of the registration rights agreement has
been filed as an exhibit to the registration statement of which this prospectus
is a part.
The exchange offer is being made to satisfy our and the Trust's
contractual obligations under the registration rights agreement. The form and
terms of the exchange capital securities are the same as the form and terms of
the original capital securities except that the exchange capital securities have
been registered under the Securities Act and will not provide for any increase
in the distribution rate and certain restrictions on transfer
30
applicable to the original capital securities. In that regard, the original
capital securities provide, among other matters, that, if a registration
statement relating to the exchange offer has not been filed with the SEC on or
prior to the 150th day after the issue date, the distribution rate borne by the
original capital securities will increase by 25 basis points per annum until the
exchange offer is consummated. Upon consummation of the exchange offer, holders
of original capital securities will not be entitled to any increase in the
distribution rate on the original capital securities or any further registration
rights under the registration rights agreement, except under limited
circumstances. You should read "Risk Factors."
The exchange offer is not being made to, nor will the Trust accept
tenders for exchange from, holders of original capital securities in any
jurisdiction in which the exchange offer or its acceptance would not be in
compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect
to the exchange offer means any person in whose name the original capital
securities are registered on the books of the Trust or any other person who has
obtained a properly completed bond power from the registered holder, or any
person whose original capital securities are held of record by DTC who desires
to deliver such original capital securities by book-entry transfer at DTC.
Under the exchange offer, we will exchange as soon as practicable after
the date of this prospectus the original guarantee for the exchange guarantee
and the original junior subordinated debt securities, in an amount corresponding
to the original capital securities accepted for exchange, for a like aggregate
principal amount of the exchange debt securities. The exchange guarantee and
exchange debt securities have been registered under the Securities Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions
set forth in this prospectus and in the accompanying letter of transmittal, to
exchange up to $70,000,000 aggregate liquidation amount of exchange capital
securities for a like aggregate liquidation amount of original capital
securities properly tendered on or prior to the expiration date and not properly
withdrawn in accordance with the procedures described below. The Trust will
issue, promptly after the expiration date, an aggregate liquidation amount of up
to $70,000,000 of exchange capital securities in exchange for a like principal
amount of outstanding original capital securities tendered and accepted in
connection with the exchange offer. Holders may tender their original capital
securities in whole or in part in a liquidation amount of not less than $100,000
(100 capital securities) or any integral multiple of $1,000 liquidation amount
(one capital security) in excess of $100,000.
The exchange offer is not conditioned upon any minimum liquidation
amount of original capital securities being tendered. As of the date of this
prospectus, $70,000,000 aggregate liquidation amount of the original capital
securities is outstanding.
Holders of original capital securities do not have any appraisal or
dissenters' rights in connection with the exchange offer. Original capital
securities which are not tendered for or are tendered but not accepted in
connection with the exchange offer will remain outstanding and be entitled to
the benefits of the trust agreement, but will not be entitled to any further
registration rights under the registration rights agreement, except under
limited circumstances. You should read "Risk Factors" and "Description of
Original Capital Securities."
If any tendered original capital securities are not accepted for
exchange because of an invalid tender, the occurrence of certain other events
set forth in this prospectus or otherwise, certificates for any such unaccepted
original capital securities will be returned, without expense, to the tendering
holder promptly after the expiration date.
Holders who tender original capital securities in connection with the
exchange offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the letter of transmittal, transfer taxes with
respect to the exchange of original capital securities in connection with the
exchange offer. We will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the exchange offer. You
should read "-- Fees and Expenses."
31
Neither we, our Board of Directors nor any trustee of the Trust makes
any recommendation to you as to whether to tender or refrain from tendering all
or any portion of your original capital securities pursuant to the exchange
offer. In addition, no one has been authorized to make any such recommendation.
You must make your own decisions whether to tender pursuant to the exchange
offer and, if so, the aggregate amount of original capital securities to tender
based upon your own financial positions and requirements.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "expiration date" means 5:00 p.m., New York City time, on
_______, 2004, unless we or the Trust extends the exchange offer, in which case
the term "expiration date" shall mean the latest date and time to which the
exchange offer is extended.
We and the Trust expressly reserve the right in our sole and absolute
discretion, subject to applicable law, at any time and from time to time:
o to delay the acceptance of the original capital securities for
exchange;
o to terminate the exchange offer, whether or not any original
capital securities have theretofore been accepted for exchange,
if the Trust determines, in its sole and absolute discretion,
that any of the events or conditions referred to under "--
Conditions to the Exchange Offer" have occurred or exist or have
not been satisfied;
o to extend the expiration date of the exchange offer and retain
all original capital securities tendered under the exchange
offer, subject, however, to the right of holders of original
capital securities to withdraw their tendered original capital
securities as described under "-- Withdrawal Rights;" and
o to waive any condition or otherwise amend the terms of the
exchange offer in any respect.
If the exchange offer is amended in a manner determined by us and the
Trust to constitute a material change, or if we and the Trust waive a material
condition of the exchange offer, we and the Trust will promptly disclose such
amendment by means of a prospectus supplement that will be distributed to the
holders of the original capital securities, and we and the Trust will extend the
exchange offer to the extent required by Rule l4e--l under the Exchange Act.
Any such delay in acceptance, extension, termination, waiver or
amendment will be followed promptly by oral or written notice to the exchange
agent and by making a public announcement, and such announcement in the case of
an extension will be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration date. Without
limiting the manner in which we and the Trust may choose to make any public
announcement and subject to applicable law, we and the Trust shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to an appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF EXCHANGE CAPITAL SECURITIES
Upon the terms and subject to the conditions of the exchange offer, the
Trust will exchange, and will issue to the exchange agent, exchange capital
securities for original capital securities validly tendered and not withdrawn
promptly after the expiration date.
In all cases, delivery of exchange capital securities in exchange for
original capital securities tendered and accepted for exchange under the
exchange offer will be made only after timely receipt by the exchange agent of
(i) the book-entry confirmation described below under "-- Procedures for
Tendering Original Capital Securities--Book-Entry Transfer" or (ii) certificates
representing such original capital securities, the letter of transmittal (or
facsimile thereof) , properly completed and duly executed, with any required
signature guarantees, and any other documents required by the letter of
transmittal.
32
Subject to the terms and conditions of the exchange offer, the Trust
will be deemed to have accepted for exchange, and thereby exchanged, original
capital securities validly tendered and not withdrawn as, if and when the Trust
gives oral or written notice to the exchange agent of the Trust's acceptance of
such original capital securities for exchange under the exchange offer. The
exchange agent will act as agent for the Trust for the purpose of receiving
tenders of book-entry confirmations or certificates representing original
capital securities, letters of transmittal and related documents, and as agent
for tendering holders for the purpose of receiving book-entry confirmations or
certificates representing original capital securities, letters of transmittal
and related documents and transmitting exchange capital securities to validly
tendering holders. Such exchange will be made promptly after the expiration
date. If for any reason whatsoever, acceptance for exchange or the exchange of
any original capital securities tendered pursuant to the exchange offer is
delayed, whether before or after the Trust's acceptance for exchange of original
capital securities, or the Trust extends the exchange offer or is unable to
accept for exchange or exchange original capital securities tendered under the
exchange offer, then, without prejudice to the Trust's rights set forth in this
prospectus, the exchange agent may, nevertheless, on behalf of the Trust and
subject to Rule l4e-l (c) under the Exchange Act, retain tendered original
capital securities and such original capital securities may not be withdrawn
except to the extent tendering holders are entitled to withdrawal rights as
described under "-- Withdrawal Rights."
In accordance with the letter of transmittal, a holder of original
capital securities will warrant and agree that it has full power and authority
to tender, exchange, sell, assign and transfer the original capital securities,
that the Trust will acquire good, marketable and unencumbered title to the
tendered original capital securities, free and clear of all liens, restrictions,
charges and encumbrances, and the original capital securities tendered for
exchange are not subject to any adverse claims or proxies. Such holder also will
warrant and agree that it will, upon request, execute and deliver any additional
documents deemed by the Trust or the exchange agent to be necessary or desirable
to complete the exchange, sale, assignment, and transfer of the original capital
securities tendered under the exchange offer. Tendering holders of original
capital securities that use ATOP will, by so doing, acknowledge that they are
bound by the terms of the letter of transmittal.
PROCEDURES FOR TENDERING ORIGINAL CAPITAL SECURITIES
VALID TENDER. Except as set forth in this prospectus, in order for
original capital securities to be validly tendered under the exchange offer, a
properly completed and duly executed letter of transmittal (or facsimile
thereof), with any required signature guarantees and any other required
documents, must be received by the exchange agent at its address set forth under
"-- Exchange Agent," and, in addition, one of the following:
o tendered original capital securities must be received by the
exchange agent;
o such original capital securities must be tendered pursuant to the
procedures for book-entry transfer set forth in this prospectus
and a book-entry confirmation must be received by the exchange
agent, in each case on or prior to the expiration date; or
o the guaranteed delivery procedures set forth in this prospectus
must be complied with.
If less than all of the original capital securities are tendered, a
tendering holder should fill in the amount of original capital securities being
tendered in the appropriate box on the letter of transmittal or so indicate in
an agent's message in lieu of the letter of transmittal. The entire amount of
original capital securities delivered to the exchange agent will be deemed to
have been tendered unless otherwise indicated.
The method of delivery of the book-entry confirmations or certificates,
the letter of transmittal and all other required documents is at the option and
sole risk of the tendering holder, and delivery will be deemed made only when
actually received by the exchange agent. If delivery is by mail, we recommend
using registered mail, return receipt requested, properly insured, or an
overnight delivery service. In all cases, sufficient time should be allowed to
ensure timely delivery.
BOOK-ENTRY TRANSFER. For purposes of the exchange offer, the exchange
agent will establish an account with respect to the original capital securities
at DTC as soon as practicable. Any tendering financial institution that is a
participant in DTC's book-entry transfer facility system must make a book-entry
delivery of the original capital securities by causing DTC to transfer such
original capital securities into the exchange agent's account at DTC in
33
accordance with DTC's ATOP procedures for transfers. Such holder of original
capital securities using ATOP should transmit its acceptance to DTC on or prior
to the expiration date, or comply with the guaranteed delivery procedures set
forth below. DTC will verify such acceptance, execute a book-entry transfer of
the tendered original capital securities into the exchange agent's account at
DTC and then send to the exchange agent confirmation of such book-entry
transfer, including an agent's message confirming that DTC has received an
express acknowledgment from such holder that such holder has received and agrees
to be bound by the letter of transmittal and that we and the Trust may enforce
the letter of transmittal against such holder.
A beneficial owner of original capital securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial owner wishes to participate in the exchange offer.
CERTIFICATES. If the tender is not made through ATOP, certificates
representing original capital securities, as well as the letter of transmittal,
or facsimile thereof, properly completed and duly executed, with any required
signature guarantees, and any other documents required by the letter of
transmittal, must be received by the exchange agent at its address set forth
under "-- Exchange Agent" on or prior to the expiration date in order for such
tender to be effective, or the guaranteed delivery procedure set forth herein
must be complied with.
If less than all of the original capital securities are tendered, a
tendering holder should fill in the amount of original capital securities being
tendered in the appropriate box on the letter of transmittal. The entire amount
of original capital securities delivered to the exchange agent will be deemed to
have been tendered unless otherwise indicated.
SIGNATURE GUARANTEES. Certificates for the original capital securities
need not be endorsed and signature guarantees on the letter of transmittal are
unnecessary unless:
o a certificate for the original capital securities is registered
in a name other than that of the person surrendering the
certificate; or
o the holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the letter of
transmittal.
In the case of the above conditions, such certificates for original
capital securities must be duly endorsed or accompanied by a properly executed
bond power, with the endorsement or signature on the bond power and on the
letter of transmittal guaranteed by a firm or other entity identified in Rule
l7Ad-l5 under the Exchange Act as an "eligible guarantor institution," including
(as such terms are defined therein) : (a) a bank; (b) a broker, dealer,
municipal securities broker or dealer or government securities broker or dealer;
(c) a credit union; (d) a national securities exchange, registered securities
association or clearing agency; or (e) a savings association that is a
participant in a Securities Transfer Association, unless the certificates are
surrendered on behalf of such eligible institution. You should read Instruction
1 to the letter of transmittal.
DELIVERY. The method of delivery of the book-entry confirmation or
certificates representing tendered original capital securities, the letter of
transmittal, and all other required documents is at the option and sole risk of
the tendering holder, and delivery will be deemed made only when actually
received by the exchange agent. If delivery is by mail, registered mail, return
receipt requested, properly insured, or an overnight delivery service is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
Notwithstanding any other provision hereof, the delivery of exchange
capital securities in exchange for original capital securities tendered and
accepted for exchange pursuant to the exchange offer will in all cases be made
only after timely receipt by the exchange agent of:
o a book-entry confirmation with respect to such original capital
securities; or
o certificates representing original capital securities and a
properly completed and duly executed letter of transmittal, or
facsimile thereof, together with any required signature
guarantees and any other documents required by the letter of
transmittal.
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Accordingly, the delivery of exchange capital securities might not be
made to all tendering holders at the same time, and will depend upon when
book-entry confirmations with respect to original capital securities or
certificates representing original capital securities and other required
documents are received by the exchange agent.
Delivery of documents to DTC in accordance with DTC's procedures does
not constitute delivery to the exchange agent.
GUARANTEED DELIVERY. If a holder desires to tender original capital
securities under the exchange offer and the certificates for such original
capital securities are not immediately available or time will not permit all
required documents to reach the exchange agent on or prior to the expiration
date, or the procedure for book-entry transfer cannot be completed on a timely
basis, such original capital securities may nevertheless be tendered, provided
that all of the following guaranteed delivery procedures are complied with:
o such tenders are made by or through an eligible institution;
o properly completed and duly executed notice to the exchange agent
guaranteeing delivery to the exchange agent of either
certificates representing original capital securities or a
book-entry confirmation in compliance with the requirements set
forth in this prospectus, referred to as the notice of guaranteed
delivery, substantially in the form accompanying the letter of
transmittal, is received by the exchange agent, as provided
herein, on or prior to expiration date; and
o a book-entry confirmation or the certificates representing all
tendered original capital securities, in proper form for
transfer, and any other documents required by the letter of
transmittal, are, in any case, received by the exchange agent
within three Nasdaq National Market trading days after the date
of execution of such notice of guaranteed delivery.
In addition, in order to utilize the guaranteed delivery procedure to tender
original capital securities in certificated form pursuant to the exchange offer,
a completed, signed and dated letter of transmittal relating to the original
capital securities (or facsimile thereof) must be received by the exchange agent
on or prior to the expiration date.
The notice of guaranteed delivery may be delivered by hand, or
transmitted by facsimile or mail to the exchange agent and must include a
guarantee by an eligible institution in the form set forth in such notice.
The Trust's acceptance for exchange of original capital securities
tendered in compliance with the procedures described above will constitute a
binding agreement between the tendering holder and the Trust upon the terms and
subject to the conditions of the exchange offer.
DETERMINATION OF VALIDITY. We and the Trust will determine all
questions as to the form of documents, validity, eligibility, including time of
receipt, and acceptance for exchange of any tendered original capital
securities, in our sole discretion, and the determination shall be final and
binding on all parties. We and the Trust reserve the absolute right, in our sole
and absolute discretion, to reject any and all tenders determined by us not to
be in proper form or the acceptance of which, or exchange for, may, in the
opinion of counsel to us and the Trust, be unlawful. We and the Trust also
reserve the absolute right, subject to applicable law, to waive any of the
conditions of the exchange offer as set forth under "-- Conditions to the
Exchange Offer" or any condition or irregularity in any tender of original
capital securities of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders.
The Trust's and our interpretation of the terms and conditions of the
exchange offer, including the letter of transmittal and the instructions
thereto, will be final and binding. No tender of original capital securities
will be deemed to have been validly made until all irregularities with respect
to such tender have been cured or waived. Neither us, the Trust, any affiliates
or assigns of us or the Trust, the exchange agent nor any other person shall be
under any duty to give any notification of any irregularities in tenders or
incur any liability for failure to give any such notification.
If any letter of transmittal, endorsement, bond power, power of
attorney, or any other document required by the letter of transmittal is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
35
corporation or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing, and unless waived by us and the
Trust, proper evidence satisfactory to us and the Trust, in our sole discretion,
of such person's authority to so act must be submitted.
RESALES OF EXCHANGE CAPITAL SECURITIES
The Trust is making the exchange offer for the original capital
securities in reliance on the position of the staff of the SEC as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither we nor the Trust sought our own interpretive letter and there
can be no assurance that the staff of the SEC would make a similar determination
with respect to the exchange offer as it has in such interpretive letters to
third parties. Based on these interpretations by the staff of the SEC, and
subject to the two immediately following sentences, we and the Trust believe
that exchange capital securities issued under this exchange offer in exchange
for original capital securities may be offered for resale, resold and otherwise
transferred by a holder, other than a holder who is a broker-dealer, without
further compliance with the registration and prospectus delivery requirements of
the Securities Act, provided that such exchange capital securities are acquired
in the ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution, within the meaning of the Securities Act, of
such exchange capital securities. However, any holder of original capital
securities who is an affiliate of us or the Trust or who intends to participate
in the exchange offer for the purpose of distributing exchange capital
securities, or any broker-dealer who purchased original capital securities from
the Trust to resell pursuant to Rule l44A or any other available exemption under
the Securities Act:
o will not be able to rely on the interpretations of the staff of
the SEC set forth in the above-mentioned interpretive letters;
o will not be permitted or entitled to tender such original capital
securities in the exchange offer; and
o must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or
other transfer of such original capital securities or, if
distributed, exchange debt securities, unless such sale is made
in reliance on an exemption from such requirements.
In addition, as described below, if any broker-dealer holds original
capital securities acquired for its own account as a result of market-making or
other trading activities and exchanges such original capital securities for
exchange capital securities, then such broker-dealer must deliver a prospectus
meeting the requirements of the Securities Act in connection with any resales of
such exchange capital securities.
Each holder of original capital securities who wishes to exchange
original capital securities for exchange capital securities in the exchange
offer will be required to represent that:
o it is not an affiliate of us or the Trust;
o any exchange capital securities to be received by it are being
acquired in the ordinary course of its business;
o it has no arrangement or understanding with any person to
participate in a distribution, within the meaning of the
Securities Act, of such exchange capital securities; and
o if such holder is not a broker-dealer, such holder is not engaged
in, and does not intend to engage in, a distribution, within the
meaning of the Securities Act, of such exchange capital
securities.
We and the Trust may require such holder, as a condition to such
holder's eligibility to participate in the exchange offer, to furnish to us and
the Trust (or an agent thereof) in writing information as to the number of
"beneficial owners," within the meaning of Rule 13d-3 under the Exchange Act, on
behalf of whom such holder holds the original capital securities to be exchanged
in the exchange offer. Each broker-dealer that receives exchange capital
securities for its own account as a result of the exchange offer must
acknowledge that it acquired
36
the original capital securities for its own account as the result of
market-making activities or other trading activities and must agree that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such exchange capital securities. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an underwriter within the
meaning of the Securities Act. Based on the position taken by the staff of the
SEC in the interpretive letters referred to above, we and the Trust believe that
participating broker-dealers who acquired original capital securities for their
own accounts as a result of market-making activities or other trading activities
may fulfill their prospectus delivery requirements with respect to the exchange
capital securities received upon exchange of such original capital securities,
other than original capital securities which represent an unsold allotment from
the initial sale of the original capital securities, with a prospectus meeting
the requirements of the Securities Act, which may be the prospectus prepared for
an exchange offer so long as it contains a description of the plan of
distribution with respect to the resale of such exchange capital securities.
Accordingly, this prospectus, as it may be amended or supplemented from time to
time, may be used by a participating broker-dealer during the period referred to
below in connection with resales of exchange capital securities received in
exchange for original capital securities where such original capital securities
were acquired by such participating broker-dealer for its own account as a
result of market-making or other trading activities. Subject to certain
provisions set forth in the registration rights agreement, we and the Trust have
agreed that this prospectus, as it may be amended or supplemented from time to
time, may be used by a participating broker-dealer in connection with resales of
such exchange capital securities for a period ending 90 days after the
expiration date, subject to extension under certain limited circumstances
described below, or earlier when all such exchange capital securities have been
disposed of by such participating broker-dealer. You should read "Plan of
Distribution." However, a participating broker-dealer who intends to use this
prospectus in connection with the resale of exchange capital securities received
in exchange for original capital securities pursuant to the exchange offer must
notify us or the Trust, or cause us or the Trust to be notified, on or prior to
the expiration date, that it is a participating broker-dealer. Such notice may
be given in the space provided for that purpose in the letter of transmittal or
may be delivered to the exchange agent at the address set forth herein under "--
Exchange Agent." Any participating broker-dealer who is an affiliate of us or
the Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
Each participating broker-dealer who surrenders original capital
securities under the exchange offer will be deemed to have agreed, by execution
of the letter of transmittal, that upon receipt of notice from us or the Trust
of the occurrence or discovery of:
o any fact which makes any statement contained or incorporated by
reference in this prospectus untrue in any material respect;
o any fact which causes this prospectus to omit to state a material
fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances
under which they were made, not misleading; or
o the occurrence of certain other events specified in the
registration rights agreement,
such participating broker-dealer will suspend the sale of exchange capital
securities, the exchange guarantee or the exchange debt securities, as
applicable, pursuant to this prospectus until we or the Trust has amended or
supplemented this prospectus to correct such misstatement or omission and has
furnished copies of the amended and supplemented prospectus to such
participating broker- dealer, or we or the Trust has given notice that the sale
of the exchange capital securities, or the exchange guarantee or the exchange
debt securities, as applicable, may be resumed, as the case may be.
If we or the Trust gives such notice to suspend the sale of the
exchange capital securities, the exchange guarantee or the exchange debt
securities, as applicable, the 90-day period referred to above shall be extended
during which participating broker-dealers are entitled to use this prospectus in
connection with the resale of exchange capital securities by the number of days
during the period from and including the date of the giving of such notice to
and including the date when participating broker-dealers shall have received
copies of the amended or supplemented prospectus necessary to permit resales of
the exchange capital securities or to and including the date on which we or the
Trust has given notice that the sale of exchange capital securities, the
exchange guarantee or the exchange debt securities, as applicable, may be
resumed, as the case may be.
37
WITHDRAWAL RIGHTS
Except as otherwise provided in this prospectus, tenders of original
capital securities may be withdrawn at any time on or prior to the expiration
date.
In order for a withdrawal to be effective, a written or facsimile
transmission of such notice of withdrawal must be timely received by the
exchange agent at the address set forth under "-- Exchange Agent" on or prior to
the expiration date. Any such notice of withdrawal must specify the name of the
person who tendered the original capital securities to be withdrawn, the
aggregate principal amount of original capital securities to be withdrawn, and,
if certificates for such original capital securities have been tendered, the
name of the registered holder of the original capital securities as set forth on
such certificates if different from that of the person who tendered such
original capital securities. If certificates representing original capital
securities have been delivered or otherwise identified to the exchange agent,
then prior to the physical release of such certificates, the tendering holder
must submit the serial numbers shown on the particular certificates to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by an
eligible institution, except in the case of original capital securities tendered
for the account of an eligible institution. If original capital securities have
been tendered in accordance with the procedures for book-entry transfer set
forth in "-- Procedures for Tendering Original Capital Securities--Book-Entry
Transfer," the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of original capital
securities. Withdrawals of tenders of original capital securities may not be
rescinded. Original capital securities properly withdrawn will not be deemed
validly tendered for purposes of the exchange offer, but may be retendered at
any subsequent time on or prior to the expiration date by following any of the
procedures described above under "-- Procedures for Tendering Original Capital
Securities."
All questions as to the validity, form and eligibility, including time
of receipt, of such withdrawal notices will be determined by us and the Trust,
in our sole discretion, which determination shall be final and binding on all
parties. Neither we, the Trust, any affiliates or assigns of us or the Trust,
the exchange agent nor any other person shall be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any original capital
securities which have been tendered but which are withdrawn will be returned to
the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON EXCHANGE CAPITAL SECURITIES
Holders of exchange capital securities whose original capital
securities are accepted for exchange will be entitled to receive cumulative cash
distributions arising from the payment of interest on the exchange debt
securities at the annual rate of 7.0% of the liquidation amount of $1,000 per
exchange capital security, accumulating from March 19, 2004, payable quarterly
in arrears on January 15th, April 15th, July 15th and October 15th of each year,
beginning on July 15, 2004. The record dates will be the 15th calendar day
immediately preceding any payment date. Because the exchange offer will be
consummated after June 30, 2004, which is the record date for the July 15, 2004
payment date, distributions were paid on the original capital securities
accumulated from and after March 19, 2004 through July 14, 2004, and
distributions will be paid on the exchange capital securities from and after
July 15, 2004. The amount of each distribution with respect to the exchange
capital securities will include amounts accrued to, but excluding the date the
distribution is due. Because of the foregoing procedures regarding
distributions, the amount of the distributions received by holders whose
original capital securities are accepted for exchange will not be affected by
the exchange.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the exchange offer, or any
extension of the exchange offer, we and the Trust will not be required to accept
for exchange, or to exchange, any original capital securities for any exchange
capital securities, and, as described below, may terminate the exchange offer
(whether or not any original capital securities have theretofore been accepted
for exchange) or may waive any conditions to or amend the exchange offer, if any
of the following conditions have occurred or exist or have not been satisfied:
o there shall occur a change in the current interpretation by the
staff of the SEC which permits the exchange capital securities
issued pursuant to the exchange offer in exchange for original
capital securities to be offered for resale, resold and otherwise
transferred by holders, other than a broker and any such holder
which is an affiliate of us or the Trust within the meaning of
Rule 405 under the
38
Securities Act, without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided
that such exchange capital securities are acquired in the
ordinary course of such holders' business and such holders have
no arrangement or understanding with any person to participate in
the distribution of such exchange capital securities;
o any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of us or the Trust, would
reasonably be expected to impair its ability to proceed with the
exchange offer;
o a stop order shall have been issued by the SEC or any state
securities authority suspending the effectiveness of the
registration statement, or proceedings shall have been initiated
or, to the knowledge of us or the Trust, threatened for that
purpose, or any governmental approval has not been obtained,
which approval we or the Trust shall, in its sole discretion,
deem necessary for the consummation of the exchange offer as
contemplated hereby; or
o we determine in good faith that there is a reasonable likelihood
that, or a material uncertainty exists as to whether,
consummation of the exchange offer would result in an adverse tax
consequence to the Trust or us.
EXCHANGE AGENT
Wilmington Trust Company, as institutional trustee of the Trust, has
been appointed as exchange agent for the exchange offer. Delivery of the letters
of transmittal and any other required documents, questions, requests for
assistance, and requests for additional copies of this prospectus or of the
letter of transmittal should be directed to the exchange agent as follows:
39
By Hand, Overnight Delivery, Registered or Certified Mail:
Wilmington Trust Company, as Exchange Agent
DC-1626 Processing Unit
P.O. Box 8861
Wilmington, DE 19899-8861
Attention: Corporate Capital Markets -
Dime Community Capital Trust I Exchange Offer
Confirm by Telephone: (302) 636-6470
Facsimile Transmission: (302) 636-4145
(ELIGIBLE INSTITUTIONS ONLY)
Delivery to another address other than the above address or facsimile
number will not constitute a valid delivery.
FEES AND EXPENSES
We have agreed to pay the exchange agent reasonable and customary fees
for its services and will reimburse it for its reasonable out-of-pocket expenses
in connection with the exchange offering. We will also reimburse brokerage
houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this prospectus
and related documents to the beneficial owners of original capital securities,
and in handling or tendering for their customers.
Holders who tender their original capital securities for exchange will
not be obligated to pay any transfer taxes in connection therewith. If, however,
exchange capital securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the original capital
securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of original capital securities in connection with the exchange
offer, then the amount of any such transfer taxes, whether imposed on the
registered holder or any other persons, will be payable by the tendering holder.
Neither we nor the Trust will make any payment to brokers, dealers or
other nominees soliciting acceptances of the exchange offer.
DESCRIPTION OF EXCHANGE CAPITAL SECURITIES
THIS SUMMARY DESCRIBES THE MATERIAL PROVISIONS OF THE EXCHANGE CAPITAL
SECURITIES. IT IS NOT COMPLETE AND IS BOTH SUBJECT TO AND QUALIFIED BY THE TRUST
AGREEMENT, INCLUDING THE DEFINITIONS USED IN THE TRUST AGREEMENT, AND THE TRUST
INDENTURE ACT OF 1939, AS AMENDED, REFERRED TO AS THE TRUST INDENTURE ACT. WE
HAVE INCORPORATED THE DEFINITIONS USED IN THE TRUST AGREEMENT IN THIS
PROSPECTUS. YOU CAN RECEIVE A COMPLETE COPY OF THE FORM OF TRUST AGREEMENT BY
REQUESTING A COPY FROM DIME COMMUNITY.
GENERAL
The exchange capital securities will represent preferred beneficial
interests in the Trust. The exchange capital securities will rank equal to, and
payments will be made on a PRO RATA basis with, the common securities, except as
a holder of exchange capital securities, you will be entitled to a preference
over the common securities in certain circumstances with respect to
distributions and amounts payable on redemption of the exchange capital
securities or liquidation of the Trust, as described under " -- Subordination of
Common Securities." The trust agreement will not be qualified under the Trust
Indenture Act except upon effectiveness of the exchange offer registration
statement or a shelf registration statement. By its terms, however, the trust
agreement will incorporate certain provisions of the Trust Indenture Act, and,
upon consummation of the exchange offer or effectiveness of the shelf
registration statement, the trust agreement will be subject to and governed by
the Trust Indenture Act.
40
The exchange capital securities will be limited to $70.0 million
aggregate liquidation amount at any one time outstanding. The institutional
trustee will have legal title to the exchange debt securities and will hold them
in trust for the benefit of you and the other holders of the exchange capital
securities. Our exchange guarantee for the benefit of the holders of the
exchange capital securities will be a guarantee on a subordinated basis with
respect to the exchange capital securities, but will not guarantee payment of
distributions or amounts payable on redemption of the exchange capital
securities or liquidation of the Trust when the Trust does not have funds
legally available for such payments. You should read "Description of Exchange
Guarantee" for more information about our guarantee.
DISTRIBUTIONS
Distributions on the exchange capital securities will be cumulative,
and will accumulate from the most recent date on which distributions have been
paid. Distributions will be payable at the annual rate of 7.0% of the
liquidation amount, payable quarterly in arrears on January 15th, April 15th,
July 15th and October 15th of each year, beginning on July 15, 2004, to the
holders of the exchange capital securities on the relevant record dates. The
record dates will be the 15th calendar day immediately preceding any payment
date. Because the exchange offer will be consummated after June 30, 2004, which
is the record date for the July 15, 2004 payment date, distributions were paid
on the original capital securities accumulated from and after March 19, 2004
through July 14, 2004, and distributions will be paid on the exchange capital
securities from and after July 15, 2004. The amount of distributions to be paid
on each distribution date with respect to the exchange capital securities will
include amounts accrued to, but excluding the date the distribution is due.
Because of the foregoing procedures regarding distributions, the amount of the
distributions received by holders whose original capital securities are accepted
for exchange will not be affected by the exchange. The amount of distributions
payable for any distribution period will be based on a 360-day year of twelve
30-day months.
If any distribution date would otherwise fall on a day that is not a
business day, the distributions payable on such date shall be paid on the next
succeeding business day without any interest or other payment in respect of any
such delay, and with the same force and effect as if made on such date. A
business day means any day other than a Saturday or a Sunday, or a day on which
banking institutions in Wilmington, Delaware or New York, New York, are
authorized or required by law, executive order or regulation to close.
The Trust's revenue available for distribution to holders of the
exchange capital securities will be limited to our payments to the Trust under
our exchange debt securities. For more information, you should read "Description
of Exchange Debt Securities -- General." If we do not make interest payments on
the exchange debt securities, the institutional trustee will not have funds
available to pay distributions only on the exchange capital securities and on
the common securities. We will irrevocably guarantee the payment of
distributions only if and to the extent that the Trust has funds legally
available to pay the distributions. You should read "Description of Exchange
Guarantee" for more information about the extent of our exchange guarantee.
OPTION TO DEFER INTEREST PAYMENTS
As long as no event of default exists with respect to the exchange debt
securities, we have the right under the indenture to elect to defer the payment
of interest, including liquidated damages, if any, on the exchange debt
securities, at any time or from time to time, for no more than 20 consecutive
quarterly periods, each such period an extension period, PROVIDED, THAT no
extension period will end on a date other than an interest payment date, or
extend beyond April 14, 2034, the stated maturity date of the exchange debt
securities, any optional redemption date or the special event redemption date.
If we defer interest payments, the Trust will defer quarterly distributions on
the exchange capital securities during the extension period. During any
extension period, distributions will continue to accumulate on the exchange
capital securities and on any accumulated and unpaid distributions, at an annual
rate equal to the interest rate applicable during such extension period plus any
liquidated damages, compounded quarterly from the relevant distribution date.
The term distributions includes any accumulated additional distributions.
Before the end of any extension period, we may extend the extension
period, as long as such extension, together with previous and subsequent
extensions, does not cause the extension period to exceed 20 consecutive
quarterly periods, or to end on a date other than an interest payment date or
extend beyond April 14, 2034 or any date of earlier redemption. At the end of
any extension period, we will be required to pay all amounts then due on the
related interest payment date, including all deferred interest for such
extension period. Thereafter, we may elect
41
to begin a new extension period subject to the above requirements. No interest
(except any additional amounts) shall be due and payable during an extension
period until such period ends. We must give the indenture trustee notice of our
election to defer interest payments or to extend an extension period at least
one business day before the regular record date applicable to the date the
distributions on the exchange capital securities would have been payable.
There is no limitation on the number of times that we may elect to
begin an extension period. You should read "Description of Exchange Debt
Securities -- Option to Extend Interest Payment Date" and "Certain U.S.
Federal Income Tax Consequences-- Interest Income and Original Issue Discount."
During any extension period, we may not:
o declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of our capital stock;
o make any payment of principal of or premium, if any, or interest
on or repay, repurchase or redeem any debt securities that rank
equal in all respects with the exchange debt securities; or
o make any guarantee payments with respect to any guarantee of the
debt securities of any of our subsidiaries if such guarantee
ranks equal in all respects with the guarantee of the exchange
capital securities.
Notwithstanding the foregoing, during an extension period the following
actions are permitted:
o repurchases, redemptions or other acquisitions of shares of
capital stock of Dime Community (1) in connection with any
employment contract, benefit plan or other similar arrangement
with or for the benefit of one or more employees, officers,
directors or consultants, (2) in connection with a dividend
reinvestment or stockholder stock purchase plan or (3) in
connection with the issuance of capital stock of Dime Community
(or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered
into prior to the occurrence of any of the events that give rise
to the foregoing restrictions;
o any exchange or conversion of any class or series of our capital
stock (or any capital stock of a subsidiary) for any class or
series of our capital stock or of any class or series of our
indebtedness;
o the purchase of fractional interests in shares of our capital
stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged;
o any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or
other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto; and
o any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks equal
to or junior to such stock.
We do not currently intend to exercise our right to defer payments of
interest on the exchange debt securities. Our obligations under the exchange
guarantee to make payments of distributions is limited to the extent that the
Trust has funds legally available to pay distributions and, therefore, will not
require us to make a payment under the exchange guarantee in respect of deferred
interest during an extension period. You should read "Description of Exchange
Guarantee" for more information about the extent of our guarantee.
REDEMPTION
Upon payment at maturity on April 14, 2034, or redemption, in whole or
in part, prior to April 14, 2034, of the exchange debt securities (other than
following the distribution of the exchange debt securities to you as a holder
42
of the Trust's exchange capital securities and us, as the holder of the Trust's
common securities), the institutional trustee will apply the proceeds from such
payment to redeem at the applicable redemption price an amount of exchange
capital securities and common securities having an aggregate liquidation amount
equal to the principal amount of the exchange debt securities included in such
payment. We will give notice of any redemption between 30 to 60 days prior to
the redemption date (other than a redemption resulting from the maturity of the
exchange debt securities on the maturity date).
If less than all of the exchange debt securities mature or are redeemed
on a redemption date, then the institutional trustee will allocate the proceeds
actually received on a PRO RATA basis among the exchange capital securities and
the common securities except as described under "-- Subordination of Common
Securities."
We will have the right to redeem the exchange debt securities:
o in whole or in part, on or after April 15, 2009; and
o in whole but not in part, at any time, if there are certain
changes in the bank regulatory, investment company or tax laws
that would adversely affect the status of the Trust, the exchange
capital securities or the exchange debt securities.
We may be required to obtain regulatory approval, including the
approval of the OTS, before we redeem any exchange debt securities. You should
read "Description of Exchange Debt Securities -- Optional Redemption" and " --
Special Event Redemption" for information on redemption of the exchange debt
securities.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF EXCHANGE DEBT SECURITIES
We will have the right at any time to dissolve the Trust and, after
satisfying the liabilities owed to the Trust's creditors as required by
applicable law, we will have the right to distribute the exchange debt
securities to the holders of the exchange capital securities and to us as holder
of the common securities. Our right to dissolve the Trust is subject to our
receiving:
o an opinion of counsel to the effect that if we distribute the
exchange debt securities, the holders of the exchange capital
securities will not experience a taxable event; and
o any required regulatory approval.
The Trust will automatically dissolve if:
o the Trust's term expires;
o certain bankruptcy events relating to us occur, or we dissolve or
liquidate;
o we distribute exchange debt securities having a principal amount
equal to the liquidation amount of the exchange capital
securities to holders of the exchange capital securities and we,
as sponsor, have exercised our right to dissolve the Trust (which
direction is at our option and, except as described above, wholly
within our discretion, as sponsor);
o the Trust redeems all of the exchange capital securities as
described under "-- Redemption;" or
o a court of competent jurisdiction enters an order for the
dissolution of the Trust.
If the Trust is dissolved for any of the above reasons, except for a
redemption of all exchange capital securities, it will be liquidated by the
trustee as soon as such trustee determines to be practicable by distributing to
holders of the exchange capital securities, after satisfying the liabilities
owed to the Trust's creditors, as provided by applicable law, exchange debt
securities having a principal amount equal to the liquidation amount of the
exchange capital securities, unless the institutional trustee determines that
this distribution is not practicable. If the institutional trustee determines
that this distribution is not practicable, the holders of the exchange capital
securities will be entitled to receive an amount equal to the aggregate of the
liquidation amount plus accumulated and unpaid distributions on the exchange
capital securities
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to the date of payment (such amount being referred to as the liquidation
distribution) out of the assets of the Trust legally available for distribution
to such holders, after satisfying the liabilities owed to the Trust's creditors.
If the liquidation distribution can be paid only in part, the exchange capital
securities will have a priority over the common securities. For more
information, you should read " -- Subordination of Common Securities."
After the liquidation date is fixed for any distribution of exchange
debt securities to holders of the exchange capital securities:
o the exchange capital securities will no longer be deemed to be
outstanding;
o DTC, or its nominee, will receive in respect of each registered
global certificate representing exchange capital securities a
registered global certificate representing the exchange debt
securities to be delivered upon such distribution; and
o any certificates representing exchange capital securities not
held by DTC or its nominee will be deemed to represent exchange
debt securities having a principal amount equal to the
liquidation amount of those exchange capital securities, and
bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid distributions on those exchange capital
securities, until such certificates are presented to us, as the
issuer of the exchange debt securities or our agent for transfer
or reissuance, in which case we will issue to those holders, and
the indenture trustee will authenticate one or more certificates
representing the exchange debt securities.
We cannot assure you of the market prices for the exchange capital
securities, or the exchange debt securities that may be distributed to you in
exchange for the exchange capital securities, if a dissolution and liquidation
of the Trust were to occur. Accordingly, the exchange capital securities that
you purchase, or the exchange debt securities that you may receive upon a
dissolution and liquidation of the Trust, may trade at a discount to the price
that you paid to purchase the exchange capital securities offered by this
prospectus.
If we elect not to redeem the exchange debt securities prior to
maturity and either elect not to or we are unable to liquidate the Trust and
distribute the exchange debt securities to holders of the exchange capital
securities, the exchange capital securities will remain outstanding until the
repayment of the exchange debt securities at maturity on April 14, 2034.
REDEMPTION PROCEDURES
If the exchange debt securities mature or are redeemed prior to
maturity, the Trust will redeem exchange capital securities at the applicable
redemption price with the proceeds received from such maturity or redemption of
the exchange debt securities. Any redemption of exchange capital securities will
be made and the applicable redemption price will be payable on the redemption
date only to the extent that the Trust has funds legally available to pay the
applicable redemption price. For more information, you should read " --
Subordination of Common Securities."
If the Trust gives a notice of redemption for the exchange capital
securities, then, by 10:00 a.m., New York City time, on the redemption date, to
the extent funds legally are available, with respect to:
o the exchange capital securities held by DTC or its nominees, the
institutional trustee will deposit, or cause the paying agent to
deposit, irrevocably with DTC funds sufficient to pay the
applicable redemption price. For more information, you should
read " -- Form, Denomination, Book-Entry Procedures and
Transfers;" and
o the exchange capital securities held in certificated form, the
institutional trustee will irrevocably deposit with the paying
agent funds sufficient to pay the applicable redemption price and
will give the paying agent irrevocable instructions and authority
to pay the applicable redemption price to
44
the holders upon surrender of their certificates evidencing the
exchange capital securities. For more information, you should
read " -- Payment and Paying Agency."
The paying agent will initially be the institutional trustee.
Notwithstanding the foregoing, if any distribution date falls on or
before the redemption date, distributions will be payable to the holders of the
exchange capital securities on the record date for such distribution date. If
the Trust gives a notice of redemption and funds are deposited as required, then
upon the date of the deposit, all rights of the holders of the exchange capital
securities called for redemption will cease except the right of the holders of
the exchange capital securities to receive the applicable redemption price,
without interest, and the exchange capital securities called to be redeemed will
cease to be outstanding.
If any redemption date for the exchange capital securities is not a
business day, then the applicable redemption price will be paid on the next
business day without interest or any other payment in respect of the delay and
with the same force and effect as if made on such date. If payment of the
applicable redemption price is improperly withheld or refused and not paid
either by the Trust or by us pursuant to the exchange guarantee:
o distributions on the exchange capital securities will continue to
accumulate at the coupon rate, from the redemption date
originally established by the Trust to but excluding the date
such applicable redemption price is actually paid; and
o the actual payment date will be the redemption date for purposes
of calculating the applicable redemption price.
Notice of any redemption will be mailed between 30 and 60 days before
the redemption date to each holder of exchange capital securities at its
registered address.
Subject to applicable law, including, without limitation, U.S. federal
securities laws, we or our subsidiaries may at any time, and from time to time,
purchase outstanding exchange capital securities in the open market or by
private agreement.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, or the redemption price of, the exchange
capital securities and the common securities or the liquidation distribution, as
applicable, will generally be made on a PRO RATA basis. However, if an event of
default exists on any distribution, redemption or liquidation date, no payment
of any distributions on, applicable redemption price of, or liquidation
distribution relating to, any of the common securities, and no other payment on
account of the redemption, liquidation or other acquisition of the common
securities, will be made unless payment in full in cash of all accumulated and
unpaid distributions on all of the outstanding exchange capital securities for
all distribution periods terminating on or before the distribution, redemption
or liquidation date, or payment of the applicable redemption price or the
liquidation distribution, as applicable, is made in full. All funds available to
the institutional trustee will first be applied to the payment in full in cash
of all distributions on, the applicable redemption price of, or liquidation
distribution relating to, the exchange capital securities then due and payable.
In the case of any event of default under the trust agreement, we, as
holder of all of the common securities, will be deemed to have waived any right
to act with respect to the event of default if the effect of the event of
default has been cured, waived or otherwise eliminated. Until any event of
default has been cured, waived or otherwise eliminated, the institutional
trustee will act solely on behalf of the holders of the exchange capital
securities and not on our behalf, and only the holders of the exchange capital
securities will have the right to direct the institutional trustee to act on
their behalf.
EVENTS OF DEFAULT; NOTICE
An event of default under the indenture constitutes an event of default
under the trust agreement. You should read "Description of Exchange Debt
Securities -- Events of Default."
45
The trust agreement provides that within 90 days after the
institutional trustee has actual knowledge of the occurrence of an event, act or
condition that, with notice or lapse of time, or both, would constitute an event
of default under the indenture, the institutional trustee will give notice of
the default to the holders of the exchange capital securities, the
administrators and to us, as sponsor, unless the default has been cured or
waived. The trust agreement also provides that within ten business days after
the institutional trustee has actual knowledge of an event of default the
institutional trustee will give notice of the event of default to such persons,
unless the event of default has been cured or waived. We, as sponsor, and the
administrators are required to file annually with the institutional trustee a
certificate as to whether we and the administrators have complied with the
applicable conditions and covenants of the trust agreement.
If an event of default exists, the exchange capital securities will
have a preference over the common securities as described under " -- Liquidation
of the Trust and Distribution of Exchange Debt Securities" and " --
Subordination of Common Securities." An event of default does not entitle the
holders of exchange capital securities to accelerate the mandatory redemption
date of the exchange capital securities. For a description of the rights of the
holders of the exchange capital securities in the case of an event of default
under the indenture, you should read " -- Voting Rights; Amendment of Trust
Agreement" and "Description of Exchange Debt Securities -- Enforcement of
Certain Rights of Certain Holders of Exchange Capital Securities." If an event
of default has occurred and is continuing and such event is attributable to our
failure to pay principal of or interest or liquidated damages, if any, on the
exchange debt securities when due, any holder of the exchange capital securities
may institute a legal proceeding directly against us for such payment without
first instituting a legal proceeding against the Trust, the institutional
trustee or any other person or entity.
REMOVAL OF TRUSTEES
Unless an event of default exists we may remove the institutional
trustee and the Delaware trustee at any time. If an event of default exists, the
institutional trustee and the Delaware trustee may be removed only by the
holders of a majority in liquidation amount of the outstanding exchange capital
securities. In no event will the holders of the exchange capital securities have
the right to vote to appoint, remove or replace the administrators, because
these voting rights are vested exclusively in us as the holder of all of the
common securities. No resignation or removal of the institutional trustee or the
Delaware trustee and no appointment of a successor trustee shall be effective
until the acceptance of appointment by the successor trustee in accordance with
the trust agreement.
MERGER OR CONSOLIDATION OF TRUSTEES
If the institutional trustee or the Delaware trustee is merged,
converted or consolidated into another entity, or such trustee is a party to a
merger, conversion or consolidation which results in a new entity, or an entity
succeeds to all or substantially all of the corporate trust business of the such
trustee, the new entity shall be the successor of such trustee under the trust
agreement, PROVIDED, THAT the entity is otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease substantially all of its properties
and assets to any corporation or other entity, except as described below or as
otherwise described under " -- Liquidation of the Trust and Distribution of
Exchange Debt Securities." The Trust may, with the consent of the administrators
but without the consent of the holders of the exchange capital securities, merge
with or into, consolidate, amalgamate or be replaced by or convey, transfer or
lease substantially all of its properties and assets to a trust organized as
such under the laws of any state; PROVIDED, THAT:
o if the Trust is not the survivor, the successor either:
o expressly assumes all of the obligations of the Trust with
respect to the exchange capital securities; or
o substitutes securities for the exchange capital securities
that have substantially the same terms as the exchange
capital securities so that the substitute securities rank
equal to the
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exchange capital securities with respect to distributions
and payments upon liquidation, redemption and otherwise;
o we appoint, as the holder of the exchange debt securities, a
trustee of the successor possessing the same powers and duties as
the institutional trustee;
o the exchange capital securities or any substitute securities are
listed or quoted, or any substitute securities will be listed or
quoted upon notification of issuance, on any national securities
exchange or other organization on which the exchange capital
securities are then listed or quoted, if any;
o if the exchange capital securities, substitute securities or
exchange debt securities are rated by any nationally recognized
statistical rating organization prior to such transaction, the
transaction does not cause the rating on the exchange capital
securities or any successor securities to be downgraded or
withdrawn by the rating organization;
o the transaction does not adversely affect the rights, preferences
and privileges of the holders of the exchange capital securities
(including any substitute securities) in any material respect;
o the successor, if any, has a purpose substantially identical to
that of the Trust;
o prior to the transaction, the Trust received an opinion from
independent counsel to the Trust experienced in such matters to
the effect that:
o the transaction does not adversely affect the rights,
preferences and privileges of the holders of the exchange
capital securities (including any substitute securities) in
any material respect (other than any dilution of such
holders' interests in the successor entity);
o following the transaction, neither the Trust nor the
successor will be required to register as an investment
company under the Investment Company Act; and
o the Trust continues to be, and any successor will be,
classified as a grantor trust for U.S. federal income tax
purposes;
o we guarantee the obligations of the successor under the
substitute securities to the same extent provided by the
indenture, the exchange guarantee, the exchange debt securities
and the trust agreement.
Notwithstanding the foregoing, the Trust may not, except with the
consent of holders of 100% in liquidation amount of the exchange capital
securities, consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease substantially all of its properties and assets to, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if the transaction would cause the Trust or the successor
to be classified other than as a grantor trust for U.S. federal income tax
purposes.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under " -- Mergers, Consolidations,
Amalgamations or Replacements of the Trust" and "Description of Exchange
Guarantee -- Amendments and Assignment" and as otherwise required by law and the
trust agreement, the holders of the exchange capital securities will have no
voting rights.
We, together with the institutional trustee, may amend the trust
agreement from time to time, without the consent of the holders of the exchange
capital securities:
o to cure any ambiguity, correct or supplement any provisions in
the trust agreement that may be defective or inconsistent with
any other provision;
47
o to add to the covenants, restrictions or obligations applicable
to us, as sponsor;
o to modify, eliminate or add to any provisions of the trust
agreement that are necessary or advisable, including, without
limitation, to ensure that at all times, the Trust will be
classified as a grantor trust for U.S. federal income tax
purposes and will not be required to register as an investment
company under the Investment Company Act; or
o to modify, eliminate or add any provisions of the trust agreement
as is necessary to enable us or the Trust to conduct an exchange
offer in the manner contemplated by the registration rights
agreement.
Notwithstanding the foregoing, in each case noted above, the amendment may not
adversely affect the powers, preferences, rights or interests of the holders of
the exchange capital securities.
In addition, we, together with the trustees, may amend the trust
agreement with the consent of holders representing a majority in liquidation
amount of the outstanding exchange capital securities upon receipt of an opinion
of counsel to the effect that the amendment or the exercise of any power granted
to the trustees in accordance with the amendment will not affect the Trust's
classification as an entity that is not taxable as a corporation or as being a
grantor trust for U.S. federal income tax purposes or the Trust's exemption from
status as an investment company under the Investment Company Act. However,
unless we obtain the consent of each holder of exchange capital securities, no
such amendment may (i) change the amount or timing of any distribution on the
exchange capital securities; (ii) change the redemption date(s) or prices or the
liquidation distribution or events; or (iii) restrict the right of a holder of
exchange capital securities to sue for the enforcement of any payment on or
after the specified date.
So long as the institutional trustee holds any exchange debt
securities, the trustees may not:
o direct the time, method and place of exercising any trust or
power conferred on the indenture trustee with respect to the
exchange debt securities;
o waive certain past defaults under the indenture;
o exercise any right to rescind or annul a declaration accelerating
the maturity of the principal of the exchange debt securities; or
o consent to any amendment, modification or termination of the
indenture or the exchange debt securities, where such consent
shall be required,
without, in each case, obtaining the prior consent of the holders of a majority
in liquidation amount of all outstanding exchange capital securities.
Notwithstanding the foregoing, where the indenture would require the consent of
each holder of exchange debt securities affected thereby, the institutional
trustee may not give consent without the prior approval of each holder of the
exchange capital securities.
The trustees will not revoke any action previously authorized or
approved by a vote of the holders of the exchange capital securities, except by
subsequent vote of such holders. The institutional trustee shall notify each
holder of exchange capital securities of any notice of default it receives with
respect to the exchange debt securities. In addition to obtaining the approvals
of the holders of the exchange capital securities, prior to taking any of the
foregoing actions, the trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will continue to be classified as a
grantor trust for U.S. federal income tax purposes.
Any required approval of holders of exchange capital securities may be
given at a meeting of the holders convened for the purpose of approving the
matter or pursuant to written consent. The administrators will cause a notice of
any meeting at which holders of exchange capital securities are entitled to
vote, or of any matter upon which action by written consent of such holders has
been taken, to be given to each holder of record of exchange capital securities
in accordance with the trust agreement.
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Notwithstanding that holders of the exchange capital securities are
entitled to vote or consent under any of the circumstances described above, any
of the exchange capital securities that are owned by us, the trustees or any of
our or any trustee's affiliates, shall, for purposes of such vote or consent, be
treated as if they were not outstanding.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFERS
The exchange capital securities initially will be represented by one or
more exchange capital securities in registered, global form (collectively, the
global capital securities). The global capital securities will be deposited upon
issuance with the institutional trustee as custodian for DTC, in Wilmington,
Delaware, and registered in the name of DTC or its nominee, in each case for
credit to an account of a direct or indirect participant in DTC as described in
this prospectus.
In the event that exchange capital securities are issued in
certificated form, the exchange capital securities will be in blocks having a
liquidation amount of not less than $100,000 (100 exchange capital securities)
and may be transferred or exchanged only in such blocks in the manner described
in this prospectus.
Except as set forth in this prospectus, the global capital securities
may be transferred, in whole and not in part, only to another nominee of DTC or
to a successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 exchange capital securities. Beneficial interests in
the global capital securities may not be exchanged for exchange capital
securities in certificated form except in the limited circumstances described in
this prospectus. You should read "-- Exchange of Book-Entry Capital Securities
for Certificated Capital Securities."
DEPOSITARY PROCEDURES
DTC has advised the Trust and us that it is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC was created to hold securities for its
participating organizations referred to as, participants, and to facilitate the
clearance and settlement of transactions in those securities between
participants through electronic computerized book-entry changes in accounts of
its participants, thereby eliminating the need for physical movement of
certificates. Participants include both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Indirect access to DTC's system is also available to banks,
securities brokers, dealers, trust companies and clearing corporations that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly referred to as, indirect participants. Persons who are
not participants may beneficially own securities held by or on behalf of DTC
only through participants or indirect participants. The ownership interest and
transfer of ownership interest of each actual purchaser of each security held by
or on behalf of DTC are recorded on the records of participants and indirect
participants.
DTC also has advised the Trust and us that, pursuant to procedures
established by it, (1) upon deposit of the global capital securities, DTC will
credit the accounts of participants designated by the initial purchaser with
portions of the liquidation amount of the global capital securities and (2)
ownership of interests in the global capital securities will be shown on, and
the transfer of ownership of the global capital securities will be effected only
through, records maintained by DTC (with respect to participants) or by
participants and indirect participants (with respect to other owners of
beneficial interests in the global capital securities).
You may hold your interests in the global capital security directly
through DTC if you are a participant, or indirectly through organizations that
are participants. All interests in a global capital security will be subject to
the procedures and requirements of DTC. The laws of some states require that
certain persons take physical delivery in certificated form of securities that
they own. Consequently, the ability to transfer beneficial interests in a global
capital security to those persons will be limited to that extent. Because DTC
can act only on behalf of participants, which in turn act on behalf of indirect
participants and certain banks, the ability of a person having beneficial
interests in a global capital security to pledge its interests to persons or
entities that do not participate in the DTC system, or otherwise take actions in
respect of its interests, may be affected by the lack of a physical certificate
evidencing its interests. For certain other restrictions on the transferability
of the exchange capital securities, you
49
should read " -- Exchange of Book-Entry Capital Securities for Certificated
Capital Securities," " -- Exchange of Certificated Capital Securities for
Book-Entry Capital Securities."
Except as described below, owners of interests in the global capital
securities will not have exchange capital securities registered in their name,
will not receive physical delivery of exchange capital securities in
certificated form and will not be considered the registered owners or holders
thereof under the trust agreement for any purpose.
Payments on the global capital securities registered in the name of
DTC, or its nominee, will be payable in immediately available funds by the
institutional trustee to DTC or its nominee in its capacity as the registered
holder under the trust agreement. Under the terms of the trust agreement, the
institutional trustee will treat the persons in whose names the exchange capital
securities, including the global capital securities, are registered as the
owners thereof for the purpose of receiving such payments and for any and all
other purposes whatsoever. Neither the institutional trustee nor any agent
thereof has or will have any responsibility or liability for:
o any aspect of DTC's records or any participant's or indirect
participant's records relating to, or payments made on account
of, beneficial ownership interests in the global capital
securities, or for maintaining, supervising or reviewing any of
DTC's records or any participant's or indirect participant's
records relating to the beneficial ownership interests in the
global capital securities; or
o any other matter relating to the actions and practices of DTC or
any of its participants or indirect participants.
DTC has advised the Trust and us that its current practice, upon
receipt of any payment on the exchange capital securities, is to credit the
accounts of the relevant participants with the payment on the payment date, in
amounts proportionate to their respective holdings in liquidation amount of the
exchange capital securities as shown on the records of DTC. Payments by
participants and indirect participants to the beneficial owners of exchange
capital securities will be governed by standing instructions and customary
practices and will be the responsibility of participants or indirect
participants and will not be the responsibility of DTC, the institutional
trustee, the Trust or us. None of the Trust, Dime Community or the institutional
trustee will be liable for any delay by DTC or any of its participants or
indirect participants in identifying the beneficial owners of the exchange
capital securities, and the Trust, Dime Community and the institutional trustee
may conclusively rely on, and will be protected in relying on, instructions from
DTC or its nominee for all purposes.
If applicable, redemption notices shall be sent to DTC or its nominee.
If less than all of the global capital securities are to be redeemed, DTC's
current practice is to determine by lot the amount of the interest of each
participant that will be redeemed.
Any secondary market trading activity in interests in the global
capital securities will settle in immediately available funds, subject in all
cases to the rules and procedures of DTC and its participants. Transfers between
participants in DTC will be effected in accordance with DTC's procedures, and
will settle in same-day funds.
DTC has advised the Trust and us that it will take any action permitted
to be taken by a holder of exchange capital securities (including, without
limitation, presenting the exchange capital securities for exchange as described
below) only at the direction of one or more participants who have an interest in
DTC's global capital securities in respect of the portion of the liquidation
amount of the exchange capital securities as to which the participant or
participants has or have given direction. However, if an event of default exists
under the trust agreement, DTC reserves the right to exchange the global capital
securities for legended exchange capital securities in certificated form and to
distribute the certificated exchange capital securities to its participants.
We believe that the information in this section concerning DTC and its
book-entry system has been obtained from reliable sources, but we do not take
responsibility for the accuracy of this information.
Although DTC has agreed to the procedures described in this section to
facilitate transfers of interests in the global capital securities among
participants in DTC, DTC is not obligated to perform or to continue to perform
these procedures, and these procedures may be discontinued at any time by giving
reasonable notice. None of the Trust,
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Dime Community or the institutional trustee will have any responsibility or
liability for any aspect of the performance by DTC or its participants or
indirect participants of any of their respective obligations under the rules and
procedures governing their operations or for maintaining, supervising or
reviewing any records relating to the global capital securities that are
maintained by DTC or any of its participants or indirect participants.
EXCHANGE OF BOOK-ENTRY ORIGINAL CAPITAL SECURITIES FOR CERTIFICATED EXCHANGE
CAPITAL SECURITIES
A global original capital security can be exchanged for exchange
capital securities in registered certificated form if:
o DTC notifies the Trust that it is unwilling or unable to continue
as depositary for the global capital security and the Trust fails
to appoint a successor depositary within 90 days of receipt of
DTC's notice, or has ceased to be a clearing agency registered
under the Exchange Act and the Trust fails to appoint a successor
depositary within 90 days of becoming aware of this condition;
o at Dime Community's request, DTC notifies holders of the exchange
capital securities that they may utilize DTC's procedures to
cause the exchange capital securities to be issued in
certificated form, and such holders request such issuance; or
o an event of default, or any event which after notice or lapse of
time or both would be an event of default, exists under the trust
agreement.
In addition, beneficial interests in a global capital security may be
exchanged by or on behalf of DTC for certificated exchange capital securities
upon request by DTC, but only upon at least 20 days' prior written notice given
to the institutional trustee in accordance with DTC's customary procedures. In
all cases, certificated exchange capital securities delivered in exchange for
any global original capital security will be registered in the names and issued
in any approved denominations requested by or on behalf of DTC (in accordance
with its customary procedures) unless the administrators determine otherwise in
compliance with applicable law.
PAYMENT AND PAYING AGENCY
The Trust will make payments on the exchange capital securities that
are held in global form in immediately available funds to DTC, or its nominee,
which will credit the relevant accounts at DTC on the applicable payment dates.
The Trust will make payments on the exchange capital securities, other than
payments on a redemption date, that are not held by DTC by mailing a check to
the address of the holders on the record date, which will be the date that is 15
calendar days prior to the relevant distribution date (except in limited
circumstances), whether or not the record date falls on a business day,
appearing on the register or by wire transfer to an account maintained by the
holder if it has delivered proper transfer instructions prior to the record
date, while payments on a redemption date will be made in immediately available
funds upon surrender of the exchange capital securities. The paying agent will
initially be the institutional trustee and any co-paying agent chosen by the
institutional trustee and acceptable to the administrators and us. The paying
agent will be permitted to resign as paying agent upon 30 days' notice to the
institutional trustee, the administrators and us. In the event that the
institutional trustee is no longer the paying agent, the administrators will
appoint a successor (which must be a bank or trust company acceptable to the
administrators and us) to act as paying agent.
RESTRICTIONS ON TRANSFER
The exchange capital securities will be issued, and may be transferred,
only in blocks having a liquidation amount of not less than $100,000 (100
exchange capital securities) and multiples of $1,000 in excess thereof. Any
attempted sale, transfer or other disposition of exchange capital securities in
a block having a liquidation amount of less than $100,000 will be deemed to be
void and of no legal effect whatsoever. Any such purported transferee will be
deemed not to be the holder of such exchange capital securities for any purpose,
including, but not limited to, the receipt of distributions on such exchange
capital securities, and such purported transferee will be deemed to have no
interest whatsoever in such exchange capital securities.
REGISTRAR AND TRANSFER AGENT
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The institutional trustee will act as registrar and transfer agent for
the exchange capital securities.
The Trust will register transfers of the exchange capital securities
without charge, except for any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. The Trust will not be
required to have the transfer of the exchange capital securities registered
after they have been called for redemption.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
Unless an event of default exists, the institutional trustee will
undertake to perform only the duties specifically set forth in the trust
agreement. Upon the occurrence and continuance of an event of default, the
institutional trustee must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the institutional trustee is not obligated to
exercise any of the powers vested in it by the trust agreement at the request of
any holder of exchange capital securities, unless it is offered reasonable
indemnity against the costs, expenses and liabilities that it might incur. If no
event of default exists and the institutional trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the trust
agreement or is unsure of the application of any provision of the trust
agreement, and the matter is not one on which holders of the exchange capital
securities are entitled under the trust agreement to vote, then the
institutional trustee shall take such action as directed by us and, if not
directed, shall take such action as it deems advisable and in the best interests
of the holders of the exchange capital securities and will have no liability,
except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
We, the administrators and the institutional trustee are authorized and
directed to conduct the affairs of and to operate the Trust in a manner not
inconsistent with the trust agreement or applicable law so that:
o the Trust will not be deemed to be an investment company required
to be registered under the Investment Company Act;
o the Trust will be classified as a grantor trust for U.S. federal
income tax purposes; and
o the exchange debt securities will be treated as our indebtedness
for U.S. federal income tax purposes.
We, together with the administrators and the institutional trustee, are
authorized to take any action, not inconsistent with applicable law or the trust
agreement, that we, the administrators and the institutional trustee determine
in our discretion is necessary or desirable for such purposes even if such
action adversely affects the interests of the holders of the exchange capital
securities.
The trust agreement provides that holders of the exchange capital
securities have no preemptive or similar rights to subscribe for any additional
exchange capital securities and the issuance of exchange capital securities is
not subject to preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge
any of its assets.
GOVERNING LAW
The trust agreement and exchange capital securities will be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to conflict of law principles.
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DESCRIPTION OF EXCHANGE DEBT SECURITIES
THIS SUMMARY DESCRIBES THE MATERIAL PROVISIONS OF THE EXCHANGE DEBT
SECURITIES. IT IS NOT COMPLETE AND IS SUBJECT TO, AND QUALIFIED IN ITS ENTIRETY
BY, THE INDENTURE. THE INDENTURE WILL NOT BE QUALIFIED UNDER THE TRUST INDENTURE
ACT, EXCEPT UPON EFFECTIVENESS OF THE EXCHANGE OFFER REGISTRATION STATEMENT OR
THE SHELF REGISTRATION STATEMENT. HOWEVER, BY ITS TERMS, THE INDENTURE WILL
INCORPORATE BY REFERENCE CERTAIN PROVISIONS OF THE TRUST INDENTURE ACT AND UPON
CONSUMMATION OF THE EXCHANGE OFFER OR EFFECTIVENESS OF THE SHELF REGISTRATION
STATEMENT, THE INDENTURE WILL BE GOVERNED BY AND SUBJECT TO THE TRUST INDENTURE
ACT. WE HAVE INCORPORATED THE DEFINITIONS USED IN THE INDENTURE IN THIS
PROSPECTUS. YOU CAN OBTAIN A COPY OF THE INDENTURE BY REQUESTING IT FROM DIME
COMMUNITY. WILMINGTON TRUST COMPANY WILL ACT AS INDENTURE TRUSTEE UNDER THE
INDENTURE.
GENERAL
The Trust invested the proceeds from the sale of the original capital
securities and the common securities in the original junior subordinated debt
securities issued by us. The original junior subordinated debt securities bear
interest at the annual rate of 7.0% of the principal amount of the original
junior subordinated debt securities, payable quarterly in arrears on interest
payment dates of January 15th, April 15th, July 15th and October 15th of each
year to the person in whose name each original junior subordinated debt security
is registered at the close of business on the relevant record date. The exchange
debt securities will have terms identical in all material respects to the
original junior subordinated debt securities, except that the exchange debt
securities will not contain terms with respect to transfer restrictions under
the Securities Act and will not provide for any liquidated damages. The first
interest payment date for the exchange debt securities will be October 15, 2004.
The period beginning on and including the date the exchange debt securities are
first issued and ending on but excluding October 15, 2004 and each period
beginning on and including an interest payment date and ending on but excluding
the next interest payment date is an interest period.
We anticipate that until the liquidation, if any, of the Trust, each
exchange debt security will be held by the institutional trustee in trust for
the benefit of the holders of the exchange capital securities. The amount of
interest payable for any interest period will be computed on the basis of a
360-day year consisting of twelve 30-day months. In the event that any interest
payment date, the stated maturity date or any earlier date of redemption would
otherwise fall on a day that is not a business day, then the payment payable on
such date will be made on the next succeeding day that is a business day,
without any interest or other payment in respect of any such delay and with the
same force and effect as if made on such date.
Accrued interest that is not paid on the applicable interest payment
date will bear additional interest (to the extent permitted by law) at the
coupon rate, compounded quarterly from the relevant interest payment date. The
term "interest," as used in this prospectus includes quarterly interest payments
and interest on quarterly interest payments not paid on the applicable interest
payment date.
The exchange debt securities will be issued as a series of exchange
deferrable interest debt securities under the indenture.
The exchange debt securities will mature on April 14, 2034.
The exchange debt securities will rank equally to all of our other
subordinated debt which has been or may be issued to other trusts established by
us, in each case similar to the Trust, and will be unsecured and rank
subordinate and junior to all of our senior debt, as set forth in the indenture.
At March 31, 2004, we had $25 million of senior debt outstanding, consisting
entirely of our subordinated notes payable. You should read "-- Subordination."
Because we are a holding company, our right to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the exchange
capital securities to benefit indirectly from such distribution) is subject to
the prior claims of preferred equity holders and creditors of that subsidiary
(including depositors, in the case of Dime of Williamsburgh), except to the
extent that we may be recognized as a creditor of that subsidiary. At March 31,
2004, our subsidiaries had total liabilities, including deposits, and preferred
equity of $3.10 billion. Accordingly, the exchange debt securities will be
effectively subordinated to all existing and future liabilities and preferred
equity of our subsidiaries (including Dime of
53
Williamsburgh's deposit liabilities) and all liabilities and preferred equity of
any of our future subsidiaries. The indenture does not limit the incurrence or
issuance of other secured or unsecured debt by us or any subsidiaries, including
senior debt. You should read " -- Subordination."
FORM, REGISTRATION AND TRANSFER
If the exchange debt securities are distributed to the holders of the
exchange capital securities, the exchange debt securities may be represented by
one or more global certificates registered in the name of Cede & Co., as the
nominee of DTC. The depositary arrangements for such exchange debt securities
are expected to be substantially similar to those in effect for the exchange
capital securities. For a description of DTC and the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other, notices and other matters, you should read "Description of Exchange
Capital Securities -- Form, Denomination, Book-Entry Procedures and Transfers."
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any), and interest on, the
exchange debt securities will be made at the office of the indenture trustee in
Wilmington, Delaware or at the place of such paying agent or paying agents as we
may designate from time to time, except that, at our option, payment of any
interest on an interest payment date other than maturity or earlier redemption
may be made, except in the case of exchange debt securities in global form:
o by check mailed to the address of the person or entity entitled
to the interest payment as such address shall appear in the
register for the exchange debt securities; or
o by wire transfer to an account maintained by the person or entity
entitled to the interest payment as specified in the register,
PROVIDED, THAT proper transfer instructions have been received by
the relevant record date.
Payment of any interest on any exchange debt security on any interest
payment date will be made to the person or entity in whose name the exchange
debt security is registered at the close of business on the record date for the
interest payment date, which will be the date that is 15 calendar days prior to
the relevant interest payment date whether or not the record date falls on a
business day, except in the case of defaulted interest. We may at any time
designate additional paying agents or rescind the designation of any paying
agent; however we will always be required to maintain a paying agent in each
place of payment for the exchange debt securities.
Payments in respect of the exchange debt securities in global form, and
upon surrender at maturity or earlier redemption regardless of whether in global
or certificated form, will be payable in immediately available funds.
Any moneys deposited with the indenture trustee or any paying agent, or
then held by us, in trust for the payment of the principal of or interest on any
exchange debt security and remaining unclaimed for two years after such
principal or interest has become due and payable shall, at our request, be
repaid to us and the holder of the exchange debt security shall thereafter look,
as a general unsecured creditor, only to us for payment.
OPTION TO EXTEND INTEREST PAYMENT DATE
As long as no event of default exists, we have the right under the
indenture to elect to defer payment of interest, including liquidated damages,
if any, on the exchange debt securities, at any time or from time to time, for
20 consecutive quarterly periods, each such period an extension period PROVIDED,
THAT no extension period will end on a date other than an interest payment date,
or extend beyond April 14, 2034, the stated maturity date of the exchange debt
securities or any date of earlier redemption. If we defer interest payments, the
Trust will defer quarterly distributions on the exchange capital securities
during the extension period. During any extension period, distributions will
continue to accrue on the exchange capital securities and on any accrued and
unpaid distributions, compounded quarterly from the relevant distribution date
at the date such deferred interest would have been payable were it not for the
extension period. The term distributions includes any accumulated additional
distributions.
54
Before the end of any extension period, we may extend such period, as
long as such extension, together with previous and subsequent extensions, does
not cause the extension period to exceed 20 consecutive quarterly periods, or,
to end on a date other than an interest payment date or extend beyond April 14,
2034 or any date of earlier redemption. At the end of any extension period we
will be required to pay all amounts then due on any interest payment date, in
which event we may elect to begin a new extension period, subject to the above
requirements. No interest (except any additional amounts that may be due and
payable) shall be due and payable during a extension period until such period
ends. We must give the indenture trustee notice of our election to defer
interest payments, or to extend an extension period at least one business day
before the regular record date applicable to the date the distributions on the
exchange capital securities would have been payable.
There is no limitation on the number of times that we may elect to
begin an extension period. You should read "Description of Exchange Debt
Securities -- Option to Extend Interest Payment Date" and "Certain Federal
Income Tax Consequences -- Interest Income and Original Issue Discount."
During any extension period, we may not:
o declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to
any of our capital stock;
o make any payment of principal of or premium, if any, or interest
on or repay, repurchase or redeem any debt securities that rank
equal in all respects with the exchange debt securities; or
o make any guarantee payments with respect to any guarantee of the
debt securities or preferred interests of any of our subsidiaries
if such guarantee ranks equal to the guarantee of the exchange
capital securities.
Notwithstanding the foregoing, during an extension period we may make
the following payments:
o repurchases, redemptions or other acquisitions of shares of
capital stock of Dime Community (1) in connection with any
employment contract, benefit plan or other similar arrangement
with or for the benefit of one or more employees, officers,
directors or consultants, (2) in connection with a dividend
reinvestment or stockholder stock purchase plan or (3) in
connection with the issuance of capital stock of Dime Community
(or securities convertible into or exercisable for such capital
stock), as consideration in an acquisition transaction entered
into prior to the occurrence of any of the events that give rise
to the foregoing restrictions;
o as a result of any exchange or conversion of any class or series
of our capital stock (or any capital stock of a subsidiary) for
any class or series of our capital stock or of any class or
series of our indebtedness for any class or series of our capital
stock;
o the purchase of fractional interests in shares of our capital
stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged;
o any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or
other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto; and
o any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks equal
with or junior to such stock.
We do not currently intend to exercise our right to defer payments of
interest on the exchange debt securities. Our obligations under the exchange
guarantee to make payments of distributions is limited to the extent that the
Trust has funds legally available to pay distributions. You should read
"Description of Exchange Guarantee" for more information about the extent of our
guarantee.
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OPTIONAL REDEMPTION
The exchange debt securities will be redeemable, in whole or in part,
at our option on or after April 15, 2009, subject to our receipt of any required
regulatory approval, at an optional redemption price equal to 100% of the
principal amount of the debt securities to be redeemed, plus any unpaid interest
and liquidated damages, if any, accrued thereon to but excluding the date fixed
for redemption. If we exercise our option to redeem the exchange debt securities
under these circumstances, then the proceeds of that redemption must be applied
to redeem the exchange capital securities at an optional redemption price. You
should read "Description of Exchange Capital Securities -- Redemption."
SPECIAL EVENT REDEMPTION
If there are changes in the bank regulatory, investment company or tax
laws that adversely affect the status of the Trust, the exchange capital
securities or the exchange debt securities, we may, at our option and at any
time, subject to our receipt of any required regulatory approval, redeem the
exchange debt securities, in whole but not in part, at any time within 90 days
of the relevant change, at the special event redemption price. If we exercise
our option to redeem the exchange debt securities under these circumstances,
then the proceeds of that redemption must be applied to redeem the exchange
capital securities at a special event redemption price.
You should read "Description of Exchange Capital Securities-- Redemption."
The special event redemption price will be equal to an amount in cash
equal to the percentage of the principal amount of the exchange debt security
that is specified below for the special event redemption date plus any unpaid
interest and liquidated damages, if any, accrued thereon to but excluding the
special event redemption date:
Special event redemption price
will be 103.5% to, but excluding
April 15, 2005 and thereafter
will be as follows for the Percentage of
12-Month Period Beginning Principal Amount
------------------------- ----------------
April 15, 2005 102.8%
April 15, 2006 102.1%
April 15, 2007 101.4%
April 15, 2008 100.7%
April 15, 2009 and thereafter 100%
A change in the bank regulatory law means the receipt of an opinion of
counsel experienced in such matters to the effect that, as a result of:
o any amendment to, or change in, any laws or regulations of the
United States or any political subdivision thereof or any rules,
guidelines or policies of an applicable regulatory agency or
authority; or
o any official administrative pronouncement or action or judicial
decision interpreting or applying such laws or regulations,
which amendment or change is effective or which pronouncement, action or
decision is announced on or after the date the exchange capital securities are
first issued, there is more than insubstantial risk that the exchange capital
securities do not constitute, or within 90 days of the opinion will not
constitute, Tier 1 capital (or its then equivalent if we were subject to such
capital requirement) applied as if we were a bank holding company.
A change in the investment company law means the receipt by us and the
Trust of an opinion of counsel experienced in such matters to the effect that,
as a result of:
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o any amendment to, or change in, any laws, rules or regulations of
the United States or any political subdivision thereof; or
o any official administrative pronouncement or action or judicial
decision interpreting or applying such laws, rules or
regulations,
which amendment or change is effective or which pronouncement, action or
decision is announced on or after the date the exchange capital securities are
first issued, there is more than an insubstantial risk that the Trust is, or
within 90 days of the date of the opinion will be, considered an investment
company that is required to be registered under the Investment Company Act.
A change in tax law means the receipt by us and the Trust of an opinion
of counsel experienced in such matters to the effect that, as a result of:
o any amendment to, clarification of or change (including any
announced prospective change) in, any laws or regulations of the
United States or any political subdivision or taxing authority
thereof or therein; or
o any official administrative pronouncement (including any private
letter ruling, technical advice memorandum, regulatory procedure,
notice or announcement, referred to as an administrative action)
or judicial decision interpreting or applying such laws or
regulations regardless of whether such administrative action or
judicial decision is issued to or in connection with a proceeding
involving us or the Trust and whether or not subject to review or
appeal,
which amendment, clarification, change, administrative action or judicial
decision is enacted, promulgated or announced in each case on or after the date
the exchange capital securities are first issued, there is more than an
insubstantial risk that:
o the Trust is, or will be within 90 days of the date of such
opinion, subject to U.S. federal income tax with respect to any
income received or accrued on the exchange debt securities;
o interest payable by us on the exchange debt securities is not, or
within 90 days of the date of such opinion will not be,
deductible by us, in whole or in part, for U.S. federal income
tax purposes; or
o the Trust is, or will be within 90 days of the date of such
opinion, subject to or otherwise required to pay, or required to
withhold from distributions to holders of exchange capital
securities, more than a DE MINIMIS amount of other taxes
(including withholding taxes), duties, assessments or other
governmental charges.
If the Trust is required to pay (or is required to withhold from
distributions to holders of exchange capital securities) any additional taxes
(including withholding taxes), duties, assessments or other governmental charges
as a result of a change in the tax law, we will pay as additional amounts on the
exchange debt securities any amounts as may be necessary in order that the net
amounts received and retained by the holders of exchange capital securities
after payment of all taxes (including withholding taxes), duties, assessments or
other governmental charges, will be equal to the amounts that such holders would
have received and retained had no such taxes (including withholding taxes),
duties, assessments or other governmental charges been imposed.
We will mail or cause the indenture trustee to mail any notice of
redemption at least 30 but not more than 60 days before the redemption date to
each holder of exchange debt securities to be redeemed at its registered
address. Unless we default in payment of the redemption price, on the redemption
date interest shall cease to accrue on the exchange debt securities called for
redemption.
CERTAIN COVENANTS OF DIME COMMUNITY
If at any time:
57
o we have actual knowledge that there is any event that is, or with
the giving of notice or the lapse of time, or both, would be, an
event of default and that we have not cured;
o we are in default with respect to our payment of any obligations
under the exchange guarantee; or
o we have given notice of our election to exercise our right to
defer interest payments on the exchange debt securities as
provided in the indenture and the extension period, or any
extension of the extension period, is continuing,
we will not:
o declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of our capital stock;
o make any payment of principal or premium if any, or interest on,
or repay, repurchase or redeem any of our debt securities that
rank equal to the exchange debt securities; or
o make any guarantee payments with respect to any of our guarantees
of the debt securities of any of our subsidiaries if such
guarantee ranks equal to the guarantee of the exchange capital
securities, other than:
o repurchases, redemptions or other acquisitions of shares of
capital stock of Dime Community (1) in connection with any
employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more
employees, officers, directors or consultants, (2) in
connection with a dividend reinvestment or stockholder stock
purchase plan or (3) in connection with the issuance of
capital stock of Dime Community (or securities convertible
into or exercisable for such capital stock), as
consideration in an acquisition transaction entered into
prior to the occurrence of any of the events that give rise
to the foregoing restrictions;
o as a result of any exchange or conversion of any class or
series of our capital stock (or any capital stock of a
subsidiary) for any class or series of our capital stock or
of any class or series of our indebtedness for any class or
series of our capital stock;
o the purchase of fractional interests in shares of our
capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being
converted or exchanged;
o any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock
or other property under any stockholder's rights plan, or
the redemption or repurchase of rights pursuant thereto; and
o any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is
the same stock as that on which the dividend is being paid
or ranks equal with or junior to such stock.
So long as the exchange capital securities and common securities remain
outstanding, we also will:
o directly or indirectly maintain 100% direct or indirect
ownership of the common securities; PROVIDED, HOWEVER, that
any of our permitted successors under the indenture may
succeed to our ownership of the common securities;
o use commercially reasonable efforts to cause the Trust to
remain a statutory trust, except in connection with the
distribution of exchange debt securities to the holders of
exchange capital
58
securities in liquidation of the Trust, the redemption of
all of the exchange capital securities, or certain mergers,
consolidations or amalgamations, each as permitted by the
trust agreement;
o use commercially reasonable efforts to cause the Trust to
otherwise continue to be classified as a grantor trust for
U.S. federal income tax purposes; and
o use commercially reasonable efforts to cause each holder of
exchange capital securities to be treated as owning an
undivided beneficial interest in the exchange debt
securities.
MODIFICATION OF INDENTURE
From time to time, we, together with the indenture trustee, may,
without the consent of the holders of exchange debt securities, enter into an
indenture or indentures supplemental to the indenture for specified purposes,
including, among other things, (i) curing ambiguities, defects or
inconsistencies, (ii) enabling us and the Trust to conduct an exchange offer as
contemplated by the registration rights agreement, PROVIDED, THAT any such
action does not adversely affect the interest of the holders of exchange debt
securities or the holders of the exchange capital securities or the common
securities and (iii) qualifying, or maintaining the qualification of, the
indenture under the Trust Indenture Act.
The indenture permits us and the indenture trustee, with the consent of
the holders of a majority in aggregate principal amount of exchange debt
securities outstanding at the time, to enter into an indenture or indentures
supplemental to the indenture or any supplemental indenture in a manner
affecting the rights of the holders of the exchange debt securities; PROVIDED,
THAT no supplemental indenture may, without the consent of the holders of each
outstanding exchange debt security affected:
o change the stated maturity date of or the principal amount
of, or any premium on, the exchange debt securities;
o reduce the rate or extend the time of payment of interest,
except pursuant to our right under the indenture to defer
the payment of interest. You should also read "-- Option to
Extend Interest Payment Date;"
o reduce or increase the aggregate principal amount of
exchange debt securities then outstanding or change any of
the redemption provisions;
o make the principal of or interest on the exchange debt
securities payable in any coin or currency other than U.S.
dollars;
o impair or affect the right of any holder of exchange debt
securities to institute suit for the payment thereof; or
o reduce the percentage of the principal amount of the
exchange debt securities, the holders of which are required
to consent to any such modification.
EVENTS OF DEFAULT
An "event of default" is:
o our failure for 30 days to pay any interest or liquidated
damages, if any, on the exchange debt securities or any
other similar debt securities when due (subject to the
extension of any interest payment date in the case of a
extension period with respect to the exchange debt
securities);
o our failure to pay any principal or premium, if any on the
exchange debt securities or any other similar debt
securities when due, whether at maturity, upon redemption,
by accelerating the maturity or otherwise;
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o our failure to observe or perform, in any material respect,
certain covenants contained in the indenture for 90 days
after written notice to us from the indenture trustee or to
us and the indenture trustee from the holders of not less
than 25% in aggregate outstanding principal amount of
exchange debt securities;
o the Trust is dissolved, unless as contemplated by the trust
agreement; or
o certain events related to our bankruptcy, insolvency or
reorganization.
The holders of a majority in aggregate outstanding principal amount of
the exchange debt securities have, subject to certain exceptions, the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the indenture trustee. The indenture trustee or the holders of not
less than 25% in aggregate outstanding principal amount of the exchange debt
securities may declare the principal and any premium and interest accrued and
unpaid thereon to be due and payable immediately upon an event of default;
PROVIDED, HOWEVER, that our bankruptcy, insolvency or reorganization will result
in an automatic acceleration of the maturity of the exchange debt securities and
all accrued and unpaid interest thereon. The holders of a majority in aggregate
outstanding principal amount of the exchange debt securities and any premium and
interest accrued, but unpaid, thereon may annul this declaration and waive the
default if the default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the indenture trustee.
Prior to any acceleration, the holders of a majority in aggregate
outstanding principal amount of the exchange debt securities may, on behalf of
the holders of all the exchange debt securities, waive (or modify any previously
granted waiver of) any past default, except a default in the payment of
principal or premium, if any, or interest or liquidated damages, if any, (unless
such default has been cured and a sum sufficient to pay all matured installments
of interest and principal due (and premium, if any) otherwise than by
acceleration has been deposited with the indenture trustee), a default in
respect of a covenant or provision which under the indenture cannot be modified
or amended without the consent of the holder of each outstanding exchange debt
security or a default in respect of the covenants regarding limitations on
dividends, PROVIDED, THAT if the exchange debt securities are held by the Trust
or a trustee of the Trust, such waiver or modification to such waiver will not
be effective until the holders of a majority in liquidation amount of the
outstanding exchange capital securities have consented to such waiver or
modification to such waiver.
The indenture requires that we file with the indenture trustee a
certificate annually as to the absence of defaults specified under the
indenture.
The indenture provides that the indenture trustee may withhold notice
of an event of default other than a default in the payment of principal,
premium, if any, interest or liquidated damages, if any, from the holders of the
exchange debt securities if the indenture trustee considers it in the interest
of the holders to do so.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF EXCHANGE CAPITAL SECURITIES
If an event of default exists that is attributable to our failure to
pay the principal of and premium, if any, or interest or liquidated damages, if
any, on the exchange debt securities on the due date, a holder of exchange
capital securities may institute a direct action against us. You should read
"Description of Exchange Capital Securities -- Events of Default; Notice." We
may not amend the indenture to remove this right to bring a direct action
without the prior written consent of the holders of all of the exchange capital
securities. Notwithstanding any payments that we make to a holder of exchange
capital securities in connection with a direct action, we shall remain obligated
to pay the principal of and premium, if any, and interest and liquidated
damages, if any, on the exchange debt securities, and we shall be subrogated to
the rights of the holder of the exchange capital securities with respect to
payments on the exchange capital securities to the extent that we make any
payments to a holder in any direct action.
The holders of the exchange capital securities will not be able to
exercise directly any remedies, other than those described in the above
paragraph, available to the holders of the exchange debt securities, unless an
event of default exists under the trust agreement. You should read "Description
of Exchange Capital Securities -- Events of Default; Notice."
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CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The indenture provides that we will not consolidate with or merge into
any other person or convey, transfer or lease substantially all of our
properties to any person, and no person shall consolidate with or merge into us
unless:
o the successor is organized under the laws of the United States or
any state or the District of Columbia, and the successor
expressly assumes our obligations under the indenture and the
exchange debt securities;
o immediately after giving effect to the transaction, no event of
default, and no event which, after notice or lapse of time, or
both, would become an event of default, exists; and
o certain other conditions as prescribed in the indenture are met.
The general provisions of the indenture do not afford holders of the
exchange debt securities protection in the event of a highly leveraged or other
transaction that we may become involved in that may adversely affect holders of
the exchange debt securities.
SATISFACTION AND DISCHARGE
The indenture provides that when, among other things,
o all exchange debt securities are delivered to the indenture
trustee for cancellation;
o all exchange debt securities not previously delivered to the
indenture trustee for cancellation have become due and payable or
will become due and payable at maturity or called for redemption
within one year; and
o we deposit or cause to be deposited with the indenture trustee
funds, in trust, for the purpose and in an amount sufficient to
pay and discharge the entire indebtedness on the exchange debt
securities not previously delivered to the indenture trustee for
cancellation, for the principal (and premium, if any) and
interest (including compounded interest and additional amounts if
any) to and including the date of redemption or maturity, as the
case may be,
then the indenture will cease to be of further effect (except as to our
obligations to pay all other sums due pursuant to the indenture and to provide
the officers' certificates and opinions of counsel), and we will be deemed to
have satisfied and discharged the indenture.
SUBORDINATION
To the extent provided in the indenture, we have promised that any of
our exchange debt securities issued under the indenture and any supplemental
indenture will be ranked junior to all of our senior debt. Upon any payment or
distribution of our assets to creditors upon our liquidation, dissolution,
winding up, reorganization, assignment for the benefit of our creditors,
marshaling of our assets or any bankruptcy, insolvency, debt restructuring or
similar proceedings in connection with any insolvency or bankruptcy proceeding
of us, the senior debt must be paid in full before the holders of the exchange
debt securities will be entitled to receive or retain any payment in respect
thereof.
No payments on account of principal or interest, if any, in respect of
the exchange debt securities may be made if there is:
o a default in any payment with respect to senior debt; or
o an event of default exists with respect to any senior debt that
accelerates the maturity of the senior debt.
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The term "senior debt" means, with respect to Dime Community, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of Dime
Community for money borrowed and (B) indebtedness evidenced by securities, debt
securities, notes, bonds or other similar instruments issued by Dime Community;
(ii) all capital lease obligations of Dime Community; (iii) all obligations of
Dime Community issued or assumed as the deferred purchase price of property, all
conditional sale obligations of Dime Community and all obligations of Dime
Community under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of
Dime Community for the reimbursement of any letter of credit, any banker's
acceptance, any security purchase facility, any repurchase agreement or similar
arrangement, any interest rate swap, any other hedging arrangement, any
obligation under options or any similar credit or other transaction; (v) all
obligations of the type referred to in clauses (i) through (iv) above of other
persons for the payment of which Dime Community is responsible or liable as
obligor, guarantor or otherwise; and (vi) all obligations of the type referred
to in clauses (i) through (v) above of other persons secured by any lien on any
property or asset of Dime Community (whether or not such obligation is assumed
by Dime Community), whether incurred on or prior to the date of the indenture or
thereafter incurred, unless, with the prior approval of the OTS (or such other
bank regulatory authority that is then the primary holding company regulator of
Dime Community) if not otherwise generally approved, in the instrument creating
or evidencing the same or pursuant to which the same is outstanding, it is
provided, that such obligations are not superior or are PARI PASSU in right of
payment to the exchange debt securities; PROVIDED, HOWEVER, that senior debt
shall not include (A) any other debt securities issued to any trust other than
the Trust (or a trustee of such trust), partnership or other entity affiliated
with Dime Community that is a financing entity of Dime Community, in connection
with the issuance by such financing entity of equity securities or other
securities in transactions substantially similar in structure to the transaction
contemplated under the indenture and in the trust agreement or (B) any
guarantees of Dime Community in respect of the equity or other securities of any
financing entity referred to in clause (A) above pursuant to an instrument that
ranks equal in right of payment to the guarantee.
We are a savings and loan holding company and almost all of our
operating assets are owned by Dime of Williamsburgh. We are a legal entity
separate and distinct from our subsidiaries. Holders of exchange debt securities
should look only to us for payments on the exchange debt securities. We rely on
dividends from Dime of Williamsburgh to pay for the interest expense on debt
obligations of approximately $2.4 million per annum, based on the outstanding
amount of debt obligations as of that date, and for our non-bank operating
expenses of approximately $750,000 per annum. There are regulatory limitations
on the payment of dividends directly or indirectly to us from Dime of
Williamsburgh. In addition, Dime of Williamsburgh is subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, us and certain other affiliates, and on investments in
stock or other securities thereof. Such restrictions prevent us and such other
affiliates from borrowing from Dime of Williamsburgh unless the loans are
secured by various types of collateral. You should read "Risk Factors -- Dime of
Williamsburgh's ability to pay dividends or lend funds to its affiliates is
subject to regulatory limitations which may prevent Dime Community from making
payments under the subordinated debt securities."
RESTRICTIONS ON TRANSFER
The exchange debt securities will be issued and may be transferred only
in minimum denominations of $100,000 and multiples of $1,000 in excess thereof.
Any attempted transfer of exchange debt securities in unauthorized denominations
will be deemed to be void and of no legal effect whatsoever. Any such purported
transferee shall be deemed not to be the holder of such exchange debt securities
for any purpose, including, but not limited to, the receipt of payments on such
exchange debt securities, and such purported transferee shall be deemed to have
no interest whatsoever in such exchange debt securities.
GOVERNING LAW
The indenture and the exchange debt securities will be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflict of law principles.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The indenture trustee is not obligated to exercise any of the powers
vested in it by the indenture at the request of any holder of exchange debt
securities, unless offered reasonable indemnity by the holder against the
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costs, expenses and liabilities which might be incurred thereby. The indenture
trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties under the
indenture.
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DESCRIPTION OF EXCHANGE GUARANTEE
We will execute and deliver the exchange guarantee at the same time the
exchange capital securities are issued. The exchange guarantee will be qualified
as an indenture under the Trust Indenture Act upon effectiveness of the exchange
offer registration statement. The terms of the exchange guarantee are identical
in all material respects to the terms of the original guarantee. This summary of
the material provisions of the exchange guarantee is not complete and is subject
to, and qualified in its entirety by, the exchange guarantee and the Trust
Indenture Act. The guarantee trustee will hold the exchange guarantee for the
benefit of the holders of the exchange capital securities. You can obtain a copy
of the exchange guarantee by requesting it from Dime Community. Wilmington Trust
Company will act as guarantee trustee under the exchange guarantee.
GENERAL
We will irrevocably agree to pay in full on a subordinated basis, to
the extent set forth herein, the payments with respect to the exchange capital
securities to the extent not paid by the Trust. The payments that will be
subject to the exchange guarantee are:
o any accrued and unpaid distributions required to be paid on the
exchange capital securities, to the extent that the Trust has
funds available at that time;
o the applicable redemption price with respect to the exchange
capital securities that are (1) called for redemption or (2)
mandatorily redeemed, to the extent that the Trust has funds
legally available at that time; and
o upon a voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (other than in connection
with the distribution of the exchange debt securities to holders
of the exchange capital securities), the lesser of (a) the
liquidation amount and any accrued and unpaid distributions on
the exchange capital securities, to the extent the Trust has
funds legally available at that time, and (b) the amount of
assets of the Trust remaining available for distribution to
holders of exchange capital securities after satisfying the
liabilities owed to the Trust's creditors as required by
applicable law.
The exchange guarantee will rank subordinate and junior to all senior
debt to the extent provided in the exchange guarantee, as discussed under " --
Status of the Exchange Guarantee." Our obligation to make a guarantee payment
may be satisfied by our direct payment of the required amounts to the holders of
the exchange capital securities or by causing the Trust to pay these amounts to
the holders of the exchange capital securities.
The exchange guarantee will be an irrevocable guarantee on a
subordinated basis of the Trust's obligations under the exchange capital
securities, but will apply only to the extent that the Trust has funds
sufficient to make these payments. If we do not make interest and other payments
on the exchange debt securities held by the Trust, then the Trust will not be
able to pay you the distributions and other amounts due on the exchange capital
securities since it will not have funds legally available therefor. You should
read "Relationship Among the Exchange Capital Securities, the Exchange Debt
Securities and the Exchange Guarantee." The exchange guarantee does not limit us
or our subsidiaries from incurring or issuing other secured or unsecured debt,
including senior debt, whether under the indenture, any other indenture that we
may enter into in the future or otherwise.
The holders of a majority in aggregate liquidation amount of the
exchange capital securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the guarantee trustee
in respect of our exchange guarantee or to direct the exercise of any trust
power conferred upon the guarantee trustee under our exchange guarantee. In the
event of a failure to make a payment under the exchange guarantee, any holder of
the exchange capital securities may institute a legal proceeding directly
against us to enforce rights of the guarantee trustee under the exchange
guarantee without first instituting a legal proceeding against the Trust, the
guarantee trustee or any other person or entity.
If we default on our obligation to pay amounts payable under the
exchange debt securities, the Trust will lack funds for the payment of
distributions and other amounts when due, and the holders of the exchange
capital
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securities will not be able to rely upon the exchange guarantee for payment of
such amounts. Instead, if an event of default exists that is attributable to our
failure to pay principal of or premium, if any, or interest on the exchange debt
securities on a payment date, then any holder of exchange capital securities may
institute a direct action against us pursuant to the terms of the indenture for
enforcement of payment to that holder of the principal of or interest on such
exchange debt securities having a principal amount equal to the aggregate
liquidation amount of the exchange capital securities of that holder. In
connection with a direct action, we will have a right of set-off under the
indenture to the extent that we made any payment to the holder of exchange
capital securities in the direct action. Except as described herein, holders of
exchange capital securities will not be able to exercise directly any other
remedy available to the holders of the exchange debt securities or assert
directly any other rights in respect of the exchange debt securities. The trust
agreement provides that each holder of exchange capital securities by accepting
the exchange capital securities agrees to the provisions of the exchange
guarantee and the indenture.
We will, through our exchange guarantee, the trust agreement, the
exchange debt securities and the indenture, taken together, fully, irrevocably
and unconditionally guarantee all of the Trust's obligations under the exchange
capital securities. No single document standing alone, or operating in
conjunction with fewer than all of the other documents, constitutes that
guarantee. Only the combined operation of these documents provides a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
exchange capital securities. You should read "Relationship Among the Exchange
Capital Securities, the Exchange Debt Securities and the Exchange Guarantee" for
more information about our guarantee.
STATUS OF THE EXCHANGE GUARANTEE
Our exchange guarantee will constitute an unsecured obligation and will
rank subordinate and junior to all present and future senior debt in the same
manner as the exchange debt securities, as described under "Description of
Exchange Debt Securities -- Subordination." In addition, because we are a
holding company, our right to participate in any distribution of Dime of
Williamsburgh's assets upon Dime of Williamsburgh's liquidation or
reorganization or otherwise is subject to the prior claims of Dime of
Williamsburgh's creditors (including its depositors) and preferred equity
holders except to the extent we may be recognized as a creditor of Dime of
Williamsburgh. Accordingly, our obligations under the exchange guarantee
effectively will be subordinated to all existing and future liabilities and
preferred equity of our present and future subsidiaries (including depositors of
Dime of Williamsburgh). As a result, claimants should look only to our assets
for payments under the exchange guarantee. You should read "Risk Factors -- Dime
of Williamsburgh's ability to pay dividends or lend funds to its affiliates is
subject to regulatory limitations which may prevent Dime Community from making
payments under the exchange debt securities" and "Description of Exchange Debt
Securities -- General."
Our exchange guarantee will rank equal to all of our other guarantees
with respect to preferred beneficial interests issued by our other financing
entities. Our exchange guarantee of the Trust's exchange capital securities does
not limit the amount of secured or unsecured debt, including senior debt, that
we or any of our subsidiaries may incur. We expect from time to time that we
will incur additional indebtedness and that our subsidiaries will also incur
additional liabilities and may issue preferred equity.
Our exchange guarantee will constitute a guarantee of payment and not
of collection, enabling the guaranteed party to institute a legal proceeding
directly against us to enforce the rights of the guarantee trustee under the
exchange guarantee without first instituting a legal proceeding against any
other person or entity. Our exchange guarantee will be held for the benefit of
the holders of the exchange capital securities. Our exchange guarantee will not
be discharged, except by payment of the guarantee payments in full to the extent
that the Trust has not paid, or upon distribution of the exchange debt
securities to the holders of the exchange capital securities.
EVENTS OF DEFAULT
There will be an event of default under the exchange guarantee if we
fail to perform any of our payment or other obligations under the exchange
guarantee. The holders of a majority in liquidation amount of the exchange
capital securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the guarantee trustee in
respect of our exchange guarantee or to direct the exercise of any trust or
power conferred upon the guarantee trustee under our exchange guarantee,
PROVIDED, HOWEVER, that the guarantee trustee shall have the right to decline to
follow any such direction if the guarantee trustee determines that the actions
would unjustly prejudice the holders not taking part, or if the guarantee
trustee is advised by legal counsel that the
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action may not be lawfully taken, or if the guarantee trustee determines that
the action would involve the guarantee trustee in personal liability.
In the event of a failure to make a payment under the exchange
guarantee, any holder of the exchange capital securities may institute a legal
proceeding directly against us to enforce the rights of the guarantee trustee
under the exchange guarantee without first instituting a legal proceeding
against the Trust, the guarantee trustee or any other person or entity.
We, as guarantor, will be required to file annually with the guarantee
trustee a certificate regarding our compliance with the applicable conditions
and covenants under our exchange guarantee.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely
affect the rights of holders of the exchange capital securities (in which case
no vote will be required), the exchange guarantee may not be amended without the
prior approval of the holders of a majority of the liquidation amount of such
outstanding exchange capital securities. You should read "Description of
Exchange Capital Securities -- Voting Rights; Amendment of the Trust Agreement"
for more information about the manner of obtaining the holders' approval. All
guarantees and agreements contained in the exchange guarantee agreement shall
bind our successors, assigns, receivers, trustees and representatives and shall
inure to the benefit of the holders of the exchange capital securities then
outstanding. We, as guarantor, may not assign our rights or delegate our
obligations under the exchange guarantee, except in connection with any merger
or consolidation as permitted by the indenture.
TERMINATION OF THE EXCHANGE GUARANTEE
Our exchange guarantee will terminate upon:
o full payment of the applicable redemption price of all
outstanding exchange capital securities;
o full payment of the liquidation distribution payable upon
dissolution of the Trust;
o distribution of exchange debt securities to the holders of the
exchange capital securities; or
o the exchange of all exchange capital securities pursuant to the
exchange offer.
Our exchange guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the exchange
capital securities must restore payment of any sums paid under the exchange
capital securities or the exchange guarantee.
INFORMATION CONCERNING THE EXCHANGE GUARANTEE TRUSTEE
The guarantee trustee, unless we default under the exchange guarantee,
will undertake to perform only such duties as are specifically set forth in the
exchange guarantee and, in case a default with respect to the exchange guarantee
has occurred, must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject
to this provision, the guarantee trustee will not be obligated to exercise any
of the powers vested in it by the exchange guarantee at the request of any
holder of the exchange capital securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that it might incur.
GOVERNING LAW
The exchange guarantee will be governed by and construed in accordance
with the laws of the State of New York, without regard to conflict of law
principles.
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DESCRIPTION OF ORIGINAL CAPITAL SECURITIES
We refer to the original capital securities, the original guarantee and
the original debt securities collectively as the original securities and refer
to the exchange capital securities, the exchange guarantee and the exchange debt
securities collectively as the exchange securities.
The terms of the original securities are identical in all materials
respects to the exchange securities, except that:
o the original securities have not been registered under the
Securities Act, are subject to certain restrictions on transfer
and are entitled to certain rights under the applicable
registration rights agreement, which rights will terminate upon
consummation of the exchange offer, except under limited
circumstances;
o the exchange capital securities will not provide for any increase
in the distribution rate; and
o the exchange debt securities will not provide for any liquidated
damages.
The original securities provide that, if a registration statement
relating to the exchange offer is not declared effective by the SEC on or prior
to the 180th day after the issue date, liquidated damages shall accrue on the
principal amount of the original junior subordinated debt securities, and
additional distributions shall accumulate on the liquidation amount of the
original capital securities, each at a rate of 25 basis points per annum. In
addition, the original capital securities provide that, if the Trust has not
exchanged exchange capital securities for all original capital securities
validly tendered by the 45th day after the date on which the registration
statement is declared effective, the distribution rate borne by the original
capital securities will increase by 25 basis points per annum for the period
from the occurrence of such event until such time as the exchange offer has been
consummated. The exchange securities are not, and upon consummation of the
exchange offer, the original securities will not be, entitled to any such
additional interest or distributions. Accordingly, holders of original capital
securities should review the information set forth under "Risk Factors--Your
failure to exchange original capital securities may adversely affect your
ability to sell such securities" and "Description of Exchange Capital
Securities."
RELATIONSHIP AMONG THE EXCHANGE CAPITAL SECURITIES, THE
EXCHANGE DEBT SECURITIES AND THE EXCHANGE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
We will irrevocably guarantee payments of distributions and other
amounts due on the exchange capital securities to the extent the Trust has funds
available to make such payments as and to the extent set forth under
"Description of Exchange Guarantee." Taken together, our obligations under the
exchange debt securities, the indenture, the trust agreement and the exchange
guarantee will provide, a full, irrevocable and unconditional guarantee of the
Trust's payments of distributions and other amounts due on the exchange capital
securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes this exchange guarantee. Only
the combined operation of these documents effectively provides a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
exchange capital securities.
If and to the extent that we do not make the required payments on the
exchange debt securities, the Trust will not have sufficient funds to make its
related payments, including distributions on the exchange capital securities.
Our exchange guarantee will not cover any payments when the Trust does not have
sufficient funds legally available to make those payments. Your remedy, as a
holder of exchange capital securities, is to institute a direct action against
us. Our obligations will be subordinate and junior to all senior debt.
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SUFFICIENCY OF PAYMENTS
As long as we pay the interest and other payments when due on the
exchange debt securities, the Trust will have sufficient funds to cover
distributions and other amounts due on the exchange capital securities,
primarily because:
o the aggregate principal amount or redemption price of the
exchange debt securities will equal the sum of the liquidation
amount or redemption price, as applicable, of the exchange
capital securities;
o the interest rate and interest payment dates and other payment
dates on the exchange debt securities will match the distribution
rate and distribution payment dates and other payment dates for
the exchange capital securities;
o as sponsor, we will pay for all and any costs, expenses and
liabilities of the Trust, except for the Trust's obligations to
holders of exchange capital securities; and
o the trust agreement also provides that the Trust is not
authorized to engage in any activity that is not consistent with
its limited purposes.
ENFORCEMENT RIGHTS OF HOLDERS OF EXCHANGE CAPITAL SECURITIES
You, as holder of exchange capital securities, may institute a legal
proceeding directly against us for nonpayment of amounts payable on the exchange
capital securities and to enforce the rights of the guarantee trustee under our
exchange guarantee without first instituting a legal proceeding against the
guarantee trustee, the Trust or any other person or entity.
A default or event of default under any senior debt would not
constitute a default or event of default under the trust agreement. However, if
there are payment defaults under, or accelerations of, senior debt or there is a
distribution of our assets upon a bankruptcy, insolvency or similar proceeding
involving us, the subordination provisions of the indenture provide that we
cannot make payments in respect of the exchange debt securities until we have
paid the senior debt in full or we have cured the related default or the related
default has been waived. Our failure to make required payments on exchange debt
securities would constitute an event of default under the trust agreement.
LIMITED PURPOSE OF THE TRUST
The exchange capital securities will represent beneficial interests in
the Trust, and the Trust exists for the sole purpose of issuing and selling the
exchange capital securities, using the proceeds from the sale of the original
capital securities and the common securities to acquire the original junior
subordinated debt securities, exchanging the original capital securities and
original junior subordinated debt securities in the exchange offer, and engaging
in only those other activities necessary, advisable or incidental thereto. A
principal difference between the rights of a holder of a exchange capital
security and a holder of a exchange debt security is that a holder of a exchange
debt security will be entitled to receive from us the principal of (and premium,
if any) and interest on its exchange debt securities, while a holder of exchange
capital securities is entitled to receive distributions and other amounts from
the Trust (or, in certain circumstances, from us under our exchange guarantee)
if and to the extent the Trust has funds legally available to pay such amounts.
RIGHTS UPON DISSOLUTION
Unless the exchange debt securities are distributed to holders of the
exchange capital securities, if the Trust is voluntarily or involuntarily
dissolved, wound-up or liquidated, after satisfying the liabilities owed to the
Trust's creditors as required by applicable law, the holders of the exchange
capital securities will be entitled to receive, out of assets held by the Trust,
the liquidation distribution in cash. You should read "Description of Exchange
Capital Securities -- Liquidation of the Trust and Distribution of Exchange Debt
Securities."
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If we are voluntarily or involuntarily liquidated or bankrupted, the
institutional trustee, as holder of the exchange debt securities, would be one
of our subordinated creditors, subordinated in right of payment to all senior
debt, but entitled to receive payment in full of the principal of and interest
on the exchange debt securities, before any of our stockholders receive payments
or distributions. Since we will be the guarantor under the exchange guarantee
and will agree to pay all costs, expenses and liabilities of the Trust (other
than the Trust's obligations to the holders of its exchange capital securities),
the positions of a holder of exchange capital securities and a holder of
exchange debt securities relative to other creditors and to our stockholders in
the event of our liquidation or bankruptcy are expected to be substantially the
same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In the opinion of Thacher Proffitt & Wood llp, special U.S. federal
income tax counsel to us and the Trust, the following describes the material
U.S. federal income tax consequences of the purchase, ownership and disposition
of a capital security.
This summary addresses only the tax consequences to a person that
acquires a capital security on its original issuance at its original price and
that holds the security as a capital asset. This summary does not address all
tax consequences that may be applicable to a beneficial owner of a capital
security and does not address the tax consequences to holders subject to special
tax regimes (like banks, thrifts, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
tax-exempt investors or persons that will hold a capital security as a position
in a "straddle," as part of a "synthetic security" or "hedge" or as part of a
"conversion transaction" or other integrated investment). This summary does not
include any description of any alternative minimum tax consequences or the tax
laws of any state or local government or of any foreign government that may
apply to a capital security. Except as noted below in the discussion of Non-U.S.
Holders, this discussion is addressed to a U.S. Holder, which is defined as a
beneficial owner of a capital security that, for U.S. federal income tax
purposes, is (or is treated as):
o a citizen or individual resident of the United States;
o a corporation or partnership (or entity treated for U.S. federal
income tax purposes as a corporation or partnership) created or
organized in or under the laws of the U.S., any state thereof or
the District of Columbia, except in the case of a partnership, to
the extent provided in Treasury regulations;
o an estate the income of which is includible in gross income for
U.S. federal income tax purposes without regard to its source; or
o a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one
or more U.S. persons have the ability to control all substantial
decisions of the trust.
This summary does not address the tax consequences to any shareholder,
partner or beneficiary of a holder of a capital security. This summary is based
on the Code, Treasury regulations thereunder and the administrative and judicial
interpretations thereof, as of the date hereof, all of which are subject to
change, possibly on a retroactive basis. An opinion of Thacher Proffitt & Wood
llp is not binding on the Internal Revenue Service, referred to as the IRS, or
the courts. No rulings have been or are expected to be sought from the IRS with
respect to any of the matters described in this prospectus. We can give no
assurance that the opinions expressed herein will not be challenged by the IRS
or, if challenged, that the challenge will not be successful.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX
ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP
AND DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS AND POSSIBLE EFFECTS OF CHANGES IN
U.S. FEDERAL OR OTHER TAX LAWS.
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EXCHANGE OF CAPITAL SECURITIES
The exchange of the original capital securities for exchange capital
securities pursuant to the exchange offer should not be treated as an exchange
for U.S. federal income tax purposes and, therefore, should not be a taxable
event to holders for U.S. federal income tax purposes, because the exchange
capital securities should not be considered to differ materially in kind or
extent from the original capital securities and because the exchange will occur
by operation of the terms of the original capital securities. If the exchange
were treated as an exchange for U.S. federal income tax purposes, such exchange
should constitute a recapitalization for U.S. federal income tax purposes.
Accordingly, the exchange capital securities should have the same issue price as
the original capital securities, and a holder should have the same adjusted tax
basis and holding period in the exchange capital securities as such holder had
in the original capital securities immediately prior to the exchange.
CLASSIFICATION OF THE EXCHANGE DEBT SECURITIES
We intend to take the position that the exchange debt securities will
be classified for U.S. federal income tax purposes as our indebtedness. We,
together with the Trust and the holders of the exchange capital securities (by
acceptance of a beneficial interest in an exchange capital security) will agree
to treat the exchange debt securities as our indebtedness for all U.S. federal
income tax purposes. We cannot be sure that this position will not be challenged
by the IRS or, if challenged, that the challenge will not be successful. The
remainder of this discussion assumes that the exchange debt securities will be
classified as our indebtedness for U.S. federal income tax purposes.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the exchange capital securities,
Thacher Proffitt & Wood llp will render its opinion that, under then current law
and assuming full compliance with the terms of the trust agreement and the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in that opinion, the Trust will be classified for U.S.
federal income tax purposes as a grantor trust and will not be classified as an
association taxable as a corporation. Accordingly, for U.S. federal income tax
purposes, the Trust will not be subject to U.S. federal income tax, each holder
of an exchange capital security will be considered the owner of an undivided
portion of the exchange debt securities owned by the Trust and each holder of an
exchange capital security will be required to include in its gross income any
interest (or accrued original issue discount), with respect to its allocable
share of the exchange debt securities.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under the terms of the Indenture, we have the right to defer the
payment of interest on the exchange debt securities at any time or from time to
time for one or more extension periods not exceeding 20 consecutive quarterly
periods each, PROVIDED, THAT no extension period shall end on a date other than
an interest payment date or extend beyond April 14, 2034. By reason of that
right, the Treasury regulations will subject the exchange debt securities to the
rules in the Internal Revenue Code, referred to as the Code, and Treasury
regulations on debt instruments issued with original issue discount, unless the
Indenture or exchange debt securities contain terms or conditions that make the
likelihood of exercise of the extension option remote. Under the Treasury
regulations, a "remote" contingency that stated interest will not be timely paid
will be ignored in determining whether a debt instrument is issued with original
issue discount. Although the answer is not clear, we believe that the likelihood
that we would exercise our option to defer payments of interest is "remote"
since exercising that option would, among other things, prevent us from
declaring dividends on any class of our equity securities. Accordingly, we
intend to take the position that the exchange debt securities will not be
considered to be issued with original issue discount and, accordingly, stated
interest on the exchange debt securities generally will be taxable to a U.S.
Holder as ordinary income at the time it is paid or accrued in accordance with
such holder's regular method of tax accounting.
Under the Treasury regulations, if we were to exercise our option to
defer payments of interest, the exchange debt securities would at that time be
treated as issued with original issue discount, and all stated interest
(including any liquidated damages) on the exchange debt securities would
thereafter be treated as original issue discount as long as the exchange debt
securities remain outstanding. If this occurred, all of a U.S. Holder's interest
income (including any liquidated damages) with respect to the exchange debt
securities would thereafter be accounted for on an economic accrual basis over
the remaining term of the exchange debt securities regardless of
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such holder's regular method of tax accounting, and actual distributions of
stated interest would not be separately reported as taxable income.
Consequently, a holder of an exchange capital security would be required to
include in gross income original issue discount even though we would not make
actual cash payments during an extension period. The amount of such includible
original issue discount could be significant. Also, under the Treasury
regulations, if the option to defer the payment of interest were determined not
to be "remote," the exchange debt securities would be treated as having been
originally issued with original issue discount. In such event a U.S. Holder
would be required to include in gross income an amount of original issue
discount each taxable year that approximates the amount of interest that accrues
on the exchange debt securities at the stated interest rate, regardless of such
holder's regular method of tax accounting, and actual cash payments of interest
on the exchange debt securities would not be separately includible in gross
income. These Treasury regulations have not yet been addressed in any rulings or
other interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation described in this prospectus.
Because income on the exchange capital securities will constitute
interest or original issue discount, corporate holders of the exchange capital
securities will not be entitled to a dividends-received deduction with respect
to any income recognized with respect to the exchange capital securities.
RECEIPT OF EXCHANGE DEBT SECURITIES OR CASH UPON LIQUIDATION OF THE TRUST
We will have the right at any time to liquidate the Trust and cause the
exchange debt securities to be distributed to the holders of the exchange
capital securities and common securities, provided that we receive (i) an
opinion of counsel to the effect that if we distribute the exchange debt
securities, the holders of the exchange capital securities will not experience a
taxable event and (ii) any regulatory approval. Under current law, the
liquidation of the Trust and the distribution of the exchange debt securities to
U.S. Holders of exchange capital securities, for U.S. federal income tax
purposes, would be treated as a nontaxable event to each holder, and the
aggregate adjusted tax basis in the exchange debt securities received by such
holder would be equal to the holder's aggregate adjusted tax basis in its
exchange capital securities surrendered. A U.S. Holder's holding period in the
exchange debt securities received in liquidation of the Trust would be no
shorter than the period during which the exchange capital securities were held
by that holder.
If a U.S. Holder receives exchange debt securities in exchange for such
holder's exchange capital securities, the U.S. Holder would continue to accrue
interest, and original issue discount, if any, in respect of those exchange debt
securities in the manner described above.
The exchange debt securities may be redeemed in cash, and the proceeds
of that redemption would be distributed to holders in redemption of their
exchange capital securities. Under current law, that redemption would
constitute, for U.S. federal income tax purposes, a taxable disposition of the
redeemed capital securities, the tax consequences of which are described below
under " -- Sales or Redemptions of Exchange Capital Securities."
SALES OR REDEMPTIONS OF EXCHANGE CAPITAL SECURITIES
On a sale or redemption of a exchange capital security for cash, a U.S.
Holder will recognize gain or loss equal to the difference between its adjusted
tax basis in the exchange capital security and the amount realized on the sale
or redemption of that exchange capital security. If the rules regarding original
issue discount do not apply, a U.S. Holder's adjusted tax basis in a exchange
capital security generally will be its initial purchase price, and if the holder
uses an accrual method of accounting, the holder will have a basis in any
accrued but unpaid interest. If the rules regarding original issue discount
apply, a U.S. Holder's adjusted tax basis in a exchange capital security
generally will be its initial purchase price increased by any original issue
discount previously included in the holder's gross income to the date of
disposition and decreased by any payments received on the exchange capital
security (other than any payments of interest or liquidated damages received
with respect to the periods prior to the effective date of Dime Community's
exercise of its option to defer payments of interest in the event that the rules
regarding original issue discount were to apply solely as a result of such
exercise). Gain or loss recognized on a sale or redemption of a exchange capital
security will be capital gain or loss. Capital gain recognized by an individual
in respect of an exchange capital security held for more than one year as of the
date of sale or redemption is subject to a maximum U.S. federal income tax rate
of 15%.
71
The exchange capital securities may trade at a price that discounts any
accrued but unpaid interest on the exchange debt securities. Therefore, the
amount realized by a U.S. Holder who disposes of an exchange capital security
between distribution payment dates and whose adjusted tax basis in the exchange
capital security has been increased by the amount of any accrued but unpaid
original issue discount (or interest) may be less than the holder's adjusted tax
basis in the exchange capital security. A U.S. Holder's adjusted tax basis in an
exchange capital security could be increased either under the rules regarding
original issue discount or, if those rules do not apply, in the case of a holder
that uses an accrual method of accounting, under the accrual accounting rules.
In that case, the U.S. Holder will recognize a capital loss. Subject to a
limited exception in the case of individual taxpayers, capital losses cannot be
applied to offset ordinary income for U.S. federal income tax purposes.
NON-U.S. HOLDERS
For purposes of this discussion, a "Non-U.S. Holder" is a
beneficial owner of an exchange capital security that is not a U.S. Holder.
Under current U.S. federal income tax laws, subject to the discussion
below of backup withholding, payments by the Trust or any of its paying agents
to a Non-U.S. Holder will not be subject to U.S. federal income or withholding
tax, PROVIDED, THAT the Non-U.S. Holder (a) does not own, actually or
constructively, ten percent or more of the total combined voting power of all
classes of our stock entitled to vote, (b) is not a controlled foreign
corporation that is related to us through stock ownership, (c) is not a bank
whose receipt of interest on the exchange debt securities is described in
Section 881(c)(3)(A) of the Code, and (d) is not a person within a foreign
country which the IRS has included in a list of countries that do not provide
adequate exchange of information with the U.S. to prevent tax evasion by U.S.
persons, and either (A) the Non-U.S. Holder certifies, on IRS Form W-8BEN (or
appropriate successor document), to the Trust or its agent, under penalties of
perjury, that it is not a U.S. Holder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of business, referred to as a
"Financial Institution," and holds the exchange capital security in that
capacity certifies to the Trust or its agent, under penalties of perjury, that
the statement has been received from the Non-U.S. Holder by it or by a Financial
Institution between it and the Non-U.S. Holder and furnishes the Trust or its
agent with a copy thereof.
If a Non-U.S. Holder does not qualify for the foregoing exemption from
withholding, payments of interest, including liquidated damages and payments
relating to any accrued original issue discount, to that Non-U.S. Holder may be
subject to withholding tax at a tax rate of 30%, which tax may be subject to
reduction, including exemption, under any applicable tax treaty, provided the
Non-U.S. Holder supplies at the time of its initial purchase, and at all
subsequent times as are required under the Treasury regulations, a properly
executed IRS Form W-8BEN, or appropriate successor form, to report its
eligibility for that reduced rate or exemption.
If a Non-U.S. Holder is engaged in a trade or business in the U.S. and
interest on the exchange capital securities (or the exchange debt securities) is
effectively connected with the conduct of that trade or business, the Non-U.S.
Holder, although exempt from the withholding tax discussed above, will be
subject to U.S. federal income tax on that interest (and any liquidated damages)
at graduated rates on a net income basis in generally the same manner as if it
were a U.S. Holder, provided the Non-U.S. Holder supplies, at the time of its
initial purchase, and at all subsequent times that are required under the
Treasury regulations, a written statement, such as a properly executed IRS Form
W-8ECI, or appropriate successor form, that such income is, or is expected to
be, effectively connected with the conduct of a trade or business within the
U.S. of that holder and is includible in the holder's gross income for the
taxable year. In addition, if such Non-U.S. Holder is a foreign corporation, it
may be subject to a branch profits tax equal to 30% of its effectively connected
earnings and profits that are repatriated or treated as repatriated. For this
purpose, the interest income would be included in the foreign corporation's
earnings and profits. In the case of a Non-U.S. Holder entitled to the benefits
of a tax treaty with the U.S., the foregoing discussion generally applies only
if the Non-U.S. Holder is engaged in business in the U.S. through a U.S.
permanent establishment and the income on the exchange debt securities is
attributable to that permanent establishment within the meaning of the treaty,
and the rate of the branch profits tax may be limited to a rate prescribed by
the treaty for the withholding of tax on dividends.
Any gain recognized upon a sale or other disposition of exchange
capital securities (or exchange debt securities) generally will not be subject
to U.S. federal income tax unless (1) the gain is, or is treated as, effectively
connected with a U.S. trade or business of the Non-U.S. Holder or (2) in the
case of a Non-U.S. Holder who is an
72
individual, that individual is present in the U.S. for 183 days or more in the
taxable year of the sale or other disposition, and certain other conditions are
met.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest, including original issue discount, accrued on
exchange capital securities held of record by U.S. persons (other than
corporations and other exempt holders) will be reported to the IRS. "Backup
withholding" will apply to payments of interest to non-exempt U.S. persons
unless the holder furnishes its taxpayer identification number in the manner
prescribed in applicable Treasury regulations, certifies that the number is
correct, certifies as to no loss of exemption from backup withholding and meets
certain other conditions. The current backup withholding rate is 28%.
Payment of the proceeds from the disposition of exchange capital
securities to or through the U.S. office of a broker is subject to information
reporting and backup withholding unless the holder or beneficial owner
establishes an exemption from information reporting and backup withholding.
Non-U.S. Holders are generally exempt from the backup withholding rules
but are required to comply with certification and identification requirements to
prove their exemption. Non-U.S. Holders may be subject to certain information
reporting rules.
Any amount withheld from a holder under the backup withholding rules
will be allowed as a refund or credit against such holder's U.S. federal income
tax liability, provided the required information is furnished to the IRS.
It is anticipated that income on exchange capital securities will be
reported to holders on Form 1099 (or any successor form) and mailed to holders
of exchange capital securities by January 31 following each calendar year.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. YOU SHOULD CONSULT YOUR TAX ADVISER WITH RESPECT TO THE
TAX CONSEQUENCES TO YOU OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF A EXCHANGE
CAPITAL SECURITY, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. FEDERAL OR OTHER TAX
LAWS.
73
ERISA CONSIDERATIONS
GENERAL
In evaluating the purchase of exchange capital securities, a fiduciary
of a qualified profit-sharing, pension or stock bonus plan, including a plan for
self-employed individuals and their employees or any other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended,
referred to as ERISA, a collective investment fund or separate account in which
such plans invest and any other investor using assets that are treated as assets
of an employee benefit plan subject to ERISA, each, referred to as a Plan and,
collectively, Plans, should consider:
o whether the ownership of exchange capital securities is in
accordance with the documents and instruments governing such
Plan;
o whether the ownership of exchange capital securities is solely in
the interest of Plan participants and beneficiaries and otherwise
consistent with the fiduciary's responsibilities and in
compliance with the requirements of Part 4 of Title I of ERISA,
including, in particular, the diversification, prudence and
liquidity requirements of Section 404 of ERISA and the prohibited
transaction provisions of Section 406 of ERISA and Section 4975
of the Code; or
o whether the assets of the Trust are treated as assets of the
Plan; and
o the need to value the assets of the Plan annually.
In addition, the fiduciary of an individual retirement arrangement or other
entity subject to Section 4975 of the Code, referred to as an IRA, considering
the purchase of exchange capital securities should consider whether the
ownership of the exchange capital securities would result in a non-exempt
prohibited transaction under Section 4975 of the Code.
Governmental plans and certain church plans (each as defined under
ERISA) are not subject to the prohibited transaction rules. Such plans may,
however, be subject to federal, state or local laws or regulations which may
affect their investment in the exchange capital securities. Any fiduciary of
such a governmental or church plan considering an investment in the exchange
capital securities should determine the need for, and the availability, if
necessary, of any exemptive relief under such laws or regulations.
The fiduciary investment considerations summarized below provide a
general discussion that does not include all of the fiduciary investment
considerations relevant to Plans and, where indicated, IRAs. This summary is
based on the current provisions of ERISA and the Code and regulations and
rulings thereunder, and may be changed (perhaps adversely and with retroactive
effect) by future legislative, administrative or judicial action.
PLANS AND IRAS THAT ARE PROSPECTIVE PURCHASERS OF EXCHANGE CAPITAL
SECURITIES SHOULD CONSULT WITH AND RELY UPON THEIR OWN ADVISORS IN EVALUATING
THESE MATTERS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.
PLAN ASSET REGULATION
Under Department of Labor regulations governing what constitutes the
assets of a Plan or IRA, referred to as Plan Assets, for purposes of ERISA and
the related prohibited transaction provisions of the Code, referred to as the
Plan Asset Regulation, 29 C.F.R. Sec. 2510.3-101, when a Plan or IRA acquires an
equity interest in another entity, and such interest does not represent a
"publicly offered security" or a security issued by an investment company
registered under the Investment Company Act, the Plan's assets include both the
equity interest and an undivided interest in each of the underlying assets of
the entity, unless it is established either that the entity is an operating
company or that equity participation in the entity by "benefit plan investors,"
as defined in the Plan Asset Regulation, is not "significant." For purposes of
the Plan Asset Regulation, the Trust will be neither an investment company nor
an operating company, and the exchange capital securities are not expected to
represent "publicly offered securities."
74
Under the Plan Asset Regulation, equity participation by benefit plan
investors will not be considered "significant" on any date only if immediately
after the most recent acquisition of the exchange capital securities, the
aggregate interest in the exchange capital securities held by benefit plan
investors will be less than 25% of the aggregate outstanding principal amount of
the exchange capital securities. Although it is possible that the equity
participation by benefit plan investors on any date will not be "significant"
for purposes of the Plan Asset Regulation, such a result cannot be assured.
Consequently, if Plans, IRAs or investors using assets of Plans purchase the
exchange capital securities, the Trust's assets could be deemed to be Plan
Assets of such Plans and/or IRAs for purposes of the fiduciary responsibility
provisions of ERISA and the prohibited transactions rules of ERISA and the Code.
Under ERISA and the Code, any person who exercises any authority or control
respecting the management or disposition of the assets of a Plan or IRA is
considered to be a fiduciary of such Plan or IRA. The institutional trustee of
the Trust could therefore become a fiduciary of the Plans and IRAs that invest
in the exchange capital securities and be subject to the general fiduciary
requirements of ERISA in exercising its authority with respect to the management
of the assets of the Trust. However, the institutional trustee will have only
limited discretionary authority with respect to the Trust assets and the
remaining functions and responsibilities performed by the institutional trustee
will be for the most part custodial and ministerial in nature.
PROHIBITED TRANSACTIONS
Each of the Trust, Dime Community (the obligor with respect to the
exchange debt securities held by the Trust) and their affiliates or the
institutional trustee may be a party in interest or a disqualified person with
respect to a Plan or IRA investing in the exchange capital securities.
Therefore, such investment by a Plan or IRA may give rise to a prohibited
transaction. Consequently, before investing in the exchange capital securities
or acquiring exchange debt securities, any person who is, or who is acquiring
such securities for, or on behalf of, a Plan or IRA should determine that either
a statutory or an administrative exemption from the prohibited transaction rules
discussed below or otherwise available is applicable to such investment in the
exchange capital securities, or that such investment in, or acquisition of, such
securities will not result in a non-exempt prohibited transaction.
The statutory or administrative exemptions from the prohibited
transaction rules under ERISA and the Code which may be available to a Plan or
IRA which is investing in the exchange capital securities include the following,
referred to collectively as the ERISA Investor Exemptions:
o Prohibited Transaction Class Exemption, referred to as PTCE,
90-1, regarding investments by insurance company pooled separate
accounts;
o PTCE 91-38, regarding investments by bank collective investment
funds;
o PTCE 84-14, regarding transactions effected by qualified
professional asset managers;
o PTCE 96-23, regarding transactions effected by in-house asset
managers; and
o PTCE 95-60, regarding investments by insurance company general
accounts.
No person who is, or who in acquiring exchange capital securities is
using the assets of, a Plan or IRA may acquire exchange capital securities
unless one of the ERISA Investor Exemptions or another applicable exemption is
available to the Plan or IRA, or such acquisition or holding of the exchange
capital securities will not result in a nonexempt Prohibited Transaction. The
acquisition of the exchange capital securities by any person who is, or who in
acquiring such exchange capital securities is using the assets of, a Plan or IRA
shall be deemed to constitute a representation by such person to the trustee of
the Trust, Dime Community and the initial purchaser either that:
o it is not a Plan, IRA, trustee or other person acting on behalf
of a Plan or IRA or other person or entity using the assets of
any Plan or IRA to finance such purchase; or
o such acquisition is eligible for the exemptive relief in one of
the ERISA Investor Exemptions or another applicable exemption and
will not result in a prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code for which there is no
applicable statutory or administrative exemption.
75
In the case of exchange capital securities delivered in certificated
form, the purchaser will be required to make such representation, in writing, to
the trustees of the Trust, Dime Community and the initial purchaser.
THE DISCUSSION OF ERISA HEREIN IS GENERAL IN NATURE AND IS NOT INTENDED
TO BE ALL INCLUSIVE. ANY FIDUCIARY OF A PLAN, IRA, GOVERNMENTAL PLAN OR CHURCH
PLAN CONSIDERING AN INVESTMENT IN THE EXCHANGE CAPITAL SECURITIES SHOULD CONSULT
WITH ITS LEGAL ADVISORS REGARDING THE CONSEQUENCES OF SUCH INVESTMENT AND
CONSIDER WHETHER THE PLAN OR IRA CAN MAKE THE REPRESENTATIONS NOTED ABOVE.
FURTHER, THE SALE OF INVESTMENTS TO PLANS AND IRAS IS IN NO RESPECT A
REPRESENTATION BY THE TRUST, DIME COMMUNITY, THE INSTITUTIONAL TRUSTEE, THE
INITIAL PURCHASER OR ANY OTHER PERSON ASSOCIATED WITH THE SALE OF THE EXCHANGE
CAPITAL SECURITIES THAT SUCH SECURITIES MEET ALL RELEVANT LEGAL REQUIREMENTS
WITH RESPECT TO INVESTMENTS BY PLANS AND IRAS GENERALLY OR ANY PARTICULAR PLAN,
OR THAT SUCH SECURITIES ARE OTHERWISE APPROPRIATE FOR PLANS AND IRAS GENERALLY
OR ANY PARTICULAR PLAN.
ANY PURCHASER PROPOSING TO ACQUIRE EXCHANGE CAPITAL SECURITIES WITH
ASSETS OF ANY PLAN OR IRA SHOULD CONSULT WITH ITS COUNSEL.
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange capital securities for its
own account pursuant to the exchange offer must acknowledge that it will deliver
a prospectus in connection with any resale of such exchange capital securities.
This prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of exchange capital
securities received in exchange for original capital securities where such
original capital securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Trust and we have
agreed that, starting on the expiration date and ending on the close of business
on the 90th day following the expiration date, the Trust and we will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, for a period of 90 days after
the expiration date, all dealers effecting transactions in the exchange capital
securities may be required to deliver a prospectus.
The Trust and we will not receive any proceeds from any sale of
exchange capital securities by broker-dealers. Exchange capital securities
received by broker-dealers for their own account pursuant to the exchange offer
may be sold from time to time in one or more transactions, in the
over-the-counter market, in negotiated transactions, through the writing of
options on the exchange capital securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such exchange capital securities. Any
broker-dealer that resells exchange capital securities that were received by it
for its own account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange capital securities may be deemed
to be an underwriter within the meaning of the Securities Act and any profit of
any such resale of exchange capital securities and any commissions or
concessions received by any such persons or entities may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
underwriter within the meaning of the Securities Act.
For a period of 90 days after the expiration date, the Trust and we
will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. The Trust and we have agreed to pay all expenses
incident to the exchange offer, including the expenses of one counsel for the
holders of the original capital securities, other than commissions or
concessions of any brokers or dealers and will indemnify the holders of the
exchange capital securities, including any broker-dealers, against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters will be passed upon for us by Thacher Proffitt &
Wood llp, our special counsel. Certain matters of Delaware law relating to the
validity of the exchange capital securities will be passed upon on behalf of the
Trust by Morris, James, Hitchens & Williams LLP, special Delaware counsel to the
Trust. Certain
76
matters relating to United States federal income tax considerations will be
passed upon for us by Thacher Proffitt & Wood llp, special tax counsel to us.
RATINGS
Neither the original capital securities nor the exchange capital
securities have been rated by a rating agency.
EXPERTS
The financial statements incorporated in this prospectus by reference
from Dime Community's Annual Report on Form 10-K for the year ended December 31,
2003, have been audited by Deloitte & Touche LLP, independent registered public
accounting firm, as stated in their report which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
77
================================================================================
You should rely only on the information contained in this prospectus or
that to which we have referred you. We have not authorized anyone to provide you
with any additional or different information. This prospectus does not
constitute an offer to sell, or the solicitation of an offer to buy, any of the
securities offered hereby to any person in any jurisdiction in which such offer
or solicitation would be unlawful. The affairs of Dime Community or the Trust
may change after the date of this prospectus.
_________________
TABLE OF CONTENTS
Available Information...............................1
Incorporation Of Certain Documents By Reference.....2
Forward Looking Statements..........................2
Summary.............................................4
The Exchange Offer..................................6
The Exchange Capital Securities....................10
Selected Consolidated Financial And Other Data.....14
Risk Factors.......................................16
Use Of Proceeds....................................26
Accounting Treatment...............................26
Capitalization.....................................27
Consolidated Ratios Of Earnings
To Fixed Charges...................................28
Dime Community Bancshares, Inc.....................29
Dime Community Capital Trust I.....................30
The Exchange Offer.................................30
Description Of Exchange Capital Securities.........40
Description Of Exchange Debt Securities............53
Description Of Exchange Guarantee..................64
Description Of Original Capital Securities.........67
Relationship Among The Exchange Capital Securities,
The Exchange Debt Securities And The Exchange
Guarantee..........................................67
Certain Federal Income Tax Consequences............69
Erisa Considerations...............................74
Plan Of Distribution...............................76
Legal Matters......................................76
Ratings............................................77
Experts............................................77
================================================================================
================================================================================
$70,000,000
DIME COMMUNITY CAPITAL TRUST I
OFFER TO EXCHANGE ITS
7.0% CAPITAL SECURITIES, SERIES B (LIQUIDATION AMOUNT $1,000
PER EXCHANGE CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND
ALL OF ITS OUTSTANDING
7.0% CAPITAL SECURITIES, SERIES A (LIQUIDATION AMOUNT $1,000
PER ORIGINAL CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY
GUARANTEED, TO THE EXTENT DESCRIBED
IN THIS PROSPECTUS, BY
[DIME LOGO]
PROSPECTUS
_______, 2004
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL"), inter
alia, empowers a Delaware corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him or her in connection with such action, suit or proceeding if he or she
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Similar indemnity is authorized for such person against expenses
(including attorneys' fees) actually and reasonably incurred in connection with
the defense or settlement of any such threatened, pending or completed action or
suit if such person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and
provided further that (unless a court of competent jurisdiction otherwise
provides) such person shall not have been adjudged liable to the corporation.
Any such indemnification may be made only as authorized in each specific case
upon a determination by the shareholders or disinterested directors or by
independent legal counsel in a written opinion that indemnification is proper
because the indemnitee has met the applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him, and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145.
Article IX of the Certificate of Incorporation of Dime Community
Bancshares, Inc., referred to as Dime Community, provides that a director shall
not be personally liable to Dime Community or its shareholders for damages for
breach of his fiduciary duty as a director, except to the extent such exemption
from liability or limitation thereof is expressly prohibited by the DGCL.
Article X of our Certificate of Incorporation requires us, among other matters,
to indemnify to the fullest extent permitted by the DGCL, any person who is or
was or has agreed to become a director or officer of Dime Community, who was or
is made a party to, or is threatened to be made a party to, or has become a
witness in, any threatened, pending or completed action, suit or proceeding,
including actions or suits by or in the right of Dime Community, by reason of
such agreement or service or the fact that such person is, was or has agreed to
serve as a director, officer, employee or agent of another corporation or
organization at the request of Dime Community.
Article X also empowers Dime Community to purchase and maintain
insurance to protect itself and its directors and officers, and those who were
or have agreed to become directors or officers, against any liability,
regardless of whether or not we would have the power to indemnify those persons
against such liability under the law or the provisions set forth in the
Certificate of Incorporation. We are also authorized by our Certificate of
Incorporation to enter into individual indemnification contracts with directors
and officers. We currently maintain directors' and officers' liability insurance
consistent with the provisions of the Certificate of Incorporation.
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ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The exhibits and financial statement schedules filed as a part of this
Registration Statement are as follows:
(a) List of Exhibits.
EXHIBIT NO. DESCRIPTION
4.1 Indenture between Dime Community Bancshares, Inc. and Wilmington Trust Company, as Indenture Trustee,
dated as of March 19, 2004, relating to the Original Debt Securities.
4.2 Form of Certificate of Exchange Debt Securities (filed as Exhibit A to Exhibit 4.1 of this
registration statement).
4.3 Certificate of Trust of Dime Community Capital Trust I, dated as of March 12, 2004.
4.4 Declaration of Trust of Dime Community Capital Trust I, dated as of March 11, 2004.
4.5 Second Amended and Restated Declaration of Trust for Dime Community Capital Trust I, dated as of July
29, 2004.
4.6 Certificate of Common Securities of Dime Community Capital Trust I.
4.7 Form of Exchange Capital Security Certificate for Dime Community Capital Trust I (filed as Exhibit
A-1-B to Exhibit 4.5 of this registration statement).
4.8 Series A Guarantee Agreement of Dime Community Bancshares, Inc. and Wilmington Trust Company, dated
as of March 19, 2004.
4.9 Series B Guarantee Agreement of Dime Community Bancshares, Inc. and Wilmington Trust Company.
4.10 Registration Rights Agreement among Dime Community Bancshares, Inc., Dime Community Capital Trust I,
and Sandler O'Neill & Partners, L.P., dated as of March 12, 2004.
4.11 Liquidated Damages Agreement among Dime Community Bancshares, Inc., Dime Community Capital Trust I,
and Sandler O'Neill & Partners, L.P., dated as of March 12, 2004.
5.1 Opinion of Thacher Proffitt & Wood llp as to the validity of the securities registered hereunder
(including the consent of that firm).
8.1 Opinion of Thacher Proffitt & Wood llp as to certain federal income tax matters (including the
consent of that firm).
12.1 Computation of ratio of earnings to combined fixed charges (excluding interest on deposits).
12.2 Computation of ratio of earnings to combined fixed charges (including interest on deposits).
23.1 Consent of Thacher Proffitt & Wood llp (included as part of Exhibits 5.1 and 8.1).
23.2 Consent of Deloitte & Touche LLP.
24.1 Power of Attorney (included in the signature page of this registration statement).
25.1 Form T-1 Statement of Eligibility of Wilmington Trust Company to act as trustee for the Exchange
Capital Securities of Dime Community Capital Trust I.
25.2 Form T--l Statement of Eligibility of Wilmington Trust Company to act as trustee for the Exchange debt
securities of Dime Community Bancshares, Inc.
25.3 Form T-l Statement of Eligibility of Wilmington Trust Company to act as trustee for the Dime
Community Bancshares, Inc. Exchange Guarantee with respect to Exchange Capital Securities
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement of Dime Community Capital Trust I and Wilmington Trust Company.
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
99.5 Form of Client Letter.
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ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(A) (1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Securities and Exchange
Commission, referred to as the SEC, pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(B) For purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (and each filing of an employee benefit plan's annual report
pursuant to Section 15 of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed
a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(C) To respond to requests for information that is
incorporated by reference into the Prospectus pursuant to Item 4,
10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained
in documents filed subsequent to the effective date of the registration
statement through the date of responding to the request.
(D) To supply by means of a post-effective amendment all
information concerning a transaction, and the Registrant being acquired
involved therein, that was not the subject of and included in the
registration statement when it became effective.
Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for
81
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
82
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrants have duly caused this Registration Statement on Form S-4 to be
signed on their behalf by the undersigned, thereunto duly authorized, in the
city of New York in the State of New York, on July 29, 2004.
DIME COMMUNITY BANCSHARES, INC.
By: /s/ Vincent F. Palagiano
--------------------------------------
Vincent F. Palagiano
Chairman of the Board and
Chief Executive Officer
By: /s/ Kenneth J. Mahon
--------------------------------------
Kenneth J. Mahon
Executive Vice President and
Chief Financial Officer
By: /s/ Vincent F. Palagiano
--------------------------------------
Vincent F. Palagiano
Director
By: /s/ Michael P. Devine
--------------------------------------
Michael P. Devine
Director
By: /s/ Kenneth J. Mahon
--------------------------------------
Kenneth J. Mahon
Director
By: /s/ Anthony Bergamo
--------------------------------------
Anthony Bergamo
Director
By: /s/ George L. Clark, Jr.
--------------------------------------
George L. Clark, Jr.
Director
By: /s/ Steven D. Cohn
--------------------------------------
Steven D. Cohn
Director
83
By: /s/ Joseph H. Farrell
--------------------------------------
Joseph H. Farrell
Director
By: /s/ John J. Flynn
--------------------------------------
John J. Flynn
Director
By: /s/ Louis V. Varone
--------------------------------------
Louis V. Varone
Director
By: /s/ Patrick E. Curtin
--------------------------------------
Patrick E. Curtin
Director
By: /s/ Fred P. Fehrenbach
--------------------------------------
Fred P. Fehrenbach
Director
By: /s/ Stanley Meisels
--------------------------------------
Stanley Meisels
Director
DIME COMMUNITY CAPITAL TRUST I
By: /s/ Kenneth J. Mahon
--------------------------------------
Kenneth J. Mahon
Administrator
By: /s/ Michael Pucella
--------------------------------------
Michael Pucella
Administrator
By: /s/ Lance Bennett
--------------------------------------
Lance Bennett
Administrator
84
POWER OF ATTORNEY
We, the undersigned directors and officers of Dime Community
Bancshares, Inc., do hereby severally constitute and appoint Lance Bennett our
true and lawful attorney and agent, to do any and all things and acts in our
names in the capacities indicated below and to execute any all instruments for
us and in our names in the capacities indicated below which said person may deem
necessary or advisable to enable Dime Community Bancshares, Inc. to comply with
the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
offering contemplated by this Registration Statement on Form S-4, including
specifically, but not limited to, power and authority to sign for us or any of
us in our names in the capacities indicated below and any and all amendments,
including post-effective amendments to this Registration Statement and any Rule
462(b) registration statement or amendments thereto; and we hereby ratify and
confirm all that said person shall do or cause to be done by virtue hereof
Pursuant to the requirements of the Securities Act of 1933, as amended,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Name Date
---- ----
By: /s/ Vincent F. Palagiano July 29, 2004
----------------------------------------- -------------
Vincent F. Palagiano
Director, Chairman of the Board and
Chief Executive Officer
By: /s/ Kenneth J. Mahon July 29, 2004
----------------------------------------- -------------
Kenneth J. Mahon
Director, Executive Vice President and
Chief Financial Officer
By: /s/ Michael P. Devine July 29, 2004
----------------------------------------- -------------
Michael P. Devine
Director
By: /s/ Anthony Bergamo July 29, 2004
----------------------------------------- -------------
Anthony Bergamo
Director
By: /s/ George L. Clark, Jr. July 29, 2004
----------------------------------------- -------------
George L. Clark, Jr.
Director
85
By: /s/ Steven D. Cohn July 29, 2004
----------------------------------------- -------------
Steven D. Cohn
Director
By: /s/ Joseph H. Farrell July 29, 2004
----------------------------------------- -------------
Joseph H. Farrell
Director
By: /s/ John J. Flynn July 29, 2004
----------------------------------------- -------------
John J. Flynn
Director
By: /s/ Louis V. Varone July 29, 2004
----------------------------------------- -------------
Louis V. Varone
Director
By: /s/ Patrick E. Curtin July 29, 2004
----------------------------------------- -------------
Patrick E. Curtin
Director
By: /s/ Fred P. Fehrenbach July 29, 2004
----------------------------------------- -------------
Fred P. Fehrenbach
Director
By: /s/ Stanley Meisels July 29, 2004
----------------------------------------- -------------
Stanley Meisels
Director
86