<PAGE>
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 (S)240.14a-11(c) or (S)240.14a-12
ROSLYN BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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:
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Notes:
<PAGE>
ROSLYN BANCORP, INC.
1400 OLD NORTHERN BOULEVARD
ROSLYN, NEW YORK 11576
(516) 621-6000
March 27, 1998
Fellow Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders (the
"Annual Meeting") of Roslyn Bancorp, Inc. (the "Company"), the holding company
for The Roslyn Savings Bank (the "Bank"), Roslyn, New York, which will be held
on April 28, 1998, at 9:30 a.m., Eastern Daylight Savings Time, at the
Milleridge Cottage, 585 North Broadway, Jericho, New York 11753.
The attached Notice of the Annual Meeting and the Proxy Statement describe
the formal business to be transacted at the Annual Meeting. Directors and
officers of Roslyn Bancorp, Inc., as well as a representative of KPMG Peat
Marwick LLP, the Company's independent auditors, will be present at the Annual
Meeting to respond to any questions that our shareholders may have regarding the
business to be transacted.
The Board of Directors of Roslyn Bancorp, Inc. has determined that the
matters to be considered at the Annual Meeting are in the best interests of the
Company and its shareholders. FOR THE REASONS SET FORTH IN THE PROXY STATEMENT,
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH MATTER CONSIDERED.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. YOUR COOPERATION
IS APPRECIATED SINCE A MAJORITY OF THE COMPANY'S COMMON STOCK MUST BE
REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE
CONDUCT OF BUSINESS.
On behalf of the Board of Directors and all of the employees of the Company
and the Bank, I thank you for your continued interest and support.
Sincerely yours,
/s/ Joseph L. Mancino
Joseph L. Mancino
Chairman of the Board,
President and Chief Executive Officer
<PAGE>
ROSLYN BANCORP, INC.
1400 OLD NORTHERN BOULEVARD
ROSLYN, NEW YORK 11576
__________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 28, 1998
__________________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Roslyn Bancorp, Inc. (the "Company") will be held on April 28,
1998, at 9:30 a.m., Eastern Daylight Savings Time, at the Milleridge Cottage,
585 North Broadway, Jericho, New York 11753.
The purpose of the Annual Meeting is to consider and vote upon the
following matters:
1. The election of three Directors to three-year terms of office each;
2. The ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors of the Company for the fiscal year ending December
31, 1998; and
3. Such other matters as may properly come before the Annual Meeting and at
any adjournments thereof, including whether or not to adjourn the Annual
Meeting.
The Board of Directors has established March 2, 1998, as the record date
for the determination of shareholders entitled to receive notice of and to vote
at the Annual Meeting and at any adjournments thereof. Only record holders of
the common stock of the Company as of the close of business on such record date
will be entitled to vote at the Annual Meeting or any adjournments thereof. In
the event there are not sufficient votes for a quorum, or to approve or ratify
any of the foregoing proposals at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit further solicitation of proxies by
the Company. A list of shareholders entitled to vote at the Annual Meeting will
be available at Roslyn Bancorp, Inc., 1400 Old Northern Boulevard, Roslyn, New
York 11576, for a period of ten days prior to the Annual Meeting and will also
be available at the Annual Meeting itself.
By Order of the Board of Directors
/s/ Mary M. Ehrich
Mary M. Ehrich
Corporate Secretary
Roslyn, New York
March 27, 1998
<PAGE>
ROSLYN BANCORP, INC.
_______________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1998
_______________________
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to shareholders of Roslyn Bancorp,
Inc. (the "Company") in connection with the solicitation by the Board of
Directors ("Board of Directors" or "Board") of proxies to be used at the Annual
Meeting of Shareholders to be held on April 28, 1998 (the "Annual Meeting"), and
at any adjournments thereof. This Proxy Statement is first being mailed to
record holders on or about March 27, 1998.
Regardless of the number of shares of common stock owned, it is important
that record holders of a majority of the shares be represented by proxy or in
person at the Annual Meeting. Shareholders are requested to vote by completing
the enclosed proxy card and returning it signed and dated in the enclosed
postage-paid envelope. Shareholders are urged to indicate their vote in the
spaces provided on the proxy card. PROXIES SOLICITED BY THE BOARD OF DIRECTORS
OF THE COMPANY WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN.
WHERE NO INSTRUCTIONS ARE INDICATED, SIGNED PROXIES WILL BE VOTED "FOR" THE
APPROVAL AND RATIFICATION OF THE SPECIFIC PROPOSALS PRESENTED IN THIS PROXY
STATEMENT.
Other than the matters listed on the attached Notice of Annual Meeting of
Shareholders, the Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. EXECUTION OF A PROXY,
HOWEVER, CONFERS ON THE DESIGNATED PROXY HOLDERS DISCRETIONARY AUTHORITY TO VOTE
THE SHARES IN ACCORDANCE WITH THEIR BEST JUDGMENT ON SUCH OTHER BUSINESS, IF
ANY, THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND AT ANY ADJOURNMENTS
THEREOF, INCLUDING WHETHER OR NOT TO ADJOURN THE ANNUAL MEETING.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Corporate Secretary of the Company, by
delivering to the Company a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, if you are a
shareholder whose shares are not registered in your own name, you will need
appropriate documentation from your record holder to vote personally at the
Annual Meeting.
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Kissel-Blake
Inc., a proxy solicitation firm, will assist the Company in soliciting proxies
for the Annual Meeting and will be paid a fee of $5,000, plus out-of-pocket
expenses. Proxies may also be solicited personally or by telephone by
Directors, officers and other employees of the Company and its subsidiaries,
without additional compensation therefor. The Company will also request
persons, firms and corporations holding shares in their
<PAGE>
names, or in the name of their nominees, which are beneficially owned by others,
to send proxy material to and obtain proxies from such beneficial owners, and
will reimburse such holders for their reasonable expenses in doing so.
VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of shares
of common stock of the Company (the "Common Stock"), with each share entitling
its owner to one vote on all matters to be voted on at the Annual Meeting,
except as described below. There is no cumulative voting for the election of
Directors.
The close of business on March 2, 1998, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
shareholders of record entitled to notice of and to vote at the Annual Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 43,642,459 shares.
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 (the "Limit") are not entitled to any vote in respect of the
shares held in excess of the Limit. A person or entity is deemed to
beneficially own shares owned by an affiliate of, as well as persons acting in
concert with, such person or entity. The Company's Certificate of Incorporation
authorizes the Board of Directors (i) to make all determinations necessary to
implement and apply the Limit, including determining whether persons or entities
are acting in concert, and (ii) to demand that any person who is reasonably
believed to beneficially own stock in excess of the Limit to supply information
to the Company to enable the Board of Directors to implement and apply the
Limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Annual
Meeting. In the event that there are not sufficient votes for a quorum, or to
approve or ratify any proposal at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further solicitation of proxies.
As to the election of Directors, the proxy card being provided by the Board
of Directors enables a shareholder to vote "FOR" the election of the nominees
proposed by the Board of Directors, or to "WITHHOLD" authority to vote for one
or more of the nominees being proposed. Under Delaware law and the Company's
Bylaws, directors are elected by a plurality of votes cast, without regard to
either (i) broker non-votes or (ii) proxies as to which authority to vote for
one or more of the nominees being proposed is withheld.
As to the ratification of KPMG Peat Marwick LLP as independent auditors of
the Company and all other matters that may properly come before the Annual
Meeting, by checking the appropriate box, a stockholder may: (i) vote "FOR" the
item; (ii) vote "AGAINST" the item; or (iii)
2
<PAGE>
"ABSTAIN" from voting on such item. Under Delaware law and the Company's Bylaws,
the affirmative vote of a majority of the votes cast at the Annual Meeting, in
person or by proxy, and entitled to vote, is required to constitute stockholder
ratification of Proposal 2. Accordingly, shares as to which the "ABSTAIN" box
has been selected on the proxy card will not be counted as votes cast for
purposes of Delaware law and the Company's Bylaws. Shares underlying broker non-
votes or in excess of the Limit will not be counted as present and entitled to
vote or as votes cast and will have no effect.
Proxies solicited hereby will be returned to the Company's transfer agent,
Registrar and Transfer Company. The Board of Directors have designated
Registrar and Transfer Company to act as inspectors of election and tabulate the
votes at the Annual Meeting. Registrar and Transfer Company is not otherwise
employed by, or a Director of, the Company or any of its affiliates. After the
final adjournment of the Annual Meeting, the proxies will be returned to the
Company for safekeeping.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date, or as disclosed in certain reports
received to date regarding such ownership filed by such persons with the Company
and with the Securities and Exchange Commission ("SEC"), in accordance with
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended
("Exchange Act"). Other than those persons listed below, the Company is not
aware of any person, as such term is defined in the Exchange Act, that owns more
than 5% of the Company's Common Stock as of the Record Date.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
- -------------- ------------------------------------ -------------- ----------
<S> <C> <C> <C>
Common Stock The Roslyn Savings Bank 3,491,397(1) 8.0%
Employee Stock Ownership Plan
("ESOP")
1400 Old Northern Boulevard
Roslyn, New York 11576
</TABLE>
___________________________
(1) Marine Midland Bank has been appointed as the corporate trustee for the
ESOP ("ESOP Trustee"). The ESOP Trustee, subject to its fiduciary duty,
must vote all allocated shares held in the ESOP in accordance with the
instructions of the ESOP participants. As of March 2, 1998, 62,371 shares
had been allocated under the ESOP and 3,427,692 shares remain unallocated.
As of March 2, 1998, the shares to be allocated under the ESOP for 1997
have been committed for allocation but have not yet been allocated to the
ESOP participants. With respect to unallocated shares, such unallocated
shares will be voted by the ESOP Trustee in a manner calculated to most
accurately reflect the voting instructions received from ESOP participants,
so long as such vote is in accordance with the provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
3
<PAGE>
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of nine (9)
Directors and is divided into three classes. Each of the nine members of the
Board of Directors of the Company also presently serves as a Director of The
Roslyn Savings Bank, which is a wholly-owned subsidiary of the Company.
Directors are elected for staggered terms of three years each, with the term of
office of only one of the three classes of Directors expiring each year.
Directors serve until their successors are elected and qualified.
The three nominees proposed for election at this Annual Meeting are Joseph
L. Mancino, James E. Swiggett and Robert G. Freese. No person being nominated
as a Director is being proposed for election pursuant to any agreement or
understanding between any such person and the Company.
In the event that any such nominee is unable to serve, or declines to serve
for any reason, it is intended that the proxies will be voted for the election
of such other person as may be designated by the present Board of Directors.
The Board of Directors has no reason to believe that any of the persons named
will be unable or unwilling to serve. UNLESS AUTHORITY TO VOTE FOR THE NOMINEE
IS WITHHELD, IT IS INTENDED THAT THE SHARES REPRESENTED BY THE ENCLOSED PROXY
CARD, IF EXECUTED AND RETURNED, WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES
PROPOSED BY THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE
NOMINEES NAMED IN THIS PROXY STATEMENT.
4
<PAGE>
INFORMATION WITH RESPECT TO THE NOMINEES, CONTINUING DIRECTORS AND CERTAIN
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth, as of the Record Date, the names of the
nominees, continuing Directors and "Named Executive Officers" of the Company, as
defined below; their ages; a brief description of their recent business
experience, including present occupations and employment; certain directorships
held by each; the year in which each became a Director and the year in which
their terms (or in the case of the nominees, their proposed terms) as Director
of the Company expire. The table also sets forth the amount of Common Stock and
the percent thereof beneficially owned by each Director and Named Executive
Officers and all Directors and executive officers as a group as of the Record
Date.
<TABLE>
<CAPTION>
NATURE AND OWNERSHIP
NAME AND PRINCIPAL EXPIRATION AMOUNT OF AS A
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIAL PERCENT OF
AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNERSHIP(2)(3)(4) CLASS
- ------------------------------------------- --- ----------- ----------- ------------------ -----------
<S> <C> <C> <C> <C> <C>
NOMINEES
Joseph L. Mancino 60 1991 1998 295,933 *
Chairman of the Board, President and
Chief Executive Officer of the
Company; Chairman of the Board,
President and Chief Executive Officer
of the Bank. Mr. Mancino also serves
as a Director of the Institutional
Investors Mutual Fund, a diversified
open end mutual fund, the Community
Bankers Association of New York State
and the Savings Bank Life Insurance
Fund.
James E. Swiggett 66 1980 1998 85,630 *
Retired Chairman of the Board,
President and Chief Executive Officer
of Kollomorgen Corp., a diversified
technology manufacturing company.
Robert G. Freese 68 1988 1998 36,164 *
Retired Vice Chairman and Chief
Financial Officer of Grumman
Corporation, a defense contractor.
CONTINUING DIRECTORS
Thomas J. Calabrese, Jr. 56 1994 2000 32,677 *
Vice President, Daniel Gale Agency,
Inc.; retired Managing Director -
Human Resources, NYNEX
Corporation, a telecommunications
firm.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NATURE AND OWNERSHIP
NAME AND PRINCIPAL EXPIRATION AMOUNT OF AS A
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIAL PERCENT OF
AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNERSHIP(2)(3)(4) CLASS
- ------------------------------------------- --- ----------- ----------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
Dr. Edwin W. Martin, Jr. 66 1994 2000 32,977 *
President Emeritus and a Director of
the National Center for Disability
Services, a non-profit education,
rehabilitation and research corporation
since 1994. Prior to that, Dr. Martin
was President and Chief Executive
Officer of the National Center for
Disability Services. Dr. Martin is
currently a Director of National
Captioning Institute, a non-profit
agency, a Director of Interboro Mutual
Indemnity Insurance Company, an
insurance company, and a Director of
Pall Corp., a manufacturer of industrial
filters.
Richard C. Webel 46 1995 2000 36,677 *
Managing Director, Innocenti &
Webel, an architectural firm. Mr.
Webel is also President of Webel
Corporation, a strategic planning
company and PlantAmerica, LLC, a
software development corporation.
Mr. Webel also serves as a general
partner of Roundbush Associates, a
real estate development partnership.
Floyd N. York 75 1967 1999 74,350 *
Retired Chairman of the Board,
President and Chief Executive Officer
of the Bank.
Victor C. McCuaig 69 1970 1999 46,850 *
Of counsel to and former partner in
Payne, Wood & Littlejohn, general
counsel to the Bank.
John P. Nicholson 73 1975 1999 44,970 *
Chairman of Nicholson & Galloway, a
local construction firm specializing in
roofing construction. Mr. Nicholson
also serves as an Advisory Director of
Bank of New York, Long Island
Division.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NATURE AND OWNERSHIP
NAME AND PRINCIPAL EXPIRATION AMOUNT OF AS A
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIAL PERCENT OF
AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNERSHIP(2)(3)(4) CLASS
- ------------------------------------------- --- ----------- ----------- ------------------ -----------
<S> <C> <C> <C> <C> <C>
NAMED EXECUTIVE OFFICERS
WHO ARE NOT DIRECTORS
Michael P. Puorro 38 -- -- 90,414 *
Treasurer and Chief Financial Officer
of the Company; Senior Vice President
and Chief Financial Officer of the
Bank since 1996. Mr. Puorro has been
employed by the Bank since 1992.
John R. Bransfield, Jr. 56 -- -- 126,568 *
Vice President of the Company;
Executive Vice President and Senior
Lending Officer of the Bank since
1996. Mr. Bransfield, Jr. was Senior
Vice President and Senior Lending
Officer of the Bank from 1993 until
1996. Prior to that, Mr. Bransfield, Jr.
was Executive Vice President and
President for the Long Island Region
of a New England-based commercial
bank.
John L. Klag 40 -- -- 79,989 *
Senior Vice President and Investment
Officer of the Bank since 1996. Mr.
Klag has been employed by the Bank
since 1993. Prior to that, Mr. Klag was
a Vice President of a New York-based
savings bank.
Arthur W. Toohig 55 -- -- 94,251 *
Senior Vice President and Human
Resources Officer of the Bank since
1992.
Directors and executive officers as a -- -- -- 1,253,735(5) 2.91%
Group (15 persons)
</TABLE>
_______________________________
* Represents less than 1.0% of the Company's voting securities.
(1) Includes years of service as a Director of the Bank.
(2) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting or dispositive power as to shares reported
herein (except as noted).
(3) Includes 34,164, 34,164 31,677, 31,677, 31,677, 34,350, 34,350 and 34,350
shares awarded under the Roslyn Bancorp, Inc. 1997 Stock-Based Incentive
Plan (the "Incentive Plan") to Messrs. Swiggett, Freese, Calabrese, Martin,
Webel, York, McCuaig and Nicholson, respectively. Such awards commence
vesting at a rate of 20% per year beginning September 2, 1998. Each
participant has voting power as to the shares awarded.
(4) Includes Stock Awards granted under the Incentive Plan consisting of
181,818, 101,138, 62,500, 62,500 and 62,500 shares awarded to Messrs.
Mancino, Bransfield, Jr., Puorro, Toohig and Klag, respectively, which will
commence vesting at a rate of 20% per year beginning on September 2, 1998
and 45,000, 20,000, 9,400, 9,400 and 9,400 shares awarded to Messrs.
Mancino, Bransfield, Jr., Puorro, Toohig and Klag, respectively, which vest
based upon the achievement of certain specified performance objectives but
in no event later than September 2, 2002. Each participant presently has
voting power as to the shares awarded.
(5) Includes a total of 763,656 shares awarded under the Incentive Plan as to
which voting may be directed.
7
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers (as
defined in regulations promulgated by the SEC thereunder) and directors, 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. 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 past fiscal year all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with except that one purchase by Mr. Nicholson was not
reported on a timely basis on a Form 4 and, due to an administrative error, each
Director and Messrs. Bransfield, Jr., Klag, Daniel Murphy, Puorro and Ms. Ehrich
did not timely file his or her Annual Statement of Beneficial Ownership of
Securities on Form 5 which would have reflected one transaction for each person
consisting of the awards under the Incentive Plan. Each required filing was
subsequently filed.
MEETINGS AND COMMITTEES OF THE BOARDS OF THE BANK AND THE COMPANY
The Board of Directors of the Company conducts its business through
meetings of the Board of Directors and through activities of its committees.
The Board of Directors of the Company meets regularly and may have additional
meetings as needed. During fiscal 1997, the Board of Directors of the Company
held 13 meetings. All of the Directors of the Company attended at least 75% of
the total number of the Company's Board meetings held and committee meetings on
which such Directors served during fiscal 1997. The Board of Directors of the
Company maintains committees, the nature and composition of which are described
below:
AUDIT COMMITTEE. The Audit Committee of the Company consists of Messrs.
Freese, Swiggett, Nicholson, York and Webel, who are outside Directors. The
purposes of this Committee are to review audit reports and management's actions
regarding the implementation of audit findings and to review compliance with all
relevant laws and regulations. The Audit Committee met 3 times in fiscal 1997.
COMPENSATION COMMITTEE. The Compensation Committee of the Company consists
of Messrs. Calabrese, Jr., Freese, Swiggett, Nicholson and Martin, Jr. The
Compensation Committee meets to establish compensation and benefits for the
executive officers and to review the incentive compensation programs when
necessary. The Compensation Committee is also responsible for establishing
certain guidelines and limits for compensation for other salaried officers and
employees of the Company and the Bank. The Compensation Committee met 6 times
in fiscal 1997.
8
<PAGE>
DIRECTORS' COMPENSATION
DIRECTORS' FEES. As of May 1, 1997, Directors of the Company receive fees
of $1,700 per Board meeting attended and $800 per Committee meeting attended,
unless such meetings are held consecutively with Board or Committee meetings of
the Bank, in which case the Directors of the Company receive no fees. Prior to
May 1, 1997, no fees were paid to Directors of the Company for their services as
members of the Board of Directors of the Company or as committee members.
Directors of the Bank receive fees of $1,700 per Board meeting attended and $800
per Committee meeting attended.
INCENTIVE PLAN. The Company maintains the Incentive Plan under which all
directors, officers and employees of the Company and the Bank are eligible to
receive stock based compensation awards. Under the Incentive Plan, each outside
director of the Company and Bank was granted non-statutory stock options to
purchase 62,500 shares of Common Stock (with Limited Rights), and awards of
common stock ("Stock Awards") 25,000 shares of Common Stock (collectively, the
"Directors' Awards") on September 2, 1997, which vest in five equal installments
commencing September 2, 1998. In addition, each outside director of the Company
and the Bank was granted non-statutory stock options to purchase 37,500 shares
of Common Stock (with Limited Rights) and Stock Awards ranging from 6,677 shares
to 9,350 shares on February 19, 1998 which vest in five (5) equal annual
installments commencing February 19, 1999. The Limited Rights provide, in the
event of a change in control, a lump sum cash payment equal to the difference
between the exercise price of the related option and the fair market value of
the shares of Common Stock subject to the option on the date of exercise, less
any applicable tax withholding. The non-statutory stock option awards vest in
five (5) equal annual installments, commencing September 2, 1998 and February
19, 1999, respectively, and have exercise prices of $22.50 and $22.00,
respectively. All options granted under the Incentive Plan expire 10 years from
the date of grant. In the event an outside director ceases service due to death
or disability, all Directors' Awards will immediately vest or become exercisable
and all stock options will remain exercisable for a period of three (3) years.
EXECUTIVE COMPENSATION
The report of the Compensation Committee and the stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act,
except as to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION. Under rules
established by the SEC, the Company is required to provide certain data and
information in regard to the compensation and benefits provided to the Company's
Chief Executive Officer and other executive officers of the Company for the year
ended December 31, 1997. Recommendations regarding all of the components of the
executive officers of the Company are made by the Compensation
9
<PAGE>
Committee of the Board ("Committee") and are approved by the Board. The Board of
Directors did not reject or modify in any material way any of the
recommendations of the Committee during fiscal 1997. Each member of the
Committee is a non-employee Director.
The Company has revised current executive compensation policies to reflect
the status of the Company as a public company and assure competitive
compensation levels. It is currently intended that the new compensation
policies of the Company and Bank will incorporate the consolidated financial
results of the Company and Bank and other factors related to the performance of
the Company's common stock.
The following policies and procedures were utilized to determine executive
compensation levels for fiscal 1997. As a result of the Bank's mutual-to-stock
conversion and other operational changes, subjective qualitative measures were
more heavily relied upon by the Committee than quantitative measures.
For 1997, the Committee operated under a policy to structure executive
compensation in a time and manner intended to limit the likelihood that current
compensation would exceed the limits for deductibility prescribed by Section
162(m) of the Internal Revenue Code, as amended (the "Code"). This policy will
continue to be operative for 1998; however, the Compensation Committee retains
discretion to make future exceptions to this policy, and in determining whether
to do so, the Compensation Committee may consider a number of factors, including
the Company and the Bank's tax position, the materiality of amounts likely to be
involved and any potential ramifications of the loss of flexibility to respond
to unforeseeable changes in circumstances.
COMPENSATION POLICIES AND PROCEDURES. The Committee is responsible for
administering the compensation and benefit programs for all of the Company's
employees, including its executive officers. It is the responsibility of the
Committee to recommend to the full Board of Directors the amount and composition
of executive compensation paid to the executive officers, including the
President and Chief Executive Officer. It is the responsibility of the Board of
Directors to review and consider such compensation recommendations of the
Committee.
The Committee annually reviews and evaluates base salary and annual bonuses
for all executive officers, and in conducting such reviews places primary
consideration upon the recommendations by the President and Chief Executive
Officer, along with the rationale for such recommendations, with the exception
of the compensation review of the President and Chief Executive Officer. The
President and Chief Executive Officer does not participate in the Committee's
decision as to his compensation package. In establishing individual
compensation levels, the Committee considers the Company's overall objectives
and performance, peer group comparisons and individual performance.
The Committee adopted the following goals in establishing executive
compensation: (1) attracting, retaining and rewarding highly qualified and
productive persons; (2) relating
10
<PAGE>
compensation to both Company and individual performance; and (3) establishing
compensation levels that are internally equitable and externally competitive.
The Bank's cash compensation program for executive officers consists of (1)
a base salary and (2) an annual bonus. In addition, executive officers
participate in other benefit plans available to all employees, including the
Retirement Plan, the ESOP, and the 401(k) Plan, and executive officers may be
selected to participate in supplemental benefit plans.
BASE SALARIES. Salary levels recommended by the Committee are intended to
be consistent and competitive with the practices of comparable financial
institutions, and each executive's level of responsibility. The Committee
generally utilizes internal and/or external surveys of compensation paid to
executive officers performing similar duties for depository institutions and
their holding companies with particular focus on the level of compensation paid
by comparable peer institutions. In this regard, the Committee, from time to
time, utilizes the services of compensation consultants to assist it in its
review. For fiscal 1997, the Committee engaged KPMG Peat Marwick LLP to prepare
survey information and to review the levels of compensation paid to the
Company's executive officers in comparison to cash compensation paid by a peer
group of financial institutions. The KPMG Peat Marwick analysis compared both
the base and total cash compensation levels of the Company in comparison to
other similarly situated financial institutions operating in the State of New
York, including the Metropolitan New York City region. The analysis addressed
the compensation of the executive officers in each institution and the financial
performance of such institutions in comparison to the Company and concluded that
the executive officers of the Company were generally compensated below their
peer group. After a thorough discussion by the Committee and Board of
Directors, the base salaries of each Named Executive Officer were increased to
amounts that attempted to make compensation levels commensurate with the levels
paid to officers of such similarly situated peer financial institutions.
Although the Committee's recommendations are discretionary and no specific
formula is used for decision making, salary increases are aimed at reflecting
the overall performance of the Bank and the performance of the individual
executive officer.
BONUS. For fiscal 1997, the Company did not maintain a structured cash
bonus plan and, while the Committee deemed it appropriate to pay discretionary
cash bonuses in prior years, it did not authorize the payment of such bonuses
for performance during fiscal 1997. In determining not to authorize cash bonuses
for 1997, the Committee considered the grant of stock options and stock awards
to its executive officers for fiscal 1997 and determined that such stock-based
compensation was a more effective method of aligning such officers' interests
with those of the Company's shareholders than a discretionary cash bonus. The
Company engaged KPMG Peat Marwick to assist the Company in granting stock awards
and stock options under the Incentive Plan. KPMG Peat Marwick conducted a
survey of stock based compensation granted by recently converted peer
institutions operating on a national and regional basis, the performance of such
institutions in comparison to the Company, and recommended the level and terms
of stock awards and stock options that were granted during 1997. The Committee
considered the report issued by KPMG Peat
11
<PAGE>
Marwick regarding such recommended stock awards and option grants and made
awards to executive officers and Directors consistent with the recommendations
of KPMG Peat Marwick.
CHIEF EXECUTIVE OFFICER COMPENSATION. The Compensation Committee set Mr.
Mancino's base compensation at $500,000 effective March 31, 1997. This
represents an increase of $80,000 or 19.05%. In establishing his base salary,
the Committee reviewed Mr. Mancino's performance for the prior year and also
considered the Company's net income, profitability, its successful conversion to
stock form as well as the cash compensation paid to chief executive officers of
similarly situated peer financial institutions as reflected in the report issued
by KPMG Peat Marwick. While no specific formula was used in connection with the
Committee's decisions regarding the Chief Executive Officer's annual salary and
while no specified salary level based on the achievement of particular
quantifiable objectives or financial goals of the Company was set by the
Committee, the Committee heavily considered the report issued by KPMG Peat
Marwick regarding compensation levels paid to chief executive officers of peer
institutions and the recommendations of KPMG Peat Marwick when determining Mr.
Mancino's base salary for 1997.
The Chief Executive Officer was paid a bonus of $2,500 in fiscal 1997,
representing loan referral recruitment and attendance bonuses. The Chief
Executive Officer did not receive any other cash bonus. While the Committee
deemed it appropriate to pay Mr. Mancino a discretionary cash bonus based on
measures such as the performance of the Bank and its successful transition to a
public company, it determined not to authorize a discretionary cash bonus for
Mr. Mancino. In determining not to authorize a cash bonus for the Chief
Executive Officer, the Committee considered the grant of stock options and stock
awards granted to the Chief Executive Officer in 1997 and concluded that such
grants to the Chief Executive Officer were a more effective means of providing
Mr. Mancino's compensation in 1997 as compared to a discretionary cash bonus.
Similar to all other grants under the Incentive Plan, grants of stock options
and stock awards made by the Committee to Mr. Mancino were made in accordance
and consistent with the report and recommendation of KPMG Peat Marwick regarding
stock-based compensation paid to chief executive officers of recently converted
institutions.
THE COMPENSATION/PERSONNEL COMMITTEE
Thomas J. Calabrese, Jr.
Robert G. Freese
Dr. Edwin W. Martin, Jr.
John P. Nicholson
James E. Swiggett
12
<PAGE>
SUMMARY COMPENSATION TABLE. The following table sets forth the cash
compensation paid by the Bank as well as certain other compensation paid or
accrued for services rendered in all capacities during the years ended December
31, 1997, 1996 and 1995, to the Chief Executive Officer and the four highest
paid executive officers of the Bank who received salary and bonus in excess of
$100,000 ("Named Executive Officers").
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION(1) AWARDS PAYOUTS
----------------------------- ------------------------- -------
OTHER
ANNUAL RESTRICTED SECURITIES
COMPEN- STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL YEAR SALARY BONUS SATION AWARDS OPTIONS/SARS PAYOUTS COMPENSATION
POSITIONS ($) ($) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6)
- ------------------------------ ---- -------- -------- ------- ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph L. Mancino 1997 $497,692 $ 2,500 - $5,273,519 518,545 - $36,403
Chairman of the Board of 1996 $403,846 404 - - - - 19,616
Directors, President and 1995 336,539 1,600 - - - - 20,433
Chief Executive Officer
John R. Bransfield, Jr. 1997 $258,462 $ 1,500 - $2,816,459 288,841 - $ 9,397
Executive Vice President 1996 $173,015 144,000 - - - - 10,774
and Senior Lending Officer 1995 151,719 75,736 - - - - 10,578
Michael P. Puorro 1997 $150,769 $ 400 - $1,671,675 175,334 - $ 5,333
Senior Vice President and 1996 $100,019 83,475 - - - - 3,077
Chief Financial Officer 1995 85,846 43,340 - - - - 2,847
Arthur W. Toohig 1997 $140,789 $ - - $1,671,675 175,334 - $ 9,808
Senior Vice President and 1996 101,992 86,580 - - - - 9,112
Human Resources Officer 1995 91,692 44,500 - - - - 7,400
John L. Klag 1997 $140,673 $ 300 - $1,671,675 175,334 - $ 1,959
Senior Vice President and 1996 $101,100 87,610 - - - - 3,263
Investment Officer 1995 90,423 47,870 - - - - 3,004
</TABLE>
(1) Under Annual Compensation, the column titled "Salary" includes amounts
deferred by the Named Executive Officer under the Bank's 401(k) Plan and the
column titled "Bonus" consists of attendance bonuses, loan referral bonuses
and recruitment bonuses.
(2) For 1997, 1996 and 1995, there were no (a) perquisites over the lesser of
$50,000 or 10% of the individual's total salary and bonus for the year; (b)
payments of above-market preferential earnings on deferred compensation; (c)
payments of earnings with respect to long-term incentive plans prior to
settlement or maturation; (d) tax payment reimbursements; or (e)
preferential discounts on stock. For 1996 and 1995, the Bank had no
restricted stock or stock related plans in existence.
(3) Includes Stock Awards granted under the Incentive Plan consisting of
181,818, 101,138, 62,500, 62,500 and 62,500 shares awarded to Messrs.
Mancino, Bransfield, Jr., Puorro, Toohig and Klag, respectively, which will
begin vesting in five equal installments on September 2, 1998 and 45,000,
20,000, 9,400, 9,400 and 9,400 shares awarded to Messrs. Mancino,
Bransfield, Jr., Puorro, Toohig and Klag, respectively, which will vest
based on the achievement of certain specified performance objectives but in
no event later than September 2, 2002. When shares become vested and are
distributed, the recipients will also receive an amount equal to the
accumulated cash and stock dividends with respect thereto, plus earnings
thereon. As of December 31, 1997, the market value of the 226,818, 121,138,
71,900, 71,900 and 71,900 shares held by Messrs. Mancino, Bransfield, Jr.,
Puorro, Toohig and Klag was $5,273,519, $2,816,459, $1,671,675, $1,671,675
and $1,671,675, respectively. For 1996 and 1995 neither the Company nor the
Bank had any stock plans in existence.
(4) Includes options granted under the Incentive Plan during fiscal year 1997.
See "Option Grants in last Fiscal Year" table for discussion of the terms of
such options granted under the Incentive Plan. No stock options or SARs were
earned or granted in 1996 or 1995.
(5) For 1997, 1996 and 1995, there were no payouts or awards under any long-
term incentive plan.
(6) For 1997, such amounts include: (a) $9,828, $5,983, $487, $1,981, and $453
of imputed income from group term life insurance on behalf of Messrs.
Mancino, Bransfield, Jr., Puorro, Toohig and Klag, respectively; (b) $5,575,
$3,414 and $2,770 of imputed income relating to the use of company
automobiles by Messrs. Mancino, Bransfield, Jr. and Toohig, respectively;
and (c) $21,000, $4,846, $5,057 and $1,506 of compensation paid for unused
1996 vacation for Messrs. Mancino, Puorro, Toohig and Klag, respectively.
13
<PAGE>
EMPLOYMENT AGREEMENTS
The Bank has entered into employment agreements with Messrs. Mancino,
Bransfield, Jr., Klag, Toohig and Puorro, and three other senior officers
(individually, the "Executive") and the Company has entered into employment
agreements with Messrs. Mancino, Bransfield, Jr. and Puorro and one other senior
officer (collectively, the "Employment Agreements"), which became effective as
of January 10, 1997. The Employment Agreements are intended to ensure that the
Bank and the Company will be able to maintain a stable and competent management
base after the Conversion. The continued success of the Bank and the Company
depends to a significant degree on the skills and competence of the above
referenced officers.
The Employment Agreements provide for three-year terms for each Executive.
The terms of the Employment Agreements shall be extended on a daily basis unless
written notice of non-renewal is given by the Board of Directors. The
Employment Agreements provide that the Executive's base salary will be reviewed
annually. The current base salaries under such Employment Agreements for
Messrs. Mancino, Bransfield, Jr., Puorro, Klag and Toohig are $500,000,
$252,000, $147,000, $137,200 and $137,000, respectively. In addition to the
base salary, the Employment Agreements provide for, among other things,
participation in stock benefits plans and other fringe benefits applicable to
executive personnel. The Employment Agreements provide for termination by the
Bank or the Company for cause, as defined in the Employment Agreements, at any
time. In the event the Bank or the Company chooses to terminate the Executive's
employment for reasons other than for cause, or in the event of the Executive's
resignation from the Bank and the Company upon: (i) failure to re-elect the
Executive to his current offices; (ii) a material change in the Executive's
functions, duties or responsibilities; (iii) a relocation of the Executive's
principal place of employment by more than 25 miles; (iv) a reduction in the
benefits and perquisites being provided to the Executive under the Employment
Agreement; (v) liquidation or dissolution of the Bank or the Company; or (vi) a
breach of the Employment Agreement by the Bank or the Company, the Executive or,
in the event of death, his beneficiary would be entitled to receive an amount
equal to the remaining base salary payments due to the Executive for the
remaining term of the Employment Agreement and the contributions that would have
been made on the Executive's behalf to any employee benefit plans of the Bank
and the Company during the remaining term of the Employment Agreement. The Bank
and the Company would also continue and pay for the Executive's life, health,
dental and disability coverage for the remaining term of the Employment
Agreement. Upon any termination of the Executive, the Executive is subject to a
one year non-competition agreement.
Under the Employment Agreements, if voluntary or involuntary termination
follows a change in control or acquisition of control of the Bank or the
Company, the Executive or, in the event of the Executive's death, his
beneficiary, would be entitled to a severance payment equal to the greater of:
(i) the payments due for the remaining terms of the Employment Agreement; or
(ii) three times the average of the five preceding taxable years' annual
compensation. The Bank and the Company would also continue the Executive's
life, health, and disability coverage for thirty-six months. Notwithstanding
that both the Bank and Company Employment Agreements provide for a severance
14
<PAGE>
payment in the event of a change in control, the Executive would only be
entitled to receive a severance payment under one Employment Agreement.
Payments to the Executive under the Bank's Employment Agreement are
guaranteed by the Company in the event that payments or benefits are not paid by
the Bank. Payment under the Company's Employment Agreement would be made by the
Company. All reasonable costs and legal fees paid or incurred by the Executive
pursuant to any dispute or question of interpretation relating to the Employment
Agreements shall be paid by the Bank or Company, respectively, if the Executive
is successful on the merits pursuant to a legal judgment, arbitration or
settlement. The Employment Agreements also provide that the Bank and Company
shall indemnify the Executive to the fullest extent allowable under federal and
Delaware law, respectively.
Payments under the Company's Employment Agreement in the event of a change
in control may constitute some portion of a "parachute payment" for federal
income tax purposes, resulting in the possible payment of a federal excise tax.
In such case, the Company must pay to the Executive an amount so as to enable
the Executive to retain the payments he would have retained had he not been
subject to such excise tax.
CHANGE IN CONTROL AGREEMENTS
The Bank has entered into two-year Change in Control Agreements (the "CIC
Agreements") with eleven officers of the Bank, none of whom are covered by the
Employment Agreements. Commencing on the first anniversary date and continuing
on each anniversary thereafter, the CIC Agreements may be renewed by the Board
of Directors of the Bank for an additional year. The CIC Agreements provide
that in the event voluntary or involuntary termination follows a change in
control of the Bank, the officer would be entitled to receive a severance
payment equal to two times the officer's average annual compensation for the
five most recent taxable years. The Bank would also continue and pay for the
officer's life, health and disability coverage for 24 months following
termination.
EMPLOYEE BENEFIT PLANS
INCENTIVE PLAN. The Company maintains the Roslyn Bancorp, Inc. 1997 Stock-
based Incentive Plan, which provides discretionary awards to directors, officers
and employees of the Company and its affiliates as determined by a committee of
disinterested directors who administer the Incentive Plan. The Incentive Plan
is intended to help the Company attract, retain and provide appropriate
incentives for management personnel. Subject to certain adjustments to prevent
dilution of awards to participants, 6,108,444 shares are available for awards
denominated in Common Stock under the Incentive Plan, of which no more than
4,364,246 shares may be granted under the Incentive Plan for purchase pursuant
to the exercise of options and option-related rights. Awards under the
Incentive Plan may be granted in any one or a combination of stock options,
limited rights, stock appreciation rights, stock awards and performance awards.
The Compensation Committee administers the Incentive Plan and authorizes the
employees, others and directors to whom awards
15
<PAGE>
are granted, the number of awards granted and the specific terms and conditions
of each grant, subject to the provisions of the Incentive Plan. Awards under the
Incentive Plan must have an exercise price of not less than fair market value at
the date of grant. No individual officer or employee may be granted an amount of
incentive stock options which exceeds 25% of all options eligible to be granted
under the Incentive Plan within any 60 month period.
Adjustments in the number and type of shares and other equitable
adjustments may be made by the Board or the Compensation Committee in the event
of a merger, reorganization, consolidation, recapitalization, spin-off, stock
dividend, stock split or any other similar event. A participant may satisfy a
tax withholding requirement by applying shares of Common Stock to which the
participant is entitled.
The right to grant awards under the Incentive Plan will terminate upon the
earlier of (i) July 22, 2007 or (ii) the issuance of all the shares under the
Incentive Plan. The Board of Directors has the authority to terminate the
Incentive Plan at anytime, however, awards granted and outstanding when the
Incentive Plan terminates are not affected or impaired by the termination.
16
<PAGE>
The following table lists all grants of options (and Limited Rights) under
the Incentive Plan to the Named Executive Officers for fiscal 1997 and contains
certain information about potential value of those options based upon certain
assumptions as to the appreciation of the Company's stock over the life of the
option.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL EXERCISE
UNDERLYING OPTIONS/SARS OR
OPTIONS/SARS GRANTED TO BASE EXPIRATION
GRANTED (#) EMPLOYEES IN PRICE DATE GRANT DATE
NAME (2)(3)(4)(5) FISCAL YEAR ($/SH)(6) (7) PRESENT VALUE(1)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joseph L. Mancino.......... 518,545 15.32 22.50 9/2/2007 $2,621,903
John R. Bransfield, Jr..... 288,841 8.54 22.50 9/2/2007 1,459,421
Michael P. Puorro.......... 175,334 5.18 22.50 9/2/2007 885,278
Arthur W. Toohig........... 175,334 5.18 22.50 9/2/2007 885,278
John L. Klag............... 175,334 5.18 22.50 9/2/2007 885,278
</TABLE>
- ------------------
(1) Determined using the Black-Scholes option pricing model with the following
weighted average assumptions to value the option grants: dividend yield of
1.74%; expected volatility of 22.5%; risk-free interest rate of 5.61%; and
expected option lives of four years. The amounts represent certain assumed
rates of appreciation. Actual gains, if any, on stock option exercises and
Common Stock holdings are dependent on the future performance of the Common
Stock and overall stock market conditions. There can be no assurance that
the amounts reflected in this table will be realized.
(2) Consists of 404,545, 237,841, 151,934, 151,934 and 151,934 incentive and
non-statutory options granted to Messrs. Mancino, Bransfield, Jr., Puorro,
Toohig and Klag, respectively, pursuant to the Incentive Plan which vest and
become exercisable in equal installments at an annual rate of 20% beginning
September 2, 1998 and 114,000, 51,000, 23,400, 23,400 and 23,400 options
granted to Messrs. Mancino, Bransfield, Jr., Puorro, Toohig and Klag,
respectively, which vest and become exercisable in installments based upon
the achievement of certain specified performance objectives, but in no
event later than September 2, 2002 .
(3) The purchase price may be paid in cash or in Common Stock.
(4) All grants are intended to be Incentive Stock Options, to extent permissible
under Section 422 of the Internal Revenue Code of 1986, as amended.
(5) Options are subject to limited rights pursuant to which the options may be
exercised in the event of a change in control of the Company or the Bank.
Upon the exercise of a limited right, the optionee would receive a cash
payment equal to the difference between the exercise price of the related
option on the date of grant and the fair market value of the underlying
shares of Common Stock on the date the limited right is exercised.
(6) The exercise price of each option is the fair market value fo the Common
Stock as of the date of grant.
(7) The option term is ten (10) years.
17
<PAGE>
The following table provides certain information with respect to the number
of shares of Common Stock represented by outstanding options held by the Named
Executive Officers as of December 31, 1997. Also reported are the value for
"in-the-money" options which represent the positive spread between the exercise
price of any such existing stock options and the year-end price of the Common
Stock. No options were exercisable by the Named Executive Officers in fiscal
1997.
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS IN-THE-
AT FISCAL YEAR-END (#)(1) MONEY OPTIONS/SARS AT
FISCAL YEAR END ($)(2)
------------------------------------------------------
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------------------------------------------
<S> <C> <C>
Joseph L. Mancino.......... 0/518,545 $0/388,919
John R. Bransfield, Jr..... 0/288,841 0/216,631
Arthur W. Toohig........... 0/175,334 0/131,500
John L. Klag............... 0/175,334 0/131,500
Michael P. Puorro.......... 0/175,334 0/131,500
</TABLE>
- ------------------
(1) The options in this table have an exercise price of $22.50. Consists of
404,545, 237,841, 151,934, 151,934 and 151,934 incentive and non-statutory
stock options granted to Messrs. Mancino, Bransfield, Jr., Toohig, Klag and
Puorro, respectively, which will vest and become exercisable at an annual
rate of 20% beginning September 2, 1998 and 114,000, 51,000, 23,400, 23,400
and 23,400 options granted to Messrs. Mancino, Bransfield, Jr., Toohig, Klag
and Puorro, respectively, which vest and become exercisable in installments
based upon the achievement of certain specified performance objectives, but
in no event later than September 2, 2002. The exercise price of each option
is the fair market value of the stock as of the date of grant. The options
will expire ten (10) years from the date of grant.
(2) Based on market value of the underlying stock at the fiscal year-end, minus
the exercise price. The market price on December 31, 1997 was $23.25.
RETIREMENT PLAN. The Bank maintains a defined benefit plan ("Retirement
Plan") for eligible employees. The Retirement Plan is intended to satisfy the
requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"). Eligible employees generally begin participating in the
Retirement Plan on the first day of the calendar month coincident with or next
following the date on which they have attained age 21 and have completed at
least one year of service with the Bank. All employees are eligible to
participate in the Retirement Plan other than (i) employees paid on an hourly-
rate or contract basis, (ii) employees regularly employed outside the Bank's own
offices in connection with the operation and maintenance of building and other
property acquired through foreclosure or deed, and (iii) leased employees.
Participants become vested in their benefits under the Retirement Plan upon
completing five years of vesting service.
The Retirement Plan provides for a monthly benefit to a participant upon
retirement at or after the later of (i) attainment of age 65 or (ii) the fifth
anniversary of initial participation in the Retirement Plan. The Retirement
Plan also provides for a benefit upon the participant's death or early
retirement. The annual normal retirement benefit for a participant under the
Retirement Plan is (i) 2% of average annual earnings multiplied by years of
credited service (up to a maximum of 30 years), plus (ii) 0.5% of average annual
earnings multiplied by the participant's number of years and months of credited
service in excess of 30 years. For purposes of the Retirement Plan, average
18
<PAGE>
annual earnings means the participant's average annual compensation (as defined
in the Retirement Plan) during the 36 consecutive calendar months within the
final 120 consecutive calendar months of the participant's credited service that
yields the highest average. A participant is eligible to receive an early
retirement benefit upon the completion of at least ten consecutive years of
vested service in the Retirement Plan and (i) attainment of age 60, or (ii) the
sum of the participant's age and years of service equals at least 75. Benefits
are generally paid in a straight life annuity for unmarried participants and in
the form of a 50% joint and survivor annuity (with the spouse as designated
beneficiary) for married participants. Other forms of benefit payments are
available under the Retirement Plan.
BENEFIT RESTORATION PLAN. The Bank maintains the Benefit Restoration Plan
(the "BRP"). The BRP is a non-qualified plan designed to permit certain
employees to receive supplemental retirement income from the Bank. Participants
in the BRP receive a benefit equal to the amount the participant would have
received under the 401(k) Plan and the Retirement Plan, but for limitations
imposed on such benefits by certain provisions of the Code, including Sections
401(a)(17), 401(m), 401(k), 402(g) and 415 of the Code. The Bank amended the
BRP to provide BRP participants with additional benefits equal to the amount of
benefits the Participant would have received under the ESOP but for certain Code
limitations. The Plan is an unfunded plan, which provides participants only
with a contractual right to obtain the benefits provided thereunder from the
general assets of the Bank. Currently, only Messrs. Mancino and Bransfield, Jr.
are eligible to participate in the BRP.
The following table sets forth the estimated annual benefits payable under
the Retirement Plan upon a participant's retirement at age 65 for the year ended
December 31, 1997, expressed in the form of a straight life annuity, and any
related amounts payable under the BRP. The covered compensation under the
Retirement Plan and BRP includes the base salary for participants and does not
consider cash bonuses. The benefits listed in the table below for the
Retirement Plan and BRP are not subject to a reduction for social security
benefits or any other offset amount.
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------
FINAL AVERAGE
COMPENSATION 15 20 25 30 35 40
- ------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 15,000 $ 20,000 $ 25,000 $ 30,000 $ 31,250 $ 32,500
100,000 30,000 40,000 50,000 60,000 62,500 65,000
125,000 37,500 50,000 62,500 75,000 78,125 81,250
150,000 45,000 60,000 75,000 90,000 93,750 97,500
175,000 52,500 70,000 87,500 105,000 109,375 113,750
200,000 60,000 80,000 100,000 120,000 125,000 130,000
225,000 67,500 90,000 112,500 135,000 140,625 146,250
250,000 75,000 100,000 125,000 150,000 156,250 162,500
300,000 90,000 120,000 150,000 180,000 187,500 195,000
350,000 105,000 140,000 175,000 210,000 218,750 227,500
400,000 120,000 160,000 200,000 240,000 250,000 260,000
450,000 135,000 180,000 225,000 270,000 281,250 292,500
500,000 150,000 200,000 250,000 300,000 312,500 325,000
</TABLE>
19
<PAGE>
The approximate years of service, as of December 31, 1997, for the Named
Executive Officers are as follows:
<TABLE>
<CAPTION>
YEARS OF
SERVICE
----------
<S> <C>
Joseph L. Mancino 37
Arthur W. Toohig 21
Michael P. Puorro 5
John L. Klag 5
John R. Bransfield, Jr. 5
</TABLE>
MANAGEMENT SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. The Bank has
implemented a non-qualified Management Supplemental Executive Retirement Plan
("SERP") to provide certain officers and highly compensated employees with
additional retirement benefits. The SERP benefit is intended to make up for
benefits lost under the ESOP allocation procedures to participants who retire
prior to the complete repayment of the ESOP loan. At the retirement of a
participant, the benefits under the SERP are determined by first: (i) projecting
the number of shares that would have been allocated to the participant under the
ESOP if they had been employed throughout the period of the ESOP loan (measured
from the participant's first date of ESOP participation); and (ii) reducing the
number determined by (i) above by the number of shares actually allocated to the
participant's account under the ESOP; and second, by multiplying the number of
shares that represent the difference between such figures by the average fair
market value of the Common Stock over the preceding five years. Benefits under
the SERP vest in 20% annual increments over a five year period commencing as of
the date of a participant's participation in the SERP. The vested portion of
the SERP participant's benefits are payable upon the retirement of the
participant.
20
<PAGE>
STOCK PERFORMANCE GRAPH. The following graph shows a comparison of total
shareholder return on the Company's Common Stock, based on the market price of
the Common Stock with the cumulative total return of companies in The Nasdaq
Market Index and the MG Index for Savings and Loans for the period beginning on
January 13, 1997, the day the Company's Common Stock began trading, through
December 31, 1997. The graph was derived from a very limited period of time,
and, as a result, may not be indicative of possible future performance of the
Company's Common Stock. The data was supplied by Media General Financial
Services.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Summary
1/13/97 03/31/97 06/30/97 09/30/97 12/31/97
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Roslyn Bancorp, Inc. 100.00 108.75 152.94 149.17 156.37
Nasdaq Market Index 100.00 94.92 112.29 130.92 122.67
MG Index For Savings and Loans 100.00 109.00 129.70 153.05 172.31
</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 100.000 on 1/13/97, the first day
of trading for Roslyn Bancorp, Inc. Common Stock. For Roslyn Bancorp, Inc.
the index commenced with the closing on the first day of trading for Roslyn
Bancorp, Inc. common stock of $15.00 per share.
21
<PAGE>
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Bank's policies do not permit the Bank to make loans to any of its
Directors and executive officers. The Company intends that all transactions
between the Company and its executive officers, Directors, holders of 10% or
more of the shares of any class of its Common Stock and affiliates thereof, will
contain terms no less favorable to the Company than could have been obtained by
it in arms length negotiations with unaffiliated persons and will be approved by
a majority of independent outside Directors of the Company not having any
interest in the transaction.
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December 31,
1997 were KPMG Peat Marwick LLP. The Company's Board of Directors has
reappointed KPMG Peat Marwick LLP to continue as independent auditors for the
Bank and the Company for the year ending December 31, 1998, subject to
ratification of such appointment by the shareholders.
Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting. They will be given an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions from
shareholders present at the Annual Meeting.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED PROXY
CARD WILL BE VOTED "FOR" RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK
LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 1999 Annual Meeting of Shareholders, a shareholder
proposal must be received by the Corporate Secretary of the Company at the
address set forth on the first page of this Proxy Statement not later than
November 28, 1998. Any such proposal will be subject to 17 C.F.R. Section
240.14a-8 of the Rules and Regulations under the Securities Exchange Act of
1934, as amended.
22
<PAGE>
NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for a
shareholder to properly bring business before an Annual Meeting. The
shareholder must give written advance notice to the Corporate Secretary of the
Company not less than ninety (90) days before the date originally fixed for such
meeting; provided, however, that in the event that less than one hundred (100)
days notice or prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must be received
not later than the close of business on the tenth day following the date on
which the Company's notice to shareholders of the annual meeting date was mailed
or such public disclosure was made. The advance notice by shareholders must
include the shareholder's name and address, as they appear on the Company's
record of shareholders, a brief description of the proposed business, the reason
for conducting such business at the Annual Meeting, the class and number of
shares of the Company's capital stock that are beneficially owned by such
shareholder and any material interest of such shareholder in the proposed
business. In the case of nominations to the Board of Directors, certain
information regarding the nominee must be provided. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy statement or the
proxy relating to an annual meeting any shareholder proposal which does not meet
all of the requirements for inclusion established by the SEC in effect at the
time such proposal is received.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
Whether or not you intend to be present at the Annual Meeting, you are
urged to return your proxy card promptly. If you are then present at the Annual
Meeting and wish to vote your shares in person, your original proxy may be
revoked by voting at the Annual Meeting.
By Order of the Board of Directors
/s/ Mary M. Ehrich
Mary M. Ehrich
Corporate Secretary
Roslyn, New York
March 27, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR
NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN, DATE AND
PROMPTLY RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
23
<PAGE>
REVOCABLE PROXY
ROSLYN BANCORP, INC.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 1998
9:30 A.M., EASTERN TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the official proxy committee of the
Board of Directors of Roslyn Bancorp, Inc. (the "Company"), each with full power
of substitution, to act as proxies for the undersigned, and to vote all shares
of Common Stock of the Company which the undersigned is entitled to vote at the
Annual Meeting of Stockholders, to be held on April 28, 1998 at 9:30 a.m.,
Eastern Time, at the Milleridge Cottage, 585 North Broadway, Jericho, New York
11753 and at any and all adjournments thereof as indicated.
<TABLE>
<CAPTION>
WITH- FOR ALL
FOR HOLD EXCEPT
<S> <C> <C> <C>
1. The election as directors of all
nominees listed to three-year
terms (except as marked to the [_] [_] [_]
contrary below):
</TABLE>
JOSEPH L. MANCINO, JAMES E. SWIGGETT AND ROBERT G. FREESE
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR
ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. The ratification of the appointment
of KPMG Peat Marwick LLP as
independent auditors of the [_] [_] [_]
Company for the fiscal year ending
December 31, 1998.
</TABLE>
3. Such other matters as may properly come before the meeting and at any
adjournments thereof, including whether or not to adjourn the meeting.
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING. [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS
LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS
PROXY WILL BE VOTED BY THE PROXY COMMITTEE OF THE BOARD OF DIRECTORS IN THEIR
DISCRETION. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
Please be sure to sign and date this Proxy in the box below.
Date
------------------
- ------------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
/\DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED./\
ROSLYN BANCORP, INC.
IMPORTANT: The undersigned acknowledges receipt from the Company prior
to the execution of this proxy of a Notice of Annual Meeting of Stockholders and
of a Proxy Statement dated March 23, 1998.
Please sign exactly as you name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
