Attached files
***CONFIDENTIAL TREATMENT REQUESTED BY BROOKLINE BANCORP, INC.
(COMMISSION FILE NO.: 0-23695)***
EXHIBIT 17.1
------------
355 Hammond St.
Newton, MA 02467
February 23, 2010
Board of Directors
Brookline Bankcorp., Inc.
160 Washington St.
Brookline, MA 02445
Dear Board of Directors:
By reason of the Board's rejection of *** proposal to buy the common stock
of Brookline at a price of $*** a share, ***, made in the January 28, 2010
letter of ***, an offer which I believe was highly favorable to Brookline
Bancorp shareholders, and by reason of the events described below, I submit my
resignation from the Board of Directors of Brookline Bancorp, Inc., as Secretary
of the Corporation, and as a member of its Audit Committee.
Yesterday, while I was preparing this letter of resignation, I received a
number of documents from the Bank, including the February 12 letter of
resignation of former Board Chairman Richard Chapman (Attachment A). Another was
an e-mail "Message from Paul Perrault," President of the Bank, to the directors
(Attachment B), transmitting a copy of a memorandum about to be given to "All
Employees" of the Bank (Attachment C). The "All Employees" memo advised that Mr.
Chapman has resigned and that
"In his letter to fellow directors Dick indicated
that he was resigning because he was dissatisfied
with the process by which the Board considered and
rejected an offer from another company to acquire
Brookline Bancorp." (Attachment C).
The Chapman resignation letter was not included in the transmission to
employees.
The Message to the directors said that if "asked about this by friends, or
neighbors, or family members, feel free to share the memo or what's included in
it, but it's best if you say nothing more about this."
Board directors are thus told by the President to advise the public that
Mr. Chapman has indicated that he was resigning because due process was not
followed in the rejection of the offer. The documents, however, show that
although procedure was questioned, Mr. Chapman tendered his resignation also
because, as a matter of substance, *** offer was favorable to the Bank's
shareholders and should not have been rejected. While Mr. Chapman's resignation
***CONFIDENTIAL TREATMENT REQUESTED BY BROOKLINE BANCORP, INC.
(COMMISSION FILE NO.: 0-23695)***
letter of February 12, 2010 does question procedure in the first three
paragraphs, the balance of the letter relates to the substantive desirability of
accepting the offer. It refers to his memorandum to the Board of February 1,
2010 (Attachment D). That memorandum finishes his discussion - of substance - as
follows:
Summing it up, this is a fine, compelling offer. The valuation fully
satisfies any financial analysis. We have a window of opportunity that is
highly unlikely to be seen again in the foreseeable future. To turn this offer
down, in my opinion would be foolish and reckless. It would require buying into
projections that would be pure wishful thinking and impossible to defend in
public.
For the directors to advise questioners that Mr. Chapman "indicated he was
resigning because he was dissatisfied with the process" and to be silent about
his position that the offer was "compelling" and a turn down would be
"impossible to defend in public" is not a program in which I would care to
participate and is a further reason for this resignation from the Board.
Very truly yours,
/s/ George C. Caner, Jr.
George C. Caner, Jr.
***CONFIDENTIAL TREATMENT REQUESTED BY BROOKLINE BANCORP, INC.
(COMMISSION FILE NO.: 0-23695)***
"A"
"Idlehours"
P.O. Box 615
Norwich, VT 05055
February 12, 2010
Directors, Brookline Bancorp
160 Washington Street
Brookline, MA 02446
Dear Directors:
As you can understand, I have given much thought to recent events, most
especially the meeting of February 3, and to my role at Brookline. I believe
that the decision to reject the recent offer to acquire our company was
misguided and emotion-driven and that, even more overriding, the process by
which the decision was made was deeply flawed. Here in summary form are some of
my objections which form the basis for my disagreement:
1. At our meeting of February 3, after having completed their
presentation, our investment bankers were expelled from the boardroom over the
strong protest of another director and of me, your chairman. It was our wish
that they remain in order to provide comment on and analysis of the presentation
of president Perrault, who had switched from being a proponent of the
transaction to opposing it. Later in the meeting, they were similarly prohibited
from hearing a summary of his presentation.
2. At that meeting, the initial and decisive vote on the offer was taken
in Executive Session, from which I was excluded by my status as a defined
insider. I was precluded from any discussion leading up to that vote, so that
the final vote, in open session, became a mere formality. There is no
requirement that a vote be taken in Executive Session, and I regard that
procedure as abusive and a maneuver to shut me out.
3. The Board's preliminary acceptance of an offer, its abrupt termination
of negotiations, and then rejection of a much enhanced offer was inconsistent.
Because the due diligence on the acquirer uncovered no surprises, and the second
offer was much improved, this inconsistency raises serious questions about the
objectivity of the process.
4. The decision to reject the offer was reached by taking an enormous
compilation of information and analysis assembled by our investment bankers and
our own senior staff that strongly supported the offer and discarding it in
favor of Mr. Perrault's strategic vision at 50,000 feet. His vision was
unsupported, highly speculative, and in my opinion, self-serving. After a two
day strategic planning session in October and after having the offer on the
table since mid-December, Mr. Perrault did not come up with a single piece of
paper with a number on it to support his rosy picture. He did, however, verbally
suggest earnings of $1.00 per share, over three times the 2009 figure and wildly
ambitious. Raising unrealistic expectations often leads to rash decisions.
***CONFIDENTIAL TREATMENT REQUESTED BY BROOKLINE BANCORP, INC.
(COMMISSION FILE NO.: 0-23695)***
5. My memorandum to the Board dated February 1 set forth a strong case in
favor of accepting the offer. For brevity's sake, let me boil that case down to
one point: Mr. Perrault, when he initially endorsed the offer, told the Board
that our bank could not possibly achieve a level of growth in the next three to
five years that would produce a present value equal to or greater than the value
of the offer. Unless discussed in Executive Session, none of the issues raised
in that memorandum were ever addressed.
Unfortunately for the Board, Brookline Bancorp is a public company. The
directors have a fiduciary responsibility to shareholders and owe them a duty of
care and loyalty. I believe you fell sadly short. You have my resignation,
effective immediately.
Yours truly,
/s/ Richard P. Chapman, Jr.
Richard P. Chapman, Jr.
***CONFIDENTIAL TREATMENT REQUESTED BY BROOKLINE BANCORP, INC.
(COMMISSION FILE NO.: 0-23695)***
"B"
[E-mail message from Paul Perrault to Directors of Brookline Bancorp, Inc.]
Fellow Directors:
Attached is a memorandum that I will distribute to employees on Tuesday morning.
It informs them to the fact that Dick Chapman has tendered his resignation.
The memorandum was written for employees but it may be shared with anyone who
asks about this turn of events.
If you are asked about this by friends or neighbors or family members, feel free
to share the memo or what's included in it -- but it's best if you say nothing
more about this.
Also attached is the Form 8-K statement which was filed this afternoon.
With respect to inquiries from anyone in the press, I will handle those and if
you should be called by a reporter, please direct that person to me.
Thank you very much.
Paul
***CONFIDENTIAL TREATMENT REQUESTED BY BROOKLINE BANCORP, INC.
(COMMISSION FILE NO.: 0-23695)***
"C"
[Brookline Bancorp Letterhead]
Memo
To: All Employees
From: Paul Perrault
Date: February 22, 2010
Re: Dick Chapman
--------------------------------------------------------------------------------
It is with deep regret that I am writing to let you know that Dick Chapman has
resigned from the Board of Directors of Brookline Bancorp, effective
immediately. The sudden resignation of such a key leader calls for an
explanation, which is why I am writing to you today.
Dick has been a forceful and effective leader at Brookline Bank for some 35
years. He led the Company for all of those years with a steady hand and
deserves tremendous credit for the financial strength and stability that
Brookline Bank enjoys today.
In his letter to fellow directors, Dick indicated that he was resigning because
he was dissatisfied with the process by which the Board considered and rejected
an offer from another company to acquire Brookline Bancorp. The offer, put
before the Board for its consideration in early February, was rejected based on
a Board vote of 10 opposed; two in favor.
The Directors, who hold Dick in high regard, are saddened by his decision to
step down. In rejecting the offer from another company, the Board believes that
the shortest path to success for our shareholders and our employees is through
continuation as an independent company.
Until the Board of Directors appoints a new chairman, Joe Slotnik, as lead
director, will serve as board chair.
***CONFIDENTIAL TREATMENT REQUESTED BY BROOKLINE BANCORP, INC.
(COMMISSION FILE NO.: 0-23695)***
"D"
MEMORANDUM - R.P. CHAPMAN Monday, February 1, 2010
BACKGROUND ON OFFER
***
DISCUSSION OF THE OFFER
***
Summing it up, this is a fine, compelling offer. The valuation fully
satisfies any financial analysis. We have a window of opportunity that is
highly unlikely to be seen again in the foreseeable future. To turn this offer
down, in my opinion, would be foolish and reckless. It would require buying
into projections that would be pure wishful thinking and impossible to defend in
public.
I understand that decisions can be driven by more than financial analysis
and considerations. We have had a great time together as bank directors and I,
of course, have spent much of my adult life with Brookline. It will be a sad day
for all of us to close the door on this, but we have to get by the emotion and
do the right thing for our shareholders. ***
***
Ultimately, our decision must be based on our fiduciary duty to do what is
right for our shareholders. On that point I see only one answer: acceptance of
this offer.
LIBC/3773011.
