The Clifton Savings Bancorp, Inc.
Committee to Preserve Shareholder Value
August 27, 2004
DEAR FELLOW SHAREHOLDER:
I am writing in response to the August 11, 2004 and August 24, 2004 letters you
received from John A. Celentano, Jr., the Chairman of the Board of Directors of
Clifton Savings Bancorp, Inc. (the "Company"). I am asking that you vote AGAINST
the Company's proposed 2004 Stock-Based Incentive Plan (the "Incentive Plan")
and WITHHOLD your vote on the election of the Company's directors.
DON'T JUST TAKE OUR WORD FOR IT
The Committee is pleased to announce that Institutional Shareholder Services,
Inc. ("ISS"), a provider of proxy advisory services to institutional investors,
has recommended that its clients vote AGAINST the Company's Incentive Plan and
WITHHOLD votes from the Company's directors. According to the report, "Such
compensation practices and the lack of board accountability to public
shareholders make us question whether this board has been a good steward of
compensation and whether approving the maximum allowable number of shares at the
earliest possible time is in the shareholders' best interest."
Please sign, date and return the GOLD proxy card in the enclosed postage-paid
envelope.
Company Statement: The Company states that the Incentive Plan "has been
thought out carefully and designed to be in your best
interests."
Reply: o How can an approximate potential
$2,300,000 five year annual
compensation expense (total expense -
$11,500,000) be in your best interest
when the Company's net income was only
$3,689,000 for the twelve month period
ending March 31, 2004? How can an
approximate after tax 38% reduction in
Net Income be good for Shareholders?
(Assumes 981,337 shares awarded at
$11.76, Page 14 of Company Proxy
Statement).
o How can a reduction of approximately
$25,980,890 or approximately 13%, of the
Company's net worth benefit the
Shareholders? (Committee's Proxy
Statement, Page 8.)
o It is the Committee's opinion that the
Incentive Plan is in the best interest
of those persons, and only those
persons, who receive the awards.
Company Statement: Mr. Seidman "has voted in favor of plans
similar to the Clifton Savings Bancorp's 2004
Plan."
Reply: o I have never voted in favor of an
Incentive Plan for a mutual holding
company
o I personally have never accepted free
stock even though I was entitled, as a
member of the Board of Directors, to
receive restricted stock, like the shares
the Company now wants to award to its
directors and senior management. I refused
to accept the free stock awards because,
in my opinion, such an award of free stock
is not in the best interest of all the
Shareholders
Company Statement: Case in Point: Wayne Savings Bank, where Mr.
Seidman pursued "his agenda".
Reply: o Harold Cook was the Chairman of Wayne
Bancorp, Inc. When asked about the
Company's comments, he replied: "Larry
Seidman was the catalyst that
encouraged the Board to seek a merger
which ultimately maximized Shareholder
value."
o When Wayne Bancorp, Inc. made its initial
public offering, its shares sold for $10
each. Less than two (2) years later,
Wayne Bancorp,Inc. was acquired by Valley
National Bank at a price of $34.38 per
share.
Company Statement: Case in Point: South Jersey Financial Corp, Inc.,
where Mr. Seidman pursued "his agenda".
Reply: o Robert Colacicco was the president and
chief executive officer of South Jersey.
When asked about the Company's comments
he replied "Larry Seidman's contributions
to South Jersey were very positive and
were all focused on maximizing Shareholder
value."
o Robert Colacicco also stated that
"even though Mr. Seidman was entitled
to receive restricted stock awards,
he refused to accept such an award."
o Mr. Colacicco also stated that "in
order to obtain Mr. Seidman's support
for the stock based benefit plan, Mr.
Seidman required that the amount of
the restricted stock available for
distribution be reduced."
Company Statement: The Company states "The 2004 Plan EXPRESSLY
(August 14, 2004) PROVIDES FOR PERFORMANCE STANDARDS." (Emphasis
in the original of August 11, 2004 letter.)
Reply: o In fact, the Plan establishes no objective
criteria for the granting of the awards.
No particular level of performance - by
the Company or by directors or by managers
- has been established in order for the
free stock to be awarded. Thus, the
Compensation Committee - whose members
will presumably be eligible to receive
awards - will have discretion to
determine to whom, and in what amounts the
awards will be given.
o The Company has now admitted there are no
performance standards in the Plan. The
Company in its August 24th letter stated
that "Mr. Seidman correctly notes no
performance standards have been
established."
o The Company claims that it will make
awards in a "prudent manner". THIS IS NOT
A PERFORMANCE STANDARD.
Company Statement: "If Mr. Seidman had been successful in his efforts
to gain a seat, he too would be eligible to receive
the benefits he now criticizes."
Reply: o It is true that if I were a Board member
I would be eligible for free stock, but I
would not accept such an award. Maybe Mr.
Celentano, Jr. wants to make the same
commitment? I doubt it!
o I have never requested a seat for
myself on the Company's Board of
Directors.
Company Statement: The Company states "Help Clifton Savings Bancorp
tell Mr.Seidman we have no interest in his personal
agenda."
Reply: o The three (3) institutions mentioned by
the Company have one thing in common.
Their stock prices rose substantially -
and all Shareholders profited.
Specifically:
(i) In an approximate two (2) year period
Wayne Savings had an approximate 243%
increase in its stock price enjoyed
by all Shareholders (from the date Mr.
Seidman commenced his stock purchases to
the date a sale of the Company was
announced.)
: (ii) In approximately fourteen (14)
months South Jersey had an approximate
70% increase in its stock price enjoyed
by all Shareholders (from the date Mr.
Seidman commenced his stock purchases to
the date a sale of the Company was
announced.)
(iii) In approximately one year CNY
Financial had a 70% increase in its stock
price enjoyed by all Shareholders (from
the date Mr. Seidman commenced his stock
purchases to the date a sale of the
Company was announced.)
It is obvious that the Company wants to have you not focus upon the merits
of the Plan. Otherwise, why would the Company conclude its first letter by
making comments about me?
After all, I have nothing to do with the Plan, I am simply delivering the
message that this Plan is not in the best interests of the Shareholders who
have invested over $130,000,000 in the Company. Please vote the GOLD proxy
today.
If you have any questions or need assistance in voting your shares, please call:
D. F. King & Co., Inc.
48 Wall Street
New York, New York 10005
(Call Toll Free (888) 542-7446