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1.
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Please
fill in the blanks throughout the proxy statement. If you are referring
to
disclosure that appears in the Company’s proxy statement to satisfy the
disclosure obligations under schedule 14A, you must specifically
so state.
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2.
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The
proxy statement should describe any past contacts or interactions
between
the Committee members and their affiliated and the Company. For example,
the disclosure on the first page of the proxy statement indicates
that Mr.
Seidman requested that the Board be expanded by one member, and that
he be
placed on the Board. As to this and any other contacts between members
of
the Committee and the Company, please expand your disclosure to provide
the background leading up to such contact, the form of the communication,
when it took place and the parties involved. Of course, you should
also
provide appropriate disclosure about any events or actions that resulted
from the contact.
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| 2. |
The
following section was added on page
5:
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3.
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Disclose
whether the Committee members or their affiliates may engage in any
transaction with the Company if you are successful in this solicitation.
In addition, discuss whether the Committee members may have an interest
in
a business combination transaction apart from their interest as
shareholders. For example, would they earn a commission or other
“finder’s
fee” for indentifying a business combination partner for the Company?
Please discuss.
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4.
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If
the Committee members have approached any potential acquirors or
acquirees
of the Company, this fact should be disclosed. Please revise or
advise.
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5.
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Throughout
the proxy statement, you cite figures from the Company’s historical
results and other data, including figures relating to sales of other
bank
holding companies. For each such statement, please provide supplemental
support to the staff. For example, tell us in which periodic report
or
other document the figures appear (please be as specific as possible,
including page cites or section headings,
etc).
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5.
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Enclosed
herewith and attached as Exhibit A, are news stories in reference
to
transactions disclosed under “Mr. Seidman’s Past History With Certain
Financial Institutions.”
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| 6. |
You
enumerate several actions your Nominees will take if elected. These
include attempting to persuade the Company to accelerate its share
repurchase program and retaining an investment banker to evaluate
its
options for maximizing shareholder value. Since your Nominees will
represent a minority of the Board members even if elected, prominently
note that in each place where you discuss their plans and caveat
the
discussion of your Nominees’
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| 6. |
The
following changes have been made to paragraph 2 of the section “Company’s
Share Repurchase Program” on page 7: “The
Committee Nominees would attempt to persuade the Company to accelerate
the
purchase of stock pursuant to the above authorized share repurchase
plan.
To accomplish this goal, the Committee Nominees, if elected, will
need the
cooperation of five of the other
Directors.”
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| 7. |
Refer
to our last comment above. Explain which contemplated actions may
also
require the approval of shareholders. In this regard, we note that
your
Nominees intend to amend the Company’s By-Laws to de-classify the Board.
Would this require shareholder approval? If so, please
disclose.
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| 8. |
On
this page, state the total number of members currently serving on
the
Company’s Board.
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8.
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It
is now stated on page 3 that there are presently fourteen members
of the
Board of Directors.
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| 9. |
Toward
the bottom of the cover page, you note that because this is a contested
election for directors, “there should not be any broker non-votes.” Please
clarify whether you mean that broker non-votes can occur, but that
shareholders should avoid them by exercising their right to vote
by
instructing their brokers as to their intentions. Or are you stating
that
the broker cannot return an unvoted proxy card in the case of an
election
contest? Please clarify for
shareholders.
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9.
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The
following changes have been made to page 4: “…Since this is a contested
election for directors, there should not be any broker non-votes,
which
means that brokers cannot vote on a client’s behalf without instructions,
so every shareholder should provide these instructions to their
broker…”
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| 10. |
You
state your belief that the Company should engage an investment banker
to
analyze the Company’s value and provide “statistical and market data” that
will assist the Board in making “an informed financial decision.” Explain
how you know whether or not the company has already engaged a financial
advisor. If you don’t know, state this in the proxy
materials.
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10.
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The
following changes have been made to paragraph 1 of this section on
page 6:
“…The Committee does not know whether or not the Company has already
engaged an investment banker or financial advisor to conduct the
type of
work referred to herein.”
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| 11. |
We
note your reference to your financial analyses to assess the performance
of the Company as compared to peer companies. In order to present
your
comparative data in a fair and complete manner, this section should
be
expanded to identify the peer companies to which you compared the
Company
and how they were selected.
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| 12. |
You
currently describe only two values derived from your analyses: return
on
average assets for 2006 and return on average tangible equity for
2006. If
other analyses yielded more favorable figures for the company as
compared
to the peer group, disclose this to present a balanced picture of
your
analyses.
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| 13. |
Define
“return on average assets” and “return on average tangible equity” as
those phrases are used in this section. Your expanded disclosure
should
explain how these measures are calculated and how they differ from
one
another.
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| 14. |
Explain
why you believe the Board should be de-classified. In addition, discuss
the effect of such a change. For example, it would presumably make
a
change in control of the Company easier and faster to accomplish.
How
would this impact shareholders? Describe this and any other potential
impact on the Company and its
shareholders.
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14.
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The
following changes have been made to paragraphs 1 and 2 of this section
on
page 9: “…A classified board can prevent shareowners from mounting a
successful opposition to the entire board, because only one-third
of the
directors are up for election in any given year. By way of contrast,
a
declassified board would stand for election in its entirety, every
year.”;
“The Committee Nominees will need the support of five additional Board
members to gain Board approval for its amendment to de-classify the
Board.
Shareholder approval is not required to amend the Company’s
By-laws.”
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| 15. |
The
heading of this subsection is the only place in the proxy statement
that
you lay out your Nominees priorities in
order.
That is, the heading makes clear that you will attempt to sell the
Company
only after you accelerate the share repurchase program, and if your
Nominees are unsuccessful in effecting an
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15.
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The
following changes have been made to paragraphs 3 and 4 of this section
on
page 10: “The first thing the Committee Nominees would request is that the
Company implement an aggressive stock repurchase program. Shortly
after
implementing the repurchase program, the Committee Nominees would
attempt
to persuade the Company to pursue an accretive acquisition. The Board
of
Directors of the Company would have to determine a satisfactory price,
which could be either all cash or stock or a combination of cash
and
stock. (The Board would have to make the same determination with
respect
to the consideration to be received in connection with a sale of
the
Company.) To accomplish the Committee's goal, the Committee Nominees,
if
elected, will need the cooperation of five of the other Directors.
Furthermore, the Committee Nominees' plans could change, subject
to the
fiduciary duty they will owe to all Shareholders, if elected.
“
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| 16. |
Refer
to the statement at the top of page 6 about what acquisitions will
require
the approval of shareholders of the Company. Briefly explain under
what
circumstances a vote may be
required.
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16.
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Paragraph
5 of this section now reads as follows on page 10: “Shareholders will not
be afforded a separate opportunity to vote on the implementation
of a
stock repurchase program. A shareholder vote will be required to
sell the
Company, whether the consideration is cash or stock. A shareholder
vote
may not be required for an acquisition involving cash and/or stock
unless
it exceeds certain
limitations.”
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17.
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In
the third paragraph of this section, note whether or not the price
paid in
CFSB’s Dutch auction represented a premium to the market value of the
shares at that time, and if so, by how
much.
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17.
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The
above mentioned paragraph has been modified as follows: “…Thus, the Dutch
Auction resulted in large measure from proposals made by, and actions
undertaken, by Seidman. The Dutch Auction was for $16.00 per share
and on
the day before it was announced, the closing price for CFSB stock
was
$14.00.”
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18.
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Where
you state in this section that you filed a Schedule 13D and then
certain
actions occurred, clarify why you believe that your filing caused
the
relevant companies to effect those actions. For example, in the fourth
from the last paragraph on page 6, you note that you filed a Schedule
13D
disclosing a plan to maximize shareholder value through an accretive
acquisition or sale of FBER, EGLB, IGAF, and ANE and then note that
all
four financial institutions were sold after the respective announcements.
Why do you believe your actions caused the sales? How close in time
to the
filing of your Schedule 13D did such sales
occur?
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18.
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The
following sentence has been added to paragraph 5 of this section
on page
11:“Mr.
Seidman does not believe that the filing of his Schedule 13Ds caused
any
company to effect the actions referred to
herein.”
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19.
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Refer
to the second to last paragraph on page 6. We don’t understand the
relevance of the disclosure here. Who are Mr. Griffith and Mr. Gendell
and
why is their involvement with KNK relevant to you? Please
clarify.
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19.
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The
above mentioned paragraph has been
deleted.
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20.
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Here
and in several other places in the proxy statement, you present data
compiled by SNL Financial LC. Disclose whether or not the consent
of the
author or publication was obtained for the use of such materials.
See Rule
14a-12(c)(ii) of Regulation 14A. In addition, please be aware that
it is
your responsibility to ensure that the materials are not used
inappropriately and out of context, and are not subject to such
qualification that their use in the proxy statement would be
misleading.
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20.
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See
the attached letter from Daniel Oakey, Chief Contracts Officer from
SNL
Financial.
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21.
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Refer
to our last comment above. We note your disclaimer in the third paragraph
on page 7 that you have not independently verified the accuracy of
the SNL
Financial Rations. Please understand that assumed responsibility
and
liability for material prepared and published by third parties that
you
include in your proxy statement. Therefore, you must be prepared
to
support the statements made, not simply the fact that such statements
were
made by a third party. Please confirm your understanding in your
response
letter and delete or modify the
disclaimer.
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21.
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The
following was added to paragraph 10 of this section on page 12: “The
Committee has not independently verified the accuracy of the SNL
Financial
ratios but believes the information provided by SNL Financial to
be
accurate and reliable and to be widely utilized in the financial
service
industry and quoted extensively in financial
publications.”
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22.
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With
respect to the November 8, 1995 order issued by the OTS against Mr.
Seidman, clarify whether or not the three-year period requiring board
review of any documentation to be submitted to that Agency has run.
It
would appear to have run given the 1995 date of the order, but the
language you use in describing it causes us to question whether the
three-year period would begin from the date that Mr. Seidman becomes
an
“institution-affiliated party of any insured depositary institution.” If
the latter, discuss the consequences if the Company is such an
institution.
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22.
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The
following sentence was added to paragraph 10 of this section on page
14:
“The Company is not an OTS regulated institution and it is Mr. Seidman’s
counsel’s opinion that the three year period requiring board review is
therefore not applicable.”
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23.
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Include
a statement like the one included on the proxy card to the effect
that
their can be no guarantee that the Company’s nominees will agree to serve
with your Nominees, if they are
elected.
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23.
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The
following sentence was added to paragraph 1 of this section on page
12:
“There is no assurance that any of the Company’s nominees will serve if
elected with the Committee’s
Nominees.”
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24.
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Your
disclosure here states that you may solicit proxies by “advertisement.”
Clarify in your response letter what kind of advertisement you may
use,
including where the ads may appear, and how you will comply with
your
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24.
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The
following sentence has been added to paragraph 1 of this section
on page
14: “At this time, the Committee has not determined the use of any
advertising in its solicitation, but this decision could be changed
dependent upon the actions of the
Company.”
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25.
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Disclose
on page 9 that a shareholder may also revoke a proxy granted to you
by
delivering a later-dated proxy to the
Company.
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25.
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On
page 15, this section of paragraph 4 of this section now reads as
follows:
“... (ii) submitting a duly executed proxy bearing a later date to
the
Committee or the Company;…”
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●
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such
participant is responsible for the adequacy and accuracy of the disclosure
in the filing;
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●
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staff
comments or changes to disclosure in response to staff comments do
not
foreclose the Commission from taking any action with respect to the
filing; and
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such
participant may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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| · |
Each
Filing Person and Participant is responsible for the adequacy and
accuracy
of the disclosure in the Proxy
Statement;
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Staff
comments or changes to disclosure in response to Staff comments do
not
foreclose the Securities and Exchange Commission from taking any
action
with respect to the Proxy Statement;
and
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Each
Filing Person and Participant may not assert Staff comments as a
defense
in any proceeding initiated by the Securities and Exchange Commission
or
any person under the federal securities laws of the United
States.
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