SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant |X|
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
CARVER BANCORP, INC.
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[LETTERHEAD OF CARVER BANCORP, INC.]
July 21, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 annual meeting of
stockholders (the "Annual Meeting") of Carver Bancorp, Inc. ("Carver" or the
"Company"), the holding company for Carver Federal Savings Bank, which will be
held on August 14, 1998 at 10:00 a.m., New York City time, in the Board Room at
the American Stock Exchange, 86 Trinity Place, New York, New York 10006 (the
"Annual Meeting").
The attached Notice of Annual Meeting of Stockholders and Proxy
Statement describe the formal business to be transacted at the Annual Meeting.
Directors and officers of Carver, as well as representatives of Mitchell &
Titus, LLP, the accounting firm appointed by the Board of Directors to be
Carver's independent auditors for the fiscal year ending March 31, 1999, will be
present at the Annual Meeting. In addition, management will report on the
operations and activities of the Company and there will be an opportunity for
you to ask questions about Carver's business.
The Board of Directors of Carver has determined that an affirmative
vote on each of proposals one and two to be considered at the Annual Meeting is
in the best interests of Carver and its stockholders and unanimously recommends
a vote "FOR" proposals one and two.
For the reasons set forth in the Proxy Statement, the Board of
Directors of Carver has determined that proposal three, a stockholder proposal,
scheduled to be considered at the Annual Meeting if properly introduced thereat,
is not in the best interests of Carver and its stockholders and unanimously
recommends a vote "AGAINST" proposal three.
It is very important that your shares be represented at the Annual
Meeting, regardless of whether or not you plan to attend in person. I urge you
to mark, execute, date and return the enclosed proxy card in the enclosed
postage-paid envelope as soon as possible to ensure that your shares will be
voted at the Annual Meeting. IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT
REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR
RECORD HOLDER TO ATTEND AND TO VOTE PERSONALLY AT THE ANNUAL MEETING.
YOUR VOTE IS IMPORTANT WHETHER OR NOT YOU PLAN
TO ATTEND THE ANNUAL MEETING IN PERSON.
On behalf of the Board of Directors and the employees of Carver, I wish
to thank you for your continued support.
Sincerely yours,
/s/ Thomas L. Clark, Jr.
------------------------
Thomas L. Clark, Jr.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
CARVER BANCORP, INC.
75 WEST 125TH STREET
NEW YORK, NEW YORK 10027-4512
==========================================================
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 14, 1998
==========================================================
NOTICE IS HEREBY GIVEN that the 1998 annual meeting of stockholders of
Carver Bancorp, Inc. ("Carver" or the "Company") will be held on August 14, 1998
at 10:00 a.m., New York City time, in the Board Room at the American Stock
Exchange, 86 Trinity Place, New York, New York 10006 (the "Annual Meeting"). At
the Annual Meeting, stockholders will be asked to consider and vote upon the
following matters:
1. To elect three directors each to serve for a three-year term
expiring at the annual meeting of stockholders to be held in
the year 2001 and until their respective successors have been
elected and qualified;
2. To ratify the appointment of Mitchell & Titus, LLP as
independent auditors for the Company for the fiscal year
ending March 31, 1999;
3. To consider and vote upon a stockholder proposal, opposed by
the Board of Directors, if properly introduced at the Annual
Meeting; and
4. Authorization of the Board of Directors, in its discretion, to
direct the vote of proxies upon such matters incident to the
conduct of the Annual Meeting as may properly come before the
Annual Meeting, and any adjournment or postponement thereof,
including, without limitation, a motion to adjourn the Annual
Meeting. The Company is not aware of any other business that
may properly come before the Annual Meeting.
Pursuant to the Bylaws of Carver, the Board of Directors has fixed June
25, 1998 as the record date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting and at any adjournment or
postponement thereof. Only holders of the common stock of the Company as of the
close of business on the record date will be entitled to vote at the Annual
Meeting or any adjournment or postponement thereof. A list of stockholders
entitled to vote at the Annual Meeting will be available at Carver Federal
Savings Bank, 75 West 125th Street, New York, New York, for a period of ten days
prior to the Annual Meeting and will also be available at the Annual Meeting.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON. THE
PROXY MAY BE REVOKED AT ANY TIME PRIOR TO ITS EXERCISE IN THE MANNER DESCRIBED
IN THE ATTACHED PROXY STATEMENT. ANY STOCKHOLDER PRESENT AT THE ANNUAL MEETING,
INCLUDING ANY ADJOURNMENT OR POSTPONEMENT THEREOF, MAY REVOKE SUCH HOLDER'S
PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE ANNUAL MEETING.
By Order of the Board of Directors,
Raymond L. Bruce, Esq.
SENIOR VICE PRESIDENT, CORPORATE COUNSEL
AND CORPORATE SECRETARY
New York, New York
July 21, 1998
<PAGE>
CARVER BANCORP, INC.
75 WEST 125TH STREET
NEW YORK, NEW YORK 10027-4512
-------------------
PROXY STATEMENT
-------------------
1998 ANNUAL MEETING OF STOCKHOLDERS
AUGUST 14, 1998
==================================================
GENERAL INFORMATION
==================================================
GENERAL
This Proxy Statement and accompanying proxy card are being furnished to
stockholders of Carver Bancorp, Inc. (the "Company" or "Carver"), in connection
with the solicitation of proxies by the Board of Directors of Carver to be used
at the Annual Meeting to be held on August 14, 1998, at 10:00 a.m., New York
City time, in the Board Room at the American Stock Exchange, 86 Trinity Place,
New York, New York 10006, and at any adjournment or postponement thereof (the
"Annual Meeting"). The accompanying Notice of Annual Meeting and this Proxy
Statement are being first mailed to stockholders on or about July 21, 1998.
The Company, a Delaware corporation, operates as a savings and loan
association holding company for Carver Federal Savings Bank ("Carver Federal" or
the "Bank").
RECORD DATE AND VOTING
The Board of Directors of Carver has fixed the close of business on
June 25, 1998 as the record date (the "Record Date") for the determination of
the holders of the common stock, par value $.01 per share of Carver Bancorp,
Inc. ("Common Stock") entitled to receive notice of and to vote at the Annual
Meeting. Only holders of record of Common Stock at the close of business on that
date will be entitled to vote at the Annual Meeting. At the close of business on
the Record Date, there were 2,314,275 shares of Common Stock outstanding. The
presence, in person or by proxy, of the holders of at least a majority of the
total number of outstanding shares of Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum at the Annual Meeting.
Each holder of shares of Common Stock outstanding on the Record Date
will be entitled to one vote for each share held of record (other than Excess
Shares, as defined below) upon each matter properly submitted at the Annual
Meeting. As provided in the Company's Certificate of Incorporation, record
holders of Common Stock who beneficially own in excess of 10% of the outstanding
shares of Common Stock ("Excess Shares") shall be entitled to cast only one
one-hundredth of one vote per share for each Excess Share. A person or entity is
deemed to beneficially own shares owned by an affiliate or associate as well as
by persons acting in concert with such person or entity. The Company's
Certificate of Incorporation authorizes the Board of Directors to interpret and
apply the provisions of the Certificate of Incorporation and Bylaws governing
Excess Shares, and to determine on the basis of information known to it after
reasonable inquiry, all facts necessary to ascertain compliance with the
Certificate of Incorporation, including, without limitation, (i) the number of
shares of Common Stock beneficially owned by any person or purported owner, (ii)
whether a person or purported owner is an affiliate or associate of, or is
acting in concert with, any other person or purported owner and (iii) whether a
person or purported owner has an agreement or understanding with any person or
purported owner as to the voting or disposition of any shares of Common Stock.
-3-
<PAGE>
If the enclosed proxy card is properly executed and received by the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon. IF NO
INSTRUCTIONS ARE GIVEN, EXECUTED PROXIES WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR ELECTION AS DIRECTORS ("PROPOSAL ONE"), FOR THE RATIFICATION OF THE
APPOINTMENT OF MITCHELL & TITUS, LLP AS INDEPENDENT AUDITORS FOR THE COMPANY
("PROPOSAL TWO") AND AGAINST THE STOCKHOLDER PROPOSAL DESCRIBED HEREIN
("PROPOSAL THREE").
Management is not aware of any matters other than those set forth in
the Notice of Annual Meeting of Stockholders that may be brought before the
Annual Meeting. If any other matters properly come before the Annual Meeting,
including, among other things, a motion to adjourn or postpone the Annual
Meeting to another time or place or both for the purpose of soliciting
additional proxies or otherwise, the persons named in the accompanying proxy
will vote the shares represented by all properly executed proxies on such
matters in such manner as shall be determined by a majority of the Board of
Directors of the Company.
VOTES REQUIRED
PROPOSAL ONE. Directors are elected by a plurality of the votes cast in
person or by proxy at the Annual Meeting. The holders of Common Stock may not
vote their shares cumulatively for the election of directors. Shares underlying
broker non-votes will not be counted as having been voted in person or by proxy
and will have no effect on the election of directors.
PROPOSAL TWO AND PROPOSAL THREE. The ratification of the appointment by
the Board of Directors of Mitchell & Titus, LLP as the Company's independent
auditors and approval of the stockholder proposal each require the affirmative
vote of the holders of a majority of the number of votes eligible to be cast by
the holders of the outstanding shares of Common Stock present and entitled to
vote at the Annual Meeting. Accordingly, shares as to which the "ABSTAIN" box
has been selected on the Proxy Card will be counted as present and entitled to
vote and will have the effect of a vote against Proposal Two or Proposal Three,
as applicable. Shares underlying broker non-votes will not be counted as having
been voted in person or by proxy and will have no effect on the vote for
Proposal Two or Proposal Three.
REVOCABILITY OF PROXIES
The presence of a stockholder at the Annual Meeting will not
automatically revoke such stockholder's proxy. However, a stockholder may revoke
a proxy at any time prior to its exercise by (1) filing a written notice of
revocation with the Corporate Secretary of the Company, (2) delivering to the
Corporate Secretary of the Company prior to the Annual Meeting a duly executed
proxy bearing a later date or (3) attending the Annual Meeting, filing a written
notice of revocation with the secretary of the meeting and voting in person. IF
YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL
NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO ATTEND AND TO VOTE
PERSONALLY AT THE ANNUAL MEETING. Examples of such documentation would include a
broker's statement, letter or other document that will confirm your ownership of
Common Stock.
SOLICITATION OF PROXIES
In addition to solicitation by mail, directors, officers and employees
of Carver may solicit proxies for the Annual Meeting from Carver stockholders
personally or by telephone or telegram without additional remuneration therefor.
The Company will also provide persons, firms, banks and corporations holding
shares in their names or in the names of nominees, which in either case are
beneficially owned by others, proxy material for transmittal to such beneficial
owners and will reimburse such record owners for their expenses in doing so. The
Company has retained Morrow & Co., Inc. ("Morrow") to assist in the solicitation
of proxies at a fee of $3,000 plus expenses and disbursements. The cost of
solicitation of proxies for the Annual Meeting, including the fees of Morrow,
will be borne by the Company.
-4-
<PAGE>
====================================================
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
====================================================
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as to those persons
believed by management to be beneficial owners of more than 5% of the
outstanding shares of Common Stock on May 31, 1998, as disclosed in certain
reports regarding such ownership filed by such persons, with the Company or the
Securities and Exchange Commission (the "SEC") in accordance with Section 13 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Other than
those persons listed below, the Company is not aware of any person or group, as
such term is defined in the Exchange Act, that beneficially owns more than 5% of
the outstanding shares of Common Stock as of May 31, 1998. For purposes of the
table set forth below and the table set forth under "--Stock Ownership of
Management," an individual is considered to "beneficially own" any securities
(a) over which such individual exercises sole or shared voting or investment
power, or (b) of which such individual has the right to acquire beneficial
ownership, including the right to acquire beneficial ownership by the exercise
of stock options within 60 days after May 31, 1998. As used herein, "voting
power" includes the power to vote, or direct the voting of, such securities, and
"investment power" includes the power to dispose of, or direct the disposition
of, such securities.
<TABLE>
<CAPTION>
AMOUNT-AND PERCENT-OF
NATURE-OF SHARES-OF
NAME-AND-ADDRESS BENEFICIAL COMMON STOCK
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OUTSTANDING (1)
- ------------------- ------------------------------ --------------- -------------------
<S> <C> <C> <C>
Common Stock EQSF Advisers, Inc. 218,500(2) 9.44%
767 Third Avenue
New York, NY 10017
Common Stock Carver Bancorp, Inc. 182,132(3) 7.87%
Employee Stock Ownership Plan
Trust (the "ESOP Trust")
75 West 125th Street
New York, NY 10027
Common Stock Koch Asset Management, L.L.C. 174,350(4) 7.53%
1293 Mason Road
Town & Country, MO 63131
Common Stock FMR Corp.
82 Devonshire Street
Boston, MA 02109 142,000(5) 6.14%
</TABLE>
- ------------------------
(1) The total number of shares of Common Stock outstanding on May 31, 1998
was 2,314,275 shares.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
-5-
<PAGE>
(2) Based on a Schedule 13G, dated February 13, 1997, and filed with the
SEC jointly by EQSF Advisers, Inc. ("EQSF") and Martin J. Whitman, the
Chief Executive Officer and controlling person of EQSF. EQSF
beneficially owns 218,500 shares of Common Stock. Mr. Whitman
disclaims beneficial ownership of such stock. Third Avenue Value Fund,
Inc., an investment Company registered under the Investment Company
Act of 1940, has the right to receive dividends with respect to, and
proceeds from the sale of, such shares. EQSF has sole voting and
dispositive power over such shares.
(3) The Administrative Committee established to administer the Carver
Bancorp, Inc. Employee Stock Ownership Plan (the "ESOP") consists of
officers of the Bank. The ESOP's assets are held in the ESOP Trust,
for which Marine Midland Bank serves as trustee (the "ESOP Trustee").
The Administrative Committee instructs the ESOP Trustee regarding the
investment of funds contributed to the ESOP. Common Stock purchased by
the ESOP Trust is held in a suspense account and allocated to
participants' accounts annually based on contributions made to the
ESOP by the Bank. Shares released from the suspense account are
allocated among participants in proportion to their compensation, as
defined in the ESOP, for the year the contributions are made, up to
the limits permitted under the Internal Revenue Code of 1986 (the
"Code"). The ESOP Trustee must vote all allocated shares held in the
ESOP Trust in accordance with the instructions of participants. As of
December 31, 1998, a total of 75,755 shares had been allocated, but
not distributed, to participants. Under the ESOP, unallocated shares
or shares for which no voting instructions have been received will be
voted by the ESOP Trustee in the same proportion as allocated shares
with respect to which the ESOP Trustee receives instructions. In the
absence of any voting instructions with respect to allocated shares,
the Board of Directors, on behalf of the Company, directs the voting
of all shares of unallocated stock, or in the absence of such
directions from the Board of Directors, the ESOP Trustee has sole
discretion with respect to the voting of such shares. Each member of
the Board of Directors disclaims beneficial ownership of the shares
held in the ESOP Trust.
(4) Based on a Schedule 13G, dated February 16, 1998, and filed with the
SEC jointly by Koch Asset Management, L.L.C. ("KAM") and Donald Leigh
Koch, the sole Managing Member of KAM. KAM is a registered investment
adviser which furnishes investment advice to individual clients by
exercising trading authority over securities held in accounts on
behalf of such clients (collectively, the "Managed Portfolios"). In
its role as an investment adviser to its clients, KAM has sole
dispositive power over the Managed Portfolios and may be deemed to be
the beneficial owner of shares of Common Stock held by such Managed
Portfolios. However, KAM does not have the right to vote or to receive
dividends from, or proceeds from the sale of , the Common Stock held
in such Managed Portfolios and disclaims any ownership associated with
such rights.
Mr. Koch may be deemed to have the power to exercise any dispositive
power that KAM may have with respect to the Common Stock held by the
Managed Portfolios. Mr. Koch, individually, and Mr. Koch and his
spouse, jointly, own and hold voting power with respect to Managed
Portfolios containing approximately 11,850 and 2,000 shares of Common
Stock, or an aggregate of approximately 0.5% of the total number of
outstanding shares of Common Stock (collectively "Koch shares"). Other
than with respect to the Koch shares, all shares reported in the
Schedule 13G have been acquired by Koch Asset Management, L.L.C., and
Mr. Koch does not have beneficial ownership, voting rights, rights to
dividends, or rights to sale proceeds associated with such shares.
(5) Based on a Schedule 13G, dated February 14, 1998, and filed with the
SEC by FMR Corp. ("FMR"). According to FMR Corp.'s Schedule 13G,
Fidelity Management & Research Company ("Fidelity"), a wholly-owned
subsidiary of FMR Corp. and an investment adviser registered under the
Investment Advisers Act of 1940, is the beneficial owner of 142,000
shares or 6.14% of the Common Stock outstanding of Carver, as a result
of acting as investment adviser to various investment companies
registered under the Investment Company Act of 1940. The ownership of
one investment company, Fidelity Select Home Finance Portfolio,
amounted to 142,000 shares or 6.14% of the Common Stock outstanding.
Edward C. Johnson 3d, Chairman of the Board of FMR Corp., through its
control of Fidelity, and the Funds each has sole power to dispose of
the 142,000 shares owned by the Funds. Neither FMR Corp. nor Mr.
Johnson, has the sole power to vote or direct the voting of the shares
owned directly by the Fidelity Funds, which power resides with the
Funds' Boards of Trustees. Fidelity carries out the voting of the
shares under written guidelines established by the Funds' Boards of
Trustees. Members of the Edward C. Johnson 3d family and trusts for
their benefit are the predominant owners of Class B shares of common
stock of FMR Corp., representing approximately 49% of the voting power
of FMR Corp. Mr. Johnson 3d owns 12.0% and Abigail Johnson owns 24.5%
of the aggregate outstanding voting stock of FMR Corp. Abigail P.
Johnson is a director of FMR Corp. The Johnson family group and all
other Class B shareholders have entered into a shareholders' voting
agreement under which all Class B shares will be voted in accordance
with the majority vote of Class B shares. Accordingly, through their
ownership of voting common stock and the execution of the
shareholders' voting agreement, members of the Johnson family may be
deemed, under the Investment Company Act of 1940, to form a
controlling group with respect to FMR Corp.
-6-
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information, determined as of May 31,
1998, as to the total number of shares of Common Stock beneficially owned by
each director, each nominee and each Named Executive Officer, as defined herein,
identified in the Summary Compensation Table, appearing elsewhere herein, and
all directors, nominees and executive officers of the Company or the Bank as a
group. Ownership information is based upon information furnished by the
respective individuals. Except as otherwise indicated, each person and the group
shown in the table has sole voting and investment power with respect to the
shares indicated.
<TABLE>
<CAPTION>
AMOUNT-AND PERCENT-OF
NATURE OF COMMON
BENEFICIAL STOCK
NAME TITLE OWNERSHIP(1)(2) OUTSTANDING(3)
- ------------------------ -------------------------------- ---------------- -------------------
<S> <C> <C> <C>
Thomas L. Clark, Jr. President and Chief 25,480(4) *
Executive Officer, Director
David N. Dinkins Director 3,421 *
Linda H. Dunham Director 2,221 *
Robert J. Franz Director 1,900 *
Pazel G. Jackson, Jr. Director 700 *
Herman Johnson, CPA Director 3,190(5) *
David R. Jones Chairman of the Board, 6,390 *
Director
Biswarup Mukherjee Former Executive Vice 8,328(6) *
President and Chief
Financial Officer
All directors, nominees and executive 176,907 7.57%
officers as a group (12 persons)(7)(8)(9)
</TABLE>
- --------------------------------------------
* Less than 1% of outstanding Common Stock.
(1) Includes 13,886, 400, 400, 200, 200, 2,776, and 2,776 shares which may
be acquired by Messrs. Clark and Dinkins, Ms. Dunham and Messrs.
Franz, Jackson, Johnson and Jones, respectively, pursuant to options
granted under the Carver Bancorp, Inc. 1995 Stock Option Plan (the
"Option Plan"). Also includes the 414 shares that may be acquired by
Mr. Clark under the Carver Bancorp, Inc. Incentive Compensation Plan
(the "Incentive Compensation Plan"). Mr. Mukherjee, a former executive
officer of the Company and the Bank, did not hold any outstanding
stock options under the Option Plan as of May 31, 1998.
(2) Excludes 10,829, 600, 600, 800, 800, 2,083 and 2,083 shares of
restricted stock granted to Messrs. Clark and Dinkins, Ms. Dunham and
Messrs. Franz, Jackson, Johnson and Jones, respectively, pursuant to
the Carver Bancorp, Inc. Management Recognition Plan (the "MRP")
and/or the Incentive Compensation Plan with respect to which such
individuals have neither voting nor dispositive power. Mr. Mukherjee,
a former executive officer of the Company and the Bank, did not have
any un-vested shares of restricted stock under either the MRP or the
Incentive Compensation Plan as of May 31, 1998. See "Directors'
Compensation-- Management Recognition Plans" and "--Incentive
Compensation Plan."
(3) Percentages with respect to each person or group of persons have been
calculated on the basis of 2,314,275 shares of Common Stock, the total
number of shares of the Company's Common Stock outstanding as of May
31, 1998, plus the number of shares of Common Stock which such person
or group has the right to acquire within 60 days after May 31, 1998,
by the exercise of stock options.
(4) Includes 3,121 shares held by the trustee of the Carver Federal
Savings Bank 401(k) Savings Plan in RSI Retirement Trust ("401(k)
Plan") which are attributable to the account of Mr. Clark, and as to
which he shares voting and dispositive power, and 2,781 shares
allocated to the account of Mr. Clark under the ESOP as to which he
has sole voting power, but no dispositive power, except in limited
circumstances.
(5) Includes 50 shares held jointly by spouse and son and 50 shares held
individually by son over which Mr. Johnson has shared voting power and
dispositive power.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
-7-
<PAGE>
(6) Includes 1,276 shares held by the trustee of the 401(k) Plan which are
attributable to the account of Mr. Mukherjee, and as to which he
shares voting and dispositive power, and 3,540 shares allocated to the
account of Mr. Mukherjee under the ESOP as to which he has sole voting
power, but no dispositive power, except in limited circumstances.
Although Mr. Mukherjee terminated employment with the Company and the
Bank during the 1998 fiscal year, as of May 31, 1998, Mr. Mukherjee
had outstanding account balances under both the 401(k) Plan and the
ESOP which will be distributed to him in accordance with the terms of
these Plans.
(7) Includes 6,813 shares held by the ESOP Trust that have been allocated
as of May 31, 1998 to the individual accounts of the executive
officers under the ESOP and as to which such executive officers have
sole voting power, but no dispositive power, except in limited
circumstances. Also includes 106,377 unallocated shares held by the
ESOP Trust as to which the Board of Directors shares voting and
dispositive power. Each member of the Board of Directors disclaims
beneficial ownership of the shares held in the ESOP.
(8) Includes 1,364 shares attributable to the individual accounts of the
executive officers under the 401(k) Plan and as to which such
executive officers have sole dispositive power and shared voting power
with the members of the committee established to administer the 401(k)
Plan.
(9) Includes the 26,586 shares which may be acquired by the directors and
executive officers, as a group, pursuant to options granted under the
Option Plan. Also includes the 942 shares which may be acquired by the
executive officers, as a group, pursuant to options granted under the
Incentive Compensation Plan. Excludes the 943 shares of restricted
stock awarded to the executive officers under the Incentive
Compensation Plan with respect to which such individuals have neither
voting nor dispositive power.
============================================
PROPOSAL ONE
ELECTION OF DIRECTORS
============================================
GENERAL
The Certificate of Incorporation of the Company provides that the Board
of Directors shall be divided into three classes, as nearly equal in number as
possible. The directors of each class serve for a term of three years, with one
class elected each year. In all cases, directors serve until their successors
are elected and qualified.
Carver's Board currently consists of seven members. The Board of
Directors has nominated for election as directors Thomas L. Clark, Jr., Herman
Johnson, and Pazel G. Jackson, Jr. each to serve for a term of three years and
until their successors are elected and qualified. On November 18, 1997, the
Board of Directors voted to increase the size of the Board from six to seven
members, effective on such date. Upon the nomination of the Nominating
Committee, the directors elected Pazel G. Jackson, Jr. to fill the newly created
vacancy. Mr. Jackson has been appointed to serve as a director in the class
whose term expires in 1998. The Bylaws of the Company provide that if the Board
expands its size by appointing an additional director, any director so appointed
shall serve for the remainder of the term of the class of directors in which the
new directorship was created. Accordingly, Mr. Jackson is a nominee for director
at the Annual Meeting since his term expires at such meeting.
Each nominee has consented to being named in the Proxy Statement and to
serve if elected. However, if any nominee is unable to serve, the shares
represented by all properly executed proxies which have not been revoked will be
voted for the election of such substitute as the Board of Directors may
recommend or the size of the Board of Directors may be reduced to eliminate the
vacancy. At this time, the Board knows of no reason why any nominee might be
unavailable to serve.
-8-
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth certain information with respect to each
nominee for election as a director and each director whose term does not expire
at the Annual Meeting ("Continuing Director"). There are no arrangements or
understandings between the Company and any director or nominee pursuant to which
such person was elected or nominated to be a director of the Company. For
information with respect to security ownership of directors and nominees, see
"General Information -- Security Ownership of Certain Beneficial Owners and
Management -- Stock Ownership of Management."
<TABLE>
<CAPTION>
END-OF POSITION-HELD-WITH-THE
NAME AGE (1) TERM COMPANY AND THE BANK DIRECTOR-SINCE-(2)
- ------------------------ --------- ------ -------------------- ----------------------
NOMINEES FOR A THREE-
YEAR TERM EXPIRING IN
2001
<S> <C> <C> <C> <C>
Thomas L. Clark, Jr. 54 2001 President, Chief Executive 1995
Officer and Director
Herman Johnson, CPA 62 2001 Director 1981
Pazel G. Jackson, Jr. 66 2001 Director 1997
CONTINUING DIRECTORS
David N. Dinkins 71 1999 Director 1996
Linda H. Dunham 48 2000 Director 1996
Robert J. Franz 60 2000 Director 1997
Chairman of the Board and
David R. Jones 50 1999 Director 1989
</TABLE>
- ------------------------
(1) As of April 30, 1998.
(2) Includes terms as directors of Carver Federal prior to the
incorporation of the Company in 1996.
The principal occupation and business experience of each nominee for
election as director, each Continuing Director is set forth below.
NOMINEES FOR ELECTION AS DIRECTORS
THOMAS L. CLARK, JR., is currently President and Chief Executive
Officer, a position he assumed on February 1, 1995. Mr. Clark is also a member
of the Bank's Board of Directors. Prior to assuming his current position, Mr.
Clark was employed by the New York State Banking Department from 1976 until 1995
and from 1987 until 1995, served as Deputy Superintendent of Banks for New York
State Banking Board. In addition, Mr. Clark serves on the Thrift Institutions
Advisory Panel of the Federal Reserve Bank of New York; as Chairman of the
Community Investment and Affordable Housing Committee of the Community Bankers
of New York State and Chairman of the American League of Financial Institutions,
the national trade association representing minority savings institutions,
(based in Washington, D.C); Mr. Clark also serves on the Boards of Directors of
the New York City Partnership and Chamber of Commerce, Inc., and the New York
City Housing Partnership, and is a member of the Advisory Board of Small
Business Development Centers of New York State.
HERMAN JOHNSON is currently self-employed as a certified public
accountant in Brooklyn, New York, and has been so employed in such profession
since 1962. Mr. Johnson currently serves as Chairman of the Board of Trustees of
Mt. Sinai Baptist Church in Brooklyn and has been a Trustee since 1966. He
formerly served as a Trustee of the Interfaith Medical Center in Brooklyn from
1987 to 1991.
-9-
<PAGE>
PAZEL G. JACKSON, JR. is currently employed as a Senior Vice President
in the Community Development Group of Chase Manhattan Bank. Since January, 1995,
Mr. Jackson has been responsible for new business development in targeted
markets throughout the United States. Mr. Jackson is also responsible for
assisting the Chase Manhattan Mortgage Corporation's staff in the development
and implementation of a national low and moderate income outreach program. Prior
to joining Chase Manhattan Bank, Mr. Jackson served as the Senior Credit Officer
of the Residential Mortgage Division of Chemical Bank. As Senior Credit Officer,
Mr. Jackson was directly responsible for Credit and Risk Management which
included oversight of the following areas: credit policy, underwriting,
appraisals, quality control, portfolio administration, asset recovery
(workouts), post-closing operations and supervision of the Affordable Housing
Unit. Mr. Jackson's previous business experience also includes employment as a
Senior Vice President in charge of Commercial and Residential Lending at The
Bowery Savings Bank. Mr. Jackson joined The Bowery in 1969 and held various
positions at this financial savings institution including, Senior Vice
President, Assistance to the Chairman (1985-1986); Senior Vice President,
Division Head, Real Estate Finance (1981-1985); Senior Vice President, Marketing
Director (1977-1981); and Vice President, Asset Recovery (1973-1977). Mr.
Jackson also served as Assistant Commissioner, New York City Department of
Buildings (1967-1968) and as Chief of Engineering Design for the 1964-1965 New
York World's Fair Corporation (1962-1966).
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE FOR THE ELECTION OF THE NOMINEES FOR ELECTION AS DIRECTORS.
CONTINUING DIRECTORS
DAVID N. DINKINS is currently a professor of public affairs at the
Columbia University School of International and Public Affairs and a senior
fellow of the Barnard-Columbia Center for Urban Policy. He also hosts a public
affairs radio program, "Dialogue with Dinkins," on WLIB-AM, and continues to be
an advocate for children, education, compassionate urban policy, and tolerance.
The 106th Mayor of the City of New York, Mr. Dinkins began his career
in public service in 1966 in the New York State Assembly, where he helped create
the Search for Education, Elevation and Knowledge (SEEK) program, which provides
low-income students with grants and educational assistance. He served as
president of the New York Board of Elections from 1972 through 1973, during
which time he established guidelines that encouraged wider voter registration.
He was appointed City Clerk in 1975, a post he held for 10 years. He was elected
President of the Borough of Manhattan in November 1985 and as Mayor of the City
of New York in November 1989, serving a four-year term.
Mr. Dinkins currently serves on the board of a number of non-profit and
charitable organizations, many of which assist children and young people. Among
them are the Association to Benefit Children; the Bard College Clemente Course
in the Humanities; Body Sculpt of New York; the Children's Health Fund; the
Federation of Protestant Welfare Agencies; Friends of the Nelson Mandela
Children's Fund; the Andrew Goodman Foundation; Hope for Infants; the Howard
Samuels Foundation; the International Tennis Hall of Fame; the Jazz Foundation
of America; the Lenox Hill Neighborhood House; the National Urban Technology
Center; the New York State International Partnership Program; the New York
Junior Tennis League; the Prisoner's Legal Services of New York; and the U.S.
Committee for UNICEF.
Mr. Dinkins is the national chairman of the Black Leadership Commission
on AIDS. He is the chairman of the board of the Constituency for Africa, and a
member of the Advisory Board of Citizens for Service, the Ronald H. Brown
Foundation, Shared Interest, and the South African-American Organization. He is
a member of the Board of Advisors of the Aristide Foundation for Democracy, of
the Advisory Group of the David C. Singler Foundation, of the Advisory Council
of the Respect for Law Alliance, and of the Advisory Committee for T-Ball USA
Association. He is a member of the President's Council of the New York City
Mission Society; of the Steering Committee of the Association for a Better New
York, and of the Honorary Board of Directors of the Rowell Foster Children's
Positive Plan. He is an Honorary Life Trustee of the Community Service of New
York, an Honorary Trustee of the Friends of Harlem Hospital, and a member of the
Eastern Tennis Association Hall of Fame.
-10-
<PAGE>
Mr. Dinkins is also a member of the Council on Foreign Relations, the
Taubman Center for State and Local Government at Harvard University's Kennedy
School of Government and the Visiting Committee of the Robert J. Milano Graduate
of Management and Urban Policy at the New School for Social Research.
LINDA H. DUNHAM is Vice President of TCB Management Corporation, a
management company which oversees the McDonald's restaurants which she co-owns
and operates. Prior to joining TCB Management Corporation, Ms. Dunham was
employed by Chemical Bank for 16 years in various capacities. Ms. Dunham is also
Secretary of the Board of Directors of The Children's Oncology Society of New
York, the Vice Chair of the Board of Trustees of Community Service Society of
New York and a member of the National Board of Directors of the Ronald McDonald
House Charities.
ROBERT J. FRANZ is currently a senior vice president of Booz-Allen &
Hamilton, Inc., which he joined in 1989, and leads the firm's financial
industries information technology practice. His entire business career has been
focused on the financial services industries in technology and operations
consulting, technology management and financial management. He began his
business career at The Travelers Corporation where he managed the implementation
of one of the first large-scale on-line computer systems in the country.
Subsequently, he founded and managed their Corporate Systems Department. Mr.
Franz spent twelve years at Arthur Andersen & Co. in New York where he was
partner-in-charge of their worldwide capital markets and insurance consulting
practices. He also was a member of their global management team for the banking
industries. Subsequently, he was Managing Director at Morgan Stanley where he
was Controller and Director of Financial Planning and Analysis.
DAVID R. JONES has been a director of Carver Federal since 1989. He was
appointed Chairman of the Board in October, 1995. Mr. Jones is currently the
President and Chief Executive Officer of the Community Service Society of New
York ("CSS"). One of the nation's oldest and largest nonprofit social welfare
organizations, the 150-year-old agency uses direct help, research, advocacy and
litigation to alleviate the effects of poverty, focusing on the areas of
education, health care delivery, income security and affordable housing. Prior
to joining CSS, Mr. Jones served for three years as Executive Director of the
New York City Youth Bureau and as Special Advisor to Mayor Edward I. Koch. A
member of the New York State and federal bars, he previously worked for four
years as a corporate lawyer at the law firm of Cravath, Swaine & Moore. Earlier,
he had been a clerk for federal Judge Constance Baker Motley and one of the last
interns for U.S. Senator Robert F. Kennedy. Mr. Jones is currently on the boards
of directors of the New York City Health and Hospitals Corporation, which runs
21 public hospitals and clinics, the Puerto Rican Legal Defense and Education
Fund, and the New York Foundation. He also serves on the board of directors of
the Prospect Park Alliance and is a member of the Board of Commissioners of the
Black Leadership Commission on AIDS. A charter trustee of Wesleyan University,
he also serves on the advisory boards of the John F. Kennedy School of
Government of Harvard University and the Barnard-Columbia Center for Leadership
on Urban Public Policy, and as a trustee of the New York Historical Society. He
is the author of the "Urban Agenda" column which appears in the AMSTERDAM NEWS
and ethnic papers throughout the nation and host of a local Cable TV show of the
same name.
BOARD AND COMMITTEE MEETINGS
The Board of Directors of the Company holds regular monthly meetings
and holds special meetings as needed. During the fiscal year ending March 31,
1998, the Board met twelve times. No director attended fewer than 83%, in the
aggregate, of the total number of Board meetings held while he or she was a
member during the fiscal year ended March 31, 1998 ("fiscal 1998")and the total
number of meetings held by committees on which he or she served during such
fiscal year. The Board of Directors has standing Audit, Executive and
Compensation Committees, the nature and composition of which are described
below.
AUDIT COMMITTEE. The Audit Committee consists of Directors Herman
Johnson (Chairman), David R. Jones, and Thomas L. Clark, Jr. (ex officio). This
committee meets at least once annually to review and approve the independent
audit report. This committee did not meet during fiscal 1998. The Bank's audit
committee met on a monthly basis during the fiscal 1998.
EXECUTIVE COMMITTEE. The Executive Committee is authorized to act as
appropriate between meetings of the Board of Directors. Members of this
committee are Directors Thomas L. Clark, Jr. (Chairman), David R. Jones, Herman
Johnson and Linda H. Dunham. This committee met 6 times during fiscal 1998.
-11-
<PAGE>
COMPENSATION COMMITTEE. The Compensation Committee consists of
directors David R. Jones (Chairman), Herman Johnson, Linda H. Dunham and Thomas
L. Clark, Jr. (ex officio). This committee evaluates the performance of the
executive officers and is authorized to establish the compensation of those
individuals. This committee met twice during fiscal 1998.
NOMINATING COMMITTEE. The Nominating Committee, which consists of
directors David R. Jones (Chairman), Thomas L. Clark, Jr. and Herman Johnson met
twice during fiscal 1998. The Nominating Committee met on November 18, 1997 to
nominate Pazel G. Jackson, Jr. to the Board. In addition, the Nominating
Committee met on May 19, 1998, to select the nominees for election as directors
at the Annual Meeting. In accordance with the Bylaws of the Company, no
nominations for election as directors, except those made by the Nominating
Committee, shall be voted upon at the Annual Meeting unless properly made by a
stockholder. No nominations for directors have been received from stockholders
for the elections to be held at the Annual Meeting as of the date of this Proxy
Statement. For a description of the procedure to be followed for a stockholder
to nominate persons for election as a director, see "Additional Information --
Notice of Business to be Conducted at Annual Meeting."
DIRECTORS' COMPENSATION
DIRECTORS' FEES. The Bank's directors, other than Mr. Clark, receive
$600 per meeting attended of the Bank's Board of Directors, except that the
Chairman and Vice Chairman receive a fee of $850 per meeting. In addition, the
Chairman and Vice Chairman of the Board each receive a quarterly retainer fee of
$1,000. Fees for executive committee meetings are $700 per meeting and $475 for
all other committee meetings. Mr. Clark does not receive fees for his attendance
at meetings of the either the Company's or Bank's board of directors or their
respective committees. Directors of the Bank also serve as directors of the
Company, but do not receive additional fees for service as directors of the
Company.
DIRECTORS' RETIREMENT PLAN. The Bank maintains the Carver Federal
Savings Bank Retirement Plan for Nonemployee Directors (the "Directors' Plan")
to provide retirement benefits to directors of the Bank who are neither
employees nor officers of the Bank. The Directors' Plan provides for a
retirement benefit equal to the product of a director's "Vested Percentage" and
the fees such director received for service on the Board during the calendar
year preceding his or her retirement. A participant's "Vested Percentage" is
based on his or her overall years of service on the Board of Directors of the
Bank, and increases from 0% for less than six years of service, to 33% for
between six and ten years of service, to 67% for between eleven and nineteen
years of service and to 100% for more than twenty years of service. However, in
the event a participant terminates service on the Board due to "disability" (as
such term is defined in the Directors' Plan) or death, the participant's Vested
Percentage becomes 100% regardless of his or her years of service. In the event
of a director's death, a survivor benefit equal to 50% of the annual amount
which would have been payable to such director had he or she survived will be
paid to his or her surviving spouse. The Bank will pay such benefits from its
general assets.
OPTION PLAN. The Company maintains the Option Plan for the benefit of
its directors and certain key employees. Under the Option Plan, each outside
director who was a director on the effective date of the Option Plan was granted
options to purchase 6,943 shares of Common Stock, except that former directors
Richard T. Greene and M. Moran Weston were each granted stock options to
purchase 10,415 shares of Common Stock. Such options were granted on September
12, 1995 at an exercise price of $10.38 per share. Any individual who becomes an
outside director following the effective date of the Option Plan will be granted
options to purchase 1,000 shares of Common Stock with an exercise price equal to
the fair market value of a share of Common Stock on the date of the grant.
Accordingly, upon becoming a director, David N. Dinkins, Linda H. Dunham, Robert
J. Franz, and Pazel G. Jackson, Jr. were each granted stock options to purchase
1,000 shares of Common Stock at an exercise price equal to the fair market value
of a share of Common Stock on the date of grant. Options granted under the
Option Plan generally vest in five equal annual installments commencing on the
first anniversary of the effective date of the grant, provided the recipient is
still a director of the Company or the Bank on such date. In September, 1997,
the Option Plan was amended to provide the Committee with discretion to grant
stock options that will vest and become exercisable pursuant to a vesting
schedule that differs from the Plan's standard five-year schedule. The Option
Plan continues to provide that upon the death or disability of an option holder,
all options previously granted to such individual will automatically become
exercisable.
-12-
<PAGE>
MANAGEMENT RECOGNITION PLAN. The Company maintains the MRP for the
benefit of its directors and certain key employees. Under the MRP, each outside
director who was a director on the effective date of the MRP received an
automatic grant of 3,471 shares of restricted stock, except that former
directors Richard T. Greene and M. Moran Weston each received 5,207 shares of
restricted stock. Any individual who becomes an outside director following the
effective date of the MRP will be granted 1,000 shares of restricted stock.
Accordingly, upon becoming directors, David N. Dinkins, Linda H. Dunham, Robert
J. Franz and Pazel G. Jackson, Jr. were each granted 1,000 shares of restricted
stock under the MRP. Awards granted under the MRP will generally vest in five
equal annual installments commencing on the first anniversary date of the award,
provided the recipient is still a director of the Company or the Bank on such
date. Awards will become 100% vested upon termination of service due to death or
disability. When shares become vested and are distributed, the recipients will
receive an amount equal to any accrued dividends with respect thereto. The MRP
was also amended in September, 1997, to permit the Committee, in its discretion,
to grant restricted stock awards with vesting schedules that differ from the
Plan's standard five-year schedule.
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT. In order to secure and
reward the services of Richard T. Greene (the "SERA Participant"), the President
and Chief Executive Officer of the Bank at the time, the Bank entered into a
supplemental executive retirement agreement with him (the "SERA"), effective
January 30, 1995. Pursuant to the terms of the SERA, upon the SERA Participant's
termination of employment with the Bank effective February 1, 1995, he became
entitled to receive annual payments from the Bank in an amount equal to (i) 50%
of his "Average Annual Compensation," less (ii) his "Annual Offset Amount."
Under the SERA, "Average Annual Compensation" means the average of the SERA
Participant's highest annual compensation for three of the five calendar years
preceding his termination of employment, and "Annual Offset Amount" means the
sum of the SERA Participant's primary social security benefits and the benefits
which the SERA Participant would receive in the form of an annuity under the
Pension Plan or the 401(k) Plan (but only to the extent attributable to Bank
matching contributions) upon his termination of employment. Such annual payments
shall be made for 10 years, except that in the event of the SERA Participant's
death, a 50% death benefit will be payable to his surviving spouse, if any.
CONSULTING AGREEMENT. For purposes of securing a smooth transition in
the membership of the Board of Directors of the Company and the Bank, the
Company entered into a Consulting Agreement dated as of October 1, 1997 with M.
Moran Weston, a former Company and Bank board member. The Consulting Agreement
provides for Mr. Weston to be available, upon request, for a five year period
beginning effective as of October 1, 1997, to provide consulting services to the
respective Boards of Directors of the Company and the Bank. In consideration for
the availability of Mr. Weston's services, the Company has agreed to pay Mr.
Weston a retainer of $12,000 per year, with payments to commence to Mr. Weston
on a monthly basis beginning on the effective date of the Agreement. In the
event of Mr. Weston's death, any remaining retainer payments due under the
Consulting Agreement would be paid to Mr. Weston's surviving spouse (or
designated beneficiary) on a monthly basis. Upon retirement from the Company's
Board of Directors, Mr. Weston also became eligible to receive a ten-year annual
retirement benefit of $15,000 under the Directors' Retirement Plan.
INCENTIVE COMPENSATION PLAN. Under the Incentive Compensation Plan,
effective as of September 12, 1995, directors and eligible employees may elect
to defer the receipt of all or part of their future fees and/or compensation.
Prior to the establishment of the Incentive Compensation Plan, the Bank
maintained the Carver Federal Savings Bank Deferred Compensation Plan (the
"Deferred Compensation Plan"). Amounts previously deferred under the Deferred
Compensation Plan are now held and invested in accordance with the terms of the
Incentive Compensation Plan. Pursuant to the terms of the Incentive Compensation
Plan, any deferred amounts will be credited to a bookkeeping account in
accordance with the terms of the deferred compensation agreement ("Deferred
Compensation Agreement") entered into with the individual director or employee.
Such accounts will be adjusted annually to reflect the investment return which
would have resulted if such deferred amounts had been invested, based on the
participant's choice, in one of the following: (i) Common Stock; (ii) the Bank's
highest annual rate of interest on 12-month certificates of deposit; or (iii)
the "Multiplier," which generally is the sum of certain indicators with respect
to the Bank's performance, times 2 percent. A participant will receive
distributions of deferred amounts in accordance with the terms of their
respective Deferred Compensation Agreements. A participant may change the
investment selection applicable to his or her account or elections as to the
timing and form of distributions from such account only with respect to
subsequently deferred fees or compensation.
-13-
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT.
THE REPORT OF THE COMPENSATION COMMITTEE OF THE COMPANY (THE
"COMPENSATION COMMITTEE") AND THE PERFORMANCE GRAPH SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE
THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933
("SECURITIES ACT") OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT CARVER
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED TO BE FILED UNDER THE SECURITIES ACT OR THE EXCHANGE ACT.
The Compensation Committee is responsible for establishing the policies
which govern employee annual compensation and stock ownership programs. The
Compensation Committee met twice during fiscal 1998 to evaluate and make
determinations with respect to the compensation of the Company's executive
officers. In this regard, it should be noted that Mr. Clark, a member of the
Compensation Committee, did not participate in any decisions affecting his
compensation. Compensation decisions for fiscal 1999 will also be made by the
Compensation Committee.
The Compensation Committee annually reviews and makes recommendations
to the Board of Directors regarding the compensation of the Company's executive
officers, including the compensation of Mr. Clark, the President and Chief
Executive Officer ("CEO") of the Company and Bank. The overall compensation
structure of the Company is aimed at establishing a total compensation package
that both rewards strong individual and Bank performance and remains competitive
with compensation levels at similar institutions.
For fiscal 1998, base salaries were set at levels determined, in the
subjective judgment of the Compensation Committee, to be commensurate with the
respective executive officer's customary duties and responsibilities. Benefit
plans, consisting of a pension plan, 401(k) Plan, ESOP and group insurance
coverages, are designed to provide for the health and welfare of all employees,
including the executives, and their families, as well as for their long-term
financial and retirement needs.
When determining salary levels, the Compensation Committee took into
account awards to executives under the Option Plan, the MRP and the Incentive
Compensation Plan. The Compensation Committee believes that incentive
compensation should be an integral component of the Bank's total compensation
package. The Compensation Committee concluded that, considering the prevailing
salary levels combined with longer-term performance incentives using options and
restricted stock, the Bank's compensation program constituted a total
compensation package that was competitive with that of comparable institutions.
The Compensation Committee reviews and updates the Bank's compensation program
on an ongoing basis in order to continue to offer a total compensation package
that provides incentive for strong individual and Bank performance and is
competitive with comparable banking institutions.
INCENTIVE COMPENSATION. The Incentive Compensation Plan provides for
incentive compensation in the form of cash bonuses, stock options and restricted
stock based upon the annual performance of the Bank in comparison to its
pre-established goals. For each fiscal year, eligible employees will receive a
bonus equal to 4% of such employee's compensation, multiplied by the lesser of 8
and the "Multiplier," which generally is the sum of certain indicators with
respect to the Bank's performance. In addition, each such employee will receive
a restricted stock award of shares having a market value equal to 30% of the
employee's bonus and an option to purchase 4 times the number of shares of
restricted stock awarded to such employee. No awards were made under the
Incentive Compensation Plan for the fiscal year ending on March 31, 1998.
STOCK OWNERSHIP PROGRAMS. The Compensation Committee believes that
providing executive officers with significant stock ownership and stock options
aligns the interests of executive officers with the interests of stockholders.
In this regard, the Company maintains the ESOP, the Option Plan, the MRP and the
Incentive Compensation Plan. Pursuant to the ESOP, each of the Company's
executive officers has an individual account within the ESOP Trust which is
invested primarily, if not exclusively, in employer securities, with the result
that a portion of each executive officer's long-term retirement savings is tied
to the performance of the Company.
-14-
<PAGE>
Following the adoption of the Option Plan, the Bank granted stock
options to provide employees, including Mr. Clark, with an incentive for future
performance through their equity interests in the Company. The size of the
grants was based in part on practices of other similar institutions and in part
on the executive officer's performance and position in the organization. The MRP
is also designed to encourage valued executive officers to remain with the Bank
through the potential of having increased equity interests in the Company.
Following the adoption of the MRP, the Company made awards under the MRP to
certain employees, including Mr. Clark, to retain these individuals and to
reward the valuable efforts made by them to the productivity and success of the
Bank.
CHIEF EXECUTIVE OFFICER. The Compensation Committee reviewed the
performance of Mr. Clark as CEO of the Bank over the past year. The Committee
concluded that his performance was outstanding, in terms of achieving the Bank's
goals and objectives as set forth in the Bank's strategic operating plan,
building a solid and talented management team and managing the Bank's growth
since the successful initial public offering of the Bank and the reorganization
of the Bank as a wholly-owned subsidiary of the Company. Mr. Clark also actively
participated in a variety of outside organizations and causes which served to
benefit the Bank and the banking industry. These factors were used to determine
Mr. Clark's salary, options and restricted stock awards.
THE BOARD OF DIRECTORS
Thomas L. Clark, Jr.*
David N. Dinkins
Linda H. Dunham*
Robert J. Franz
Pazel G. Jackson, Jr.
Herman Johnson, CPA*
David R. Jones (Chairman)*
- -------------------
* Indicates a member of the Compensation Committee. Mr. Clark serves on
the Compensation Committee as an ex officio member without power to
vote.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
One of the responsibilities of the Compensation Committee is to
determine the level of compensation for executive officers of the Company and
the Bank. There are no other interlocks, as defined under the SEC's rules,
between the Compensation Committee and corporate affiliates of members of the
Compensation Committee or otherwise.
-15-
<PAGE>
PERFORMANCE GRAPH
In accordance with the regulations of the SEC, set forth below is a
line graph comparing the cumulative total return of the Common Stock with that
of the American Stock Exchange ("AMEX") and the AMEX Stocks- Savings
Institutions index for the period from October 25, 1994, the date that the Bank
became a public company, through March 31, 1998. The Common Stock began trading
on AMEX on May 21, 1997 under the symbol "CNY". Also presented below is a line
graph comparing the cumulative total return of the Common Stock with that of The
Nasdaq Stock Market and the Nasdaq Stocks Savings Institutions for the period
presented in the AMEX performance graph. On October 17, 1996, the Company became
the holding company for Carver Federal pursuant to the reoganization of the Bank
as a wholly-owned subsidiary of the Company and each share of the Bank's common
stock was exchanged for one share of Common Stock. At that time, the Company
replaced the Bank as the issuer listed by The Nasdaq Stock Market trading under
the symbol "CARV." Accordingly, through October 17, 1996, the graphs below
represent the performance of the Bank's common stock, and not the performance of
the Company's Common Stock."
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG CARVER BANCORP, INC., AMEX AND AMEX STOCKS - SAVINGS INSTITUTIONS
[Performance Graph Appears]
<TABLE>
<CAPTION>
LEGEND
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 10/25/94 03/31/95 03/29/96 03/31/97 03/31/98
- ------ ----------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
- --------* CARVER BANCORP, INC. 100.0 89.8 114.3 125.7 193.8
- --------** AMEX STOCK MARKET (US COMPANIES) 100.0 105.8 130.0 127.5 176.6
- --------*** AMEX STOCKS-(SIC 6030-6039 US COMPANIES 100.0 93.2 165.5 201.9 285.8
SAVINGS INSTITUTIONS)
</TABLE>
NOTES:
A. THE LINES REPRESENT MONTHLY INDEX LEVELS DERIVED FROM COMPOUNDED DAILY
RETURNS THAT INCLUDE ALL DIVIDENDS.
B. THE INDEXES ARE REWEIGHTED DAILY, USING THE MARKET CAPITALIZATION ON
THE PREVIOUS TRADING DAY.
C. IF THE MONTHLY INTERVAL, BASED ON THE FISCAL YEAR-END, IS NOT A TRADING
DAY, THE PRECEDING TRADING DAY IS USED.
D. THE INDEX LEVEL FOR ALL SERIES WAS SET TO $100.00 ON 10/25/94.
-16-
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG CARVER BANCORP, INC., THE NASDAQ STOCK MARKET AND
NASDAQ STOCKS - SAVINGS INSTITUTIONS
[Performance Graph Appears]
<TABLE>
<CAPTION>
LEGEND
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 10/25/94 03/31/95 03/29/96 03/31/97 03/31/98
<S> <C> <C> <C> <C> <C> <C>
- --------* CARVER BANCORP, INC. 100.0 89.8 114.3 125.7 193.8
- --------** Nasdaq Stock Market (US Companies) 100.0 108.5 147.3 163.8 248.5
- --------*** Nasdaq Stocks-Savings Institutions 100.0 108.0 147.6 201.9 344.3
(SIC 6030-6039, US Companies)
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 10/25/94.
THERE CAN BE NO ASSURANCE THAT STOCK PERFORMANCE WILL
CONTINUE INTO THE FUTURE WITH THE SAME OR SIMILAR TRENDS
DEPICTED IN THE GRAPHS ABOVE.
-17-
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth cash and noncash compensation for the
fiscal years ending March 31, 1998, 1997, and 1996 awarded to or earned by the
Company's Chief Executive Officer and by each other executive officer whose
compensation exceeded $100,000 for services rendered in all capacities to the
Company and the Bank during the fiscal year ending March 31, 1998 ("Named
Executive Officers"). No other officers received total compensation in excess of
$100,000 in fiscal 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
---------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------- ------------------ ------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER RESTRICTED
ANNUAL STOCK LTIP ALL-OTHER
NAME AND PRINCIPAL FISCAL COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
POSITIONS YEAR SALARY($) BONUS($)(2) ($)(3) ($)(2)(4) (#)(2) ($) ($)(5)(6)(7)
- ----------------------- ------- --------- ----------- ------------ ---------- ------- ------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas L. Clark, Jr. 1998 200,000 14,520 -- 161,081 -- -- 25,720
President and Chief 1997 200,000 -- -- 4,274 2,072 -- 17,766
Executive 1996 165,000 13,926 -- 186,588 34,715 -- 1,103
Officer
Biswarup Mukherjee (1) 1998 66,546 -- -- -- -- -- 82,977
Former Executive Vice 1997 115,000 -- -- 2,978 1,444 -- 13,354
President and Chief 1996 115,001 9,706 -- 111,961 13,886 -- 13,808
Financial Officer
</TABLE>
- -----------------------------------
(1) Mr. Mukherjee resigned from employment with the Company and the Bank
effective as of October 24, 1997. Prior to his resignation, Mr.
Mukherjee was paid an annual base salary of $115,000. The total dollar
amount of the annual base salary actually received by Mr. Mukherjee
during the 1998 fiscal year is reported in column (c) of the Summary
Compensation Table.
(2) Mr. Clark received a management bonus of $14,520 for the fiscal year
ending March 31, 1998. No bonus, stock option or restricted stock
awards were granted to either Mr. Clark or Mr. Mukherjee under the
Incentive Compensation Plan, the Option Plan or the MRP during the
fiscal year ending March 31, 1998.
(3) Does not include perquisites and other personal benefits the value of
which did not exceed the lesser of $50,000 or 10% of salary and bonus.
(4) Pursuant to the Incentive Compensation Plan, awards of 518 and 361
shares of restricted stock were made to Mr. Clark and Mr. Mukherjee,
respectively, on August 20, 1996, which vest in five equal installments
commencing on August 20, 1997. In addition, awards of 17,357 and 10,415
shares of restricted stock were made to Mr. Clark and Mr. Mukherjee,
respectively, under the MRP on September 12, 1995, which vest in five
equal installments beginning on September 12, 1996. The dollar amounts
in the table for 1997 are based on the closing price of $8.25 per share
of Common Stock on August 20, 1996, as reported on The Nasdaq Stock
Market, and the dollar amounts in the table for 1996 are based on the
closing price of $10.75 per share of Common Stock on September 12,
1996, as reported on The Nasdaq Stock Market. When shares become vested
and are distributed, the recipient also receives an amount equal to
accumulated dividends and earnings thereon, if any. As of March 31,
1998, the aggregate value of the 10,829 un-vested shares of restricted
stock awarded to Mr. Clark under both the Incentive Compensation Plan
and the MRP was $161,081 based on the closing stock price of $14.875
per share of Common Stock, as reported on the American Stock Exchange.
Any un-vested shares of restricted stock or stock options awarded to
Mr. Mukherjee under the Company's stock benefit plans were
automatically forfeited on October 24, 1997, the effective date of his
resignation from employment with the Company and the Bank.
(5) Includes $4,761, $3,830, and $95 in matching contributions allocated to
Mr. Clark's account under the Bank's 401(k) Plan for the fiscal years
ending March 31, 1998, 1997 and 1996, respectively, and $3,600, $2,087
and $2,897 in matching contributions allocated to Mr. Mukherjee's
account under the Bank's 401(k) Plan for the fiscal years ending March
31, 1998, 1997 and 1996, respectively.
(6) Includes allocations under the ESOP of 1,409 and 1,351 shares of Common
Stock for the plan years ending December 31, 1997 and 1996 with total
market values of $20,959 and $13,003, respectively, as of March 31,
1998 and 1997 for the account of Mr. Clark and allocations of 876,
1,123 and 1,247 of Common Stock for the plan years ending December 31,
1997, 1996 and 1995 with total market values of $13,031, $10,809 and
$10,911, respectively, as of March 31, 1998, 1997 and 1996 for the
account of Mr. Mukherjee.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
-18-
<PAGE>
(7) Also includes $66,346, the aggregate dollar amount of the severance
paid to Mr. Mukherjee during the fiscal year ending March 31, 1998.
EMPLOYMENT AGREEMENTS, SEVERANCE AGREEMENT AND EMPLOYEE BENEFIT PLANS
EMPLOYMENT AGREEMENTS. The Company and the Bank have entered into
employment agreements with Mr. Clark in his capacity as President and CEO of the
Company and the Bank (collectively, the "Employment Agreements").
The Employment Agreements with Mr. Clark, each effective as of April 1,
1997, provide for three-year terms. The Bank's Employment Agreement provides
that, commencing on the first anniversary date and continuing each anniversary
date thereafter, the Board of Directors may, after conducting a performance
evaluation of Mr. Clark and with Mr. Clark's concurrence, extend its Employment
Agreement for an additional year, so that the remaining term shall be three
years. The Company's Employment Agreement provides for automatic daily
extensions such that the remaining term of the employment Agreement shall be
three years unless written notice of non-renewal is given by the Board of
Directors or Mr. Clark. The Employment Agreements provide that Mr. Clark's base
salary will be reviewed annually. As of May 31, 1998, Mr. Clark's base salary
was $200,000. In addition to base salary, the Employment Agreements provide for,
among other things, entitlement to participation in stock, retirement and
welfare benefit plans and supplemental retirement benefits to compensate Mr.
Clark for the benefits he cannot receive under the Company's and the Bank's
tax-qualified employee benefit plans due to the limitations imposed under the
Code and eligibility for fringe benefits applicable to executive personnel such
as a company car and fees for club and organization memberships deemed
appropriate by the Bank or Company and Mr. Clark. The Employment Agreements
provide for termination by the Bank or the Company at any time for cause as
defined in the Employment Agreements. In the event the Bank or the Company
chooses to terminate Mr. Clark's employment for reasons other than for cause, or
in the event of Mr. Clark's resignation from the Bank and the Company upon: (i)
failure to re-appoint, elect or re-elect him to the office of President and CEO;
(ii) failure to re-elect or nominate him for Board membership; (iii) a material
adverse change in his functions, duties or responsibilities; (iv) a relocation
of his principal place of employment more than 30 miles from its current
location without his consent; (v) liquidation or dissolution of the Bank or the
Company; (vi) a "change of control" (as defined below); or (vii) a breach of the
Employment Agreement by the Bank or the Company, Mr. Clark, or, in the event of
death, his beneficiary, would be entitled to a lump sum cash payment in an
amount equal to the remaining base salary and bonus payments due to Mr. Clark
and the additional cash compensation, contributions or benefits that he would
have earned under any employee benefit plans of the Bank or the Company during
the remaining term of the Employment Agreements. The Bank and the Company would
also continue Mr. Clark's life, health and disability insurance coverage for the
remaining term of the Employment Agreements.
Payments to Mr. Clark under his Employment Agreement with the Bank will
be guaranteed by the Company in the event that payments or benefits are not paid
by the Bank. To the extent that payments under the Company's Employment
Agreement and the Bank's Employment Agreement are duplicative, payments due
under the Company's Employment Agreement would be offset by amounts actually
paid by the Bank. Mr. Clark would be entitled to reimbursement of certain costs
incurred in negotiating, interpreting or enforcing the Employment Agreements.
Each Employment Agreement also provides for the Bank and the Company to
indemnify Mr. Clark to the fullest extent allowable under federal and Delaware
law, respectively.
Cash and benefits paid to Mr. Clark under the Employment Agreements
together with payments under other benefit plans following a "change in control"
of the Bank or the Company may constitute an "excess parachute" payment under
Section 280G of the Code resulting in the imposition of a 20% excise tax on Mr.
Clark. For purposes of Mr. Clark's Employment Agreements, a "change in control"
will generally be deemed to have occurred during the term of the employment
agreement: (i) if a person or group of persons acting in concert acquires
beneficial ownership of 20% or more of any class of equity security, such as
Common Stock, of the Company or the Bank; (ii) in the event of certain mergers,
reorganizations, consolidation of assets; (iii) in the event of a complete
liquidation or dissolution of the Company or the Bank; or (iv) in the event of a
contested election of directors which results in a change of control of a
majority of the Board of Directors of the Company or the Bank. In the event that
any amounts paid to Mr. Clark following a change of control would constitute
"excess parachute payments" under section 280G of the Code, the Employment
Agreement with the Company provides that he will be indemnified for any excise
taxes imposed due to such excess parachute payments, and any additional income
and employment taxes imposed as a result of such indemnification of excise
taxes. Any excess parachute payments and indemnification amounts paid will not
be deductible compensation expenses for the Company or the Bank.
-19-
<PAGE>
SEVERANCE AGREEMENT. Effective as of October 24, 1997, Biswarup
Mukherjee resigned from his positions as Executive Vice President and Chief
Financial Officer of the Company and the Bank. In order to achieve an amicable
severance of employment, the Company and the Bank entered into a Separation
Agreement and General Release with Mr. Mukherjee dated as of October 24, 1997
("Severance Agreement"). The Severance Agreement provides for Mr. Mukherjee to
receive an aggregate severance payment of $60,000, to be paid by the Company and
the Bank in monthly installments of $2,500 beginning on November 1, 1997 and
ending on October 1, 1999. In addition, the Agreement provides for the Company
to purchase shares of Common Stock from Mr. Mukherjee during the 120-day period
following his resignation date at a purchase price equal to the sum of the
average of the bid and ask prices of a share of Common Stock as reported on the
American Stock Exchange on the day before such purchase plus $0.25. Mr.
Mukherjee did not, however, elect to sell his shares of Common Stock to the
Company pursuant to this provision of his Severance Agreement. The Severance
Agreement also provides for Mr. Mukherjee to continue to receive group health,
life and disability insurance benefits under the employee welfare benefit plans
maintained by the Company and the Bank during the two year term of the
Agreement. As consideration for these severance payments and benefits, Mr.
Mukherjee agreed to a general release of claims and to the non-compete,
non-solicitation and confidentiality provisions contained in the Severance
Agreement. Since Mr. Mukherjee participated and accrued benefits under the ESOP,
Pension and 401(k) Plans during his employment with the Company and the Bank, he
will be eligible to receive distributions from these Plans in accordance with
their terms. All stock option and restricted stock awards granted to Mr.
Mukerhjee under the Incentive Compensation Plan, Option Plan and MRP, to the
extent un-vested on October 24, 1997, the effective date of Mr. Mukerhjee's
resignation, were automatically forfeited and canceled.
PENSION PLAN. The Bank maintains a non-contributory, tax-qualified
defined benefit plan (the "Pension Plan"). As required, the Bank annually
contributes an amount to the Pension Plan necessary to satisfy the actuarially
determined minimum funding requirements in accordance with the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
Employees who are 18 years of age or older and who have completed one
year of service with the Bank are eligible to participate in the Pension Plan.
Participants become 100% vested after five years of service, death, or
termination of the Pension Plan, regardless of the participant's years of
service. The Pension Plan also provides for early retirement benefits, on an
actuarially reduced basis, at the election of a participant who terminates
employment after age 55.
Under the Pension Plan, each participant is entitled to a retirement
benefit equal to the greater of (a) the product of 50% of final earnings (as
defined in the Pension Plan) reduced by 50% of the social security amount (as
defined in the Pension Plan) times the ratio of number of years of credited
service (as defined in the Pension Plan) up to a maximum of 15, over 15 if the
participant's employment ceased after the normal retirement age (as defined in
the Pension Plan) or multiplied by the ratio of the number of years of credited
service divided by the greatest of (i) 15 and (ii) the number of years of
credited service he or she would have had on his or her normal retirement date,
if the participant's employment ceased prior to the normal retirement age (as
defined in the Pension Plan), or (b) $25 multiplied by the number of the
participants' months of credited service.
The following table sets forth the estimated annual benefits that would
be payable under the Pension Plan in the form of a single life annuity before
reduction for the social security amount upon retirement at the normal
retirement date. The amounts are expressed at various levels of compensation and
years of service.
-20-
<PAGE>
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
FINAL EARNINGS 15 20 25 30 35
- -------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$100,000 $50,000 $50,000 $50,000 $50,000 $50,000
150,000 75,000 75,000 75,000 75,000 75,000
200,000(1) 100,000 100,000 100,000 100,000 100,000
250,000(1) 125,000 125,000 125,000 125,000 125,000
</TABLE>
- ------------------------
(1) Under Section 401(a)(17) of the Code, a participant's compensation in
excess of $160,000 (as adjusted to reflect cost-of- living increases)
is disregarded for purposes of determining final earnings. The amounts
shown in the table include the supplemental retirement benefits payable
to Mr. Clark under his employment agreement to compensate for the
limitation on includible compensation.
Final earnings equal the average of the participant's highest three
consecutive calendar years of taxable compensation during the last 10
full calendar years of employment prior to termination, or the average
of the Participant's annual compensation over his or her total service,
if less.
The following table sets forth the years of credited service and the
final earnings determined as of March 31, 1998 for each of the individuals named
in the Summary Compensation Table.
YEARS OF CREDITED SERVICE
-------------------------
NAME YEARS MONTHS FINAL EARNINGS
- ---- ----- ------ --------------
Thomas L. Clark, Jr. 3 2 $188,598
Biswarup Mukherjee 11 4 $113,151
MANAGEMENT RECOGNITION PLAN. The MRP provides for automatic grants of
restricted stock to certain employees as of the effective date of the MRP,
including Mr. Clark and former executive officer Mr. Mukherjee who received
17,357 and 10,415 shares of restricted stock, respectively. In addition, the MRP
provides for additional discretionary grants of restricted stock to those
employees selected by the committee established to administer the MRP. Awards
generally vest in five equal annual installments commencing on the first
anniversary date of the award, provided the recipient is still an employee of
the Company or the Bank on such date. Awards will become 100% vested upon
termination of service due to death or disability. When shares become vested and
are distributed, the recipients will receive an amount equal to any accrued
dividends with respect thereto.
INCENTIVE COMPENSATION PLAN. The Incentive Compensation Plan provides
incentive compensation to certain eligible employees, including Mr. Clark and
former executive officer Mr. Mukherjee, in the form of bonuses, stock options
and restricted stock. For each fiscal year, eligible employees will receive a
bonus equal to 4% of such employee's compensation, multiplied by the lesser of 8
and the "Multiplier." In addition, each such employee will receive a restricted
stock award of shares having a market value equal to 30% of the employee's bonus
and an option to purchase 4 times the number of shares of restricted stock
awarded to such employee.
OPTION PLAN. The Option Plan provides for automatic option grants to
certain employees as of the effective date of the Option Plan, including Mr.
Clark and former executive officer Mr. Mukherjee, who were granted options to
purchase 34,715 and 13,886 shares of Common Stock, respectively, on September
12, 1995 at an exercise price of $10.38 per share. In addition, the Option Plan
provides for additional discretionary option grants to those employees selected
by the committee established to administer the Option Plan with an exercise
price equal to the fair market value of a share of Common Stock on the date of
the grant. Options granted under the Option Plan generally vest in five equal
annual installments commencing on the first anniversary of the effective date of
the grant, provided the recipient is still an employee of the Company or the
Bank on such date. Upon death or disability, all options previously granted
automatically become exercisable.
-21-
<PAGE>
The following table provides certain information with respect to the
number of shares of Common Stock acquired through the exercise of, or
represented by, outstanding stock options held by the Named Executive Officers
on March 31, 1998. Also reported is the value for any "in-the-money" options,
which represent the positive spread between the exercise price of any such
existing stock options and the fiscal year-end price of Common Stock, which was
$14.875 per share. No new stock options were granted to the Named Executive
Officers during the fiscal year ending March 31, 1998 under either the Incentive
Compensation Plan or the Option Plan.
<TABLE>
<CAPTION>
FISCAL YEAR END OPTION/SAR VALUES
---------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES VALUE OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
ACQUIRED ON REALIZED ON YEAR-END YEAR-END(3)
EXERCISE EXERCISE (#)(3) ($)
NAME (#)(1) ($)(2) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------ ------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Thomas L. Clark, Jr. -- -- 14,300/22,487 65,239/104,926
Biswarup Mukherjee 5,843 17,440 -- --
</TABLE>
- ------------------------
(1) As of March 31, 1998, Mr. Mukherjee had exercised all of the stock
options granted to him under the Incentive Compensation Plan and the
Option Plan that had become vested and were immediately exercisable as
of October 24, 1997, the effective date of his resignation from
employment with the Company and the Bank. Any options that were not
vested as of the effective date of Mr. Mukherjee's resignation were
automatically forfeited and canceled.
(2) Based on the exercise by Mr. Mukherjee of 289 stock options granted to
him under the Incentive Compensation Plan with an exercise price of
$8.06 per share and the exercise of 5,554 stock options granted to him
under the Option Plan with an exercise price of $10.38 per share. Also
based on the closing price of $13.25 per share of Common Stock, as
reported on the American Stock Exchange for November 13, 1997, the date
Mr. Mukherjee exercised his stock options under these Plans.
(3) As of March 31, 1998, Mr. Clark held 2,072 options granted to him under
the Incentive Compensation Plan with an exercise price of $8.06 per
share, of which 414 were exercisable and 1,658 were unexercisable. All
of these options are "in-the-money" options. As of March 31, 1998, Mr.
Clark also held 34,715 options granted to him under the Option Plan
with an exercise price of $10.38 per share, of which 13,886 were
exercisable and 20,829 were unexercisable. All of these options are
also "in-the-money" options.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") requires that all loans or extensions of credit to executive officers
and directors must be made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more than the normal
risk of repayment or present other unfavorable features. Carver Federal offers
loans to its directors, officers and employees, which loans are made in the
ordinary course of business, and are not made with more favorable terms nor do
they involve more than the normal risk of collectibility or present unfavorable
features. Furthermore, loans above the greater of $25,000 or 5% of the Bank's
capital and surplus (up to $500,000) to the Bank's directors and executive
officers must be approved in advance by a disinterested majority of the Bank's
Board of Directors. Under prior law, however, Carver had a policy of offering
loans to directors, officers, employees and their immediate family members
residing at the same address on terms substantially equivalent to those offered
to the public, except the interest rates on loans were reduced so long as the
director, officer or employee remained at the Bank.
-22-
<PAGE>
The following table sets forth information at March 31, 1998 relating
to loans made to directors and executive officers of the Bank whose terms
included reduced interest rates or other preferential terms and whose total
aggregate balances exceeded $60,000 at any time since April 1, 1997.
<TABLE>
<CAPTION>
HIGHEST
BALANCE
BALANCE AT SINCE
TYPE-OF DATE ORIGINAL INTEREST MARCH 31, APRIL 1,
NAME AND RELATION TO COMPANY LOAN ORIGINATED AMOUNT RATE 1998 1997
- ---------------------------- ---- ---------- ------ ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Biswarup Mukherjee
Former Executive Vice President
and Chief Financial Officer Mortgage 9/13/88 $160,000 8.25% $114,825 $121,359
Herman Johnson
Director Mortgage 10/18/89 $150,000 8.50% $115,842 $121,411
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
certain officers, and persons who own more than ten percent of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the SEC and the American Stock Exchange. Officers,
directors and greater than ten percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on a review of copies of such reports of ownership
furnished to the Company, or written representations that no forms were
necessary, the Company believes that, during the last fiscal year, all filing
requirements applicable to its officers, directors and greater than ten percent
shareholders of the Company were complied with, except for the late filing with
the SEC of one Form 3 "Initial Statement of Beneficial Ownership of Securities"
by Pazel G. Jackson, Jr., upon first becoming a director of the Company and in
which he failed to timely report his beneficial ownership of 300 shares of
Common Stock and the late filings with the SEC of one Form 5 "Annual Statement
of Changes in Beneficial Ownership" by Herman Johnson, a director, reporting his
sale of 1,100 shares of Common Stock and the late filing of a Form 4 "Statement
of Changes in Beneficial Ownership" by Raymond L. Bruce, an executive officer,
reporting his exercise of options to purchase 1,388 shares of Common Stock and
his simultaneous subsequent sale of such securities. The Company's grant of
stock options and restricted stock awards to Directors Franz and Jackson were
reported on Forms 5 which, although filed late with the SEC, were accurate in
all other respects. Additionally, the open market purchase of 1,500 shares of
Common Stock by Director Franz, a transaction required to be reported on a Form
4, was reported on a late basis on the Form 5 filed for him with respect to the
fiscal year ended March 31, 1998.
=====================================================
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
=====================================================
The Board of Directors of Carver has appointed the firm of Mitchell &
Titus, LLP as independent auditors for Carver for the fiscal year ending March
31, 1999, subject to ratification of such appointment by the stockholders.
Representatives of Mitchell & Titus, LLP are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement if they desire
to do so, and will be available to respond to questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF MITCHELL & TITUS, LLP AS INDEPENDENT
AUDITORS FOR CARVER.
-23-
<PAGE>
=====================================================
PROPOSAL THREE
STOCKHOLDER PROPOSAL
=====================================================
ENHANCEMENT OF SHAREHOLDER VALUE RESOLUTION
"RESOLVED, that the shareholders assembled in person and by proxy,
recommend that in order to enhance shareholder value, the Board of Directors of
Carver Bancorp, Inc. engage the services of a leading investment banking firm
specializing in financial institutions, with particular expertise in thrift
institutions, to make recommendations to the Board of Directors as to specific
actions to be taken to enhance shareholder value. These recommendations could
include among others: the active solicitation of merger overtures from other
financial institutions."
SUPPORTING STATEMENT
This resolution and supporting statement were written with the facts
available to this writer as of March 1, 1998.
The Bank's performance is still very disappointing. On January 30,
1998, the bank reported earnings of only $0.14 cents a share for its third
quarter. The Bank is making extremely slow progress becoming a public company in
1994 Carver Bancorp Inc. has paid a total dividend of five cents a share, yet
there is much talk to maximize shareholder value.
The annualized return on equity based on the first nine months ended
December 31, 1997 was 3.56%. I believe this is a very low and unacceptable
return. Any of us can get more return on our funds by investing in a simple
insured Bank CD. The Banks annualized return on its $415 million in assets is
only 0.30%. This is way below other banking institutions.
Furthermore the ratio of non-interest expenses to average total assets
was an astonishing high 2.82%.
Carver's long term goal of improved earning and greater profitability
appears to be along way over the horizon.
The stockholder Return Performance Presentation on page 14 of the proxy
statement dated July 17, 1997 shows that $100.00 invested in Carver Bancorp,
Inc. from October 25, 1994 to March 31, 1997 increased to $125.70 while a Nasdaq
Stocks-Savings Institutions index for the same period increased to $201.90. A
similar poor relative price performance is anticipated for the years October 25,
1994 to March 31, 1998.
Management should focus its efforts on improved corporate performance
while being sufficiently open to entertain advice from outside knowledgeable
consultants.
Personally, I would like to see Carver Bancorp, Inc. merged with a
larger financial institution that will increase lending to the communities where
the Carver branch offices are located. I believe that a sale leading to a
takeover of Carver Bank would be beneficial to both the shareholders and the
customers of the Bank.
Last year, a resolution "to sell the company for cash and/or securities
valued at no less than TWENTY DOLLARS per share or 120% of the current book
value, which ever value is higher," received 325,844 affirmative votes (24.1% of
the votes cast). 810,549 votes were not cast. Please vote this year.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION.
-24-
<PAGE>
=====================================================
STATEMENT OF THE BOARD OF DIRECTORS OF CARVER BANCORP, INC. IN
OPPOSITION TO THE STOCKHOLDER PROPOSAL
=====================================================
The Board of Directors of the Company vigorously opposes the
stockholder proposal and recommends a vote "AGAINST" for the following reasons:
The Board of Directors believes that the stockholder proposal is
unnecessary in light of the current financial condition of the Company. Since
our initial public offering in 1994, the Board and management have steadily
increased the value of Carver's Common Stock. Between March 28, 1997 and March
27, 1998, the total return (capital appreciation plus dividend) on the Common
Stock was 52.71%. This compares to a 44.11% return for the Standard & Poor's
500, an index prepared by Standard & Poor's, a nationally recognized rating
agency, and a 48.95% return for Keefe Bank Index, an index prepared by Keefe
Bruyette & Woods, an investment banking firm that has advised the Company from
time to time.
The Board and management have continued to strive to meet our goal of
maximizing long-term stockholder value. The Company has recently completed a
restructuring of its balance sheet, the results of which are just beginning to
improve our performance. In addition, the Company paid its first dividend to
stockholders during the fiscal year which ended March 31, 1998 ("fiscal 1998").
The Board believes that a formal engagement of an investment banker would prove
costly and demand a great deal of time and resources of the Board and
management. It is the Board's belief that our stockholders will be better served
by the investment of our management's time and resources to implement Carver's
business objectives.
Stockholders are also advised that the Proponent's supporting statement
is riddled with broad generalizations concerning the Company and fails to
provide stockholders with the information necessary to put the Proponent's
claims into the proper perspective. For instance, the Proponent points out that
Carver's earnings per share for the third quarter of fiscal 1998 were "only"
$0.14 (14 cents), but fails to inform you that this represents a 100.00%
increase in earnings per share from the same quarter in the prior year. In fact,
the Company's financial statements reflect that, as of the year ended March 31,
1998, the Company increased its loan portfolio by approximately 40.00%, total
assets have increased approximately 3.00% and total deposits have increased by
approximately 3.00% over the prior year. The Board and management urge you to
review our financial statements for additional information regarding the
financial condition and results of operations of the Company.
It is clear that the ultimate goal of the stockholder proposal is to
create an atmosphere which would disadvantage further efforts to carry out the
Company's business objectives. Moreover, approval of the stockholder proposal
would compromise the ability of the Board of Directors to fulfill its fiduciary
duty to stockholders. The directors are elected by stockholders to manage the
business and affairs of the Company and are in the best position to evaluate and
consider all of the various options which may be available from time to time.
The principal goal of your Board of Directors is and always will be to
maximize stockholder value consistent with prudent business practices and our
special mission as a community-based institution. Fiscal 1998 began with a
restructuring of our balance sheet and ended with some aggressive steps to
streamline our operations and to focus on our most profitable products. The
Board of Directors believes that the steps taken during the last fiscal year
have set the stage for stockholders to realize the rewards of an investment in
Carver. The Board and management pledge to continue to do our best to maximize
the return to stockholders in the future.
THE BOARD FIRMLY BELIEVES THAT THE STOCKHOLDER PROPOSAL IS NOT IN THE
BEST INTEREST OF THE COMPANY AND OUR STOCKHOLDERS.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST
THE STOCKHOLDER PROPOSAL
Unless marked to the contrary, the shares represented by the Company's
signed proxy card will be voted "AGAINST" the stockholder proposal. .
-25-
<PAGE>
=====================================================
ADDITIONAL INFORMATION
=====================================================
PROPOSALS FOR 1999 ANNUAL MEETING
Any stockholder wishing to have a proposal considered for inclusion in
the Company's proxy statement and form of proxy relating to the 1999 Annual
Meeting of Stockholders must, in addition to other applicable requirements, set
forth such proposal in writing and file it with the Corporate Secretary of the
Company on or before March 23, 1999.
NOTICE OF BUSINESS TO BE CONDUCTED AT ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for a
stockholder to properly bring business before an annual meeting or to nominate
any person for election to the Company's Board of Directors. The stockholder
must be a stockholder of record and have given timely notice thereof in writing
to the Secretary of the Company. To be timely, a stockholder's notice must be
delivered to or received by the Secretary not later than the following dates:
(i) with respect to an annual meeting of stockholders, sixty (60) days in
advance of such meeting if such meeting is to be held on a day which is within
thirty (30) days preceding the anniversary of the previous year's annual
meeting, or ninety (90) days in advance of such meeting if such meeting is to be
held on or after the anniversary of the previous year's annual meeting; and (ii)
with respect to an annual meeting of stockholders held at a time other than
within the time periods set forth in the immediately preceding clause (i), the
close of business on the tenth (10th) day following the date on which notice of
such meeting is first given to stockholders. Notice shall be deemed to first be
given to stockholders when disclosure of such date of the meeting of
stockholders is first made in a press release reported to Dow Jones News
Services, Associated Press or comparable national news service, or in a document
publicly filed by the Company with the SEC pursuant to Section 13, 14 or 15(d)
of the Exchange Act. A stockholder's notice to the Corporate Secretary shall set
forth such information as required by the Bylaws of the Company. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
statement and proxy card relating to an annual meeting any shareholder proposal
or nomination which does not meet all of the requirements for inclusion
established by the SEC in effect at the time such proposal or nomination is
received. See "Proposals For 1999 Annual Meeting."
OTHER MATTERS
As of the date of this Proxy Statement, management does not know of any
other matters to be brought before the stockholders at the Annual Meeting. If,
however, any other matters not now known are properly brought before the Annual
Meeting, the persons named in the accompanying proxy will vote the shares
represented by all properly executed proxies on such matters in such manner as
shall be determined by a majority of the Company's Board of Directors.
-26-
<PAGE>
=====================================================
FINANCIAL STATEMENTS
=====================================================
A copy of the Annual Report to Stockholders for the year ended March
31, 1998, containing financial statements as of March 31, 1998 and March 31,
1997 and for each of the years in the three-year period ended March 31, 1998,
prepared in conformity with generally accepted accounting principles,
accompanies this Proxy Statement. The consolidated financial statements have
been audited by Mitchell & Titus, LLP whose report thereon appears in the Annual
Report.
THE COMPANY HAS FILED AN ANNUAL REPORT ON FORM 10-K FOR ITS FISCAL YEAR
ENDED MARCH 31, 1998 WITH THE SEC. STOCKHOLDERS MAY OBTAIN, FREE OF CHARGE, A
COPY OF SUCH ANNUAL REPORT (EXCLUDING EXHIBITS) BY WRITING TO RAYMOND L. BRUCE,
ESQ., SENIOR VICE PRESIDENT, CORPORATE COUNSEL AND CORPORATE SECRETARY, CARVER
BANCORP, INC., 75 WEST 125TH STREET, NEW YORK, NEW YORK 10027, OR BY TELEPHONING
(212) 876-4747.
By Order of the Board of Directors,
Raymond L. Bruce, Esq.
SENIOR VICE PRESIDENT,
CORPORATE COUNSEL AND CORPORATE SECRETARY
New York, New York
July 21, 1998
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING,
PLEASE SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING
PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
-27-
<PAGE>
CARVER BANCORP, INC. REVOCABLE PROXY
75 WEST 125TH STREET
NEW YORK, NEW YORK 10027
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF CARVER BANCORP, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 14, 1998
The undersigned stockholder of Carver Bancorp, Inc. hereby appoints
David R. Jones, Linda H. Dunham, and Raymond L. Bruce, or any of them, with full
powers of substitution, to represent and to vote as proxy, as designated, all
shares of common stock of Carver Bancorp, Inc. held of record by the undersigned
on June 25, 1998, at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held at 10:00 a.m., on August 14, 1998, or at any adjournment or
postponement thereof. The undersigned hereby revokes all prior proxies.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. IF PROPERLY EXECUTED, BUT NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF NOMINEES LISTED
IN ITEM 1, FOR THE PROPOSAL IN ITEM 2 AND AGAINST THE STOCKHOLDER PROPOSAL IN
ITEM 3 (IF PROPERLY INTRODUCED AT THE ANNUAL MEETING).
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
PLEASE MARK YOUR CHOICE LIKE THIS /X/ IN BLUE OR BLACK INK.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR ALL
NOMINEES" IN ITEM 1 AND "FOR" THE PROPOSAL IN ITEM 2.
...................................................................
1. Election of Directors to a Three Year Term.
Nominees: Thomas L. Clark, Jr., Herman Johnson, CPA
and Pazel G. Jackson, Jr.
INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE
PROVIDED: -------------------------------------
FOR all WITHHOLD for all
Nominees Nominees
/_/ /_/
...................................................................
2. Ratification of Appointment of Mitchell & Titus LLP, as independent
auditors for the Company for the fiscal year ending March 31, 1999.
FOR AGAINST ABSTAIN
/_/ /_/ /_/
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
"AGAINST" THE STOCKHOLDER PROPOSAL IN ITEM 3.
. ....................................................................
3. Adoption of the stockholder proposal described in the
accompanying Proxy Statement, if properly introduced at
the Annual Meeting.
FOR AGAINST ABSTAIN
/_/ /_/ /_/
....................................................................
4. If any other matters properly come before the Annual
Meeting, including, among other things, a motion to adjourn
or postpone the Annual Meeting to another time and/or
place for the purpose of soliciting additional proxies or
otherwise, the persons named in this Proxy will vote on
such matters in such a manner as shall be determined by a
majority of the Board of Directors. As of the date of the
Proxy Statement for the Annual Meeting, management of
the Company is not aware of any other such business.
- --------------------------------------------------------------------
I WILL ATTEND THE ANNUAL MEETING /_/
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and the Proxy Statement for the Annual Meeting.
-----------------------------------------------------------------
-----------------------------------------------------------------
Signature(s)
Dated: ______________________________________________________, 1998
Please sign exactly as your name appears on this proxy. Joint owners should each
sign personally. If signing as attorney, executor, administrator, trustee or
guardian, please include your full title. Corporate or partnership proxies
should be signed by an authorized officer.
<PAGE>
[CARVER BANCORP, INC. LETTERHEAD]
July 21, 1998
Dear Plan Account Holder:
The Carver Bancorp, Inc. ("Company") Employee Stock Ownership Plan
("ESOP") has a related trust ("ESOP Trust") which holds common stock ("Common
Stock") of the Bank. Marine Midland Bank, as the trustee of the ESOP Trust
("ESOP Trustee"), is therefore a shareholder of the Company and may vote on
matters presented for shareholder action at the Company's Annual Meeting of
Stockholders scheduled to be held on August 14, 1998 ("Annual Meeting").
The ESOP Trust provides that in casting votes at the Annual Meeting,
the ESOP Trustee is to follow the instructions given by participants, former
participants and beneficiaries of deceased former participants ("Participants")
with respect to the Common Stock allocated to their accounts in the ESOP as of
June 25, 1998.
The records for the ESOP indicate that you are among the Participants
who may give voting instructions. You may give your instructions by completing
and signing the enclosed Confidential Voting Instruction ("Voting Instruction")
and returning it in the envelope provided to CT Corporation Systems ("CT Corp").
The Voting Instruction lets you give instructions for each matter expected to be
presented for shareholder action at the Annual Meeting. The ESOP Trustee expects
CT Corp to tabulate the instructions given on a confidential basis and to
provide the ESOP Trustee with only the final results of the tabulation.
The voting of the Common Stock held by the ESOP Trust is subject to
legal requirements under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). The ESOP Trustee, in consultation with its legal advisors,
considers these requirements in establishing voting instruction procedures and
voting the Common Stock allocated to Participants' accounts. The remainder of
this letter describes the voting procedures which the Committee expects to
follow for the Annual Meeting.
How your voting instructions count depends on whether it was
anticipated that the matter being voted upon would be presented for shareholder
action at the Annual Meeting; whether you had an interest in the ESOP Trust on
the proper date; and how large your interest was, as follows:
ANTICIPATED PROPOSALS
(a) ALLOCATED COMMON STOCK. In general, the ESOP Trustees will vote the
number of shares of Common Stock, if any, held by the ESOP Trust and allocated
as of June 25, 1998 to your individual account under the ESOP according to the
instructions specified on the Voting Instruction. The Voting Instruction shows
the number of shares of Common Stock allocated to your individual account under
the ESOP Trust as of June 25, 1998. In general, if you do not file the Voting
Instruction by August 10, 1998, the ESOP Trustee will vote the number of shares
allocated to your account FOR or AGAINST each proposal identified on the Voting
Instruction in the same proportions as instructions to cast votes FOR or AGAINST
such proposal are given with respect to shares allocated to the accounts of
Participants who do file Voting Instructions.
<PAGE>
2
(b) UNALLOCATED COMMON STOCK. The ESOP Trust holds certain shares of
Common Stock that are not allocated to any individual's account. In general, the
ESOP Trustee will vote the Common Stock not allocated to any individual's
account by casting votes FOR or AGAINST each proposal identified on the Voting
Instruction, in the same proportions as instructions to cast votes FOR or
AGAINST such proposal are given with respect to allocated Common Stock. However,
if the ESOP Trustee does not receive instructions from any of the Participants,
the Board of Directors of the Company will direct the ESOP Trustees with respect
to the voting of any shares of unallocated stock, or, in the absence of such
direction by the Board of Directors, the ESOP Trustee will have sole discretion
as to the voting of such shares.
If you do not file the Voting Instruction by August 10, 1998 or if you
ABSTAIN as to a proposal, your instructions will not count in voting any
allocated Common Stock for which no voting instructions have been received from
Participants or the unallocated Common Stock. Each individual's instructions for
such purposes are weighted according to the number of shares of Common Stock
allocated to all individuals' accounts for which instructions to vote FOR or
AGAINST have been received. However, the ESOP Trustee may be required to vote
the allocated Common Stock for which no instructions have been received and the
unallocated Common Stock held by the ESOP Trust in a different manner, if it
determines such a vote to be in the best interests of Participants, in
accordance with the legal requirements of ERISA.
UNANTICIPATED PROPOSALS
It is possible, although very unlikely, that proposals other than those
specified on the Voting Instruction will be presented for shareholder action at
the Annual Meeting. If this should happen, the ESOP Trustees will vote upon such
matters in their discretion, or cause such matters to be voted upon in the
discretion of the individuals named in any proxies executed by them.
Your interest in the ESOP Trust offers you the opportunity to
participate, as do the Company shareholders, in decisions that affect the future
of the Company and Carver Federal Savings Bank ("Bank") and we encourage you to
take advantage of it. To help you decide how to complete the Voting Instruction,
enclosed is a copy of the Proxy Statement and Annual Report that is being
furnished to all holders of Common Stock in connection with the Annual Meeting.
Please complete, sign and return your Voting Instruction today. Your
instructions are important regardless of the size of your interest in the ESOP
Trust.
If you have questions regarding the terms of the ESOP or how to
complete the Voting Instruction, please call the Human Resources Department of
the Bank at (212) 876-4747.
Sincerely,
CARVER BANCORP, INC.
EMPLOYEE STOCK OWNERSHIP COMMITTEE
Enclosures
<PAGE>
================================================================================
CARVER BANCORP, INC. CONFIDENTIAL VOTING INSTRUCTION
This Instruction is solicited by the Employee Stock Ownership Plan Committee
of Carver Bancorp, Inc.
as named fiduciary for the
CARVER BANCORP, INC.
EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP")
For the Annual Meeting of Stockholders of Carver Bancorp, Inc.
to be held on August 14, 1998
The undersigned Participant, Former Participant or Beneficiary of a
deceased Former Participant in the ESOP (the "Instructor") hereby provides the
voting instructions hereinafter specified to Marine Midland Bank, as the trustee
of the ESOP ("ESOP Trustee"), which instructions will be taken into account by
the ESOP Trustee in voting, in person, by limited or general power of attorney,
or by proxy, the shares and fractional shares of common stock (the "Shares") of
Carver Bancorp, Inc. ("Carver") which are held by the ESOP Trustee, in its
capacity as ESOP Trustee, as of June 25, 1998 (the "Record Date") at the August
14, 1998 Meeting of Stockholders of Carver (the "Annual Meeting") to be held at
the American Stock Exchange, 86 Trinity Place, New York, New York at 10:00 a.m.,
or at any adjournment or postponement thereof.
As to the proposals listed below, which are more particularly described
in the Proxy Statement dated July 21, 1998, the ESOP Trustee will vote the
common stock of Carver Bancorp, Inc. held by the ESOP Trust to reflect the
voting instructions on this Confidential Voting Instruction, in the manner
described in the accompanying letter from the Committee dated July 21, 1998.
As to other matters which may properly come before the Annual Meeting,
the ESOP Trustee will vote upon such matters in its discretion, or cause such
matters to be voted upon in the discretion of the individuals named in any
proxies executed by it.
The instruction set forth below will be taken into account as described
above in directing the ESOP Trustee how to vote the Shares of Carver held by it
as of the Record Date, in its capacity as Trustee, provided this instruction is
filed with CT Corporation Systems by August 10, 1998.
PLEASE MARK YOUR INSTRUCTIONS ON THIS
VOTING INSTRUCTION, SIGN AND DATE IT AND
RETURN IT IN THE ENCLOSED ENVELOPE.
================================================================================
IF THIS VOTING INSTRUCTION IS SIGNED BUT NO
DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED
"FOR" PROPOSALS 1 AND 2 AND "AGAINST" PROPOSAL 3.
- -------------------------------- ---------------------------------------
PARTICIPANT ESOP PLAN COMMON (as of June 25, 1998)
PLEASE MARK YOUR CHOICE LIKE THIS /X/ IN BLUE OR BLACK INK.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE "FOR" PROPOSALS 1 AND 2 .
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR A THREE YEAR /_/ For all nominees (except as /_/ WITHHOLD AUTHORITY to votE
TERM indicated to the contrary for all nominees
Nominees: Thomas L. Clark, Jr., Herman Johnson below)
CPA,
and Pazel G. Jackson, Jr. INSTRUCTIONS: To
(Terms of Office Expire in 2001) withhold authority to vote
for any individual
nominee,
write that nominee's name
in the space provided:
--------------------------
</TABLE>
2. PROPOSAL TO APPOINT MITCHELL & TITUS, LLP as independent auditors for the
fiscal year ending March 31, 1999.
/_/ FOR /_/ AGAINST /_/ ABSTAIN*
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" PROPOSAL 3.
- -------------------------------------------------------------------------------
3. STOCKHOLDER PROPOSAL described in the accompanying Proxy Statement, if
properly introduced at the Annual Meeting.
/_/ FOR /_/ AGAINST /_/ ABSTAIN*
4. If any other matters properly come before the Annual Meeting, including,
among other things, a motion to adjourn or postpone the Annual Meeting to
another time and/or place for the purpose of soliciting additional proxies
or otherwise, the ESOP Trustee will vote on such matters in such a manner
as shall be determined by a majority of the Board of Directors. As of the
date of the Proxy Statement for the Annual Meeting, management of the
Company is not aware of any other such business.
The undersigned hereby instructs the Committee to direct the
ESOP Trustee to vote in accordance with the voting
instructions indicated above and hereby acknowledges receipt
of the letter from the Committee dated July 21, 1998, a
Notice of Annual Meeting of Stockholders of Carver Bancorp,
Inc., a Proxy Statement for the Annual Meeting and the 1998
Annual Report.
DATE
-----------------------------------------------------------
SIGNATURE
-----------------------------------------------------------
SIGNATURE
-----------------------------------------------------------
Please date and sign exactly as your name appears on this
instruction and return in the enclosed envelope. If acting
as attorney, executor, administrator, trustee, guardian or
otherwise, please so indicate when signing. If the signer is
a corporation, please sign the full corporate name, by a
duly authorized officer. If shares are held jointly, each
shareholder named should sign.
*For purposes of directing the voting of the Shares for
which no instructions are received, abstentions will be
disregarded.
<PAGE>
[CARVER FEDERAL SAVINGS BANK LETTERHEAD]
July 21, 1998
Dear Plan Account Holder:
The Carver Federal Savings Bank ("Bank") 401(k) Savings Plan in RSI
Retirement Trust ("401(k) Plan") has a related trust ("Employer Stock Fund
Trust") which holds common stock ("Common Stock") of Carver Bancorp, Inc.
("Company"). Marine Midland Bank ("Marine Midland"), as the trustee of the
401(k) Plan Employer Stock Fund Trust ("Employer Stock Fund Trustee"), is
therefore a shareholder of the Company and may vote on matters presented for
shareholder action at the Company's Annual Meeting of Stockholders scheduled to
be held on August 14, 1998 ("Annual Meeting").
The Employer Stock Fund Trust provides that in casting its votes at the
Annual Meeting, the Employer Stock Fund Trustee is to follow directions given by
the 401(k) Plan Committee ("Committee"). The Committee in turn follows
instructions provided by participants, former participants and beneficiaries of
deceased former participants ("Participants") with respect to the Common Stock
attributable to their accounts in the Employer Stock Fund as of June 25, 1998.
The records for the 401(k) Plan indicate that you are among the
Participants who may give voting instructions. You may give your instructions by
completing and signing the enclosed Confidential Voting Instruction ("Voting
Instruction") and returning it in the envelope provided to CT Corporation
Systems ("CT Corp"). The Voting Instruction lets you give instructions for each
matter expected to be presented for shareholder action at the Annual Meeting.
The Committee expects CT Corp to tabulate the instructions given on a
confidential basis and to provide the Committee with only the final results of
the tabulation. The final results will be used by the Committee in directing the
Employer Stock Fund Trustee.
The voting of the Common Stock held by the 401(k) Plan Trust is subject
to legal requirements under the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). The Committee, in consultation with its legal advisors,
considers these requirements in establishing voting instruction procedures and
directing the Employer Stock Fund Trustee. The remainder of this letter
describes the voting procedures which the Committee expects to follow for the
Annual Meeting.
How your voting instructions count depends on whether it was
anticipated that the matter being voted upon would be presented for shareholder
action at the Annual Meeting; whether you had an interest in the Employer Stock
Fund Trust on the proper date; and how large your interest was, as follows:
<PAGE>
ANTICIPATED PROPOSALS
In general, the Employer Stock Fund Trustee will vote the number of
shares of Common Stock (if any) held by the Employer Stock Fund Trust and
attributable as of June 25, 1998 to your individual account under the 401(k)
Plan according to the instructions specified on the Voting Instruction. The
Voting Instruction shows the number of shares of Common Stock attributable to
your individual account under the 401(k) Trust as of June 25, 1998. In general,
if you do not file the Voting Instruction by August 10, 1998, the number of
shares attributable to your account will be voted FOR or AGAINST each proposal
identified on the Voting Instruction in the same proportions as instructions to
cast votes FOR or AGAINST such proposal are given with respect to shares
attributable to the accounts of Participants who do file Voting Instructions. In
addition, if you do not file the Voting Instruction by August 10, 1998 or if you
ABSTAIN as to a proposal, your instructions will not count in voting any Common
Stock attributable to Participants' accounts for which no voting instructions
have been received. Each individual's instructions for such purposes are
weighted according to the number of shares of Common Stock attributable to all
individuals' accounts for which instructions to vote FOR or AGAINST have been
received. Notwithstanding the foregoing, the Committee may be required to
instruct the Employer Stock Fund Trustee to vote the Common Stock for which no
instructions have been received in a different manner, if it determines such a
vote to be in the best interests of Participants, in accordance with the legal
requirements of ERISA.
UNANTICIPATED PROPOSALS
It is possible, although very unlikely, that proposals other than those
specified on the Voting Instruction will be presented for shareholder action at
the Annual Meeting. If this should happen, the Employer Stock Fund Trustee will
be instructed to vote upon such matters in its discretion, or to cause such
matters to be voted upon in the discretion of the individuals named in any
proxies executed by it.
Your interest in the Employer Stock Fund Trust offers you the
opportunity to participate, as do the Company's shareholders, in decisions that
affect the future of the Company and the Bank, and we encourage you to take
advantage of it. To help you decide how to complete the Voting Instruction,
enclosed is a copy of the Proxy Statement and Annual Report that is being
furnished to all holders of Common Stock in connection with the Annual Meeting.
Please complete, sign and return your Voting Instruction today. Your
instructions are important regardless of the size of your interest in the Common
Stock held by the 401(k) Plan.
If you have questions regarding the terms of the 401(k) Plan or how to
complete the Voting Instruction, please call the Human Resources Department of
the Bank at (212) 876-4247.
Sincerely,
401(K) PLAN COMMITTEE OF
CARVER FEDERAL SAVINGS BANK
Enclosures
<PAGE>
================================================================================
CARVER BANCORP, INC. CONFIDENTIAL VOTING INSTRUCTION
This Instruction is solicited by the 401(k) Plan Committee
of Carver Federal Savings Bank
as named fiduciary for the
CARVER FEDERAL SAVINGS BANK 401(K) SAVINGS PLAN
IN RSI RETIREMENT TRUST ("401(K) PLAN")
For the Annual Meeting of Stockholders of Carver Bancorp, Inc.
to be held on August 14, 1998
The undersigned Participant, Former Participant or Beneficiary of a
deceased Former Participant in the 401(k) Plan (the "Instructor") hereby
provides the voting instructions hereinafter specified to the 401(k) Plan
Committee (the "Committee") of Carver Bancorp, Inc. ("Carver"), which
instructions shall be taken into account in directing Marine Midland Bank, as
the trustee of the 401(k) Plan Employer Stock Fund ("Employer Stock Fund
Trustee") to vote, in person, by limited or general power of attorney, or by
proxy, the shares and fractional shares of common stock (the "Shares") of Carver
which are held by the Employer Stock Fund Trustee, in its capacity as Trustee,
as of June 25, 1998 (the "Record Date") at the August 14, 1998 Meeting of
Stockholders of Carver (the "Annual Meeting") to be held at the American Stock
Exchange, 86 Trinity Place, New York, New York at 10:00 a.m., or at any
adjournment or postponement thereof.
As to the proposals listed below and as more particularly described in
the Proxy Statement dated July 21, 1998, the Committee will give voting
directions to the Employer Stock Fund Trustee. Such directions will reflect the
voting instructions filed by the Instructor on this Confidential Voting
Instruction, in the manner described in the accompanying letter from the
Committee dated July 21, 1998.
As to other matters which may properly come before the Annual Meeting,
the Employer Stock Fund Trustee will be instructed to vote upon such matters in
its discretion, or cause such matters to be voted upon in the discretion of the
individuals named in any proxies executed by them.
The instruction set forth below will be taken into account as described
above in directing the Employer Stock Fund Trustee how to vote the Shares of
Carver held by it as of the Record Date, in its capacity as Trustee, provided
this instruction is filed with CT Corporation Systems by August 10, 1998.
PLEASE MARK YOUR INSTRUCTIONS ON THIS VOTING INSTRUCTION, SIGN AND
DATE IT AND RETURN IT IN THE ENCLOSED ENVELOPE.
================================================================================
IF THIS VOTING INSTRUCTION IS SIGNED BUT NO
DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED
"FOR" PROPOSALS 1 AND 2 AND "AGAINST" PROPOSAL 3.
- ----------------------------- ----------------------------------------
PARTICIPANT ESOP PLAN COMMON (as of June 25, 1998)
PLEASE MARK YOUR CHOICE LIKE THIS /X/ IN BLUE OR BLACK INK.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
PROPOSALS 1 AND 2 .
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR A THREE YEAR /_/ For all nominees (except as /_/ WITHHOLD AUTHORITY to vote
TERM indicated to the contrary for all nominees
Nominees: Thomas L. Clarke, Jr., Herman Johnson, CPA below)
and Pazel G. Jackson, Jr. INSTRUCTIONS: To
(Terms of Office Expire in 2001) withhold authority to vote
for any individual nominee,
write that nominee's name
in the space provided:
----------------------------
</TABLE>
2. PROPOSAL TO APPOINT MITCHELL & TITUS, LLP as independent auditors for the
fiscal year ending March 31, 1999.
/_/ FOR /_/ AGAINST /_/ ABSTAIN*
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" PROPOSAL 3.
- --------------------------------------------------------------------------------
3. STOCKHOLDER PROPOSAL described in the accompanying Proxy Statement, if
properly introduced at the Annual Meeting.
/_/ FOR /_/ AGAINST /_/ ABSTAIN*
4. If any other matters properly come before the Annual Meeting, including,
among other things, a motion to adjourn or postpone the Annual Meeting to
another time and/or place for the purpose of soliciting additional proxies
or otherwise, the Employer Stock Fund Trustee will vote on such matters in
such a manner as shall be determined by a majority of the Board of
Directors. As of the date of the Proxy Statement for the Annual Meeting,
management of the Company is not aware of any other such business.
- --------------------------------------------------------------------------------
The undersigned hereby instructs the Committee to direct the
Employer Stock Fund Trustee to vote in accordance with the
voting instructions indicated above and hereby acknowledges
receipt of the letter from the Committee dated July 21,
1998, a Notice of Annual Meeting of Stockholders of Carver
Bancorp, Inc., a Proxy Statement for the Annual Meeting and
the 1998 Annual Report.
DATE
------------------------------------------------------------
SIGNATURE
------------------------------------------------------------
SIGNATURE
------------------------------------------------------------
Please date and sign exactly as your name appears on this
instruction and return in the enclosed envelope. If acting
as attorney, executor, administrator, trustee, guardian or
otherwise, please so indicate when signing. If the signer is
a corporation, please sign the full corporate name, by a
duly authorized officer. If shares are held jointly, each
shareholder named should sign.
*For purposes of directing the voting of the Shares for
which no instructions are received, abstentions will be
disregarded.
