To address Helena's comment about keeping only two dominating cells, here's an example matrix which I think shows this doesn't work in general:

The above shows the state of the filter after the first two dominating cells are found. We can see there are 3 areas still free, including a 4X4 middle area. By induction if we can create empty sub-matrices, then these can be further subdivided as well in the same manner which can be seen once the 7 cell is handled. There's some upper limit to the number to this for any given N that, if generalized, might be potentially useful for optimization.