UJB FINANCIAL URGES REJECTION OF DISSIDENT BOARD CANDIDATES
PRINCETON, N.J., March 31 /PRNewswire/ -- The following letter was sent today by T. Joseph Semrod, chairman, president and chief executive officer of UJB Financial Corp. to its shareholders:
"By now you should have received both an initial mailing from your company asking for your proxy, as well as a mailing from a dissident group. Neil J. Weisman, Robert I. Cohen and Chilmark Capital Corp., the leaders of this group, are asking you to replace five of UJB Financial's experienced directors with their handpicked nominees which they have chosen to call "independent directors" and are also asking you to approve certain non-binding resolutions. We believe that shareholders can now determine their best interests.
Your board of directors strongly believes that the election of the Weisman/Cohen group candidates is not in your best interest. WE URGE YOU TO REJECT THEIR CANDIDATES. DO NOT SIGN THEIR GREEN CARD. EVEN IF YOU SIGNED A GREEN CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR MIND. ONLY YOUR LATEST PROXY CARD COUNTS. SUPPORT YOUR BOARD BY PROMPTLY SIGNING, DATING AND MAILING YOUR WHITE PROXY CARD!
What Have Weisman And Cohen Told You?
Because Weisman and Cohen are telling you that you should have a chance to consider a premium offer for your stock, you might think that there actually is a premium offer available for your stock. But look at the facts.
Weisman and Cohen, in their own words, told you that five months ago they had "very brief and limited discussions" with unnamed "representatives" of "two" unnamed "financial institutions" although no specific terms were ever discussed. For the last five months, there have been no further discussions and they themselves admit that they don't know if anyone is currently interested in pursuing negotiations with UJB at this time. They also admit to you that there are no guarantees that a transaction can be negotiated on terms which are acceptable to UJB shareholders within a reasonable period of time.
In short, Weisman and Cohen have admitted that they have:
NO SPECIFIC BUYERS
NO SPECIFIC PRICE
NO SPECIFIC TERMS
Yet, on this basis, they want you to trust them with five board seats! In our opinion it is the wrong time and the wrong economic environment to seek an offer. Your board has been told by its financial advisor, Merrill Lynch & Co., that it would be inadvisable at this time for the company to initiate the type of activities Weisman and Cohen suggest. Merrill Lynch was not authorized to, and did not, solicit the sale of UJB Financial and did not generate independent financial analysis of the company. Weisman and Cohen have presented no independent financial advice supporting their proposal.
The depressed economy in the Mid-Atlantic region and the nationwide recession have created a climate that is favorable for buyers and unfavorable for sellers. Underscoring this point, even the list of bank mergers referred to in the Chilmark letter reflects the generally unfavorable Mid-Atlantic bank merger and acquisition environment. Of the eight bank mergers referenced, only the Chemical Banking Corp./Manufacturers Hanover Corp. merger involved an institution in our region and this merger occurred at no premium to shareholders of Manufacturers Hanover.
UJB Financial has begun to make a strong rebound from the difficulties of the past few years. Earnings have now improved for four successive quarters and we have a strong capital base. Accordingly, your Board of Directors does not believe we should be seeking a buyer at this time. We do believe that UJB Financial is poised to benefit from the regional economic recovery when it occurs.
We plan to continue working toward our long-term goal of becoming the premier banking organization in our region. Putting your company "on the block" now could severely impair our ability to realize this goal for you, and we believe achieving it is the surest path to maximizing shareholder value for all shareholders. We believe that Weisman/Cohen want to "shop the company" regardless of the timing, the price, the economic environment or the possible harmful consequences to operations.
Remember: We have been advised by Merrill Lynch and we believe that commencing a sales process in the current environment could be significantly disruptive to UJB Financial's operations and performance and could severely impair our ability to build value for shareholders of UJB Financial.
Who Do Weisman And Cohen Represent?
The management and board of directors of UJB Financial believe that you are entitled to know more about those who wish to exert a significant degree of control over your company.
We call upon Weisman and Cohen to tell the shareholders who the investors are in their group, including the limited partners in all their partnerships, and particularly the investors in their offshore funds which are organized and headquartered outside the United States. Although the Weisman/Cohen group is subject to United States securities laws, the offshore funds are not subject to United States securities laws.
Your company is a financial services institution having more than $13 billion in total assets and ranking among the 50 largest bank holding companies in the nation. It is built upon trust and service to the community. In an era that has seen the failure of numerous banking institutions, the abuses of BCCI, the savings and loan debacle and the Wall Street scandals, we think it is reasonable for shareholders to know who the investors are who seek to elect five of their directors. Apparently it is more important to the Weisman/Cohen group to maintain secrecy than to disclose this information to shareholders of the company of which they are seeking to elect directors.
Your company's five nominees have 88 years aggregate experience in banking and are long-time residents and businessmen in the New Jersey/Pennsylvania area. Take a closer look at the Weisman/Cohen nominees and decide for yourself who is better qualified to lead your company. In the last five years, Beier, Toll and Weisman have had no experience whatsoever as a director, officer or employee of a public company. We believe you should examine the record of Seidler and Dresner, which is set forth below.
Lee J. Seidler
Seidler is a director of Players International, Inc., a company whose subsidiaries, among other things, target the recreational gambler through club membership promotional efforts. Players has never paid dividends. Most recently, they have applied for a license to run a riverboat gambling establishment on the Ohio River. Players has working arrangements with five casinos in Atlantic City.
Milton H. Dresner
Although we are not aware of any accusations of wrongdoing on Dresner's part, Dresner has been identified as having been a limited partner in the amount of $6,000,000 in Ivan Boesky's arbitrage partnership in the mid-1980's.
Dresner is now part of the owner group and serves on the board of Flagship Federal Savings Bank in San Diego. It shut down four of its five branches and terminated 30 of its employees in 1990. While no one director of a company bears responsibilities for losses and dividend eliminations, the public companies on whose boards Mr. Dresner has served in recent years have all suffered losses and either eliminated or never paid a dividend.
With their background and experience, should you elect these men to positions of trust on the board of UJB Financial? Can UJB Financial's shareholders, employees, customers and communities rely on them to serve everyone's best interests?
We believe the answer is clearly "no" and they do not deserve your vote.
Is Compensation Really An Issue?
Take a close look at the Weisman/Cohen "smokescreen" assertions about executive compensation. The Personnel and Stock Option Committee of the board of directors, which consists solely of non-employee, independent directors, decides compensation matters. The board of directors believes that UJB's cash compensation and benefits are consistent with those of other companies of similar size in the banking industry.
By design, the compensation system at UJB Financial of awarding a significant portion of executive compensation in the form of stock and options directly aligns management's interests with those of all shareholders. Management benefits only if shareholders benefit. Look at the facts:
Fact: Weisman and Cohen tell you that management options sharply increased in value during the past year. What they don't tell you is that the value of all UJB shares, including their shares, increased by over $450 million during the same period.
Fact: Comparing 1991 to 1989, cash compensation for UJB Financial's top 5 executive officers was reduced almost 13 percent. Awards of restricted stock were reduced almost 39 percent.
We urge you to reject the Weisman/Cohen group and their handpicked candidates.
Do not sign their green card. Even if you signed a green card, you have every right to change your mind. Only your latest proxy card counts. Support your board of directors' nominees by signing, dating and mailing the enclosed WHITE proxy card, even if you have previously returned a WHITE proxy card.
Your vote is important. Please act promptly.
Thank you for your continued interest and support.
On behalf of your board of directors and management."
Shareholders should not send a green card. Any later dated green card signed by you will cancel any white card you previously sent, even if you intended to vote the green card against the Weisman/Cohen group nominees. If you have any questions or need assistance, please call D. F. King & Co., Inc., which is assisting us, toll-free at (800) 669-5550 or at any of the numbers listed below:
D. F. KING & CO., INC.
135 S. LaSalle Street 77 Water Street 5777 W. Century Blvd.
Chicago, IL 60603 New York, NY 10005 Los Angeles, CA 90045
312-236-5881 212-269-5550 310-215-3860
(collect) (collect) (collect)
/CONTACT: Barrie H. MacKay of UJB, 609-987-3350, or Thomas M. Daly, Jr. of Kekst and Company, 212-593-2655, for UJB/
(UJB) CO: UJB Financial Corp. ST: New Jersey IN: FIN SU: SM -- NY087 -- 3592 03/31/92 16:50 EST