SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
YONKERS FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
<PAGE>
[YONKERS FINANCIAL CORPORATION LETTERHEAD]
December 29, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Yonkers Financial
Corporation (the "Company"), I cordially invite you to attend the Annual Meeting
of Stockholders. The meeting will be held at 4:30 p.m. on January 27, 1999 at
the principal office of The Yonkers Savings and Loan Association, FA, located at
One Manor House Square, Yonkers, New York.
An important aspect of the meeting process is the stockholder vote on
corporate business items. I urge you to exercise your rights as a stockholder to
vote and participate in this process. Stockholders are being asked to consider
and vote upon the election of two directors, to approve certain amendments to
the Yonkers Financial Corporation 1996 Stock Option and Incentive Plan and the
Yonkers Financial Corporation 1996 Management Recognition Plan, and the
ratification of the appointment of KPMG Peat Marwick LLP as independent auditors
of the Company for the fiscal year ending September 30, 1999. The Board of
Directors has carefully considered these proposals and unanimously recommends
that you vote "For" all of the proposals.
In addition to the annual stockholder vote on corporate business items,
the meeting will include management's report to you on Yonkers Financial
Corporation's 1998 financial and operating performance.
I encourage you to attend the meeting in person. WHETHER OR NOT YOU
ATTEND THE MEETING, HOWEVER, PLEASE READ THE ENCLOSED PROXY STATEMENT AND THEN
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE POSTAGE
PREPAID ENVELOPE PROVIDED AS PROMPTLY AS POSSIBLE. This will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented. Please note that you may vote in person at the meeting even if you
have previously returned the proxy.
Thank you for your attention to this important matter.
Sincerely,
Richard F. Komosinski
President and Chief Executive Officer
<PAGE>
YONKERS FINANCIAL CORPORATION
6 Executive Plaza
Yonkers, New York 10701
(914) 965-2500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on January 27, 1999
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Yonkers Financial Corporation (the "Company") will be held at the
principal office of The Yonkers Savings and Loan Association, FA, located at One
Manor House Square, Yonkers, New York, at 4:30 p.m. New York time, on January
27, 1999.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company;
2. The approval of certain amendments to the Yonkers Financial
Corporation 1996 Stock Option and Incentive Plan to provide
for the acceleration of the vesting of the awards in the event
of a change of control;
3. The approval of certain amendments to the Yonkers Financial
Corporation 1996 Management Recognition Plan to provide for
the acceleration of the vesting of the awards in the event of
a change of control;
4. The ratification of the appointment of KPMG Peat Marwick LLP
as the independent auditors of the Company for the fiscal year
ending September 30, 1999;
and such other matters as may properly come before the Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on December 4, 1998
are the stockholders entitled to vote at the Meeting and any adjournments
thereof. A complete list of stockholders entitled to vote at the Meeting will be
available for inspection by stockholders at the offices of the Company during
the ten days prior to the Meeting, as well as at the Meeting.
You are requested to complete and sign the enclosed form of proxy,
which is solicited on behalf of the Board of Directors, and to mail it promptly
in the enclosed envelope. The proxy will not be used if you attend and vote at
the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
William G. Bachop
Chairman of the Board
Yonkers, New York
December 29, 1998
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF
MAILED WITHIN THE UNITED STATES.
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<PAGE>
PROXY STATEMENT
YONKERS FINANCIAL CORPORATION
6 Executive Plaza
Yonkers, New York 10701
(914) 965-2500
ANNUAL MEETING OF STOCKHOLDERS
January 27, 1999
This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of Yonkers Financial Corporation (the
"Company"), the parent company of The Yonkers Savings and Loan Association, FA
("Yonkers Savings" or the "Association"), of proxies to be used at the Annual
Meeting of Stockholders of the Company (the "Meeting") which will be held at the
principal office of the Association, located at One Manor House Square, Yonkers,
New York, on January 27, 1999 at 4:30 p.m. New York time, and all adjournments
of the Meeting. The accompanying Notice of Annual Meeting and this Proxy
Statement are first being mailed to stockholders on or about December 29, 1998.
At the Meeting, stockholders of the Company are being asked to consider
and vote upon the election of two directors, to approve certain amendments to
the Yonkers Financial Corporation 1996 Stock Option and Incentive Plan and the
Yonkers Financial Corporation 1996 Management Recognition Plan, and the
appointment of KPMG Peat Marwick LLP as independent auditors for the Company.
Vote Required and Proxy Information
All shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the proposals set forth
in this Proxy Statement. The Company does not know of any matters, other than as
described in the Notice of Annual Meeting, that are to come before the Meeting.
If any other matters are properly presented at the Meeting for action, the
persons named in the enclosed form of proxy and acting thereunder will have the
discretion to vote on such matters in accordance with their best judgment.
The directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. The proposals to approve certain amendments to the
Yonkers Financial Corporation 1996 Stock Option and Incentive Plan, to approve
certain amendments to the Yonkers Financial Corporation 1996 Management
Recognition Plan, and the ratification of the appointment of KPMG Peat Marwick
LLP as independent auditors each require the affirmative vote of a majority of
shares present in person or represented by proxy at the Meeting and entitled to
vote on the matter. Proxies marked to abstain with respect to these proposals
have the same effect as votes against the proposal. Broker non-votes have no
effect on the vote. One-third of the shares of the Common Stock, present in
person or represented by proxy, shall constitute a quorum for purposes of the
Meeting. Abstentions and broker non-votes are counted for purposes of
determining a quorum.
A proxy given pursuant to the solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy, (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting, or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Joseph L.
Macchia, Secretary, Yonkers Financial Corporation, 6 Executive Plaza, Yonkers,
New York 10701.
1
<PAGE>
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on December 4, 1998
will be entitled to one vote for each share of Common Stock then held. As of
that date, the Company had 2,726,239 shares of Common Stock issued and
outstanding. The following table sets forth information regarding share
ownership of those persons or entities known by management to beneficially own
more than five percent of the Common Stock and all directors and executive
officers of the Company and the Association as a group.
<TABLE>
<CAPTION>
Shares
Beneficially
Owned at Percent
Beneficial Owner December 4, 1998 of Class
---------------- ---------------- --------
<S> <C> <C>
Five Percent Beneficial Owners
- ------------------------------
Yonkers Financial Corporation Employee Stock Ownership Plan(1) 214,245 7.86%
6 Executive Plaza
Yonkers, New York 10701
Wellington Management Co., LLP(2) 254,400 9.33
75 State Street
Boston, Massachusetts 02109
First Financial Fund, Inc.(3) 168,000 6.16
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102-4077
Gould Investors, L.P.(4) 241,300 8.85
60 Cutter Mill Road, Suite 303
Great Neck, New York 11021-3190
Directors and executive officers of the Company 258,349 9.51
and the Association, as a group (10 persons)
</TABLE>
<PAGE>
- -------------------------
(1) The amount reported represents shares held by the Employee Stock
Ownership Plan ("ESOP"), of which 71,415 shares have been allocated to
accounts of participants. Community Bank, N.A., the trustee of the
ESOP, may be deemed to beneficially own the shares held by the ESOP
which have not been allocated to accounts of participants. Participants
in the ESOP are entitled to instruct the trustee as to the voting of
shares allocated to their accounts under the ESOP. Unallocated shares
held in the ESOP's suspense account or allocated shares for which no
voting instructions are received are voted by the trustee in the same
proportion as allocated shares voted by participants.
(2) Based on information included in a Schedule 13G/A filed by Wellington
Management Co., LLP with the Securities and Exchange Commission on
February 10, 1998. Wellington Management Co., LLP is an investment
advisor which claimed shared voting power in 82,400 shares of Common
Stock and shared dispositive power with respect to all of the shares of
Common Stock reported in the Schedule 13G/A. More than five percent of
said shares of Common Stock owned by Wellington Management Co., LLP are
owned in its capacity as investment advisor on behalf of First
Financial Fund, Inc.
(3) Based on information included in Schedule 13G filed by First Financial
Fund, Inc. with the Securities and Exchange Commission on February 11,
1998. First Financial Fund is an Investment Company which claimed sole
voting power and shared dispositive with respect to all of the shares
of Common Stock reported in the Schedule 13G.
(4) Based on information included in a Schedule 13D/A filed by Gould
Investors L.P. with the Securities and Exchange Commission on July 7,
1998. Gould Investors L.P. is a limited partnership engaged primarily
in the real estate business. It also invests in equity securities of
other entities. Gould Investors L.P. reported sole voting power and
sole dispositive power with respect to all of the shares of Common
Stock reported in the Schedule 13D/A. An additional 9,200 shares of
Common Stock are owned by persons or entities who may be deemed
affiliates of Gould Investors L.P.
2
<PAGE>
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of seven
members, each of whom is also a director of the Association. Directors of the
Company are generally elected to serve for a three-year term or until their
respective successors shall have been elected and shall qualify. Approximately
one-third of the directors are elected annually.
The following table sets forth certain information regarding the Board
of Directors of the Company and the Association, including their terms of office
and the nominees for election as director. It is intended that the proxies
solicited on behalf of the Board of Directors (other than proxies in which the
vote is withheld as to the nominee) will be voted at the Meeting for the
election of the nominees identified in the following table. If a nominee is
unable to serve, the shares represented by all such proxies will be voted for
the election of such substitute as the Board of Directors may recommend. At this
time, the Board of Directors knows of no reason why the nominees might be unable
to serve, if elected. Except as described herein, there are no arrangements or
understandings between any director or nominee and any other person pursuant to
which such director or nominee was selected.
<TABLE>
<CAPTION>
Shares of Common
Term Stock Beneficially Percent
to Owned at of
Name Age Position(s) Held Director Since(1) Expire December 4, 1998(2) Class
- --------------------------- ------ ----------------------------- ------------------ --------- ------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
- --------
Richard F. Komosinski 56 Director, President and Chief 1977 2002 71,569 2.63%
Executive Officer
Michael J. Martin 44 Director 1992 2002 9,285 0.34
DIRECTORS CONTINUING IN OFFICE
- ------------------------------
William G. Bachop 69 Chairman of the Board 1982 2000 23,428 0.86
Donald R. Angelilli 60 Director 1982 2000 19,428 0.71
Eben T. Walker 50 Director 1994 2000 19,103 0.70
P. Anthony Sarubbi 72 Vice Chairman of the Board 1985 2001 28,428 1.04
Charles D. Lohrfink 70 Director 1985 2001 23,126 0.85
</TABLE>
- ----------------------------
(1) Includes service as a director of the Association.
(2) Includes shares held directly, as well as shares held in retirement
accounts, shares allocated to the ESOP accounts of certain of the named
persons, shares held by certain members of the named individuals'
families, or shares held by trusts of which the named individual is a
trustee or substantial beneficiary, with respect to which shares the
named individuals may be deemed to have sole voting and/or investment
power. The amount also includes awards of 25,714 shares of restricted
stock under the Yonkers Financial Corporation 1996 Management
Recognition Plan as of December 4, 1998 and 77,126 options under the
Yonkers Financial Corporation 1996 Stock Option and Incentive Plan as
of December 4, 1998.
The business experience of each director and director nominee is set
forth below. All directors have held their present positions for at least the
past five years, except as otherwise indicated.
Richard F. Komosinski. Mr. Komosinski is President and Chief Executive
Officer of the Association and the Company, positions he has held since 1977 and
1995, respectively. Mr. Komosinski has been employed by the Association since
1960 and has held a variety of positions. As the Association's Chief Executive
Officer, Mr. Komosinski is responsible for all aspects of the Association's
operations.
Michael J. Martin. Mr. Martin is Vice President of Herbert G. Martin,
Inc., an electrical contracting company located in Yonkers, New York. He has
been employed by this company since 1981 and was promoted to his present
position in 1986.
3
<PAGE>
William G. Bachop. Mr. Bachop is currently retired. Prior to his
retirement in May 1992, he was a professional engineer and President of Herbert
G. Martin, Inc., an electrical contracting company located in Yonkers, New York,
for 43 years.
Donald R. Angelilli. Mr. Angelilli has been a real estate broker since
1992. He is currently employed by Weichert Realtors located in Toms River, New
Jersey. Prior to 1992, he was employed as a building contractor and Vice
President of Frank Angelilli Construction Company.
Eben T. Walker. Mr. Walker is President of Graphite Metallizing
Corporation, a manufacturing company located in Yonkers, New York. Mr. Walker
has been employed by this company since 1979 and was promoted to his present
position in 1985.
P. Anthony Sarubbi. Mr. Sarubbi is a consulting engineer and President
of P. Anthony Sarubbi, Inc., a general contracting company located in Mt.
Vernon, New York. He has held his present position since 1982.
Charles D. Lohrfink. Mr. Lohrfink is currently retired. Prior to his
retirement in 1990, he was Public Affairs Director for Consolidated Edison
located in New York, New York for 15 years and employed by Consolidated Edison
for 43 years.
Board of Directors' Meetings and Committees
Board and Committee Meetings of the Company. Meetings of the Company's
Board of Directors are generally held on a quarterly basis. The Board of
Directors of the Company held eleven meetings during fiscal 1998. No incumbent
director attended fewer than 75% of the total number of meetings held by the
Board of Directors and by all committees of the Board of Directors on which he
served during the fiscal year.
The Board of Directors of the Company has standing Executive, Audit,
Compensation, Investment and Nominating committees.
The Executive Committee generally acts in lieu of the full Board of
Directors between Board meetings. The members of this Committee are Directors
Sarubbi (Chairman), Bachop, Komosinski and Lohrfink. Alternative members of this
Committee are Directors Martin and Walker. This Committee did not meet during
fiscal 1998.
The Audit Committee reviews audit reports and related matters to ensure
effective compliance with regulations and internal policies and procedures. This
Committee also acts as a liaison between the Company's internal and external
auditors and the Board. Directors Angelilli (Chairman), Martin, Sarubbi, and
Walker currently comprise this committee.
The Committee met once during fiscal 1998.
The Compensation Committee reviews and approves all executive officers'
compensation plans. The current members of this Committee are Directors Bachop
(Chairman), Lohrfink, and Sarubbi. The Committee met four times during fiscal
1998.
The Investment Committee, comprised of Directors Walker (Chairman),
Bachop, Komosinski and Lohrfink, reviews, formulates, establishes policy, sets
appropriate goals and limitations, and makes recommendations to the Board with
respect to investments. The Committee did not meet during fiscal 1998.
The Nominating Committee meets annually in order to nominate candidates
for membership on the Board of Directors. This Committee is comprised of
Directors Komosinski (Chairman), Bachop, Martin and Walker. While the Board of
Directors will consider nominees recommended by stockholders, the Committee has
not actively solicited such nominations. Pursuant to the Company's Bylaws,
nominations by stockholders must be delivered in writing to the Secretary of the
Company at least 30 days before the date of the Meeting. The Committee met once
during fiscal 1998.
Board and Committee Meetings of the Association. The Association's
Board of Directors meets monthly and may have additional special meetings upon
the request of the Chairman or at least three Directors. The Board of Directors
met thirteen times during the fiscal year ended September 30, 1998. During the
fiscal year, no director of the Association attended fewer than 75% of the
aggregate of the total number of Board meetings and the total number of meetings
held by the committees of the Board of Directors on which he served.
4
<PAGE>
The Association has standing Executive, Business Development and
Building, Audit, Loan, Investment, New Directors and Compensation Committees.
The Executive Committee is comprised of Directors Sarubbi (Chairman),
Bachop, Komosinski and Lohrfink. Alternative members are Directors Martin and
Walker. The Executive Committee meets on an as-needed basis between Board
meetings and generally has the authority of the full Board. The Committee met
six times during fiscal 1998.
The Business Development and Building Committee meets as needed to
review the Association's business strategies and strategic planning alternatives
and makes recommendations to the full Board. Members of this Committee include
Directors Lohrfink (Chairman), Angelilli, Komosinski and Sarubbi. The Committee
met five times during fiscal 1998.
The Audit Committee, comprised of Directors Angelilli (Chairman),
Lohrfink, Martin, Sarubbi and Walker, meets quarterly with the Association's
internal auditor to oversee and monitor the Association's internal auditing
function. This Committee also meets periodically with the Association's external
auditors. This Committee met four times during fiscal 1998.
The Loan Committee generally meets monthly to review the Association's
lending policies and underwriting standards. Members of the Committee include
Directors Martin (Chairman), Angelilli, Komosinski and Walker. The Committee met
eight times during fiscal 1998.
The Investment Committee, comprised of Directors Walker (Chairman),
Bachop, Komosinski and Martin, reviews, formulates, establishes policy, sets
appropriate goals and limitations, and makes recommendations to the Board with
respect to investments. The Committee met twice during fiscal 1998.
The New Directors Committee meets on an as-needed basis to select
candidates to fill vacancies on the Association's Board of Directors. During
fiscal 1998, the New Directors Committee was comprised of Directors Bachop
(Chairman), Angelilli, Komosinski, Lohrfink, Martin, Sarubbi and Walker. This
Committee did not meet during fiscal 1998.
The Compensation Committee is responsible for reviewing and making
recommendations to the Board regarding all benefits, personnel policies and
compensation issues. The current members of the Compensation Committee are
Directors Bachop (Chairman), Komosinski, Lohrfink and Sarubbi. This Committee
met six times during fiscal 1998.
Director Compensation
Effective February 1998, each of the directors, other than the Chairman
and the Vice Chairman, received a fee of $750 per meeting attended as
compensation for service on the Board of the Company. The Chairman and Vice
Chairman of the Board of the Company received $800 and $775, respectively, for
Board meetings attended. In addition, all directors received a retainer fee of
$6,000 as compensation for serving as a member of the Board. Also, all
non-employee members of the Board received an additional $275 for each committee
meeting attended and committee Chairmen received $300 per committee meeting
attended.
Effective February 1998, each of the directors, other than the Chairman
and the Vice Chairman, received a fee of $500 per meeting attended as
compensation for service on the Board of the Association. The Chairman and Vice
Chairman of the Board of the Association received $600 and $550, respectively,
for Board meetings attended. Also, all non-employee members of the Board
received an additional $200 for each committee meeting attended and committee
Chairmen received $225 per committee meeting attended. Director Emeriti received
a fee of $450 per Board meeting.
Executive Compensation
The Company has not paid any compensation to its executive officers
since its formation. The Company does not presently anticipate paying any
compensation to such persons until it becomes actively involved in the operation
or acquisition of businesses other than the Association.
5
<PAGE>
The following table sets forth information concerning the compensation
for services in all capacities to the Company for the fiscal year ended
September 30, 1998 to Richard F. Komosinski, the Company's Chief Executive
Officer, Joseph L. Macchia, the Company's Vice President and Secretary, Joseph
D. Roberto, the Company's Vice President, Treasurer and Chief Financial Officer,
and Philip A. Guarnieri, the Company's Vice President, all of whose aggregate
compensation exceeded $100,000 during any reported fiscal period.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term Compensation
----------------------
Annual Compensation Awards
------------------- ------
Restricted Securities
Other Annual Stock Underlying All Other
Salary Bonus Compensation Award(s) Options/ Compensation
Name and Principal Position Year ($) ($) ($)(1) ($) SARs(#) ($)
--------------------------- ---- --- --- ------ --- ------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Richard F. Komosinski, President, Chief
Executive Officer and Director 1998 $163,939(2) $32,820 --- --- --- $ 560(7)
1997 156,954(3) 16,360 --- $459,728(5) 85,698(6) 1,539(7)
1996 147,051(4) 18,083 --- --- --- 3,571(7)
Joseph L. Macchia, Vice President and
Secretary 1998 $85,762 $24,350 --- --- --- $ 487(8)
1997 81,754 10,000 --- $147,110(12) 28,566(15) 1,013(8)
1996 76,995 9,285 --- --- --- 2,129(8)
Joseph D. Roberto, Vice President, Treasurer
and Chief Financial Officer 1998 $78,428 $24,350 --- --- --- $ 448(9)
1997 73,577 9,760 --- $147,110(13) 28,566(16) 928(9)
1996 69,064 9,019 --- --- --- 1,922(9)
Philip A. Guarnieri, Vice President 1998 $83,340 $24,350 --- --- 3,000(17) $ 448(10)
1997 78,337 4,120 --- $69,375(14) 15,003(18) 373(10)
1996 14,846(11) --- --- --- --- 90(10)
</TABLE>
- ---------------
(1) Pursuant to SEC rules, the table above excludes perquisites and other
personal benefits which do not exceed the lesser of $50,000 or 10% of
salary and bonus.
(2) Includes directors and retainer fees of $15,500 paid to Mr. Komosinski
by the Company and Association.
(3) Includes directors fees of $13,500 paid to Mr. Komosinski.
(4) Includes directors fees of $11,600 paid to Mr. Komosinski.
(5) Pursuant to the Yonkers Financial Corporation 1996 Management
Recognition Plan, on October 30, 1996 the Company granted to Mr.
Komosinski an award of 35,707 shares of restricted common stock, which
vests in five equal installments beginning on October 30, 1997. As of
September 30, 1998, the 28,566 unvested restricted shares of common
stock awarded Mr. Komosinski had an aggregate value of $435,632 based
on the closing price per share as reported on the Nasdaq National
Market on such date.
(6) Pursuant to the Yonkers Financial Corporation 1996 Stock Option and
Incentive Plan, on October 30, 1996 the Company granted to Mr.
Komosinski options to purchase 85,698 shares of common stock at a
market price on the date of grant of $12.875 per share. Such options
vest in five equal installments beginning October 30, 1997.
(7) Includes the Association's contributions of $0, $1,035 and $3,067 to
the 401(k) Plan and life insurance premiums paid by the Association of
$560, $504, and $504 on behalf of Mr. Komosinski for the years 1998,
1997 and 1996, respectively.
(8) Includes the Association's contributions of $0, $600 and $1,726 to the
401(k) Plan and life insurance premiums paid by the Association of
$487, $413 and $403 on behalf of Mr. Macchia for the years 1998, 1997
and 1996, respectively.
(9) Includes the Association's contributions of $0, $555 and $1,562 to the
401(k) Plan and life insurance premiums paid by the Association of
$448, $373 and $360 on behalf of Mr. Roberto for the years 1998, 1997
and 1996, respectively.
(10) Life insurance premiums paid by the Association of $448, $373 and $90
on behalf of Mr. Guarnieri for the years 1998, 1997 and 1996,
respectively.
(11) Mr. Guarnieri began employment with the Company on July 8, 1996.
(12) Pursuant to the Yonkers Financial Corporation 1996 Management
Recognition Plan, on October 30, 1996 the Company granted to Mr.
Macchia an award of 11,426 shares of restricted common stock, which
vests in five equal installments beginning on October 30, 1997. As of
September 30, 1998, the 9,140 unvested restricted shares of common
stock awarded Mr. Macchia had an aggregate value of $139,385 based on
the closing price per share as reported on the Nasdaq National Market
on such date.
(13) Pursuant to the Yonkers Financial Corporation 1996 Management
Recognition Plan, on October 30, 1996 the Company granted to Mr.
Roberto an award of 11,426 shares of restricted common stock, which
vests in five equal installments beginning on October 30, 1997. As of
September 30, 1998, the 9,140 unvested restricted shares of common
stock awarded
6
<PAGE>
Mr. Roberto had an aggregate value of $139,385 based on the closing
price per share as reported on the Nasdaq National Market on such date.
(14) Pursuant to the Yonkers Financial Corporation 1996 Management
Recognition Plan, on February 18, 1997 the Company granted to Mr.
Guarnieri an award of 5,000 shares of restricted common stock, which
vests in five equal installments beginning on February 18, 1998. As of
September 30, 1998, the 4,000 unvested restricted shares of common
stock awarded Mr. Guarnieri had an aggregate value of $61,000 based on
the closing price per share as reported on the Nasdaq National Market
on such date.
(15) Pursuant to the Yonkers Financial Corporation 1996 Stock Option and
Incentive Plan, on October 30, 1996 the Company granted to Mr. Macchia
options to purchase 28,566 shares of common stock at a market price on
the date of grant of $12.875 per share. Such grants vest in five equal
installments beginning on October 30, 1997.
(16) Pursuant to the Yonkers Financial Corporation 1996 Stock Option and
Incentive Plan, on October 30, 1996 the Company granted to Mr. Roberto
options to purchase 28,566 shares of common stock at a market price on
the date of grant of $12.875 per share. Such grants vest in five equal
installments beginning on October 30, 1997.
(17) Pursuant to the Yonkers Financial Corporation 1996 Stock Option and
Incentive Plan, the Company granted to Mr. Guarnieri, effective October
30, 1997, options to purchase 3,000 shares of common stock at a market
price on the date of grant of $21.625 per share. Such grants vest in
five equal installments beginning on October 30, 1998.
(18) Pursuant to the Yonkers Financial Corporation 1996 Stock Option and
Incentive Plan, on October 30, 1996 the Company granted to Mr.
Guarnieri options to purchase 15,003 shares of common stock at a market
price on the date of grant of $12.875 per share. Such grants vest in
five equal installments beginning on October 30, 1997.
<PAGE>
The following table provides information regarding stock options. No
stock appreciation rights were granted during fiscal 1998.
<TABLE>
<CAPTION>
====================================================================================================================================
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- ------------------------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
- ------------------------------------------------------------------------------------------------------------------------------------
% of Total
Options Exercise
Options Granted to or Base
Granted Employees Price Expiration
Name (#) in Fiscal Year ($/Sh) Date 5% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Philip A. Guarnieri 3,000 100% $21.625 10/30/07 $40,845 $103,455
====================================================================================================================================
</TABLE>
7
<PAGE>
The following table provides information as to the value of the options
held by the Company's Named Officer, during fiscal 1998, none of which have been
exercised.
<TABLE>
<CAPTION>
===================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUES AT SEPTEMBER 30, 1998
- -------------------------------------------------------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)(1)
- -------------------------------------------------------------------------------------------------------------------
Shares
Acquired on Value
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard F. Komosinski --- $--- 17,140 68,558 $40,708 $162,825
Joseph D. Roberto --- $--- 5,713 22,853 13,568 54,276
Joseph L. Macchia --- $--- 5,713 22,853 13,568 54,276
Philip A. Guarnieri --- $--- 3,001 15,002(2) 7,127 35,630
===================================================================================================================
</TABLE>
- -----------------
(1) Represents the aggregate market value (market price of the Common Stock
less the exercise price) of the option granted based upon the closing
price of $15.25 per share of the Common Stock as reported on the Nasdaq
National Market on September 30, 1998.
(2) In fiscal 1997, Mr. Guarnieri was granted options to purchase 15,003
shares of the Company's common stock at an exercise price of $12.875
per share. In fiscal 1998, Mr. Guarnieri was granted options to
purchase an additional 3,000 shares of the Company's common stock at an
exercise price of $21.625 per share.
Employment Agreement
The Company has entered into an employment agreement with Mr.
Komosinski. The employment agreement is designed to assist the Association in
maintaining a stable and competent management team. The continued success of the
Company depends to a significant degree on the skills and competence of its
President and Chief Executive Officer. The employment agreement provides for an
annual base salary in an amount not less than such individual's current salary
and an initial term of three years. The agreement provides that it shall be
extended directly for a period of one day (so that its term is always three
years) unless the Company gives a 90-day notice that it will not extend the
agreement. The agreement provides for termination upon the employee's death, for
cause or in certain events specified in the Agreement. The employment agreement
is also terminable by the employee upon 90 days' notice to the Company.
In the event Mr. Komosinski is involuntarily terminated in connection
with a change in control, the employment agreement provides for payment to Mr.
Komosinski of a lump sum payment equal to 299% of his base compensation, plus
the maintenance of his health insurance for the remaining term of the contract,
in lieu of the payment of his salary. Such provision could have the effect of
deterring an attempt to acquire control of the Company by increasing the
acquiror's expenses if any acquisition occurs. The termination payment is
subject to reduction by the amount of all other compensation to Mr. Komosinski
deemed for purposes of the Internal Revenue Code of 1986, as amended (the
"Code") to be contingent on a "change in control," and may not exceed three
times the employee's average annual compensation over the most recent five-year
period or be non-deductible by the Association for federal income tax purposes.
Based on his salary at September 30, 1998, if Mr. Komosinski had been
terminated as of such date in connection with a change in control, under
circumstances entitling him to severance pay as described above, he would have
been entitled to receive a lump sum cash payment of approximately $526,605.
8
<PAGE>
Change in Control Severance Agreements
The Company has entered into three year change in control severance
agreements with Vice Presidents Joseph L. Macchia, Joseph D. Roberto and Philip
A. Guarnieri. Each agreement provides for daily extensions on the same basis as
the employment contract discussed above. Each agreement provides for termination
for cause or upon the occurrence of certain events designated therein.
Each agreement provides for payment to the employee of 299% of the
employee's base compensation and the continued payment of health insurance
coverage in the event employment terminates involuntarily in connection with a
change in control of the Company. This termination payment is subject to
reduction by the amount of all other compensation to the employee deemed for
purposes of the Code to be contingent on a "change in control," and may not
exceed three times the employee's average annual compensation over the most
recent five-year period or be non-deductible by the Association for federal
income tax purposes. Based upon Messrs. Macchia, Roberto and Guarnieri's
salaries at September 30, 1998, if a change of control occurs with the result
that they were terminated, they would be entitled to receive a lump sum cash
payment of approximately $281,538, $257,056 and $222,857, respectively.
Benefit Plans
General. Yonkers Savings currently provides health care benefits to its
employees, including hospitalization, major medical, life and disability
insurance, subject to certain deductibles and copayments by employees. The
Association also offers a cafeteria plan to its employees which enables
participating employees to defer up to $5,000 of each employee's annual salary
to cover, among other things, dental care, eye care expense, dependent care and
medical insurance premiums.
Defined Benefit Pension Plan. The Association sponsors a defined
benefit pension plan for its employees (the "Pension Plan"). Full-time salaried
employees are eligible to participate in the Pension Plan following the
completion of one year of service (1,000 hours worked during a continuous
12-month period) and attainment of 21 years of age. A participant must reach
five years of service before attaining a vested interest in his or her
retirement benefits, after which such participant is 100% vested. The Pension
Plan is funded solely through contributions made by Yonkers Savings. There was
no Pension Plan contribution for the 1998 plan year due to benefit adjustments
to the plan.
The benefit provided to a participant at normal retirement age
(generally age 65) is based on the average of the participant's basic annual
compensation during the five consecutive calendar years of service within which
yields the highest average compensation ("average annual compensation").
Effective January 1, 1998, the annual benefit provided to a participant who
retires at age 65 is equal to 1.25% of average annual compensation for each year
of service subject to offset of the participant's anticipated Social Security
benefits. An individual's annual benefit is limited to the lesser of 100% of his
or her annual average compensation or $125,000. The Pension Plan also provides
for death benefits.
The following table sets forth, as of September 30, 1998, estimated
annual pension benefits for individuals at age 65 payable in the form of a life
annuity under the most advantageous plan provisions for various levels of
compensation and years of service. The benefits set forth in this table are
based upon the assumption that the retirement plan continues in its present
form, are in addition to those which may be received as social security
benefits, and do not reflect benefits payable under the ESOP. At September 30,
1998, the estimated years of credited service of Mr. Komosinski, Mr. Macchia,
Mr. Roberto and Mr. Guarnieri are 35, 26, 24 and 1 year, respectively.
9
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================================
PENSION PLAN TABLE
- ---------------------------------------------------------------------------------------------------------------------
Average
Eligible 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
Compensation Service Service Service Service Service Service
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$100,000 $23,680 $31,873 $40,066 $48,259 $56,453 $63,758
125,000 30,183 40,618 51,053 61,488 71,924 81,055
150,000 36,685 49,362 62,040 74,717 87,395 98,352
175,000 36,909 49,587 62,264 74,941 87,619 98,576
200,000 36,909 49,587 62,264 74,941 87,619 98,576
225,000 36,909 49,587 62,264 74,941 87,619 98,576
=====================================================================================================================
</TABLE>
Generally, an employee who has attained age 55 has the right to elect
to immediately begin receiving adjusted retirement benefits less than those
indicated in the table upon any separation from service with the Association.
The Internal Revenue Code places a maximum limit on the benefits that can be
provided under qualified retirement plans such as the Pension Plan. For 1998,
the annual Internal Revenue Code limit for a straight life annuity benefit at
normal retirement age was $130,000, which amount is actuarially reduced for
participants who retire and begin receiving benefits early.
Supplemental Executive Retirement Agreement. The Association has
entered into a non-qualified Supplemental Executive Retirement Agreement
("SERA") with President Komosinski which provides him with a supplemental
retirement benefit equal to what would have been provided to him under the
Pension Plan but for the limitations contained in Sections 401, 414 and 415 of
the Code. Such benefit shall be payable upon retirement in form of a lump sum
distribution. The SERA is presently unfunded and all obligations arising
thereunder are payable from the general assets of the Association.
The Association may establish an irrevocable grantor trust in
connection with the SERA. This trust would be funded with contributions from the
Association for the purpose of providing the benefits promised under the terms
of the SERA. Under such circumstances, the SERA participant would have only the
rights of an unsecured creditor with respect to the trust's assets, and would
not recognize income with respect to benefits provided by the SERA until such
benefits are received by the participant. The assets of the grantor trust would
be considered part of the general assets of the Association and would be subject
to the claims of the Association's creditors in the event of the Association's
insolvency. Earnings on the trust's assets would be taxable to the Association.
The trustee of the trust may invest the trust's assets in the Company's Common
Stock.
401(k) Savings Plan. The Association has a qualified, tax-exempt
savings plan with a cash or deferred feature qualifying under Section 401(k)
(the "401(k) Plan") of the Code. All full-time salaried employees who have
attained age 21 and completed one year of employment, during which they worked
at least 250 hours, are eligible to participate.
Participants are permitted to make salary reduction contributions to
the 401(k) Plan of up to 15.0% of the participant's annual salary up to a
maximum of $10,000 for calendar year 1998. There were no matching contributions
for 1998. All participant contributions and earnings are fully and immediately
vested. All matching contributions are vested at a rate of 20% per year over a
five-year period beginning upon the completion of the second year of service.
However, in the event of normal retirement, permanent disability or death, a
participant will automatically become 100% vested in the value of all matching
contributions and earnings thereon.
The funds included in the 401(k) Plan are invested at the direction of
the participant into one of the investment options available under the 401(k)
Plan, which includes the Company's Common Stock. Changes in investment
directions among the funds are currently permitted on a monthly basis pursuant
to procedures established by the Plan Administrator. Each participant receives a
quarterly statement which provides information regarding, among other
10
<PAGE>
things, the market value of his investments and contributions made to the 401(k)
Plan on his behalf. Participants are permitted to borrow against their account
balance in the 401(k) Plan.
Employee Stock Ownership Plan. The Boards of Directors of Yonkers
Savings and the Company adopted the ESOP for the benefit of full-time employees
of Yonkers Savings. The ESOP is designed to meet the requirements of an employee
stock ownership plan as described at Section 4975(e)(7) of the Code and Section
407(d)(6) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and, as such, the ESOP is empowered to borrow in order to finance
purchases of the Company's Common Stock.
The ESOP was funded with a loan from the Company. The proceeds from
this loan were used by the ESOP to purchase 8% of the Common Stock issued in the
Conversion. The interest rate paid on this loan is the Internal Revenue Service
("IRS") prescribed applicable federal rate at the time of origination. The ESOP
will repay the loan using periodic tax-deductible contributions from the
Association over a 10-year period. As a qualified employee pension plan under
Section 401(a) of the Code, the ESOP is in the form of a stock bonus plan and
provides for contributions, predominantly in the form of either the Company's
Common Stock or cash, which will be used within a reasonable period after the
date of contributions primarily to purchase the Company Common Stock. The
maximum tax-deductible contribution by the Association in any year is an amount
equal to the maximum amount that may be deducted by the Association under
Section 404 of the Code, subject to reduction based on contributions to other
tax-qualified employee plans. The Association receives a tax deduction equal to
the amount it contributes to the ESOP. The Association will not make
contributions if such contributions would cause the Association to violate its
regulatory capital requirements. The assets of the ESOP are invested primarily
in the Company's Common Stock.
From time to time, the ESOP may purchase additional shares of Common
Stock for the benefit of plan participants through purchases of outstanding
shares in the market, upon the original issuance of additional shares by the
Company or upon the sale of shares held in treasury by the Company. Such
purchases, which are not currently contemplated, would be subject to
then-applicable laws, regulations and market conditions.
All full-time salaried employees of the Association are eligible to
participate in the ESOP after they attain age 21 and complete one year of
service during which they work at least 1,000 hours. Employees are credited for
years of service to the Association prior to the adoption of the ESOP for
participation and vesting purposes. The Association's contribution to the ESOP
is allocated among participants on the basis of compensation. Each participant's
account is credited with cash and shares of Company Common Stock based upon
compensation earned during the year with respect to which the contribution is
made. A participant will become fully vested in his or her ESOP account at a
rate of 20% per year over a five-year period beginning upon the completion of
the second year of service. ESOP participants are entitled to receive
distributions from their ESOP accounts only upon termination of service.
Distribution will be made in cash and in whole shares of the Company's Common
Stock. Fractional shares will be paid in cash. Participants will not incur a tax
liability until a distribution is made.
Participating employees are entitled to instruct the trustee of the
ESOP as to how to vote the shares of Company Common Stock held in their account.
The trustee, who has dispositive power over the unallocated shares in the ESOP
trust fund, is not affiliated with the Company or Yonkers Savings. The ESOP may
be amended by the Board of Directors of the Company, except that no amendment
may be made which would reduce the interest of any participant in the ESOP trust
fund or divert any of the assets of the ESOP trust fund for purposes other than
the benefit of participants or their beneficiaries.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
The Company's Compensation Committee has responsibility for reviewing
the compensation policies and plans of the Association and its affiliates. The
policies and plans established are designed to enhance both short-term and
long-term operational performance of the Association and to build stockholder
value through appreciation in the Company's Common Stock price.
One of the Committee's primary objectives in the compensation area is
to develop and maintain compensation plans which provide the Association with
the means of attracting and retaining quality executives at competitive
11
<PAGE>
compensation levels and to implement compensation plans which seek to motivate
executives to perform to the full extent of their abilities and which seek to
enhance stockholder value by aligning closely the financial interests of the
Company's executives with those of its stockholders. In determining compensation
levels, plans and adjustments, the Committee takes into account, among other
things, compensation reviews made by third parties each year. These studies are
used to compare the compensation levels of Association personnel to those of
personnel at other local financial institutions.
During fiscal 1998, the Company entered into an employment contract
with Mr. Komosinski which contained terms similar to the Association's previous
contract with Mr. Komosinski except that it automatically renews daily rather
than annually. The principal purpose of this provision was to assure that Mr.
Komosinski's contract continues to have the three year term originally
established by the Association's board of directors. Upon entering into this
employment contract, Mr. Komosinski's previous contract with the Association was
terminated.
In July 1998, the Company also entered into three year change in
control severance agreements with daily renewal with three senior officers, who
previously had two year change in control severance agreements, with annual
renewal with the Association. The purpose of these new contracts was to extend
the change in control protection for such employees.
With respect to Mr. Komosinski's base salary in the fiscal year ended
September 30, 1998, the Committee took into account a comparison of salaries of
chief executive officers of local financial institutions. Likewise, each
executive officer's base salary was determined utilizing financial institution
compensation surveys. Mr. Komosinski's base salary for fiscal year 1998 was
increased from the level set by the Committee for fiscal year 1997 because it
was the judgment of the Committee that the competitive salary data indicated
that Mr. Komosinski's base salary was lower than appropriate. The Committee also
determined, based on the Association's capital ratios as well as continued
progress in executing the Association's business plan, the implementation of
cost control measures and recognition of the improvement in performance by the
Association, to award Mr. Komosinski a cash bonus of $31,093.
The Association and the Company include stock option and restricted
stock awards as elements of the overall compensation package. Equity-based
compensation provides a long-term alignment of interests and results achieved
for stockholders with the compensation rewards provided to executive officers by
providing those executives and others on whom the continued success of the
Company most depends with a proprietary interest in the Company. In 1996, a
Stock Option and Incentive Plan and a Management Recognition Plan were adopted
providing for the grant of several types of equity-based awards including stock
option and restricted stock awards. These plans were ratified by the Company's
stockholders on October 30, 1996.
On October 30, 1996, the Association's executive officers were granted
restricted stock and stock option awards, vesting over a five-year schedule. In
fiscal 1998, there was a stock option award of 3,000 shares to an executive
officer. Based upon the awards of restricted stock and stock options and their
respective vesting schedules, 7,142 shares of restricted stock and 17,140 stock
options vested for Mr. Komosinski on October 30, 1998.
Through the compensation programs described above, a significant
portion of the Association's executive compensation is linked directly to
individual and corporate performance. The Committee will continue to review all
elements of compensation to assure that the compensation objectives and plans
meet the Company's business objectives and philosophy of linking executive
compensation to stockholder interests of corporate performance as discussed
above.
In 1993, Congress amended the Internal Revenue Code to add Section
162(m) to limit the corporate deduction for compensation paid to a corporation's
five most highly compensated officers to $1.0 million per executive per year,
with certain exemptions. The Committee carefully reviewed the impact of this
legislation on the cost of the Association's current executive compensation
plans. Under the legislation and regulations adopted thereunder, it is not
expected that any portion of the Company's (or Association's) deduction for
employee remuneration will be non-deductible by reason of compensation awards
granted. The Committee intends to review the Company's (and Association's)
executive compensation policies on an ongoing basis, and propose appropriate
modifications, if the Committee deems them necessary, with a view toward
avoiding or minimizing any disallowance of tax deductions under Section 162(m).
12
<PAGE>
The foregoing report is furnished by the Compensation Committee of the
Board of Directors:
William G. Bachop Charles D. Lohrfink P. Anthony Sarubbi
Stockholder Return Performance Presentation
The following graph compares the cumulative total stockholder return on
the Company's Common Stock to the Nasdaq U.S. Stock Index (which includes all
Nasdaq traded stocks of U.S. companies) and a savings and loan industry index
for the period from April 18, 1996, the date the Company's Common Stock
commenced trading on the Nasdaq National Market, through September 30, 1998. The
graph assumes that $100 was invested on April 18, 1996 and that all dividends
were reinvested. On September 30, 1998, the closing sale price for the Company's
Common Stock on the Nasdaq National Market was $15.25 per share.
[GRAPHIC OMITTED --- GRAPH WITH POINTS PLOTTED TO FIGURES IN TABLE BELOW]
<TABLE>
<CAPTION>
4/18/96 9/30/96 9/30/97 9/30/98 9/30/98
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Yonkers Financial Corp. 100 130.12 207.8 161.82 161.82
Savings and Loan 100 111.77 189.66 167.35 167.35
Nasdaq Market Index 100 102.34 139.11 144.56 144.56
</TABLE>
Transactions with Management and Indebtedness of Management
The Association has followed a policy of granting consumer loans and
loans secured by the borrower's personal residence to officers, directors and
employees. Loans to directors are made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and do
not involve more than the normal currently risk of collectibility or present
other unfavorable features. Loans to directors must be approved by a majority of
the disinterested directors. Loans to an executive officer must be approved by a
majority of the Board of Directors. Federal law currently requires that all
loans to directors and executive officers, not made pursuant to a benefit or
compensation program that is widely available on a non-discriminatory basis to
institution employees, be made on terms and conditions comparable to those for
similar transactions with non-affiliates. Loans outstanding to all directors and
executive officers and their associates totaled $488,480 at September 30, 1998,
which was less than 1.0% of the Company's stockholders' equity. As of September
30, 1998, all such loans are performing in accordance with their repayment
terms.
Set forth below is certain information as to loans made by the
Association (prior to changes in federal law) to each of its directors and
executive officers at a preferential interest rate (generally 100 to 225 basis
points over the Association's cost of funds as adjusted on a quarterly basis)
pursuant to the Association's loan policy at the time such loans were made. Each
of the loans was made in the ordinary course of business and did not involve
more than the
13
<PAGE>
normal risk of collectibility. All of these loans are first mortgage loans
secured by the borrower's principal place of residence.
<TABLE>
<CAPTION>
Largest
Amount
Date of Original Outstanding Balance at
Name and Position Loan Type of Loan Amount Since 10/1/97 09/30/98
----------------- ---- ------------ ------ ------------- --------
<S> <C> <C> <C> <C> <C>
John S. Kulacz, Director Emeritus 12/82 Residence $60,000 $37,537 $34,764
Richard F. Komosinski, President, Chief Executive 09/85 Residence 60,000 42,266 39,963
Officer and Director
Joseph D. Roberto, Vice President, Treasurer and 05/86 Residence 55,000 44,727 43,314
Chief Financial Officer
Joseph L. Macchia, Vice President and Secretary 10/85 Residence 90,000 72,104 69,727
</TABLE>
In addition to the loans listed in the table above, the Association has
in the ordinary course of business made loans to its directors, executive
officers and members of their immediate families or affiliates thereof on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unrelated parties. Such
loans did not involve more than the normal risk of collectibility or present
other unfavorable features, and had total outstanding balances of approximately
$305,259 at September 30, 1998, or .7% of the Company's stockholders' equity.
PROPOSAL II - APPROVAL OF CERTAIN AMENDMENTS TO THE YONKERS
FINANCIAL CORPORATION 1996 STOCK OPTION AND INCENTIVE PLAN
The Yonkers Financial Corporation 1996 Stock Option and Incentive Plan
(the "Stock Option Plan") was adopted by the Board of Directors of the Company
and ratified by stockholders on October 30, 1996. Pursuant to regulations of the
Office of Thrift Supervision (the "OTS") applicable to stock option plans
established within one year following the completion of a mutual-to-stock
conversion, the Stock Option Plan contains a provision prohibiting the
acceleration vesting of stock awards upon the occurrence of a change in control
(as defined in the Stock Option Plan).
OTS policy permits the elimination of the prohibition on acceleration
vesting upon a change in control, provided that stockholder approval is obtained
more than one year following the completion of the mutual-to-stock conversion.
In order to assure that the Stock Option Plan achieves its purposes of
encouraging the recruitment and retention of those individuals on whom the
continued success of the Company most depends, the Board has amended (the
"Amendment") the Stock Option Plan to provide for immediate vesting of awards
upon the occurrence of a change in control. The Amendment does not increase the
number of shares reserved for issuance under the Stock Option Plan, change
existing awards, decrease the price per share at which Options may be granted
under the Stock Option Plan or alter the classes of individuals eligible to
participate in the Stock Option Plan. In the event the Amendment is not approved
by stockholders at the Annual Meeting, the Amendment will not be in effect, but
the Stock Option Plan as approved by stockholders in 1996 will remain in effect.
Certain provisions of the Stock Option Plan as amended are described below. The
full text of the Stock Option Plan (as amended) is set forth as Appendix A to
this Proxy Statement and the summary of the Stock Option Plan (as amended)
provided below is qualified in its entirety by such reference.
Principal Features of the Stock Option Plan
The Stock Option Plan provides for awards in the form of stock options
and stock appreciation rights ("SAR"s). Each award is made on such terms and
conditions, consistent with the Stock Option Plan and applicable OTS
regulations, as the Compensation Committee determines. Currently, awards made in
1996 under such plan vest at a rate of no more than one-fifth of the initial
award per year, subject to the participant maintaining continuous service since
the date of grant. If the Amendment is approved by the shareholders, the Stock
Option Plan as amended would provide for immediate vesting of all unvested
options upon the occurrence of a Change in Control.
The Stock Option Plan provides that shares may be either authorized but
unissued shares or reacquired shares held by the Company in its treasury. Any
shares subject to an award which expires or is terminated unexercised will
14
<PAGE>
again be available for issuance under the Stock Option Plan. Generally, no award
or any right or interest therein is assignable or transferable except under
certain limited exceptions set forth in the Stock Option Plan.
The Stock Option Plan is administered by the Compensation Committee of
the Board of Directors of the Company (the "Compensation Committee"), which is
comprised of non-employee directors of the Company. Pursuant to the terms of the
Stock Option Plan, any director, officer or employee of the Company or its
affiliates is eligible to participate in the Stock Option Plan, which currently
includes eighty-eight persons. In granting awards under the Stock Option Plan,
the Compensation Committee considers, among other things, position and years of
service, value of the participant's services to the Company and the Bank and the
added responsibilities of such individuals as employees, directors, and officers
of a public company.
Stock Options
The term of stock options do not exceed ten years from the date of
grant. The Compensation Committee may grant either "incentive stock options" as
defined under Section 422 of the Code or stock options not intended to qualify
as such ("non-qualified stock options").
In general, stock options will not be exercisable after the expiration
of their terms. Currently, in the event a participant ceases to maintain
continuous service (as defined in the Stock Option Plan) with the Company or the
Association for any reason (excluding death, disability and termination for
cause), an exercisable stock option will continue to be exercisable for three
months thereafter but in no event after the expiration date of the option. In
the event of disability of a participant during such service, all options not
then exercisable shall become exercisable in full for the three month period
immediately following such person's termination of service, but in no event
shall the options be exercisable later than the expiration date of the option.
If a participant to whom an option was granted ceases to maintain continuous
service by reason of death, all options not then exercisable shall become
exercisable in full for the period described above. Finally, if the Amendment is
approved by the shareholders, the Stock Option Plan as amended would provide for
immediate vesting of all unvested options upon the occurrence of a Change in
Control.
The exercise price for the purchase of shares subject to a stock option
at the date of grant may not be less than 100% of the market value of the shares
covered by the option on that date. The exercise price must be paid in full in
cash or shares of Common Stock, or a combination of both.
Amendment and Termination
The Board of Directors of the Company may at any time amend, suspend or
terminate the Stock Option Plan or any portion thereof but may not, without the
prior ratification of the stockholders, make any amendment which shall (i)
increase the aggregate number of securities which may be issued under the Stock
Option Plan (except as specifically set forth under the Stock Option Plan), (ii)
materially increase the benefits accruing to participants, (iii) materially
change the requirements as to eligibility for participation in the Stock Option
Plan, or (iv) change the class of persons eligible to participate in the Stock
Option Plan, provided, however, that no such amendment, suspension or
termination shall impair the rights of any participant, without his consent, in
any award made pursuant to the Stock Option Plan. Unless previously terminated,
the Stock Option Plan shall continue in effect for a term of ten years, after
which no further awards may be granted under the Stock Option Plan.
Adjustments Upon Changes in Capitalization
Stock Option Plan awards granted under the Stock Option Plan will be
adjusted by the Compensation Committee in the event of a reorganization,
recapitalization, stock split, return of capital stock dividend, combination or
exchange of shares, merger or other change in corporate structure or the Common
Stock of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF CERTAIN AMENDMENTS OF THE YONKERS FINANCIAL CORPORATION 1996 STOCK
OPTION AND INCENTIVE PLAN TO PROVIDE FOR IMMEDIATE VESTING OF UNVESTED OPTIONS
UPON THE OCCURRENCE OF A CHANGE IN CONTROL.
15
<PAGE>
Proposal III - Approval of Certain Amendments to the
YONKERS FINANCIAL CORPORATION 1996 MANAGEMENT RECOGNITION PLAN
The Yonkers Financial Corporation 1996 Management Recognition Plan (the
"MRP") was adopted by the Board of Directors of the Company, and ratified by
stockholders on October 30, 1996. Pursuant to regulations of the OTS applicable
to stock benefit plans established or implemented within one year following the
completion of a mutual-to-stock conversion, the MRP contains a provision
prohibiting accelerated vesting upon the occurrence of a Change of Control (as
defined in the MRP).
OTS policy permits the elimination of the provision of the MRP which
prohibits accelerated vesting upon the occurrence of a Change in Control,
provided that stockholder approval is obtained more than one year following the
completion of the mutual-to-stock conversion. In order to assure that the MRP
achieves its purposes of encouraging the recruitment and retention of those
individuals on whom the continued success of the Company most depends, the Board
has amended the MRP (the "MRP Amendment") to provide for immediate vesting of
unvested restricted stock awards upon the occurrence of a change in control. The
MRP Amendment does not increase the number of shares available for distribution
under the MRP, change the MRP's eligibility requirements, or alter the types of
restricted stock or other existing awards that may be made to participants in
the MRP. In the event the MRP Amendment is not approved by stockholders at the
Annual Meeting, the MRP Amendment will not be in effect but the MRP as approved
by stockholders in 1996 will remain in effect. Certain provisions of the MRP as
amended are described below. The full text of the MRP as amended is set forth as
Appendix B to this Proxy Statement and the summary of the MRP as amended
provided below is qualified in its entirety by such reference.
Principal Features of the Amended MRP
The MRP as amended provides for the award of shares of Common Stock
("MRP Shares") subject to the restrictions described below. Each award under the
MRP is made on such terms and conditions, consistent with the MRP and applicable
OTS regulations, as the Compensation Committee determines.
The MRP as amended is administered by the Compensation Committee. The
Compensation Committee selects the recipients and terms of awards pursuant to
the MRP as amended. In determining to whom and in what amount to grant awards,
the Compensation Committee considers the positions and responsibilities of
eligible individuals, the value of their services to the Company and the Bank
and other factors it deems relevant. Pursuant to the terms of the MRP as
amended, any director, officer or employee of the Company or its affiliates is
eligible to participate therein. As of September 30, 1998, there were
eighty-eight persons eligible to participate in the MRP.
The MRP as amended provides that MRP Shares used to fund awards under
the MRP may be either authorized but unissued shares or reacquired shares held
by the Company in its treasury. Any MRP Shares which are forfeited are again
available for issuance under the MRP as amended or any other plan of the Company
or its subsidiaries.
Award recipients earn (i.e., become vested in) awards, over a period of
time as determined by the Compensation Committee, at the time of grant. Under
the MRP as currently in effect, awards made thereunder must vest at a rate of no
more than one-fifth of the initial award per year, subject to the maintenance of
continuous service since the date of grant. If the MRP Amendment is approved by
stockholders, the MRP as amended would provide for immediate vesting of all
unvested restricted stock upon the occurrence of a change in control.
In the event a recipient ceases to maintain continuous service (as
defined) with the Company or the Bank by reason of death or disability, MRP
Shares still subject to restrictions will be free of these restrictions and
shall not be forfeited. In the event of termination for any other reason, all
shares will be forfeited and returned to the Company. Pursuant to the MRP
Amendment, all shares covered by an outstanding award will also become 100%
vested upon the occurrence of a Change of Control of the Company.
Adjustments Upon Changes in Capitalization
MRP Shares awarded under the MRP as amended will be adjusted by the
Compensation Committee in the event of a reorganization, recapitalization, stock
split, stock dividend, combination or exchange of shares, merger or other change
in corporate structure or the Common Stock of the Company.
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THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF CERTAIN AMENDMENTS TO THE YONKERS FINANCIAL CORPORATION 1996
MANAGEMENT RECOGNITION PLAN TO PROVIDE FOR IMMEDIATE VESTING OF UNVESTED
RESTRICTED SHARES UPON THE OCCURRENCE OF A CHANGE IN CONTROL.
PROPOSAL IV - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed KPMG Peat Marwick
LLP, independent accountants, to be the Company's auditors for the fiscal year
ending September 30, 1999. Representatives of KPMG Peat Marwick LLP are expected
to attend the Meeting to respond to appropriate questions and to make a
statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1999.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at the Company's executive office at 6
Executive Plaza, Yonkers, New York 10701 no later than September 1, 1999. Any
such proposal shall be subject to the requirements of the proxy rules adopted
under the Securities Exchange Act of 1934, as amended. Otherwise, any
shareholder proposal to take action at such meeting must be received at the
Company's executive office at 6 Executive Plaza, Yonkers, New York 10701 by
November 19, 1999; provided, however, that in the event that the date of the
annual meeting is held before January 7, or after March 28, 2000, the
shareholder proposal must be received not later than the close of business on
the later of the 70th day prior to such annual meeting or the tenth day
following the day on which notice of the date of the annual meeting was mailed
or public announcement of the date of such meeting was first made. All
shareholder proposals must also comply with the Company's bylaws and Delaware
law.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers, certain directors emeritus, and persons who own more than
10% of a registered class of the Company's equity securities, to file with the
SEC reports of ownership and reports of changes in ownership of common stock and
other equity securities of the Company. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. To the Company's knowledge, based solely
on a review of the copies of such reports furnished to the Company and written
representations that no other reports were required during the fiscal year ended
September 30, 1998, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10 percent beneficial owners were met.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or the Association
may solicit proxies personally or by telegraph or telephone without additional
compensation.
BY ORDER OF THE BOARD OF DIRECTORS
William G. Bachop
Chairman of the Board
Yonkers, New York
December 29, 1999
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APPENDIX A
YONKERS FINANCIAL CORPORATION
1996 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, advisory directors, directors emeriti,
officers and employees of the Corporation and its Affiliates. It is intended
that designated Options granted pursuant to the provisions of this Plan to
persons employed by the Corporation or its Affiliates will qualify as Incentive
Stock Options. Options granted to persons who are not employees will be
Non-Qualified Stock Options.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" - means any "parent corporation" or "subsidiary corporation"
of the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Association" - means The Yonkers Savings & Loan Association, FA and any
successor entity.
"Award" - means the grant of an Incentive Stock Option, a Non-Qualified
Stock Option, a Stock Appreciation Right, a Limited Stock Appreciation Right or
any combination thereof, as provided in the Plan.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 3 hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, advisory director, director emeritus,
officer or employee of the Corporation or an Affiliate, except that when used
with respect to any Options or Rights which at the time of exercise are intended
to be Incentive Stock Options, continuous service means the absence of any
interruption or termination of service as an employee of the Corporation or an
Affiliate. Service shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the Corporation
or in the case of transfers between payroll locations of the Corporation or
between the Corporation, its parent, its subsidiaries or its successor. With
respect to any advisory director or director emeritus, continuous service shall
mean the availability to perform such functions as may be required of such
persons.
"Corporation" - means Yonkers Financial Corporation, a Delaware
corporation.
"Disinterested Person" - means any member of the Board of Directors of
the Corporation who: (a) is an outside director as defined under Section 162 (m)
of the Code and the regulations thereunder; (b) is not currently a Senior
Officer of the Corporation or its Affiliates, or otherwise currently employed by
the Corporation or its Affiliates; (c) does not receive compensation, either
directly or indirectly, from the Corporation or its Affiliates, for services
rendered as a consultant or in any capacity, other than as a director, except
for an amount that does not exceed the dollar amount for which disclosure would
be required to Rule 404(a) of Regulation S-K under the Securities and Exchange
Commission Regulations; and (d) does not possess an interest in any other
transaction for which disclosure would be required pursuant to Rule 404(a) of
Regulation S-K of the Securities and Exchange Commission Regulations.
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"Employee" - means any person, including an officer or director, who is
employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Exercise Price" - means (i) in the case of an Option, the price per
Share at which the Shares subject to such Option may be purchased upon exercise
of such Option and (ii) in the case of a Right, the price per Share (other than
the Market Value per Share on the date of exercise and the Offer Price per Share
as defined in Section 10 hereof) which, upon grant, the Committee determines
shall be utilized in calculating the aggregate value which a Participant shall
be entitled to receive pursuant to Sections 9, 10 or 12 hereof upon exercise of
such Right.
"Incentive Stock Option" - means an option to purchase Shares granted by
the Committee pursuant to Section 6 hereof which is subject to the limitations
and restrictions of Section 8 hereof and is intended to qualify under Section
422(b) of the Code.
"Limited Stock Appreciation Right" - means a stock appreciation right
with respect to Shares granted by the Committee pursuant to Sections 6 and 10
hereof.
"Market Value" - means the average of the high and low quoted sales price
on the date in question (or, if there is no reported sale on such date, on the
last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the NASDAQ System, or any similar system then
in use, or, if no such quotations are available, the fair market value on such
date of a Share as the Committee shall determine.
"Non-Qualified Stock Option" - means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof, which is not intended to qualify
under Section 422(b) of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" - means any director, advisory director, director emeritus,
officer or employee of the Corporation or any Affiliate who is selected by the
Committee to receive an Award or who is granted an Award pursuant to Section 19
hereof.
"Plan" - means the 1996 Stock Option and Incentive Plan of the
Corporation.
"Related" - means (i) in the case of a Right, a Right which is granted in
connection with, and to the extent exercisable, in whole or in part, in lieu of,
an Option or another Right and (ii) in the case of an Option, an Option with
respect to which and to the extent a Right is exercisable, in whole or in part,
in lieu thereof has been granted.
"Right" - means a Limited Stock Appreciation Right or a Stock
Appreciation Right.
"Shares" - means the shares of common stock, par value $0.01 per share,
of the Corporation.
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"Senior Officer" - means the Corporation's president, principal financial
officer, principal accounting officer (or if there is no such accounting
officer, the controller), any vice president of the Corporation in charge of a
principal business unit, division or function (such as sales, administration or
finance), any other officer who performs a policy-making function, or any other
person who performs similar policy-making functions for the Corporation.
Officers of the Corporation's Affiliates shall be deemed Senior Officers of the
Corporation if they perform such policy-making functions for the Corporation.
"Stock Appreciation Right" - means a stock appreciation right with
respect to Shares granted by the Committee pursuant to Sections 6 and 9 hereof.
3. Administration. The Plan shall be administered by a Committee
consisting of two or more members, each of whom shall be a Disinterested Person.
The members of the Committee shall be appointed by the Board of Directors of the
Corporation. Except as limited by the express provisions of the Plan, the
Committee shall have sole and complete authority and discretion, subject to
Office of Thrift Supervision Regulations, to (i) select Participants and grant
Awards; (ii) determine the number of Shares to be subject to types of Awards
generally, as well as to individual Awards granted under the Plan; (iii)
determine the terms and conditions upon which Awards shall be granted under the
Plan; (iv) prescribe the form and terms of instruments evidencing such grants;
and (v) establish from time to time regulations for the administration of the
Plan, interpret the Plan, and make all determinations deemed necessary or
advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
4. Participation in Committee Awards. The Committee may select from time
to time Participants in the Plan from those directors (including advisory
directors and directors emeriti), officers and employees (other than
Disinterested Persons), of the Corporation or its Affiliates who, in the opinion
of the Committee, have the capacity for contributing to the successful
performance of the Corporation or its Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the operation of
Section 11 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 357,075 Shares. The Shares with respect to which
Awards may be made under the Plan may be either authorized and unissued shares
or issued shares heretofore or hereafter reacquired and held as treasury shares.
Shares which are subject to Related Rights and Related Options shall be counted
only once in determining whether the maximum number of Shares with respect to
which Awards may be granted un der the Plan has been exceeded. An Award shall
not be considered to have been made under the Plan with respect to any Option or
Right which terminates and new Awards may be granted under the Plan with respect
to the number of Shares as to which such termination has occurred.
6. General Terms and Conditions of Options and Rights. The Committee
shall have full and complete authority and discretion, subject to Office of
Thrift Supervision Regulations and except as expressly limited by the Plan, to
grant Options and/or Rights and to provide the terms and conditions (which need
not be identical among Participants) thereof. In particular, the Committee shall
prescribe the following terms and conditions: (i) the Exercise Price of any
Option or Right, which shall not be less than the Market Value per Share at the
date of grant of such Option or Right, (ii) the number of Shares subject to, and
the expiration date of, any Option or Right, which expiration date shall not
exceed ten years from the date of grant, (iii) the manner, time and rate
(cumulative or otherwise) of exercise of
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such Option or Right, and (iv) the restrictions, if any, to be placed upon such
Option or Right or upon Shares which may be issued upon exercise of such Option
or Right. The Committee may, as a condition of granting any Option or Right,
require that a Participant agree not to thereafter exercise one or more Options
or Rights previously granted to such Participant. Notwithstanding the foregoing
and subject to compliance with applicable Office of Thrift Supervision
Regulations, no individual shall be granted Awards in any calendar year with
respect to more than 25% of the total shares subject to the Plan.
No director who is not an employee of the Corporation shall be granted
Awards with respect to more than 5% of the total shares subject to the Plan. All
non-employee directors of the Corporation, in the aggregate, may not be granted
Awards with respect to more than 30% of the total shares subject to the Plan and
no individual shall be granted Awards with respect to more than 25% of the total
shares subject to the Plan.
Any Award made pursuant to this Plan, which Award is subject to the
requirements of Office of Thrift Supervision Regulations, shall vest in at least
five equal annual installments with the first installment vesting on the
one-year anniversary of the date of grant, except in the event of death,
disability or change in control.
In the event Office of Thrift Supervision Regulations are amended (the
"Amended Regulations") to permit shorter vesting periods, any Award made
pursuant to this Plan, which Award is subject to the requirements of such
Amended Regulations, may vest, at the sole discretion of the Committee, in
accordance with such Amended Regulations.
Furthermore, at the time of any Award, the Participant shall enter into
an agreement with the Corporation in a form specified by the Committee, agreeing
to the terms and conditions of the Award and such other matters as the
Committee, in its sole discretion, shall determine (the "Option Agreement").
7. Exercise of Options or Rights.
(a) Except as provided herein, an Option or Right granted under the Plan
shall be exercisable during the lifetime of the Participant to whom such
Option or Right was granted only by such Participant and, except as
provided in paragraphs (c) and (d) of this Section 7, no such Option or
Right may be exercised unless at the time such Participant exercises such
Option or Right, such Participant has maintained Continuous Service since
the date of grant of such Option or Right. Cash settlements of Rights may
be made only in accordance with any applicable restrictions pursuant to
Rule 16b-3(e) under the Securities Exchange Act of 1934 or any similar or
successor provision.
(b) To exercise an Option or Right under the Plan, the Participant to whom
such Option or Right was granted shall give written notice to the
Corporation in form satisfactory to the Committee (and, if partial
exercises have been permitted by the Committee, by specifying the number
of Shares with respect to which such Participant elects to exercise such
Option or Right) together with full payment of the Exercise Price, if any
and to the extent required. The date of exercise shall be the date on
which such notice is received by the Corporation. Payment, if any is
required, shall be made either (i) in cash (including check, bank draft
or money order) or (ii) if permitted by the Committee, by delivering (A)
Shares already owned by the Participant and having a fair market value
equal to the applicable exercise price, such fair market value to be
determined in such ap propriate manner as may be provided by the
Committee or as may be required in order to comply with or to conform to
requirements of any applicable laws or regulations, or (B) a combination
of cash and such Shares.
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(c) If a Participant to whom an Option or Right was granted shall cease to
maintain Continuous Service for any reason (excluding death, disability
and termination of employment by the Corporation or any Affiliate for
cause), such Participant may, but only within the period of three months
immediately succeeding such cessation of Continuous Service and in no
event after the expiration date of such Option or Right, exercise such
Option or Right to the extent that such Participant was entitled to
exercise such Option or Right at the date of such cessation, provided,
however, that such right of exercise after cessation of Continuous
Service shall not be available to a Participant if the Committee
otherwise determines and so provides in the applicable instrument or
instruments evidencing the grant of such Option or Right. If a
Participant to whom an Option or Right was granted shall cease to
maintain Continuous Service by reason of death or disability then, unless
the Committee shall have otherwise provided in the instrument evidencing
the grant of an Option or Right, all Options and Rights granted and not
fully exercisable shall become exercisable in full upon the happening of
such event and shall remain so exercisable (i) in the event of death for
the period described in paragraph (d) of this Section 7 and (ii) in the
event of disability for a period of three months following such date. If
the Continuous Service of a Participant to whom an Option or Right was
granted by the Corporation is terminated for cause, all rights under any
Option or Right of such Participant shall expire immediately upon the
effective date of such termination.
(d) In the event of the death of a Participant while in the Continuous
Service of the Corporation or an Affiliate or within the three-month
period referred to in paragraph (c) of this Section 7, the person to whom
any Option or Right held by the Participant at the time of his death is
transferred by will or the laws of descent and distribution, or in the
case of an Award other than an Incentive Stock Option, pursuant to a
qualified domestic relations order, as defined in the Code or Title 1 of
ERISA or the rules thereunder may, but only to the extent such
Participant was entitled to exercise such Option or Right upon his death
as provided in paragraph (c) above, exercise such Option or Right at any
time within a period of one year succeeding the date of death of such
Participant, but in no event later than ten years from the date of grant
of such Option or Right. Following the death of any Participant to whom
an Option was granted under the Plan, irrespective of whether any Related
Right shall have theretofore been granted to the Participant or whether
the person entitled to exercise such Related Right desires to do so, the
Committee may, as an alternative means of settlement of such Option,
elect to pay to the person to whom such Option is transferred by will or
by the laws of descent and distribution, or in the case of an Option
other than an Incentive Stock Option, pursuant to a qualified domestic
relations order, as defined in the Code or Title I of ERISA or the rules
thereunder, the amount by which the Market Value per Share on the date of
exercise of such Option shall exceed the Exercise Price of such Option,
multiplied by the number of Shares with respect to which such Option is
properly exercised. Any such settlement of an Option shall be considered
an exercise of such Option for all purposes of the Plan.
(e) Notwithstanding the provisions of subparagraphs (c) and (d) above, the
Committee may, in its sole discretion, establish different terms and
conditions pertaining to the effect of termination to the extent
permitted by applicable federal and state law.
8. Incentive Stock Options. Incentive Stock Options may be granted only
to Participants who are Employees. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of Directors of the
Corporation and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less
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than the Market Value per Share on the date such Incentive Stock Option is
granted, (iii) any Incentive Stock Option shall not be transferable by the
Participant to whom such Incentive Stock Option is granted other than by will or
the laws of descent and distribution, and shall be exercisable during such
Participant's lifetime only by such Participant, (iv) no Incentive Stock Option
shall be granted to any individual who, at the time such Incentive Stock Option
is granted, owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Corporation or any Affiliate unless
the Exercise Price of such Incentive Stock Option is at least 110 percent of the
Market Value per Share at the date of grant and such Incentive Stock Option is
not exercisable after the expiration of five years from the date such Incentive
Stock Option is granted, and (v) the aggregate Market Value (determined as of
the time any Incentive Stock Option is granted) of the Shares with respect to
which Incentive Stock Options are exercisable for the first time by a
Participant in any calendar year shall not exceed $100,000.
9. Stock Appreciation Rights. A Stock Appreciation Right shall, upon its
exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate value of which (i.e.,
the sum of the amount of cash and/or Market Value of such Shares on date of
exercise) shall equal (as nearly as possible, it being understood that the
Corporation shall not issue any fractional shares) the amount by which the
Market Value per Share on the date of such exercise shall exceed the Exercise
Price of such Stock Appreciation Right, multiplied by the number of Shares with
respect of which such Stock Appreciation Right shall have been exercised. A
Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. At the time of grant of an Option the Committee shall determine
whether and to what extent a Related Stock Appreciation Right shall be granted
with respect thereto, provided, however, and notwithstanding any other provision
of the Plan, that if the Related Option is an Incentive Stock Option, the
Related Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Stock Appreciation Right were
an Incentive Stock Option and as if other rights which are Related to Incentive
Stock Options were Incentive Stock Options. In the case of a Related Option,
such Related Option shall cease to be exercisable to the extent of the Shares
with respect to which the Related Stock Appreciation Right was exercised. Upon
the exercise or termination of a Related Option, any Related Stock Appreciation
Right shall terminate to the extent of the Shares with respect to which the
Related Option was exercised or terminated.
10. Limited Stock Appreciation Rights. At the time of grant of an Option
or Stock Appreciation Right to any Participant, the Committee shall have full
and complete authority and discretion to also grant to such Participant a
Limited Stock Appreciation Right which is Related to such Option or Stock
Appreciation Right, provided, however and notwithstanding any other provision of
the Plan, that if the Related Option is an Incentive Stock Option, the Related
Limited Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Limited Stock Appreciation
Right were an Incentive Stock Option and as if all other Rights which are
Related to Incentive Stock Options were Incentive Stock Options. Subject to
vesting requirements contained in 12 C.F.R. ss. 563b.3(g)(4) or any successor
regulation, a Limited Stock Appreciation Right shall be exercisable only during
the period beginning on the first day following the date of expiration of any
"offer" (as such term is hereinafter defined) and ending on the forty-fifth day
following such date.
A Limited Stock Appreciation Right shall, upon its exercise, entitle the
Participant to whom such Limited Stock Appreciation Right was granted to receive
an amount of cash equal to the amount by which the "Offer Price per Share" (as
such term is hereinafter defined) or the Market Value on the date of such
exercise, as shall have been provided by the Committee in its discretion at the
time of grant, shall exceed the Exercise Price of such Limited Stock
Appreciation Right, multiplied by the number of
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Shares with respect to which such Limited Stock Appreciation Right shall have
been exercised. Upon the exercise of a Limited Stock Appreciation Right, any
Related Option and/or Related Stock Appreciation Right shall cease to be
exercisable to the extent of the Shares with respect to which such Limited Stock
Appreciation Right was exercised. Upon the exercise or termination of a Related
Option or Related Stock Appreciation Right, any Related Limited Stock
Appreciation Right shall terminate to the extent of the Shares with respect to
which such Related Option or Related Stock Appreciation Right was exercised or
terminated.
For the purposes of this Section 10, the term "Offer" shall mean any
tender offer or exchange offer for Shares other than one made by the
Corporation, provided that the corporation, person or other entity making the
offer acquires pursuant to such offer either (i) 25% of the Shares outstanding
immediately prior to the commencement of such offer or (ii) a number of Shares
which, together with all other Shares acquired in any tender offer or exchange
offer (other than one made by the Corporation) which expired within sixty days
of the expiration date of the offer in question, equals 25% of the Shares
outstanding immediately prior to the commencement of the offer in question. The
term "Offer Price per Share" as used in this Section 10 shall mean the highest
price per Share paid in any Offer which Offer is in effect any time during the
period beginning on the sixtieth day prior to the date on which a Limited Stock
Appreciation Right is exercised and ending on the date on which such Limited
Stock Appreciation Right is exercised. Any securities or property which are part
or all of the consideration paid for Shares in the Offer shall be valued in
determining the Offer Price per Share at the higher of (A) the valuation placed
on such securities or property by the corporation, person or other entity making
such Offer or (B) the valuation placed on such securities or property by the
Committee.
11. Adjustments Upon Changes in Capitalization. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number, class and exercise price of shares with respect to which Awards
theretofore have been granted under the Plan shall be appropriately adjusted by
the Committee, whose determination shall be conclusive.
12. Effect of Merger. In the event of any merger, consolidation or
combination of the Corporation (other than a merger, consolidation or
combination in which the Corporation is the continuing entity and which does not
result in the outstanding Shares being converted into or exchanged for different
securities, cash or other property, or any combination thereof) pursuant to a
plan or agreement the terms of which are binding upon all stockholders of the
Corporation (except to the extent that dissenting stockholders may be entitled,
under statutory provisions or provisions contained in the certificate or
articles of incorporation, to receive the appraised or fair value of their
holdings), any Participant to whom an Option or Right has been granted at least
six months prior to such event shall have the right (subject to the provisions
of the Plan and any limitation or vesting period applicable to such Option or
Right), thereafter and during the term of each such Option or Right, to receive
upon exercise of any such Option or Right an amount equal to the excess of the
fair market value on the date of such exercise of the securities, cash or other
property, or combination thereof, receivable upon such merger, consolidation or
combination in respect of a Share over the Exercise Price of such Right or
Option, multiplied by the number of Shares with respect to which such Option or
Right shall have been exercised. Such amount may be payable fully in cash, fully
in one or more of the kind or kinds of property payable in such merger,
consolidation or combination, or partly in cash and partly in one or more of
such kind or kinds of property, all in the discretion of the Committee.
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13. Assignments and Transfers. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or in the case of
Awards other than Incentive Stock Options pursuant to a qualified domestic
relations order, as defined in the Code or Title I of ERISA or the rules
thereunder.
14. Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 14 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, shall become the
beneficial owner of shares of the Corporation with respect to which 25% or more
of the total number of votes for the election of the Board of Directors of the
Corporation may be cast, (ii) as a result of, or in connection with, any cash
tender offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of the
Corporation shall cease to constitute a majority of the Board of Directors of
the Corporation, or (iii) the stockholders of the Corporation shall approve an
agreement providing either for a transaction in which the Corporation will cease
to be an independent publicly-owned corporation or for a sale or other
disposition of all or substantially all the assets of the Corporation. Upon a
change in control, unless the Committee shall have otherwise provided in the
applicable Option Agreement, all Options and Stock Appreciation rights
theretofore granted and not fully exercisable shall become exercisable in
accordance with their terms, regardless of any vesting provision; provided,
however, that no Option or Stock Appreciation Right which has previously been
exercised or otherwise terminated shall become exercisable.
15. Employee Rights Under the Plan. No director, officer or employee
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and no director, officer, employee or
other person shall have any claim or right to be granted an Award under the Plan
or under any other incentive or similar plan of the Corporation or any
Affiliate. Neither the Plan nor any action taken thereunder shall be construed
as giving any employee any right to be retained in the employ of the Corporation
or any Affiliate.
16. Delivery and Registration of Stock. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other Federal, state or local
securities legislation or regulation. It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares or other
action eliminating the necessity of such representation under such Securities
Act or other securities legislation. The Corporation shall not be required to
deliver any Shares under the Plan prior to (i) the admission of such shares to
listing on any stock exchange or other system on which Shares may then be
listed, and (ii) the completion of such registration or other qualification of
such Shares under any state or Federal law, rule or regulation, as the Committee
shall determine to be necessary or advisable.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative and shall not
affect the validity of the remaining provisions of the Plan.
17. Withholding Tax. The Corporation shall have the right to deduct from
all amounts paid in cash with respect to the exercise of a Right under the Plan
any taxes required by law to be withheld with respect to such cash payments.
Where a Participant or other person is entitled to receive Shares pursuant to
the exercise of an Option or Right pursuant to the Plan, the Corporation shall
have the right to require
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the Participant or such other person to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such Shares,
and may, in its sole discretion, withhold sufficient Shares to cover the amount
of taxes which the Corporation is required to withhold.
18. Amendment or Termination. The Board of Directors of the Corporation
may amend, suspend or terminate the Plan or any portion thereof at any time,
subject to Office of Thrift Supervision Regulations, but no amendment shall be
made without approval of the stockholders of the Corporation which shall, (i)
increase the aggregate number of Shares with respect to which Awards may be made
under the Plan (except pursuant to Section 4), (ii) materially change the
requirements as to eligibility for participation in the Plan or (iii) change the
class of persons eligible to participate in the Plan; provided, however, that no
such amendment, suspension or termination shall impair the rights of any
Participant, without his consent, in any Award theretofore made pursuant to the
Plan.
19. Effective Date and Term of Plan. The Plan shall become effective upon
its ratification by stockholders of the Corporation. It shall continue in effect
for a term of ten years unless sooner terminated under Section 17 hereof.
20. Initial Grant. By, and simultaneously with, the ratification of this
Plan by the stockholders of the Corporation, each member of the Board of
Directors of the Corporation at the time of stockholder ratification of this
Plan who is not a full-time Employee, is hereby granted a ten-year,
Non-Qualified Stock Option to purchase 17,853 Shares. Each such Option shall be
evidenced by a Non-Qualified Stock Option Agreement in a form approved by the
Board of Directors and shall be subject in all respects to the terms and
conditions of this Plan, which are controlling. All Options granted pursuant to
this section shall vest in five equal annual installments (except in the event
of death, disability or change in control, in which case such Options shall
immediately vest) with the first installment vesting on the first anniversary of
the date of grant, subject to the Director maintaining Continuous Service with
the Corporation or its Affiliates since the date of grant.
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APPENDIX B
YONKERS FINANCIAL CORPORATION
1996 MANAGEMENT RECOGNITION PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, executive officers and employees of the
Corporation and its Affiliates.
2. Definitions. The following definitions are applicable to the Plan:
"Award" - means the grant of Restricted Stock pursuant to the terms of
Section 12 of the Plan or by the Committee, as provided in the Plan.
"Affiliate" - means any "parent corporation" or "subsidiary corporation"
of the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Association" - means The Yonkers Savings & Loan Association, FA, a
savings institution and its successors.
"Beneficiary" - means the person or persons designated by a Participant
to receive any benefits payable under the Plan in the event of such
Participant's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Participant's surviving spouse, if
any, or if none, his estate.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee of the Board of Directors of the
Corporation referred to in Section 6 hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, director emeritus, advisory director,
executive officer or employee of the Corporation or any Affiliate. Service shall
not be considered interrupted in the case of sick leave, military leave or any
other leave of absence approved by the Corporation or any Affiliate or in the
case of transfers between payroll locations of the Corporation or between the
Corporation, its Affiliates or its successor. With respect to any director
emeritus or advisory director, continuous service shall mean the availability to
perform such functions as may be required of such individuals.
"Corporation" - means Yonkers Financial Corporation, a Delaware
corporation.
"Disability" - means any physical or mental impairment which qualifies
an employee, director, director emeritus or advisor director for disability
benefits under any applicable long-term disability plan maintained by the
Association or an Affiliate, or, if no such plan applies, which renders such
employee or director, in the judgment of the Committee, unable to perform his
customary duties and responsibilities.
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"Disinterested Person" - means any member of the Board of Directors of
the Corporation who: (a) is not currently a Senior Officer of the Corporation or
its Affiliates, or otherwise currently employed by the Corporation or its
Affiliates; (b) does not receive compensation, either directly or indirectly,
from the Corporation or its Affiliates, for services rendered as a consultant or
in any capacity, other than as a director, except for an amount that does not
exceed the dollar amount for which disclosure would be required to Rule 404(a)
of Regulation S-K of the Securities and Exchange Commission Regulations; and (c)
does not possess an interest in any other transaction for which disclosure would
be required pursuant to Rule 404(a) of Regulation S-K of the Securities and
Exchange Commission Regulations.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Participant" - means any director, director emeritus, advisory
director, executive officer or employee of the Corporation or any Affiliate who
is selected by the Committee to receive an Award or is granted an Award pursuant
to Section 12.
"Plan" - means the 1996 Management Recognition Plan of the Corporation.
"Restricted Period" - means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 3
hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently awarded
to a Participant by the Committee subject to the restrictions referred to in
Section 3 hereof, so long as such restrictions are in effect.
"Senior Officer" - means the Corporation's president, principal
financial officer or principal accounting officer (or if there is no such
accounting officer, the controller), any vice president of the Corporation in
charge of a principal business unit, division or function (such as sales,
administration or finance), any other officer who performs a policy-making
function, or any other person who performs similar policy-making functions for
the Corporation. Officers of the Corporation's Affiliates shall be deemed Senior
Officers of the Corporation if they perform such policy-making functions for the
Corporation.
"Shares" - means the common stock, par value $0.01 per share, of the
Corporation.
3. Terms and Conditions of Restricted Stock. The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
Awards and, in addition to the terms and conditions contained in paragraphs (a)
through (f) of this Section 3, to provide such other terms and conditions (which
need not be identical among Participants) in respect of such Awards, and the
vesting thereof, as the Committee shall determine, subject to OTS regulations.
(a) At the time of an Award, the Committee shall establish for each
Participant a Restricted Period which shall not be less than five years,
during which or at the expiration of which, as the Committee shall
determine and provide in the agreement referred to in paragraph (d) of
this Section 3, the Shares awarded as Restricted Stock shall vest, and
subject to any such other terms and conditions as the Committee shall
provide, Shares of Restricted Stock may not be sold,
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assigned, transferred, pledged, voted or otherwise encumbered by the
Participant, except as hereinafter provided, during the Restricted
Period. Except for such restrictions, and subject to paragraphs (c) and
(e) of this Section 3 and Section 4 hereof, the Participant as owner of
such shares shall have all the rights of a stockholder. The Committee
shall have the authority, in its discretion, subject to compliance with
OTS regulations, to accelerate the time at which any or all of the
restrictions shall lapse with respect to an Award, or to remove any or
all of such restrictions, whenever it may determine that such action is
appropriate by reason of changes in applicable tax or other laws or
other changes in circumstances occurring after the commencement of such
Restricted Period.
No director who is not an employee of the Corporation shall be granted
Awards with respect to more than 5% of the total shares subject to the
Plan. All non-employee directors of the Corporation, in the aggregate,
may not be granted Awards with respect to more than 30% of the total
shares subject to the Plan and no individual shall be granted Awards
with respect to more than 25% of the total shares subject to the Plan.
Any Award made pursuant to this Plan, which Award is subject to the
requirements of Office of Thrift Supervision Regulations, shall vest in
not less than five equal annual installments with the first installment
vesting on the one-year anniversary of the date of grant, except in the
event of death, disability or change in control in which case all
unvested shares shall rest immediately.
In the event that Office of Thrift Supervision Regulations are amended
(the "Amended Regulations") to permit shorter vesting periods, any Award
made pursuant to this Plan, which Award is subject to the requirements
of such Amended Regulations, may vest, at the sole discretion of the
Committee, in accordance with such Amended Regulations.
(b) Except as provided in Section 5 hereof, if a Participant ceases to
maintain Continuous Service for any reason (other than death or
disability), unless the Committee shall otherwise determine, all Shares
of Restricted Stock theretofore awarded to such Participant and which at
the time of such termination of Continuous Service are subject to the
restrictions imposed by paragraph (a) of this Section 3 shall upon such
termination of Continuous Service be forfeited and returned to the
Corporation. If a Participant ceases to maintain Continuous Service by
reason of death or disability, Restricted Stock then still subject to
restrictions imposed by paragraph (a) of this Section 3 will be free of
those restrictions.
(c) Each certificate in respect of Shares of Restricted Stock awarded under
the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in
blank, with the Corporation and shall bear the following (or a similar)
legend:
The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and conditions
(including forfeiture) contained in the 1996 Management Recognition
Plan of Yonkers Financial Corporation. Copies of such Plan are on
file in the offices of the Secretary of Yonkers Financial
Corporation, 6 Executive Plaza, Yonkers, New York 10701-9858.
(d) At the time of the granting of any Award, the Participant shall enter
into an Agreement with the Corporation in a form specified by the
Committee, agreeing to the terms and conditions of the
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Award and such other matters as the Committee, in its sole discretion,
shall determine (the "Restricted Stock Agreement").
(e) The payment to the Participant of any dividends declared or paid by the
Corporation on any Restricted Stock shall be deferred and held by the
Corporation for the account of the Participant until the earlier to
occur of (i) the lapsing of the restrictions imposed under paragraph (a)
of this Section 3 or (ii) the forfeiture of such shares under paragraph
(b) of this Section 3. There shall be credited at the end of each year
(or portion thereof) interest on the amount of the Participant's account
at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon,
shall be made upon the earlier to occur of the lapsing of the
restrictions imposed under paragraph (a) of this Section 3 or upon death
or disability. Shares of Restricted Stock shall not be voted by the
Participant during the Restricted Period. Shares of Restricted Stock
still subject to restriction shall be voted by an independent party to
be named by resolution of the Committee.
(f) At the lapsing of the restrictions imposed by paragraph (a) of this
Section 3, the Corporation shall deliver to the Participant (or where
the relevant provision of paragraph (b) of this Section 3 applies in the
case of a deceased Participant, to his legal representative, beneficiary
or heir) the certificate(s) and stock power deposited with it pursuant
to paragraph (c) of this Section 3 and the Shares represented by such
certificate(s) shall be free of the restrictions referred to in
paragraph (a) of this Section 3.
4. Adjustments Upon Changes in Capitalization. In the event of any change
in the outstanding Shares subsequent to the effective date of the Plan by reason
of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Corporation in the manner
provided in Section 3 hereof.
5. Assignments and Transfers. During the Restricted Period, no Award nor
any right or interest of a Participant under the Plan in any instrument
evidencing any Award under the Plan may be assigned, encumbered or transferred
except (i) in the event of the death of a Participant, by will or the laws of
descent and distribution, or (ii) pursuant to a qualified domestic relations
order as defined in the Code or Title I of ERISA or the rules thereunder.
6. Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 6 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, shall become the
beneficial owner of shares of the Corporation with respect to which 25% or more
of the total number of votes for the election of the Board of Directors of the
Corporation may be cast, (ii) as a result of, or in connection with, any cash
tender offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of the
Corporation
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shall cease to constitute a majority of the Board of Directors of the
Corporation, or (iii) the stockholders of the Corporation shall approve an
agreement providing either for a transaction in which the Corporation will cease
to be an independent publicly-owned corporation or for a sale or other
disposition of all or substantially all of the assets of the Corporation. Upon a
change in control, unless the Committee shall have otherwise provided in the
applicable Restricted Stock Agreement, any Restricted Period with respect to
Restricted Stock theretofore awarded to such participant shall lapse upon the
happening of such event and all Shares awarded as Restricted Stock shall become
fully vested in the Participant to whom such Shares were awarded.
7. Administration. The Plan shall be administered by a Committee
consisting of two or more members, each of whom shall be a Disinterested Person.
The members of the Committee shall be appointed by the Board of Directors of the
Corporation. Except as limited by the express provisions of the Plan, the
Committee shall have sole and complete authority and discretion, subject to OTS
regulations, to: (i) select Participants and grant Awards; (ii) determine the
number of Shares to be subject to types of Awards generally, as well as
individual Awards granted under the Plan; (iii) determine the terms and
conditions upon which Awards shall be granted under the Plan; (iv) prescribe the
form and terms of instruments evidencing such grants; and (v) establish from
time to time regulations for the administration of the Plan, interpret the Plan,
and make all determinations deemed necessary or advisable for the administration
of the Plan. The Committee may maintain, and update from time to time as
appropriate, a list designating selected directors as Disinterested Persons. The
purpose of such list shall be to evidence the status of such individuals as
Disinterested Persons, and the Board of Directors may appoint to the Committee
any individual actually qualifying as a Disinterested Person, regardless of
whether identified as such on said list.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
8. Shares Subject to Plan. Subject to adjustment by the operation of
Section 4 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 142,830 Shares. The Shares with respect to which
Awards may be made under the Plan may be either authorized and unissued Shares
or issued Shares heretofore or hereafter reacquired and held as treasury Shares.
An Award shall not be considered to have been made under the Plan with respect
to Restricted Stock which is forfeited and new Awards may be granted under the
Plan with respect to the number of Shares as to which such forfeiture has
occurred.
The Corporation's obligation to deliver Shares with respect to an Award
shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Participant to whom such
Shares are to be delivered, in such form as the Committee shall determine to be
necessary or advisable to comply with the provisions of the Securities Act of
1933 or any other Federal, state or local securities legislation or regulation.
It may be provided that any representation requirement shall become inoperative
upon a registration of the Shares or other action eliminating the necessity of
such representation under such Securities Act or other securities legislation.
The Corporation shall not be required to deliver any Shares under the Plan prior
to (i) the admission of such shares to listing on any stock exchange on which
Shares may then be listed, and (ii) the completion of such registration or other
qualification of such Shares under any state or Federal law, rule or regulation,
as the Committee shall determine to be necessary or advisable.
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9. Employee Rights Under the Plan. No director, director emeritus,
advisory director, officer or employee shall have a right to be selected as a
Participant nor, having been so selected, to be selected again as a Participant
and no director, officer, employee or other person shall have any claim or right
to be granted an Award under the Plan or under any other incentive or similar
plan of the Corporation or any Affiliate. Neither the Plan nor any action taken
thereunder shall be construed as giving any officer or employee any right to be
retained in the employ of the Corporation, the Association or any Affiliate.
10. Withholding Tax. Upon the termination of the Restricted Period with
respect to any shares of Restricted Stock (or at such earlier time, if any, that
an election is made by the Participant under Section 83(b) of the Code, or any
successor provision thereto, to include the value of such shares in taxable
income), the Corporation may, in its sole discretion, withhold from any payment
or distribution made under this Plan sufficient Shares or withhold sufficient
cash to cover any applicable withholding and employment taxes. The Corporation
shall have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments. No discretion or choice shall
be conferred upon any Participant with respect to the form, timing or method of
any such tax withholding.
11. Amendment or Termination. The Board of Directors of the Corporation
may amend, suspend or terminate the Plan or any portion thereof at any time,
subject to OTS regulations; provided, however, that no such amendment,
suspension or termination shall impair the rights of any Participant, without
his consent, in any Award theretofore made pursuant to the Plan.
12. Term of Plan. The Plan shall become effective upon its ratification by
the stockholders of the Corporation. It shall continue in effect for a term of
ten years unless sooner terminated under Section 11 hereof.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative and shall not
affect the validity of the remaining provisions of the Plan.
13. Director Awards. By, and simultaneously with, the ratification of this
Plan by the stockholders of the Corporation, each non-employee member of the
Board of Directors of the Corporation with 10 or more years of service to the
Corporation or its Affiliates, each non-employee member of the Board of
Directors of the Corporation with fewer than 10 years of service to the
Corporation or its Affiliates and each director emeritus of the Association, is
hereby granted an Award equal to 5,713, 2,856 and 7,141 Shares. Each such Award
shall be evidenced by a Restricted Stock Agreement in a form approved by the
Corporation and shall be subject in all respects to the terms and conditions of
this Plan, which are controlling. All Awards granted pursuant to this Section 13
shall vest in five equal annual installments (except in the event of death,
disability or change in control, in which all such Awards shall immediately
vest) with the first installment vesting on the one-year anniversary of the date
of grant, as long as the director maintains Continuous Service with the
Corporation or its Affiliates, provided, however, no Award shall be earned in
any fiscal year (and shall be carried over to the subsequent fiscal year) in
which the Association fails to meet all of its fully phased-in capital
requirements.
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REVOCABLE PROXY
YONKERS FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
January 27, 1999
The undersigned hereby appoints the Board of Directors of Yonkers
Financial Corporation (the "Company"), and its survivor, with full power of
substitution, to act as attorneys and proxies for the undersigned to vote all
shares of common stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Stockholders (the "Meeting"), to be held on January 27,
1999 at the principal office of The Yonkers Savings and Loan Association, FA
located at One Manor House Square, Yonkers, New York, at 4:30 p.m., Yonkers, New
York time, and at any and all ad journments thereof, as follows:
FOR ALL
FOR WITHHELD EXCEPT
I. The election of the
following directors for
a three year term to [ ] [ ] [ ]
expire in 2002:
RICHARD F. KOMOSINSKI
MICHAEL J. MARTIN
INSTRUCTION: To withhold authority to vote for any individual nominee,
mark "For All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
II. Approval of certain amendments to the
Yonkers Financial Corporation 1996 [ ] [ ] [ ]
Stock Option and Incentive Plan
III. Approval of certain amendments to the
Yonkers Financial Corporation 1996 [ ] [ ] [ ]
Management and Recognition Plan
IV. The ratification of the appointment
of KPMG Peat Marwick LLP, as the
independent auditors of the [ ] [ ] [ ]
Company for the fiscal year ended
September 30, 1999.
<PAGE>
In their discretion, the proxies are authorized to vote on such other
matters as may properly come before the Meeting or any adjournments or
postponements thereof.
The Board of Directors recommends a vote "FOR" the listed proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
Please be sure to sign and date this Proxy in the box below.
- --------------------------------------------------------------------------------
Date
- --------------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope
provided.
YONKERS FINANCIAL CORPORATION
Should the above signed be present and elect to vote at the Meeting or
at any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Meeting of the stockholder's decision to
terminate this Proxy, then the power of such attorneys and proxies shall be
deemed terminated and of no further force and effect.
The above signed acknowledges receipt from the Company, prior to the
execution of this Proxy, of Notice of the Annual Meeting, a Proxy Statement
dated December 29, 1998, and the Company's Annual Report to Stockholders for the
fiscal year ended September 30, 1998.
Please sign exactly as your name appears above on this card. When
signing as attorney, executor, administrator, trustee or guardian, please give
your full title. If shares are held jointly, each holder should sign.
PLEASE ACT PROMPTLY
SIGN DATE & MAIL YOUR PROXY CARD TODAY
