Dime Financial P.O. Box 700
CORPORATION Wallingford, CT 06492
(203) 269-8881
July 28, 1998
To the Shareholders of Dime Financial Corporation:
We recently mailed you a notice of a special meeting of shareholders
of Dime Financial Corporation ("DFC") to be held on Wednesday, August 19,
1998, and a Proxy Statement-Prospectus relating thereto, each dated July
10, 1998. The purpose of the meeting is to consider and vote on a proposal
to approve and adopt an Agreement and Plan of Merger dated as of March 31,
1998 (the "Merger Agreement") among HUBCO, Inc. ("HUBCO"), Lafayette
American Bank, DFC and The Dime Savings Bank of Wallingford, and the
transactions contemplated thereby, and to transact such other business as
may properly come before the meeting or any adjournment or postponement
thereof.
As described in the Proxy Statement-Prospectus, if the Merger
Agreement is approved, DFC will be merged with and into HUBCO (the
"Merger") and DFC Common Stock will be converted into the right to receive
HUBCO Common Stock at an Exchange Ratio determined by dividing $38.25 by
the Median Pre-Closing Price of HUBCO Common Stock, subject to a specified
Maximum Exchange Ratio and Minimum Exchange Ratio. If the Median Pre-
Closing Price of HUBCO Common Stock is less than a specified threshold,
originally $31.43 (the "Termination Threshold"), DFC will have the right to
terminate the Merger Agreement unless HUBCO agrees to increase the Exchange
Ratio to $33.00 divided by the Median Pre-Closing Price of HUBCO Common
Stock. The "Median Pre-Closing Price" is the price half-way between the
closing prices left after discarding the four lowest and four highest
closing prices during the ten consecutive trading day period which ends on
(and includes) the day the parties receive final bank regulatory approval
for the Merger (the "Determination Date").
We are writing to inform you that, on July 17, 1998, HUBCO declared a
$0.25 quarterly cash dividend and a 3% stock dividend, each payable on
September 1, 1998 to HUBCO shareholders of record on August 14, 1998. If
the Merger Agreement is approved at the special meeting, the Merger is
expected to close between August 19, 1998 and August 31, 1998. Since DFC
shareholders will not yet be HUBCO shareholders as of the August 14 record
date, they will not be entitled to receive either dividend from HUBCO. DFC
shareholders will, however, receive DFC's regular quarterly cash dividend
of $0.12 per share, payable on August 18, 1998 to shareholders of record on
July 31, 1998. In addition, pursuant to the terms of the Merger Agreement,
the amount of HUBCO Common Stock to be received per share of DFC Common
Stock will be adjusted for the HUBCO stock dividend, as follows.
In calculating the Median Pre-Closing Price, all closing prices prior
to August 12, 1998 (the date on which HUBCO Common Stock begins trading ex-
dividend) will be adjusted by dividing the actual closing prices by 1.03.
The Median Pre-Closing Price will then be determined by taking the price
half-way between the closing prices of HUBCO Common Stock (as adjusted)
left after discarding the four lowest and four highest closing prices in
the ten consecutive trading day period which ends on (and includes) the
Determination Date. The Exchange Ratio will then be determined by dividing
$38.25 by the Median Pre-Closing Price as so determined. The Maximum
Exchange Ratio and Minimum Exchange Ratio will be increased by 3%. Thus, a
Maximum Exchange Ratio of 1.0815 will apply if the calculated Exchange
Ratio would exceed 1.0815, and a Minimum Exchange Ratio of 0.9579 will
apply if the calculated Exchange Ratio would be less than 0.9579. Finally,
the Termination Threshold will be divided by 1.03, resulting in an adjusted
threshold of $30.51.
The following table (which restates the comparable table set forth on
page 38 of the Proxy Statement-Prospectus, as adjusted for the HUBCO stock
dividend) illustrates the effects of the adjustments on the Exchange Ratio.
Adjusted Median Pre-Closing Price of HUBCO
COMMON STOCK AS OF THE DETERMINATION DATE EXCHANGE RATIO
- ------------------------------------------ --------------
Greater than $39.93 0.9579
Between $39.93 and $35.37 $38.25 / the Median Pre-
Closing Price
Less than $35.37 and greater than or
equal to 30.51 1.0815
Less than $30.51 1.0815; PROVIDED, that DFC will
have the right to terminate the
Merger Agreement and HUBCO will
have the right to nullify that
termination by agreeing to an
Exchange Ratio of $33.00 / the
Median Pre-Closing Price
Your Board of Directors has unanimously approved the Merger Agreement
and unanimously recommends that you vote "FOR" approval of the Merger
Agreement and the transactions contemplated thereby.
On Behalf of Your Board of Directors
/s/ Richard H. Dionne
Richard H. Dionne
President and Chief Executive Officer
567-LTR2-98